Case: 24-2274 Document: 61 Page: 1 Filed: 05/06/2025
United States Court of Appeals for the Federal Circuit ______________________
JAZZ PHARMACEUTICALS, INC., Plaintiff-Appellee
v.
AVADEL CNS PHARMACEUTICALS, LLC, Defendant-Appellant
______________________
2024-2274 ______________________
Appeal from the United States District Court for the District of Delaware in No. 1:21-cv-00691-GBW, Judge Gregory Brian Williams.
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JAZZ PHARMACEUTICALS, INC., JAZZ PHARMACEUTICALS IRELAND LIMITED, Plaintiffs-Appellees
2024-2277 ______________________ Case: 24-2274 Document: 61 Page: 2 Filed: 05/06/2025
Appeal from the United States District Court for the District of Delaware in No. 1:21-cv-01138-GBW, Judge Gregory Brian Williams.
JAZZ PHARMACEUTICALS, INC., JAZZ PHARMACEUTICALS IRELAND LIMITED, Plaintiffs-Appellees
AVADEL CNS PHARMACEUTICALS, LLC, Defendant-Appellant ______________________
2024-2278 ______________________
Appeal from the United States District Court for the District of Delaware in No. 1:21-cv-01594-GBW, Judge Gregory Brian Williams. ______________________
Decided: May 6, 2025 ______________________
FRANK CALVOSA, I, Quinn Emanuel Urquhart & Sulli- van, LLP, New York, NY, argued for plaintiff-appellee. Also represented by GABRIEL P. BRIER, FRANCIS DOMINIC CERRITO, QUENTIN JORGENSEN, ELLYDE R. THOMPSON; ISAAC SAIDEL-GOLEY, Boston, MA.
GABRIEL K. BELL, Latham & Watkins LLP, Washing- ton, DC, argued for defendant-appellant. Also represented by ALEXANDER G. SIEMERS; KENNETH G. SCHULER, MARC NATHAN ZUBICK, Chicago, IL; HERMAN H. YUE, New York, Case: 24-2274 Document: 61 Page: 3 Filed: 05/06/2025
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NY; KIRA ALEXIS DAVIS, Morrison & Foerster LLP, Los An- geles, CA; DARALYN JEANNINE DURIE, San Francisco, CA; DANIEL M. SILVER, McCarter & English, LLP, Wilmington, DE. ______________________
Before LOURIE, REYNA, and TARANTO, Circuit Judges. LOURIE, Circuit Judge. Avadel CNS Pharmaceuticals, LLC (“Avadel”) appeals from the decision of the U.S. District Court for the District of Delaware permanently enjoining it from seeking ap- proval from the U.S. Food and Drug Administration (“the FDA”) of its product, Lumryz, for the treatment of idio- pathic hypersomnia, as well as from marketing Lumryz for that indication. Jazz Pharms., Inc. v. Avadel CNS Pharms. LLC, No. 21-cv-691, 2024 WL 4005200 (D. Del. Aug. 27, 2024) (“Permanent Injunction Order”); see Jazz Pharms., Inc. v. Avadel CNS Pharms. LLC, No. 21-cv-691, 2024 WL 4100159 (D. Del. Aug. 27, 2024) (“Decision”). As the district court later clarified in an order denying Avadel’s motion to stay the injunction pending appeal, Avadel is specifically enjoined from: (1) offering open-label extensions to clinical trial participants, (2) applying for FDA approval of Lumryz for idiopathic hypersomnia, and (3) initiating new clinical trials or studies after the Permanent Injunction Order’s ef- fective date. Jazz Pharms., Inc. v. Avadel CNS Pharms. LLC, No. 21-cv-691 (D. Del. Sep. 24, 2024) (“Stay Order”), J.A. 38–44. For the following reasons, we reverse-in-part, vacate- in-part, and remand. BACKGROUND I Jazz Pharmaceuticals, Inc. and Jazz Pharmaceuticals Ireland Limited (collectively, “Jazz”) manufacture and sell two sodium oxybate products: Xyrem®, a sodium oxybate Case: 24-2274 Document: 61 Page: 4 Filed: 05/06/2025
oral solution approved for the treatment of excessive day- time sleepiness (“EDS”) and cataplexy in adult and pediat- ric patients with narcolepsy, and Xywav®, a low-sodium oxybate product approved for the same indications as Xyrem, as well as for the treatment of idiopathic hyper- somnia. Idiopathic hypersomnia, or “IH,” is a chronic neu- rological condition “on a spectrum with narcolepsy” that is similarly characterized by EDS. J.A. 5666. Xywav is the first and, currently, only FDA-approved treatment for IH. Jazz is not without competition, however. On Decem- ber 15, 2020, Avadel submitted a New Drug Application (“NDA”) to the FDA pursuant to section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 355(b)(2), seeking approval of its own product, Lumryz, a once-nightly formulation of sodium oxybate for the treat- ment of EDS and cataplexy in adults with narcolepsy. An NDA filed under that section is commonly referred to as a “paper NDA,” which, unlike an Abbreviated New Drug Ap- plication (“ANDA”), requires the applicant to submit safety and efficacy data. See AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1045–46 (Fed. Cir. 2010). But such data need not have been developed by the applicant; rather, the applicant may rely on existing FDA findings of safety and efficacy for already-approved drugs, or on other studies not performed by the applicant. Takeda Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 629 (Fed. Cir. 2015). Avadel’s paper NDA relied in part on the FDA’s findings of safety and efficacy for Jazz’s Xyrem. J.A. 9255–56. On March 23, 2021, three months after Avadel submit- ted its paper NDA, Jazz filed a patent application entitled “GHB [(i.e., oxybate)] Formulation and Method for its Man- ufacture,” which issued on October 19, 2021, as U.S. Patent 11,147,782 (“the ’782 patent”). Relevant here, claims 14 and 24 of the ’782 patent recite: Case: 24-2274 Document: 61 Page: 5 Filed: 05/06/2025
