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Prior Art Coherency and Cache Incoherency: “Known-Technique” Rationale for Motivation to Combine

by Jake B. Vallen | Mar 23, 2023 | Patents

The US Court of Appeals for the Federal Circuit, addressing the issue of whether certain factual and legal conclusions relating to obviousness were supported by substantial evidence, held that the Patent Trial & Appeal Board improperly rejected evidence of “known-technique” rationale to provide a motivation to combine. Intel Corp. v. PACT XPP Schweiz AG, Case No. 22-1037 (Fed. Cir. Mar. 13, 2023) (Newman, Prost, Hughes, JJ.)

PACT owns a patent that “relates to multiprocessor systems and how processors in those systems access data.” The claimed multiprocessor system addressed cache incoherency, a problem associated with the use of multiple cache memories to store data, particularly local copies of the same data stored on multiple processors. Cache incoherency (i.e., inconsistencies among different cache processors) “may arise if one processor changes its local copy of the data and that change isn’t propagated to the other copies of that data.”

Intel petitioned for inter partes review of claims 4 and 5 of the patent, relying on two prior art references, Kabemoto and Bauman. Kabemoto and Bauman both address the problem of cache incoherency. As the Federal Circuit explained, Kabemoto maintains cache coherency “by ‘snooping’ along a shared ‘bus,’” while Bauman “us[es] a global, segmented secondary cache.”

The Board upheld the patentability of the challenged claims, concluding that “Intel failed to prove the obviousness of each limitation of [independent] claim 4,” from which claim 5 depended. Intel had contended that a person of ordinary skill in the art would combine Kabemoto and Bauman to teach all limitations in claim 4 by “replac[ing] Kabemoto’s secondary caches” with “Bauman’s segmented global [secondary cache],” which is a separate cache. PACT did not dispute that the combination of Kabemoto and Bauman taught each limitation of claim 4 but argued that Intel failed to demonstrate a motivation to combine Kabemoto and Bauman.

The Board nevertheless found that Intel failed to demonstrate that the prior art disclosed the segment-to-segment limitation and concluded that Intel failed to show that a person of ordinary skill in the art would have been motivated to combine the teachings of Kabemoto and Bauman. Intel appealed.

The Federal Circuit first addressed Intel’s contention “that substantial evidence d[id] not support the Board’s determination that the prior art fails to disclose the segment-by-segment limitation” of claim 4. The Court found that “Bauman’s Figure 6 teaches—if not plainly illustrates—the segment-to-segment limitation of the claims interconnect system” and reversed the Board’s contrary conclusion.

Next, the Federal Circuit addressed Intel’s contention that the Board’s determination that there was no motivation to combine Kabemoto and Bauman was not supported by substantial evidence. On this issue, the Court reasoned that under KSR, it was “enough for Intel to show that there was a known problem of cache incoherency in the art, that Bauman’s secondary cache helped address that issue, and that combining the teachings of Kabemoto and Bauman wasn’t beyond the skill of an ordinary artisan.” As the Court put it, “[n]othing more is required to show a motivation to combine under KSR.”

Explaining [...]

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Actual or Potential Consumers in Related Goods Context Doesn’t Require PURE Overlap

by Benjamin Ediger, Ph.D. | Mar 23, 2023 | Trademarks

The US Court of Appeals for the Federal Circuit reminded us that, in the context of related goods, the likelihood of confusion analysis does not require that actual or potential consumers of the goods be the same, but only that there be sufficient overlap. In re Oxiteno S.A. Industria e Comercio, Case No. 22-1213 (Fed. Cir. Mar. 9, 2023) (Dyk, Bryson, Prost, JJ.)

Oxiteno filed an intent-to-use trademark application for OXIPURITY, with its goods and services statement ultimately amended to include dozens of chemical products “for use in the pharmaceutical, veterinary, flavor and fragrance, and cosmetic fields.” The application was refused on likelihood of confusion grounds in view of FMC Corporation’s registered OXYPURE mark, largely because the hydrogen peroxide products covered by the OXYPURE registration moved through the same channels of trade as products recited in the Oxiteno application.

