Don’t Sleep on This: Federal Circuit Reverses Permanent Injunction Barring Clinical Trials and New Indications for NDA

In Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals, LLC, No. 24-2274 (Fed. Cir. May 6, 2025), the Federal Circuit reversed in part, vacated in part, and remanded a permanent injunction barring Avadel from seeking FDA approval of its Lumryz product for treating idiopathic hypersomnia, a sleep disorder, and from marketing Lumryz for that indication.

Jazz sued Avadel under the Hatch-Waxman Act, alleging that Avadel’s Lumryz product infringed a patent claiming a sodium oxybate formulation. Because Jazz’s products did not embody the asserted patent, the patent was not Orange Book listed, and no 30-month regulatory stay of FDA approval could be imposed on Avadel. Avadel received FDA approval and launched Lumryz. Jazz then amended its complaint to allege infringement under § 271(a)-(c). The parties stipulated to infringement, and a jury determined that Avadel had failed to prove that the patent was invalid. After trial, the district court issued a permanent injunction that, among other things, barred Avadel from initiating new clinical trials and seeking FDA approval for new indications related to Lumryz.

On appeal, the Federal Circuit reversed the injunction barring Avadel from initiating new clinical trials, holding that it improperly curtailed activities that could be protected under the safe-harbor provision of § 271(e)(1), which permits activities reasonably related to the development and submission of information to the FDA. The court also vacated the injunction preventing Avadel from seeking FDA approval for new indications and remanded the case for the district court to determine, in the first instance, whether infringement under § 271(e)(2) is limited to submissions that seek approval of a drug claimed in an Orange Book patent.