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14. A unit dose comprising a formulation of gamma-hydroxybutyrate, wherein the formulation comprises: a plurality of immediate release particles comprising gamma-hydroxybutyrate; a plurality of modified release particles comprising gamma-hydroxybutyrate; a viscosity enhancing agent; and an acid; wherein the viscosity enhancing agent and the acid are separate from the immediate release particles and the modified release particles. 24. The unit dose of claim 14, wherein the unit dose is a sachet. ’782 patent, col. 26 ll. 9–20, 54–55. The ’782 patent will expire on February 18, 2036. Neither of Jazz’s Xyrem and Xywav products practices claim 24 of the ’782 patent, the only asserted claim in this litigation. Indeed, the ’782 patent is not listed in the Or- ange Book for either Xyrem or Xywav, indicating Jazz’s view that the ’782 patent does not claim those drugs or their use. See 21 U.S.C. § 355(b)(1)(A)(viii) (providing the statutory requirements for listing a patent in the Orange Book). As such, in pursuing its paper NDA for Lumryz, Avadel did not need to make—and, indeed, did not make— any patent certifications under § 355(b)(2)(A) as to the ’782 patent. 1
1 As with an ANDA, a paper NDA requires the appli- cant to submit a certification that, for example, any patent Case: 24-2274 Document: 61 Page: 6 Filed: 05/06/2025
II On November 10, 2021, roughly one month after the ’782 patent issued and eleven months after Avadel submit- ted its paper NDA, Jazz filed a complaint in the U.S. Dis- trict Court for the District of Delaware, alleging that Avadel’s FDA submission “constitute[d] infringement [of the ’782 patent] under 35 U.S.C. § 271(e)(2)(A).” J.A. 10167. That statute provides: It shall be an act of infringement to submit an ap- plication . . . described in section 505(b)(2) of [the FDCA] for a drug claimed in a patent . . . if the pur- pose of such submission is to obtain approval under [the FDCA] to engage in the commercial manufac- ture, use, or sale of a drug . . . claimed in a pa- tent . . . before the expiration of such patent. § 271(e)(2)(A). In its claim for relief, Jazz sought, inter alia, a permanent injunction under 35 U.S.C. § 271(e)(4)(B), 2 as well as damages for any of Avadel’s infringement “other than those acts expressly exempted by 35 U.S.C. § 271(e)(1).” 3 J.A. 10169–70. Accordingly, at the time of
that “claims the drug” for which the relied-upon investiga- tions were conducted “is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted.” See § 355(b)(2)(A)(i)–(iv). 2 For an act of infringement under § 271(e)(2), as Jazz’s complaint alleged, the statute provides that “injunc- tive relief may be granted . . . to prevent the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug . . . .” § 271(e)(4)(B). 3 The statute expressly excludes from infringement any infringing activities done “solely for uses reasonably related to the development and submission of information” Case: 24-2274 Document: 61 Page: 7 Filed: 05/06/2025
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the initial filing of Jazz’s complaint, this lawsuit appeared to fall within the bounds of the Hatch-Waxman Act insofar as the alleged infringement “ar[ose] from Avadel’s filing of a New Drug Application.” J.A. 10157 (emphasis added). That is, Jazz’s claims were based on an artificial act of in- fringement under § 271(e)(2), and not on any actual acts of infringement under § 271(a)–(c). See J.A. 10167; J.A. 7741 (Avadel letter to district court explaining that “Jazz initi- ated this series of actions under the Hatch-Waxman Act”); see also Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676 (1990) (explaining that § 271(e)(2) “define[s] a new (and somewhat artificial) act of infringement for a very limited and technical purpose that relates only to certain drug ap- plications”). That changed, however, on May 1, 2023, when the FDA approved Avadel’s paper NDA and on June 5, 2023, when Avadel commercially launched Lumryz. 4 Consequently, on June 8, 2023, the parties stipulated, subject to the district court’s approval, to allow Jazz leave to amend its com- plaint. Stipulation to Amend Complaint, Jazz Pharms., Inc. v. Avadel CNS Pharms. LLC, No. 21-cv-1594 (D. Del. June 8, 2023), ECF No. 209. Specifically, Jazz amended its complaint to remove any allegations of “artificial”
to the FDA. § 271(e)(1) (“the safe-harbor provision” or “the safe harbor”). 4 Because the ’782 patent is not listed in the Orange Book for Xyrem, the filing of Jazz’s complaint did not trig- ger a 30-month regulatory stay on the FDA’s approval of Avadel’s paper NDA. See 21 U.S.C. § 355(c)(3)(C); see also Oral Arg. 9:30–9:38, available at https://oralargu- ments.cafc.uscourts.gov/default.aspx?fl=24-2274_0207202 5.mp3 (counsel for Avadel noting that “the reason we’re not dealing with an automatic stay is we’re not dealing with an Orange Book-listed patent here. Jazz doesn’t practice the patent that [it’s] asserting.”). Case: 24-2274 Document: 61 Page: 8 Filed: 05/06/2025
infringement under § 271(e)(2), replacing them with af- firmative allegations that Avadel had and would infringe the ’782 patent under each of § 271(a)–(c) by making and selling the now-FDA-approved Lumryz. Compare J.A. 10167–68, with J.A. 10007. Jazz further amended its com- plaint to remove its prayer for a permanent injunction un- der § 271(e)(4)(B), but otherwise maintained its requests for injunctive relief and damages against infringing activi- ties, other than damages for acts exempted by § 271(e)(1). Compare J.A. 10169–70, with J.A. 10008. Following discovery and prior to trial, the parties stip- ulated that Lumryz would infringe claim 24 of the ’782 pa- tent if that claim was not found to be invalid. J.A. 4312. And after a five-day trial, a jury found that Avadel had failed to prove the invalidity of that claim. J.A. 4387–89. The jury awarded Jazz a reasonable royalty of $233,562.83 for Avadel’s past infringement. J.A. 4390. III On April 12, 2024, following trial, Jazz moved for a per- manent injunction under 35 U.S.C. § 283 seeking to pre- vent Avadel from making, using, or selling Lumryz until expiration of the ’782 patent, February 18, 2036. J.A. 4545–47. Jazz proposed to exclude from the injunc- tion, however, Avadel’s making, using, and selling Lumryz “(a) for the patients who have been prescribed Lumryz as of the effective date of the injunction . . . ; (b) in currently- ongoing clinical trials and studies; (c) to update data in old studies if necessary; and (d) to re-run necessary tests for quality control for regulators or customers.” J.A. 4550. And, “[f]or the avoidance of doubt,” Jazz proposed that alt- hough Avadel “may continue to use Lumryz in currently- ongoing clinical trials and studies . . . , [it] may not seek ap- proval from the [FDA] for any indication that was not al- ready part of Lumryz’s approved product labeling as of March 4, 2024.” Id. Jazz’s motion was fully briefed, and an oral hearing was held on June 4, 2024. Case: 24-2274 Document: 61 Page: 9 Filed: 05/06/2025