Oxiteno appealed the refusal to the Trademark Trial & Appeal Board. The Board analyzed likelihood of confusion using the DuPont factors and found the first four factors most relevant:

Factor 1: The similarity of OXIPURITY and OXYPURE. The Board concluded (as had the Examiner) that the two marks were “similar in sound, meaning and commercial impression,” and found that this factor strongly favored a likelihood of confusion.

Factor 2: The similarity of the covered goods. The Board agreed with the Examiner that the respective goods, while not the same, were sufficiently related to favor a likelihood of confusion finding.

Factor 3: The similarity of channels of trade. The Board reviewed the third-party websites that the Examiner considered particularly dispositive. The websites sold hydrogen peroxide goods covered by the OXYPURE mark and the chemicals Oxiteno intended to sell under the OXIPURITY mark. The Board concluded that the same sources manufactured FMC’s established products and Oxiteno’s intent-too-use products, and directly sold these products to largely overlapping industries.

Factor 4: “[t]he conditions under which and buyers to whom sales are made.” Of the four most relevant factors in this case, this was the only factor that the Board found to favor registration. The Board concluded that the consumers of the established and intent-to-use products would be sophisticated and not act on impulse.

Despite the potential consumers’ presumed sophistication, the Board found that factors 1 through 3 “rendered confusion likely” and thus affirmed the Examiner’s refusal. Oxiteno appealed.

Oxiteno argued that likelihood of confusion could not be found when the actual or potential consumers of the respective products covered by two marks were not the same, as with the relevant products here.

The Federal Circuit affirmed the Board, noting statements made by a company selling Oxiteno’s products that explained why almost every business is a potential purchaser of FMC’s OXYPURE hydrogen peroxide products. The Court also noted that FMC’s brochures stated that it sold its hydrogen peroxide products under OXYPURE and other brand names to the same key industries to which Oxiteno sold its products. The Court, therefore, concluded that substantial evidence supported that at least some [...]

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Show Your Work: PTO Director’s Procedure for Issuing Instructions Is Reviewable

by Rodney Swartz, PhD | Mar 23, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed the district court’s finding under the Administrative Procedure Act (APA) that the substance of the US Patent & Trademark Office (PTO) Director’s instructions is unreviewable but reversed the finding that the cloak of unreviewability extended to the procedure used in issuing the instructions. Apple v. Vidal, Case No. 22-1249 (Fed. Cir. Mar. 13, 2023) (Lourie, Taranto, Stoll, JJ.)

The creation of the inter partes review (IPR) program opened new avenues for reviewing the validity of patents following issuance. Since the program’s inception, Congress has recognized that there is a possibility of parallel proceedings at the Patent Trial & Appeal Board and in the district court, that such proceedings could result in conflicting decisions and reduced efficiency in the system. However, Congress left it to the discretion of the two branches to work out such situations among themselves.

As one lever to overcome these issues, Congress provided the Director with unreviewable discretion in deciding whether to institute an IPR. Recently, the Director attempted to leverage this power to increase efficiencies and reduce gamesmanship by instructing the Board on what to consider when instituting an IPR.

Apple and four other companies challenged these instructions in the district court. Apple argued that the Director’s instructions violated the APA by being contrary to the IPR provisions, arbitrary and capricious, and issued without the notice-and-comment rulemaking required under the APA.

Following a motion to dismiss, the district court concluded that Apple’s challenges were directed at the Director’s actions, making them unreviewable by the court. Apple appealed.

On appeal, the Federal Circuit considered all three of Apple’s APA challenges to the instructions, along with whether Apple had standing to bring the suit. The Court agreed with the district court that the question of whether an instruction violates the APA by being contrary to the IPR provisions or by being arbitrary and capricious is directed to the substance of the Director’s action and is not reviewable: “§ 314(a) invests the Director with discretion on the question whether to institute review . . . : The determination by the Director whether to institute an inter partes review . . . shall be final and nonappealable.” As the Federal Circuit noted, this conclusion rests on the well-supported need for the PTO Director to give guidance to delegatees on how to make institution determinations.

