Patent Case Summaries February 28, 2023

Patent Case Summaries | Week Ending February 24, 2023

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals, LLC, No. 2023-1186 (Fed. Cir. (D. Del.) Feb. 24, 2023). Opinion by Lourie, joined by Reyna and Taranto.

Jazz holds an approved New Drug Application (NDA) for the narcolepsy drug Xyrem®. Jazz also owns a patent that relates to a single-pharmacy distribution system, which controls access to abuse-prone prescription drugs. Representative claims of the patent are directed to “a computer-implemented system for treatment of a narcoleptic patient with a prescription drug that has a potential for misuse, abuse or diversion.” Jazz listed the patent in the Orange Book as covering a method of using Xyrem®.

Avadel submitted an NDA for its own drug, and the FDA required Avadel to file a certification regarding the Jazz patent’s single-pharmacy system. Jazz subsequently sued Avadel for infringement. Avadel then sued the FDA alleging that it violated the Administrative Procedure Act by requiring Avadel’s certification over Jazz’s patent. Avadel’s suit was ultimately dismissed on the basis that Avadel had a separately available and adequate remedy under 21 U.S.C. § 355(c)(3)(D)(ii)(I). Avadel thus responded to Jazz’s infringement suit with a counterclaim seeking delisting of Jazz’s patent for failure to claim a drug or method of use. The district court agreed and ordered Jazz to ask the FDA to delist the patent. Jazz appealed.

On appeal, Jazz argued that the district court abused its discretion in finding that Jazz’s patent is not a method-of-use patent for listing and delisting purposes. Jazz argued that although the claims recite a “system,” they are actually directed to a method. The Federal Circuit disagreed. Each of the independent claims describe a “computer-implemented system” that comprises “one or more computer memories” and a “data processor.” The claims thus recite “an assemblage of components,” defining a system.

Jazz also argued that, even if the patent is not directed to a method of use, the district court abused its discretion in finding that § 355(c)(3)(D)(ii)(I) provides a delisting remedy. The Federal Circuit determined that the delisting statute does not require determining whether the patent holder violated the law by listing the patent in the first instance. Instead, “it simply provides that those accused of infringing a listed patent may request an order requiring the patent holder to correct or delete listings for patents that do not claim the drug or a method of using the drug.” Here, Jazz’s patent claimed neither, and thus the district court correctly ordered Jazz to seek delisting of its patent from the Orange Book.

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Nested Bean, Inc. v. Big Beings USA Pty Ltd, et al., No. IPR2020-01234 (Feb. 24, 2023) (designated precedential on Feb. 24, 2023). Decision by Vidal.

Nested Beam filed an IPR petition challenging claims 1–18 of a patent owned by Big Beings directed to a swaddling suit. Claims 1 and 2 are independent, and claims 3–16 are multiple dependent claims that depend directly or indirectly from either claim 1 or 2. For example, claim 3 recites, among other things, “[a] swaddling suit according to claim 1 or 2.”

The Patent Trial and Appeal Board granted institution and issued a final written decision finding that Nested Beam failed to establish unpatentability of claims 1, 17, and 18 but did establish unpatentability of independent claim 2 and multiple dependent claims 3–16. In reaching those conclusions, the Board considered claims 3–16 to be anticipated or rendered obvious by the prior art “if either version of these claims (the version depending from claim 1 or the version depending from claim 2) is described by the prior art". Accordingly, the Board determined that “both versions of claims 3–16, i.e., the first version depending from claim 1 and the second version depending from claim 2, were shown to be unpatentable because the second version depended from claim 2, which was shown to be unpatentable.”

Big Beings filed a request for Director review arguing that the Board should have found that Nested Beam failed to show claims 3–16, as depending from claim 1, are unpatentable. Director Vidal granted the request and authorized supplemental briefing to address the proper interpretation of 35 U.S.C. § 112, fifth paragraph, governing multiple dependent claims.

On rehearing, the Director found that “the Board’s consideration of multiple dependent claim patentability as to each of its alternatively referenced claims is an issue of first impression before the Board.” Relying on Federal Circuit case law, the statute’s legislative history, and both USPTO procedure and “long-standing MPEP guidance,” she determined that “the plain language of 35 U.S.C. § 112, fifth paragraph, requires that the patentability of a multiple dependent claim is considered separately as to each of its alternatively referenced claims.”

The Director found the statute clear “that a multiple dependent claim is the equivalent of several single dependent claims.” “Thus, in the same way that the unpatentability of multiple single dependent claims would each rise or fall separately, so too should the dependent claims covered by a multiple dependent claim.” Accordingly, in these scenarios, the Board is required to “consider separately the limitations of each claim incorporated by reference into the multiple dependent claim.”

Applying this framework, the Director determined that the Board “erred in its analysis of multiple dependent claims 3–16 by failing to separately consider that claims 3–16 incorporate by reference the limitations of claim 1—which was not shown to be unpatentable.” The Director thus granted rehearing and modified the Board’s final written decision.

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