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While Jazz’s motion was pending, on August 1, 2024, Avadel launched its REVITALYZ clinical trial, a “double- blind, placebo-controlled, randomized withdrawal, multi- center study of the efficacy and safety of Lumryz with an open-label extension period in patients diagnosed with [IH].” J.A. 7529 (citing Safety and Efficacy of [Lumryz] in Idiopathic Hypersomnia (REVITALYZ), ClinicalTrials.gov, https://clinicaltrials.gov/study/NCT06525077?term=NCT0 6525077&rank=1). Relevant here, an open-label extension (“OLE”) period “allows clinical trial participants to receive a trial drug past the formal completion of the trial, both to gather additional safety data for submission to the FDA and to maintain continuity of patient treatment.” J.A. 7511–12. On August 27, 2024, the district court granted in part Jazz’s motion. Specifically, it granted a “limited perma- nent injunction prohibiting Avadel from seeking approval from the [FDA] and marketing Lumryz for the treatment of IH.” Permanent Injunction Order, at *1. But, as Jazz had proposed, it excluded from the injunction Avadel’s making, using, and selling Lumryz for use “in currently- ongoing clinical trials and studies.” Id. It further adopted Jazz’s proposed language that, “[f]or the avoidance of doubt, . . . while Avadel may continue to use Lumryz in currently-ongoing clinical trials and studies . . ., Avadel may not seek approval of Lumryz from the FDA for the treatment of IH or for any indication that was not already part of Lumryz’s approved product labeling as of March 4, 2024.” Id. Avadel filed a Notice of Appeal the next day. J.A. 341. 5
5 The district court also denied in part Jazz’s motion. Specifically, the court refused to enjoin Avadel from mak- ing, using, and selling Lumryz for the treatment of narco- lepsy—its FDA-approved indication. See Decision, at *1. The court found that enjoining such activities threatened a Case: 24-2274 Document: 61 Page: 10 Filed: 05/06/2025
IV One week later, on September 3, 2024, Avadel filed an emergency motion in the district court to stay the injunc- tion pending appeal, arguing that enjoining Avadel from initiating new clinical trials and seeking approval from the FDA to market Lumryz for the treatment of IH (or any other indication) “overlook[ed] a crucial feature of federal patent law”—the safe-harbor provision. J.A. 7496. Avadel argued that, under the safe harbor, the enjoined activities are “entirely non-infringing,” such that the injunction ex- ceeds its lawful scope. J.A. 7502. And it told the court that Jazz had demanded that, pursuant to the injunction, Avadel cease enrolling new patients in its ongoing REVITALYZ trial and “terminate the [OLE] period for those who ha[d] already been enrolled” and prescribed Lumryz as part of that trial. J.A. 7511. Jazz opposed the motion, arguing that Avadel’s arguments were misplaced because the safe harbor is an affirmative defense that Avadel never pleaded or pursued, and that therefore had been waived. J.A. 7542. In a memorandum order, the district court denied Avadel’s motion to stay the injunction. See Stay Order, J.A. 39. In doing so, the court “[found] it pertinent to dis- cuss and clarify the scope of conduct enjoined.” Id., J.A. 40. It began by clarifying what activities were not covered by the injunction. Under the injunction’s “explicit terms,” the district court explained, Avadel may continue to make, use, and sell Lumryz for its REVITALYZ clinical study because that trial was initiated prior to entry of the injunction. Id.,
“substantial harm to the public interest” that outweighed any irreparable injury to Jazz. Id. at *9. Instead, the court determined that Jazz is entitled to a reasonable royalty for Avadel’s ongoing sales of Lumryz for narcolepsy. Id. at *13. Jazz does not appeal from that partial denial, so we do not address it further. Case: 24-2274 Document: 61 Page: 11 Filed: 05/06/2025
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J.A. 40–41. It further clarified that Avadel was not en- joined from enrolling new subjects in that already ongoing study. Id. at 41. And finally, it stated that, “while the [Per- manent Injunction Order] enjoins Avadel from seeking FDA approval for IH, [it] does not enjoin Avadel from sub- mitting information or results from ongoing studies to the FDA.” Id. The district court then clarified that Avadel is enjoined from: “(1) offering open-label extensions to [REVITALYZ] trial participants; (2) applying for FDA approval of Lumryz for IH; and (3) initiating new clinical trials or studies after the [Permanent Injunction Order]’s effective date.” Id. Having clarified the specific activities precluded by the in- junction, the court proceeded to determine whether Avadel had made the requisite showings as to each of those activ- ities to warrant a stay. And finding that Avadel had not demonstrated a substantial risk of immediate and irrepa- rable harm for any of those activities, the district court de- nied the motion. Id. Avadel timely amended its Notice of Appeal to include both the Permanent Injunction Order and the Stay Order. Jazz Pharms., No. 21-cv-1594 (D. Del. Sep. 27, 2024), ECF No. 584. We have jurisdiction under 28 U.S.C. § 1292(c)(1). 6