The Federal Circuit disagreed that the announcement procedure the Director used for issuing the instructions to the Board was unreviewable, however. As the Court noted, the procedure employed by an agency to announce guidelines is “quite apart” from the substance of those guidelines. Given this distinction, the Court concluded that the procedure the Director used to announce the instructions was reviewable: “The government here has not shown that anything in § 314(d) or elsewhere in the IPR statute supplies clear and convincing evidence that there was to be no judicial review of the choice of announcement procedure, a matter for which generally applicable standards exist.”

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The Fondues and Don’ts of Certification Marks

by Sarah Bro | Mar 16, 2023 | Trademarks

The US Court of Appeals for the Fourth Circuit affirmed a summary judgment grant in favor of the opposers of a certification mark application for the trademark GRUYERE to designate cheese that originates in the Gruyère region of Switzerland and France. The Court found that the term “gruyere” is generic because consumers of cheese understand the term to refer to a category of cheese that can come “from anywhere.” Interprofession du Gruyere; Syndicat Interprofessionnel du Gruyere. v. U.S. Dairy Export Council; Atalanta Corporation; Intercibus, Inc., Case No. 22-1041 (4th Cir. March 3, 2023) (Gregory, Thacker, Rushing, JJ.)

In the United States, a certification mark is a type of trademark used to show consumers that particular goods or services, or their providers, have met certain standards. Unlike a typical trademark, a certification mark is not used by the owner of the mark (the certifier) but instead controls how others use the mark.

In an approach similar to the preceding certifiers of ROQUEFORT® and REGGIANO®, the Swiss Consortium Interprofession du Gruyère (IDG) and French consortium Syndicat Interprofessionnel du Gruyère believed that the term “gruyere” should only be used to label cheese produced in the Gruyère region of Switzerland and France. In 2010, IDG applied to the US Patent & Trademark Office (PTO) to register LE GRUYERE as a certification mark but was refused registration on grounds that “gruyere is a generic designation for cheese.” In 2013, the PTO granted IDG a certification mark registration for LE GRUYERE in a specific design form, paired with the word “Switzerland,” the letters “AOC” and a stylized Swiss cross. IDG undertook efforts to enforce the mark and sent letters to several US cheese retailers and manufacturers demanding that they cease labeling their non-Swiss cheeses as gruyere.

In 2015, IDG again attempted to register the term GRUYERE on its own as a certification mark. The U.S. Dairy Export Council, Atalanta Corporation and Intercibus melted together to throw a wedge in the process, opposing the application for the mark on grounds that “gruyere” was generic for cheese and, therefore, ineligible for protection as a certification mark. The Trademark Trial & Appeal Board (Board) found that the term “gruyere” was generic because cheese consumers understand it to be a designation for “a category within the genus of cheese that can come from anywhere.” IDG filed a complaint in the US District Court for the Eastern District of Virginia challenging the Board’s decision. Ultimately, the district court granted the opposers’ motion, finding that the factual record demonstrated that “gruyere” refers to a generic type of cheese without reference to the geographic region where the cheese is produced. IDG appealed.

The Fourth Circuit began by explaining that certification marks, like typical trademarks, include a bar on the registration of terms that are generic for the applied-for product or service category. The Court framed the genericness inquiry as whether “members of the relevant public primarily use or understand the term sought to be protected to refer to the genus of goods . [...]

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Transfer Motions Take Priority Regardless of Target District

by Jodi Benassi | Mar 16, 2023 | Patents

The US Court of Appeals for the Federal Circuit granted a writ of mandamus and ordered the district court to decide a motion for intra-district transfer before proceeding to further substantive matters, explaining that both intra-district and inter-district transfer motions must be prioritized. In re: Apple Inc., Case No. 23-120 (Fed. Cir. Mar. 6, 2023) (per curiam) (nonprecedential).

