Jazz Pharms., Inc. v. Avadel Pharms. Plc

Case Name: Jazz Pharms., Inc. v. Avadel Pharms. Plc, Civ. No. 21-691 (MN), 2021 WL 4860682 (D. Del. Oct. 19, 2021) (Noreika, J.)

Drug Product and Patent(s)-in-Suit: Xyrem® (sodium oxybate); U.S. Patent No. 8,731,963 (“the ’963 patent”)

Nature of Case and Issue(s) Presented: Jazz made and sold Xyrem, a drug approved for the treatment of cataplexy and excessive daytime sleepiness associated with the sleep disorder narcolepsy. The active ingredient in Xyrem had been recognized as a dangerous substance, frequently misused as a “date rape drug” in cases of drug-facilitated sexual assault. Therefore, the FDA conditioned approval on the implementation of a Risk Evaluation and Mitigation Strategy (REMS) that controlled distribution of the product and minimized the possibility of abuse. The ’963 patent purportedly covered using a computer-implemented system that addressed certain FDA-required REMS conditions of using Xyrem according to its label.

Avadel submitted a 505(b)(2) application seeking approval to manufacture and sell its own sodium oxybate product. Avadel acknowledged that a REMS would be required for its product. Jazz sued Avadel for infringement of five patents, the only Orange Book-listed patent being the ’963 patent. In its answer and counterclaim, Avadel alleged that the ’963 patent should be delisted from the Orange Book. Avadel then moved for judgment on the pleadings with respect to its counterclaim seeking delisting of the ’963 patent. The court denied Avadel’s motion.

Why Jazz Prevailed: Avadel argued that the ’963 patent should be delisted because it claimed a “system,” not a drug product or method of using a drug, as required by statute. Jazz conceded that its patent claimed a system, but argued that: (i) Avadel’s counterclaim was not ripe because Avadel had not filed a certification against the ’963 patent; and (ii) there were at least factual issues regarding whether it was required to list the patent in the Orange Book.

The court disagreed with Jazz’s first argument that the motion was not ripe. The Supreme Court had found that Congress created a mechanism, in the form of a legal counterclaim, for parties to challenge patent information submitted to the FDA, and that such a counterclaim was available regardless of whether the defendant had certified against the listed patent.

But the court found in favor of Jazz based on its second argument. The Hatch-Waxman Act recited two requirements for a patent to be eligible for listing in the Orange Book. First, it must be one for which infringement could reasonably be asserted if a person not licensed by the owner of the patent were to engage in the manufacture, use, or sale of the drug. Second, it must claim one of the following three categories of subject matter: (i) a drug substance; (ii) a drug product; or (iii) a method of using such drug for which approval was sought or had been granted in the patent holder’s NDA. The FDA-approved label stated that “Xyrem is available only through a restricted distribution program called the … XYREM REMS because of the risks of central nervous system depression and abuse and misuse.” Moreover, Avadel’s arguments depended on claim construction and whether a “system” included methods of using the approved product.