6 On October 2, 2024, a motions panel of this court granted Avadel’s motion to stay the district court’s injunc- tion “insofar as it enjoins ‘initiating new clinical trials or studies,’” but declined to stay the injunction in all other re- spects due to Avadel’s “failure to establish irreparable in- jury.” Appeal No. 24-2274, ECF No. 30. Case: 24-2274 Document: 61 Page: 12 Filed: 05/06/2025
DISCUSSION I An injunction is a “drastic and extraordinary remedy” rooted in well-established principles of equity. Apple Inc. v. Samsung Elecs. Co., 735 F.3d 1352, 1359 (Fed. Cir. 2013) (quoting Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 165 (2010)). To show entitlement to a permanent in- junction, a plaintiff must establish: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hard- ships between the plaintiff and defendant, a remedy in eq- uity is warranted; and (4) that the public interest would not be disserved by a permanent injunction” (“the eBay fac- tors”). eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). “[D]istrict courts are frequently admonished not to issue sweeping injunctions against potentially in- fringing activities in patent cases, but to restrict the scope of the injunction to the particular adjudicated infringing activity.” Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335, 1344 (Fed. Cir. 2012) (collecting cases). Per- manent injunctions of proper scope are provided for by law. But this is not such a case. We review the district court’s grant of a permanent in- junction and the scope of that injunction for abuse of dis- cretion. Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 772 (Fed. Cir. 1993). “An abuse of discretion may be established by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.” Novo Nordisk of N. Am., Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed. Cir. 1996). Legal error therefore consti- tutes an abuse of discretion. See id. Case: 24-2274 Document: 61 Page: 13 Filed: 05/06/2025
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II For clarity and precision, we address each of the indi- vidually enjoined activities separately. Those activities are (1) initiating new clinical trials for Lumryz, (2) offering open-label extensions in ongoing clinical trials, and (3) ap- plying for FDA approval of Lumryz for IH. See Stay Order, J.A. 41. A. Initiating New Clinical Trials for Lumryz In 1984, Congress enacted the Hatch-Waxman Act with one of its purposes being “mak[ing] available more low cost generic drugs.” H.R. Rep. No. 98-857, pt. 1, at 14 (1984), as reprinted in 1984 U.S.C.C.A.N. 2647, 2647. To that end, Congress created the safe-harbor provision, § 271(e)(1), “to establish that experimentation with a pa- tented drug product, when the purpose is to prepare for commercial activity which will begin after a valid patent expires, is not a patent infringement.” Id. at 45–46 (abro- gating Roche Prods., Inc. v. Bolar Pharm. Co., 733 F.2d 858 (Fed. Cir. 1984)). Congress determined that “experimental activity does not have any adverse economic impact on the patent owner’s exclusivity during the life of a patent, but prevention of such activity would extend the patent owner’s commercial exclusivity beyond the patent expiration date.” Id. at 46 (also emphasizing that, upon patent expiration, “immediate competition should be encouraged”). As such, Congress provided that, “[i]n any action for patent infringe- ment brought under [§ 271], no injunctive or other relief may be granted which would prohibit the making, using, offering to sell, or selling within the United States or im- porting into the United States of a patented invention un- der [the safe-harbor provision, § 271(e)(1)].” 35 U.S.C. § 271(e)(3) (emphasis added). The plain language and purposes of the Hatch-Wax- man Act make it clear that enjoining Avadel from initiating new clinical trials for Lumryz (for IH or otherwise) until expiration of the ’782 patent is unlawful and, therefore, an Case: 24-2274 Document: 61 Page: 14 Filed: 05/06/2025
abuse of discretion. That activity is statutorily non-infring- ing under § 271(e)(1) and statutorily precluded from being enjoined under § 271(e)(3). As the Supreme Court has ex- plained, it is “apparent from the statutory text” that § 271(e)(1) “exempt[s] from infringement . . . all uses of pa- tented inventions that are reasonably related to the devel- opment and submission of any information under the FDCA . . . necessarily includ[ing] preclinical studies of pa- tented compounds that are appropriate for submission to the FDA.” Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005). The injunction prohibiting Avadel from initiating new clinical trials is therefore over- broad as a matter of law. Resisting that conclusion, Jazz challenges that the safe harbor provides an “affirmative defense” requiring factual development that Avadel failed to plead or develop in the district court such that it is waived. Jazz Br. 29–42. Jazz argues, for example, that “Avadel presented no evidence that each use of Lumryz in each future clinical trial” qual- ifies for safe-harbor protection, and that “Avadel has not proved . . . that its IH activities are solely for uses reason- ably related to the development and submission of infor- mation to the FDA.” Id. at 45–47. We are unpersuaded. Jazz is correct that, in some circumstances, reliance on the safe harbor requires factual development. E.g., Amgen Inc. v. Hospira, Inc., 944 F.3d 1327, 1337 (Fed. Cir. 2019); Edwards Lifesciences Corp. v. Meril Life Scis. Pvt. Ltd., 96 F.4th 1347, 1353 (Fed. Cir. 2024). But that is because applicability of the safe harbor typically arises in situations where the patent owner alleges that certain past or current activities of the defendant, activities that the defendant be- lieves fall within the scope of the safe harbor, constitute infringement. In those cases, then, there is a burden on the defendant to establish in fact that the accused activities are non-infringing under the safe harbor. And those cases are resolved when the factfinder adjudicates that issue. Case: 24-2274 Document: 61 Page: 15 Filed: 05/06/2025