SpaceTime3D sued Apple for patent infringement in February 2022 in the Western District of Texas, Waco Division. In July 2022, Apple moved to transfer the action within the Western District to Austin. The motion was fully briefed by the parties on November 7, 2022. The claim construction hearing was scheduled for November 17, 2022, based on an agreement between the parties. The day before the hearing, Apple moved to stay the hearing and all other proceedings until the district court ruled on Apple’s pending motion to transfer. The district court deferred claim construction, then denied Apple’s stay motion. The district court acknowledged that it was required to prioritize a motion for inter-district transfer but stated that “it does not have to stay the proceedings or decide whether to transfer the case intra-district until closer to trial.” Apple filed a writ of mandamus with the Federal Circuit.

The Federal Circuit noted that although the remedy of mandamus is drastic and should be invoked only in extraordinary situations, it has previously granted mandamus “to correct a clearly arbitrary refusal to act on a longstanding pending transfer motion.” The Federal Circuit stated that under Fifth Circuit law, precedent entitles parties to have their transfer motions prioritized. The Federal Circuit was not swayed by the trial court’s reliance on a statement in an unpublished, nonprecedential Fifth Circuit decision in Sundell v. Cisco Systems, Inc., because the Fifth Circuit did not suggest any discretion in the prioritization of transfer motions based on the type of transfer. The Federal Circuit explained that the Fifth Circuit does not require that inter-district transfer motions be prioritized to the exclusion of intra-district transfer motions. The Federal Circuit granted Apple’s petition for mandamus and ordered the district court to timely decide the transfer motion before proceeding with further substantive matters beyond the claim construction hearing.

A Maze-Like Path and Laundry List Don’t Provide Written Description

by Cecilia Choy, Ph.D. | Mar 16, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) decision that there was insufficient written description in the asserted priority applications to support a genus claim because of a lack of ipsis verbis disclosure and insufficient blaze marks. The Court concluded that the priority applications did not support an early priority date. Regents of the University of Minnesota v. Gilead Sciences, Inc., Case No. 21-2168 (Fed. Cir. March 6, 2023) (Lourie, Dyk, Stoll, JJ.)

Gilead filed a petition for inter partes review (IPR) challenging Minnesota’s patent directed to phosphoramidate prodrugs preventing virus reproduction or cancerous tumor growth. Gilead’s US Food & Drug Administration-approved drug, sofosbuvir, is marketed by Gilead to treat chronic hepatitis C infections and falls within claim 1 of the patent.

The 2014 application that issued as the challenged patent claimed priority to four applications. In the IPR, Gilead argued that the claims were anticipated by a Gilead-owned patent publication (Sofia). The publications used in the decision are as follows:

NP3 and NP2 have the same disclosure. NP2 and P1 contain similar disclosures, which the Board called NP2-P1. The broader claim in NP2-P1 has a relationship of genus to the narrower subgenus claims in the patent at issue. There was no dispute that Sofia disclosed every limitation of each challenged claim. The Board held that NP2-P1 failed to provide a sufficient written description to support the asserted priority date of the challenged claims, which were therefore found to be anticipated by Sofia. Minnesota appealed.

Minnesota argued the following to the Federal Circuit:

The Board erred in holding that the NP2-P1 applications have insufficient written description.
The Board ran afoul of Administrative Procedure Act (APA) requirements.
Minnesota is a sovereign state entity immune from IPR.

35 U.S.C. § 120 sets forth requirements for a patent application to benefit from a filing date of an earlier application. Minnesota asserted that the NP2-P1 priority applications literally described or provided blaze marks to the challenged subgenus claims. The Federal Circuit disagreed, explaining that written description for a genus claim of chemical compounds raises “particular issues,” requiring a description of the outer limits of the genus and either a representative number of members or structural features common to the members of the genus. The Court found that the asserted priority applications (NP2-P1) did not provide such description and the challenged claims were not entitled to the filing dates of those applications.