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This case, however, is factually and procedurally unique in our safe-harbor jurisprudence. The subject of this appeal is not whether any current or former activities of Avadel with respect to Lumryz are infringing. Indeed, Avadel stipulated that its manufacture, use, and sale of Lumryz infringe the ’782 patent. Avadel therefore does not invoke § 271(e)(1) as a defense to negate its own liability. Instead, Avadel’s argument is that the district court’s for- ward-looking injunction is unlawful on its face insofar as it necessarily enjoins Avadel from making, using, and selling Lumryz “solely for uses reasonably related to the develop- ment and submission of information” to the FDA, i.e., non- infringing activities, in violation of § 271(e)(3). That facial challenge, contrary to Jazz’s position, is a purely legal in- vocation of the safe harbor and does not require factual de- velopment. We therefore reject Jazz’s argument that Avadel waived its reliance on the safe-harbor provision. At most, Avadel forfeited its argument by unclearly developing it in the district court. See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1320 (Fed. Cir. 2006) (explaining that a party forfeits undeveloped arguments on appeal). But we have discretion to consider forfeited arguments, see In re Google Tech. Holdings LLC, 980 F.3d 858, 863 (Fed. Cir. 2020), and we exercise that discretion here where Avadel’s argument turns entirely on a legal question. What is more, Jazz has never alleged that any of Avadel’s activities with respect to its future clinical trials are infringing. Therefore, there has never been an oppor- tunity for Avadel to develop any facts to support a safe-har- bor defense as to those activities, let alone sufficient facts to allow a factfinder to adjudicate that issue. Put simply, Jazz’s argument that Avadel “presented no evidence that each use of Lumryz in each future clinical trial” qualifies for safe-harbor protection is premature. Jazz Br. 46 (em- phases added). As we have explained, § 271(e)(3) “makes clear that no injunction may issue until the § 271(e)(1) Case: 24-2274 Document: 61 Page: 16 Filed: 05/06/2025
exception has been adjudicated and ruled out.” Eli Lilly & Co. v. Medtronic, Inc., 915 F.2d 670, 674 (Fed. Cir. 1990), superseded by statute on other grounds as discussed in Ro- tec Indus., Inc. v. Mitsubishi Corp., 215 F.3d 1246, 1251 (Fed. Cir. 2000). Thus, Jazz’s additional argument that, even if initiating new clinical trials is non-infringing, the district court has discretion to “narrowly enjoin[]” non-in- fringing activities “as necessary to prevent infringing con- duct,” falls short. See Jazz Br. 57–60 (citing TiVo Inc. v. EchoStar Corp., 646 F.3d 869, 890 n.9 (Fed. Cir. 2011) (en banc)). Although that may be true in other contexts, Jazz’s argument cannot be squared with the plain language of § 271(e)(3), which leaves no room for such discretion here. Accordingly, we reverse the district court’s injunction prohibiting Avadel from initiating any new clinical trials for Lumryz as unlawfully overbroad. Reversal, as opposed to vacatur, is appropriate here where the enjoined activi- ties have never been accused of infringement. As such, there is no support in the record to sustain a determination one way or the other on whether the safe-harbor provision applies to those activities. Cf. Eli Lilly, 915 F.2d at 674–75 (vacating permanent injunction that preemptively carved out § 271(e)(1) activities where merits case had been re- manded for trial on the applicability of the safe harbor to those accused activities). We do note that our conclusion does not necessarily leave Jazz without recourse. If Jazz comes to believe that Avadel is making, using, or selling Lumryz, a product ad- judicated to be infringing, for uses other than those “rea- sonably related to the development and submission of information” to the FDA, Jazz is free to challenge those ac- tivities. 7 At that point, we agree that, to negate liability, it
7 We do not speculate which activities may, in light of the district court’s refusal to enjoin Avadel from making, Case: 24-2274 Document: 61 Page: 17 Filed: 05/06/2025
JAZZ PHARMACEUTICALS, INC. v. 17 AVADEL CNS PHARMACEUTICALS, LLC
may be “incumbent upon Avadel to plead” its entitlement to safe-harbor protection as to each of those accused activ- ities. Jazz Br. 32. But to enjoin Avadel outright from those activities at this juncture, before they have been adjudi- cated to infringe, exceeds the bounds of the law. B. Offering OLEs in Ongoing Clinical Trials Next, we consider the scope of the injunction insofar as it enjoins Avadel from offering OLEs to trial participants, including those currently enrolled in the ongoing REVITALYZ trial. See Stay Order, J.A. 41. As noted above, OLEs allow clinical trial participants to continue taking the drug after their trial participation is complete. See J.A. 7512. This may be done to maintain continuity of patient treatment and to “better characterize the safety of a drug late in its development.” Id. (citing Expanded Ac- cess to Investigational Drugs for Treatment Use—Questions and Answers, U.S. Dep’t of Health & Hum. Servs. (2017), https://www.fda.gov/media/85675/download). Pursuant to the district court’s clarification of the injunction, see Stay Order, J.A. 41, Avadel cannot offer this OLE period to pa- tients enrolled in the ongoing REVITALYZ trial. As such, those patients will be terminated from Lumryz treatment upon the end of their participation in the trial. The parties debate extensively on appeal the nature of OLEs and whether Avadel’s use of OLEs is an activity pro- tected by the safe harbor. We do not comment on those arguments. Those arguments were not raised in the dis- trict court until Avadel’s emergency motion to stay the in- junction pending appeal. Therefore, the district court only addressed that activity in the context of clarifying the scope of the injunction—not whether those activities could or should be enjoined in the first place pursuant to the eBay