The Federal Circuit found that the asserted priority applications did not provide ipsis verbis disclosure of the challenged subgenus claim. The Court quoted an oft-noted saying associated with Yogi Berra, a catcher for the New York Yankees some 50 years ago, about a notable failure to provide direction: “when one comes to a fork in the road, take it.” The Court also cited its 1996 decision in [...]

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Charter Schools Aren’t Immune from Trademark Suits

by Amol Parikh | Mar 16, 2023 | Trademarks

The US Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of a trademark suit against a charter school operator and public school district in Texas but explained that the charter school was not automatically immune from lawsuits based on sovereign immunity. Springboards to Education, Inc. v. McAllen Indep. School District, Case Nos. 21-40333; -40334 (5th Cir. Mar. 8, 2023) (Smith, Duncan, JJ.) (Oldham, J., concurring).

Springboards sells products to school districts in connection with its Read a Million Words Campaign. The campaign incentivizes school children to read books through promises of induction into the Millionaires’ Reading Club and access to rewards such as t-shirts, backpacks and fake money. Springboards’s goods typically bear any combination of trademarks that the company registered with the US Patent & Trademark Office, including “Read a Million Words,” “Million Dollar Reader,” “Millionaire Reader” and “Millionaires’ Reading Club.”

Springboards filed a complaint for trademark infringement, trademark counterfeiting and false designation of origin against McAllen Independent School District (MISD), a public school district in Texas, and IDEA Public Schools, a nonprofit organization operating charter schools in Texas. Both MISD an IDEA moved to dismiss for lack of subject matter jurisdiction, arguing that they were arms of the state and thus entitled to sovereign immunity. They also moved for summary judgment for lack of infringement. The district court ruled that only IDEA enjoyed sovereign immunity and accordingly granted IDEA’s motion to dismiss but denied MISD’s. The district court granted MISD’s motion for summary judgment after concluding that Springboards could not establish that MISD’s program was likely to cause confusion with Springboards’s trademarks. Springboards appealed.

The Fifth Circuit began with the jurisdictional issue of whether IDEA and MISD enjoyed sovereign immunity. The Court explained that determining whether an entity is an arm of the state is governed by the Clark factors, which were set forth in the Fifth Circuit’s 1986 decision in Clark v. Tarrant County. Those factors are as follows:

Whether state statutes and case law view the entity as an arm of the state
The source of the entity’s funding
The entity’s degree of local autonomy
Whether the entity is concerned primarily with local, as opposed to statewide, problems
Whether the entity has the authority to sue and be sued in its own name
Whether the entity has the right to hold and use property.

The Fifth Circuit analyzed each of the factors and concluded that IDEA was not an arm of the state. The Court found that factors 1 and 3 favored sovereign immunity while factors 2, 4, 5 and 6 did not. The Court’s decision focused heavily on factor 2, explaining that the inquiry under factor 2 has two parts: the state’s liability in the event there is a judgment against the defendant, and the state’s liability for the defendant’s general debts and obligations. The district court had concluded that factor 2 weighed in favor of immunity because 94% of IDEA’s funding came from the state and federal sources. The [...]

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Stryking Noncompete Preliminary Injunction

by Tessa Kroll | Mar 9, 2023 | Trade Secrets

The US Court of Appeals for the Sixth Circuit upheld a district court’s grant of a preliminary injunction restricting a former employee from working for conflicting organizations or communicating with a competitor’s counsel. Stryker Emp. Co., LLC v. Abbas, Case No. 22-1563 (6th Cir. Feb. 16, 2023) (Clay, Bush, JJ.; Sutton, C.J.) The Court found that the preliminary injunction was an appropriate measure to protect the plaintiff’s confidential information that was consistent with the employee’s noncompete agreement.

Stryker develops and manufactures spinal implants and related medical products. From 2013 through mid-2022, Stryker employed Abbas in various roles relating to finance and sales. As part of his job duties, Abbas led sales and finance projects, assisted with Stryker’s litigation efforts, and cultivated relationships with customers, distributors and sales representatives. These responsibilities required Abbas to have access to Stryker’s confidential information and trade secrets.

In April 2022, Abbas entered into a confidentiality, noncompetition and nonsolicitation agreement with Stryker. This agreement prohibited Abbas from disclosing Stryker’s confidential information without its consent and barred Abbas from working for “any Conflicting Organization” in which Abbas could use Stryker’s confidential information to boost the marketability of a “Conflicting Product or Service.” The noncompete provision was time limited to one year following Abbas’s departure from Stryker.

In summer 2021, a competing spinal implant manufacturer, Alphatec, began recruiting Abbas for a finance position. After determining that the finance position was too similar to Abbas’s previous work at Stryker, Alphatec created a new “sales role” that was allegedly “crafted to protect Stryker’s confidential information.” Abbas resigned from Stryker in May 2022 to take the newly created role.

Shortly after Abbas resigned, Stryker sued for breach of contract, misappropriation of trade secrets and violation of the Michigan Uniform Trade Secrets Act. Stryker also requested a no-notice temporary restraining order (TRO) and preliminary and permanent injunctions. The district court granted Stryker’s motion for preliminary injunction prohibiting Abbas from the following:

Working in any capacity for Alphatec or any “Conflicting Organization”
Having any ex parte communications with Alphatec’s counsel or otherwise disclosing information concerning Stryker’s litigation strategies.

Abbas appealed, arguing that the noncompetition portion of the preliminary injunction amounted to an industry-wide ban and that the communication portion impermissibly disqualified counsel.

The Noncompetition Provision

The Sixth Circuit first noted that federal law, rather than state law, defines a court’s power to issue a noncompetition restriction in a preliminary injunction. Under federal law, courts have discretion to craft preliminary injunctions based on the equities of a case and can even “proscribe activities that, standing alone, would have been unassailable.” Applying this standard, the Sixth Circuit reasoned that the preliminary injunction was not overly broad but instead preserved the status quo. First, the district court found that Abbas often worked beyond the scope of his position. Second, the district court agreed to entertain a motion to vacate the injunction if Alphatec created a new position for Abbas that Stryker found acceptable. Third, the injunction merely sought to enforce the noncompetition agreement, which [...]

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Out of Tune: Eleventh Circuit Permits Retrospective Relief for Timely Copyright Claims under Discovery Rule

by Kavya Rallabhandi | Mar 9, 2023 | Copyrights

The US Court of Appeals for the Eleventh Circuit furthered a circuit split in holding that, as a matter of first impression, a copyright plaintiff’s timely claim under the discovery rule is subject to retrospective relief for infringement occurring more than three years before the suit was filed. Nealy v. Warner Chappell Music, Inc., Case No. 21-13232 (11th Cir. Feb. 27, 2023) (Wilson, Jordan, Brasher, JJ.)

Section 507(b) of the Copyright Act includes a three-year statute of limitations that runs from the time the claim accrues, and a claim may only accrue one time under the discovery rule. In 2014, the US Supreme Court held in Petrella v. Metro-Goldwyn-Mayer, Inc., that the equitable doctrine of laches does not bar copyright claims that are otherwise timely under the three-year limitations period set forth in § 507(b). The circuits are split on Petrella’s application—the Second Circuit strictly limits damages from copyright infringement to the three-year period before a complaint is filed, whereas the Ninth Circuit permits retrospective relief for infringement occurring more than three years before the lawsuit’s filing as long as the plaintiff’s claim is timely under the discovery rule.

Music Specialist and Sherman Nealy (collectively, Music Specialist) filed a copyright infringement suit against Warner alleging that Warner was using Music Specialist’s musical works based on invalid third-party licenses and in violation of 17 U.S.C. § 501. The alleged copyright infringement occurred as early as 10 years before Music Specialist filed the present lawsuit. The district court denied Warner’s motion for summary judgment on statute of limitation grounds, finding that there was a genuine dispute of material fact regarding when Music Specialist’s claim accrual occurred. In a separate order, the district court certified for interlocutory appeal whether “damages in this copyright action are limited to the three-year lookback period as calculated from the date of the filing of the Complaint pursuant to the Copyright Act and Petrella.” Music Specialist appealed.