using, or selling Lumryz for narcolepsy, be suitable for such a claim. Case: 24-2274 Document: 61 Page: 18 Filed: 05/06/2025
factors. Moreover, much like Avadel’s activities related to its future clinical trials discussed above, whether Avadel’s use of an OLE period is a safe-harbor activity is a question of fact that has not yet been accused, let alone adjudicated. Accordingly, because this activity has never been ac- cused of infringement, and because “[t]he statute clearly requires that the § 271(e)(1) issue be decided prior to the grant of injunctive relief,” Eli Lilly, 915 F.2d at 674, we re- verse the injunction insofar as it enjoins Avadel from offer- ing OLEs to patients in clinical trials. Only if and when that activity is adjudicated to fall outside the protection of the safe harbor, and only if and when the district court finds the eBay factors to favor an injunction, may it be per- manently enjoined. C. Applying for FDA Approval of Lumryz for IH Finally, we consider whether the district court abused its discretion by enjoining Avadel from applying for FDA approval of Lumryz for any indication that was not part of its label as of March 4, 2024. For the following reasons, we vacate the injunction in this respect and remand. Avadel argues that enjoining it from submitting an ap- plication for FDA approval of the IH indication constituted legal error because the Hatch-Waxman Act “makes clear that seeking FDA approval in and of itself is not infringing activity.” Avadel Br. 24. Avadel’s argument is two- pronged. First, it argues that “the mere submission of an FDA application” is not a “use” of a patented invention and therefore not an infringement under § 271(a). Id. Alterna- tively, it argues that, even if the submission is a “use,” the safe harbor provides that “uses reasonably related to the . . . submission of information” to the FDA are non-in- fringing. Id. at 24–25. And because “[a]n application for FDA approval is a ‘submission of information’ to the FDA,” that application is necessarily non-infringing. Id. at 25. Case: 24-2274 Document: 61 Page: 19 Filed: 05/06/2025
JAZZ PHARMACEUTICALS, INC. v. 19 AVADEL CNS PHARMACEUTICALS, LLC
We agree that the submission of an application to the FDA is not infringement under § 271(a). That activity is not a making, using, offering to sell, selling, or importing of a patented invention. And because applicability of the safe harbor is dependent on there being a predicate infring- ing activity (indeed, absent an infringing act, there would be no need for safe-harbor protection), submitting an appli- cation for FDA approval is not an activity that triggers the safe harbor. Although we need not reach Avadel’s alternative argu- ment that submitting an application to the FDA, even if it were an infringing “use,” would be protected under the safe harbor, we briefly note that the argument rests on a mis- reading of the statute. The “solely for uses” clause of § 271(e)(1) modifies the infringing act—it does not define the infringing act itself. That is, the inquiry looks to the alleged infringing activity—the making, using, selling, of- fering to sell, or importing—and asks whether the purpose of that activity was “solely for uses reasonably related to the . . . submission of information” to the FDA. § 271(e)(1); see Amgen, 944 F.3d at 1339. It does not follow from the plain language that the “submission of information” itself is non-infringing under that provision. But concluding that the submission of an application to the FDA is not infringement under § 271(a) does not end the matter because that activity is infringement under § 271(e)(2). That section, which neither party meaning- fully addresses on appeal, provides: It shall be an act of infringement to submit an ap- plication under section 505(j) of the [FDCA] or de- scribed in section 505(b)(2) of [the FDCA] for a drug claimed in a patent or the use of which is claimed in a patent. § 271(e)(2)(A) (emphasis added). That language plainly states that the submission of an ANDA (under section 505(j) of the FDCA) or a paper NDA (under section Case: 24-2274 Document: 61 Page: 20 Filed: 05/06/2025
505(b)(2) of the FDCA) for a drug claimed in a patent is an act of infringement. That understanding is consistent with precedent (and our conclusion above) that such submis- sions are not actual acts of infringement under § 271(a) be- cause they are not a making, using, or selling of the patented invention, but instead artificial acts of infringe- ment that provide a basis for litigation. See Glaxo, Inc. v. Novopharm, Ltd., 110 F.3d 1562, 1569 (Fed. Cir. 1997) (“The act of infringement that gives rise to a case or contro- versy under section 271(e)(2) has been stated to be ‘artifi- cial,’ in the sense that a specific infringing composition has not yet been made, used, or sold, and is thus not necessarily available for a court to compare to the claims.” (quoting Eli Lilly, 496 U.S. at 677)). Even Avadel admits that the sub- mission of an ANDA under section 505(j) of the FDCA would be “an act of artificial infringement if the purpose of the submission is to obtain approval with respect to ‘a drug