The Eleventh Circuit concluded that where a copyright plaintiff has a timely claim for infringement occurring more than three years before the filing of the lawsuit, the plaintiff may obtain retrospective relief for that infringement. The Court found that Petrella focused on the application of 17 U.S.C. § 507(b) to claim accrual under the injury rule, not the discovery rule, and was therefore inapplicable. The injury rule precludes recovery for harms occurring earlier than three years before the plaintiff files suit. On the other hand, the discovery rule permits damages recovery for infringing acts that copyright owners reasonably become aware of years later. Therefore, the discovery rule permits timely claims for infringement that occurred more than three years before the suit. The Eleventh Circuit found that the Supreme Court expressly reserved application of the discovery rule’s propriety for a future case and that, in the Eleventh Circuit’s opinion, the plain text of the Copyright Act does not place a time limit on remedies for an otherwise timely claim.

Practice Note: The Eleventh Circuit disagreed with the Second Circuit’s [...]

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Patent Law Principles Apply to Claim Scope: Orange Book Delisting and Listing and Regulations

by Benjamin Ediger, Ph.D. | Mar 9, 2023 | Patents

The US Court of Appeals for the Federal Circuit ordered that the only Orange Book patent asserted in a lawsuit must be delisted since its claims were directed to the computer-implemented distribution system and not a method of use. Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, Case No. 23-1186 (Fed. Cir. Feb. 24, 2023) (Lourie, Reyna, Taranto, JJ.)

Jazz Pharmaceuticals holds a new drug application (NDA) for Xyrem, an oral sodium oxybate solution prescribed to help those with certain narcolepsies manage cataplexy. Sodium oxybate itself is no longer covered by patents because it has been used in relation to narcolepsy since the 1960s. For this reason, Jazz built its patent portfolio around Xyrem’s formulation, use and distribution.

Jazz uses a single-pharmacy distribution system for Xyrem, known as a risk evaluation mitigation strategy (REMS). Implementing REMS was a condition of Xyrem’s US Food & Drug Administration (FDA) approval because it mitigates safety risks of dangerous active pharmaceutical ingredients such as sodium oxybate. One of Jazz’s patents is directed to this REMS distribution system. Abbreviated New Drug Application (ANDA) 505(b)(2) NDA (Hybrid NDA) approval is similarly conditioned on implementing a REMS that is sufficiently comparable to any that the NDA holder must implement. The FDA eventually determined that single-pharmacy systems were unnecessary for Xyrem and potentially detrimental.

Avadel submitted a hybrid NDA for a drug that requires only a single nightly dose, unlike Xyrem, which requires a patient to wake up during the night to ingest a second dose. Avadel’s application also proposed a more lenient REMS that utilizes multiple pharmacies. In view of these differences, Avadel believed that it could avoid a lengthy FDA approval process because all of Jazz’s Xyrem Orange-Book-listed patents seemed addressable without making any Paragraph IV certifications. As for the REMS patent, Avadel filed a statement under 21 U.S.C. § 355(b)(2)(B) because the patent was listed as claiming a method of use and Avadel was not seeking approval for the REMS system to which that patent’s claims were directed.

Jazz sued Avadel asserting seven patents, of which the REMS patent was the only Orange-Book-listed patent. Avadel asserted a counterclaim requesting that the district court order Jazz to delist the REMS patent from the Orange Book. The district court subsequently held a Markman hearing finding that the REMS patent’s claims were directed to a system and not a method. The district court granted Avadel’s motion for judgment on the pleadings, finding that the REMS patent did not claim “the drug for which the application was approved” and thus had to be delisted from the Orange Book. Jazz appealed.

Jazz argued that because the FDA permitted the REMS patent to be Orange Book listed, Avadel was prohibited from availing itself of the statutory delisting provision. The Federal Circuit disagreed, concluding that the language of the delisting provision was only concerned with whether a listed patent met the provisions’ conditions at the time of the triggering litigation.

Jazz also argued that there was no evidence that Congress imported patent-law [...]

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