claimed in a patent or the use of which is claimed in a pa- tent.’” Avadel Br. 24 n.7 (quoting § 271(e)(2)(A)). Curi- ously, however, Avadel leaves out of its recitation of the statutory language that the submission of a paper NDA un- der section 505(b)(2) of the FDCA is also an artificial act of infringement when it is done for that purpose. And that is where we observe a critical, unresolved, and unbriefed is- sue underlying the parties’ arguments on appeal. As noted above, Avadel’s initial submission for ap- proval of Lumryz for the treatment of narcolepsy was a pa- per NDA filed under § 505(b)(2) of the FDCA, 21 U.S.C. § 355(b)(2). See J.A. 9255, 9267. But because Jazz’s ’782 patent is not listed in the Orange Book, Avadel did not sub- mit with its application a patent certification under § 355(b)(2)(A)(iv) (a “paragraph iv” certification) as to that patent, which would have given notice to Jazz of Avadel’s FDA filing and entitled Jazz to a 30-month stay of the FDA’s approval of that application upon the initiation of a lawsuit. See § 355(c)(3)(C). One way or another, even with- out that paragraph iv notice, Jazz learned of Avadel’s filing Case: 24-2274 Document: 61 Page: 21 Filed: 05/06/2025
JAZZ PHARMACEUTICALS, INC. v. 21 AVADEL CNS PHARMACEUTICALS, LLC
and brought its claim for infringement under 35 U.S.C. § 271(e)(2)(A), alleging that Avadel’s submission of its pa- per NDA constituted infringement. At oral argument, Avadel argued for the first time that its paper NDA for Lumryz would not trigger a claim for in- fringement under § 271(e)(2) because the ’782 patent is not an Orange Book patent. See Oral Arg. 12:06–12:13 (coun- sel for Avadel arguing that Avadel’s supplemental NDA would not trigger § 271(e)(2) because “there’s no Orange Book-listed patent, there’s no paragraph iv certification that would trigger [§ 271(e)(2)] infringement”). Thus, in Avadel’s view, it is not the submission of the paper NDA itself that triggers infringement, but the accompanying cer- tification giving notice to a patent owner of that submis- sion. 8 Put otherwise, Avadel argues that only applications for FDA approval that require paragraph iv certifications against Orange Book patents trigger infringement under § 271(e)(2). Avadel admitted at argument that that inter- pretation of § 271(e)(2) is “not in the text necessarily,” but suggested that “the Supreme Court has read it to be.” See Oral Arg. 11:57–12:05 (not citing authority). Jazz does not appear to have taken a firm position on this issue. Avadel is incorrect in its assertion that it is the certifi- cation relating to an Orange Book patent that constitutes
8 We observe that this position may be consistent with Avadel’s answer to Jazz’s original complaint, which included an “Improper Hatch-Waxman Suit” defense, al- leging that, based on Avadel’s paper NDA for the narco- lepsy indication, “Jazz is not entitled to any relief under that Statute, including a permanent injunction pursuant to 35 U.S.C. § 271(e)(4)(B).” J.A. 10381. But because this dispute transformed into one arising under § 271(a)–(c) mid-litigation, upon the FDA’s approval of Lumryz, the merits of that defense were never adjudicated. Case: 24-2274 Document: 61 Page: 22 Filed: 05/06/2025
the artificial act of infringement. Section 271(e)(2) makes plain that it is the submission of the application, ANDA or paper NDA, that is the infringement. Further, the statute provides that such submission is infringement if it seeks approval of “a drug claimed in a patent or the use of which is claimed in a patent.” § 271(e)(2) (emphases added). The provision does not mention or otherwise appear to limit the act of infringement to only Orange Book patents. Rather, its plain language would seem to render any ANDA or pa- per NDA submitted in the face of any existing patent that claims the applied-for drug or its use to be an act of in- fringement. On the other hand, the placement of § 271(e)(2) within the context of the Hatch-Waxman Act suggests that the provision may only apply where the ANDA or paper NDA seeks approval of a drug claimed in an Orange Book patent. That interpretation would comport with Congress’s inten- tion of triggering litigation, after notice is given to a patent owner and regulatory approval is stayed, to hasten the in- troduction of generic drugs to the market if the relevant patents are found to be invalid or not infringed. Indeed, portions of the legislative history of the Act suggest that Congress “expect[ed] that infringement actions . . . w[ould] only be brought in the instance described in section 271(e)(2), where a party submitting an [ANDA] certifies that a patent is invalid or non-infringed and gives the re- quired notice of that certification to the patent owner.” H.R. Rep. No. 98-857, pt. 1, at 46 (emphases added). After all, we have not been made aware of any cases before or after the enactment of the Hatch-Waxman Act where a reg- ulatory filing alone was held to be a patent infringement. Nonetheless, as the issue was raised only at oral argu- ment and not briefed, we leave it for the district court to address in the first instance on remand, if it remains con- tested. But the resolution of that issue may be determina- tive in resolving the parties’ dispute about the scope of the injunction. Case: 24-2274 Document: 61 Page: 23 Filed: 05/06/2025
JAZZ PHARMACEUTICALS, INC. v. 23 AVADEL CNS PHARMACEUTICALS, LLC
If Avadel’s submission of its paper NDA for Lum- ryz—for the treatment of IH or any other indication—is an act of infringement under § 271(e)(2), then the district court’s injunction barring Avadel from seeking FDA ap- proval of any new indications of Lumryz was unlawful. That is because the injunction exceeds the scope of the lim- ited remedies available to a patent owner for that artificial act of infringement. Specifically, under § 271(e)(4), “the only remedies” that would be available are: (1) an order set- ting the effective date of any FDA approval of Lumryz to be no sooner than February 18, 2036, the expiration date of the ’782 patent; (2) an injunction preventing Avadel’s com- mercial activities relating to Lumryz; and (3) damages for any of Avadel’s past commercial activities relating to Lum- ryz. § 271(e)(4)(A)–(C). 9 None of those remedies permits a court to enjoin an adjudicated infringer from applying for additional FDA approvals of a patented drug. To conclude otherwise would run afoul of not only the text of the stat- ute, but also the precise purpose of the Hatch-Waxman Act to encourage “immediate competition” upon expiration of relevant patents. H.R. Rep. No. 98-857, at 46. If Avadel cannot apply for approval of Lumryz until after the ’782 patent expires, Jazz will receive a de facto extension of pa- tent term to which it is not otherwise entitled for the amount of time it takes the FDA to consider and grant that application. See Eli Lilly, 496 U.S. at 676. If, however, Avadel’s submission of its paper NDA is not an act of infringement under § 271(e)(2), then the rem- edies available to Jazz are no longer limited by § 271(e)(4). In that case, it was not improper for the district court to
9 The fourth remedy specified in § 271(e)(4)(D) ap- plies only to certain cases involving the Biologics Price Competition and Innovation Act of 2009, Pub. L. No. 111–148, §§ 7001–7003, 124 Stat. 119, 804–21 (2010). Ac- cordingly, it is not relevant here. Case: 24-2274 Document: 61 Page: 24 Filed: 05/06/2025
consider whether enjoining Lumryz from engaging in that activity was warranted based on a full consideration of the eBay factors. However, because that activity would not constitute infringement—under either § 271(e)(2) or § 271(a)—to properly enjoin that activity, the district court must have concluded that the injunction was necessary to prevent infringement. See Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1367 (Fed. Cir. 1998) (explaining that an injunction may reach non-infringing activities, but that “[i]t is necessary . . . that the injunction prevent infringe- ment” of a patent); accord TiVo Inc., 646 F.3d at 890 n.9. Here, the district court enjoined Avadel from seeking FDA approval of new indications because it found that “Lumryz’s entrance into the IH market would undoubtedly cause Jazz to suffer significant injury.” Decision, at *10. Unlike the narcolepsy indication, the district court ex- plained, “Jazz’s Xywav is the only FDA-approved treat- ment for IH,” and therefore, “Avadel’s entrance into the market would strip Jazz of a unique selling point critical to growing its reputation and goodwill.” Id. That analysis is insufficient to support the injunction at issue here. It well may be that Jazz would be irreparably harmed upon Lumryz’s entrance into the IH market. But entitle- ment to an injunction requires a showing that there is a “causal nexus” between the alleged irreparable harm and the enjoined activity. See Apple Inc., 735 F.3d at 1359–60 (explaining that a patentee must establish “that a suffi- ciently strong causal nexus relates the alleged harm to the alleged infringement”). Here, the only findings to support enjoining Avadel from seeking FDA approval relate to the harm Jazz would suffer if Avadel were to enter the market for the IH indication—not if Avadel were merely to apply for FDA approval of that indication. Although Avadel’s ability to enter the market is, in part, dependent on Avadel seeking FDA approval, it does not follow that enjoining Avadel’s application would be necessary to prevent in- fringement. See Johns Hopkins Univ., 152 F.3d at 1367. Case: 24-2274 Document: 61 Page: 25 Filed: 05/06/2025
JAZZ PHARMACEUTICALS, INC. v. 25 AVADEL CNS PHARMACEUTICALS, LLC
Future infringement, e.g., commercialization of Lumryz for IH, can only occur if and when the FDA approves Lumryz for that indication. And any number of things may prevent that approval from ever arriving. Avadel may decide the financial investment in pursuing the approval does not comport with its business prospects. Clinical trials may fail. The district court’s analysis is simply too speculative and tenuous to reasonably conclude from its findings that enjoining Avadel from applying for FDA approval is neces- sary to prevent future infringement. For those reasons, we vacate the injunction insofar as it bars Avadel from submitting an application for FDA ap- proval of any indication not part of Lumryz’s approved product label as of March 4, 2024, and we remand to the district court. On remand, if the issue remains contested, the district court is instructed to consider in the first in- stance whether Avadel’s submission of a paper NDA for an additional indication of Lumryz would be an act of infringe- ment under 35 U.S.C. § 271(e)(2). If so, as discussed above, the district court must conclude that that activity cannot be enjoined. If, however, the district court determines that that submission would not be an act of infringement, the district court must address the eBay factors anew in ac- cordance with this opinion before again enjoining that ac- tivity. CONCLUSION We have considered the parties’ remaining arguments and find them unpersuasive. We reverse the injunction to the extent it enjoins Avadel from initiating new clinical tri- als for Lumryz and from offering OLE periods to current clinical trial participants. We vacate the injunction to the extent it enjoins Avadel from seeking FDA approval for new indications of Lumryz, and remand to the district court for reconsideration of that issue in light of this opin- ion. Case: 24-2274 Document: 61 Page: 26 Filed: 05/06/2025
REVERSED-IN-PART, VACATED-IN-PART, AND REMANDED COSTS The parties shall bear their own costs.