“Improper” Listing of Patents in the FDA’s Orange Book

As we previously discussed, on November 7, 2023, the Federal Trade Commission (“FTC”) sent warning letters to certain drug manufacturers regarding their purportedly improper listings of device patents in the Food and Drug Administration’s (“FDA”) Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book” or “OB”).  We subsequently reported on a class action lawsuit filed on March 6, 2024 by the Massachusetts Laborers’ Health & Welfare Fund against Boehringer involving antitrust, unfair competition, and consumer protection claims.  The allegations in that complaint included Boehringer’s alleged failure “to remove improperly listed patents from the Orange Book” despite receiving a warning letter from the FTC. 

In this post, we highlight two recent judicial decisions — one from the District of Delaware and the other from the District of New Jersey — that shed additional light on how asserting improperly OB-listed patents may impact patent litigation.  In each case, the defendant answered the complaint for patent infringement by, among other things, asserting antitrust counterclaims based on the asserted patents being improperly OB-listed.  In both cases, the plaintiff unsuccessfully moved to dismiss the antitrust counterclaims.

In Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC,[1]  Jazz sued Avadel for patent infringement based on Avadel’s New Drug Application to market LUMRYZ—a version of Jazz’s Zyrem® drug product prior to the expiration of Jazz’s U.S. Patent No. 8,731,963 (“the ’963 Patent”).  Id., D.I. 1 (complaint), ¶ 1.  “In response, Avadel filed counterclaims against Jazz . . ., alleging that Jazz violated Section 2 of the Sherman Act by improperly listing the ’963 patent in the Orange Book, and that Jazz continues to violate Section 2 of the Sherman Act by refusing to delist that patent.”  Jazz Pharms., 2024 WL 2700031, at *1.  Jazz moved to dismiss Avadel’s antitrust counterclaims, arguing that Avadel had not sufficiently stated a claim for violation of Section 2 of the Sherman Act, because, among other reasons, Jazz had a reasonable basis for listing the ’963 patent.  Id. at *1.  The court held, however, that “Avadel does not have to allege that Jazz lacked a reasonable basis for listing the ’963 patent to state a claim under Section 2 of the Sherman Act.”  Id. at *3.  Even if that were a requirement, however, the court found that Avadel satisfied that pleading standard by alleging that Jazz should have known that the ’963 patent did not qualify for listing because it does not claim the active pharmaceutical ingredient in Xyrem®, the formulation or composition of Xyrem®, or a method of using Xyrem®.  Id. at *4. Instead, the court noted, the “’963 patent is a REMS-related (risk evaluation and mitigation strategies) patent directed to a system and method for distributing sensitive drugs.”  Id. at *1 n.1.

In Teva Branded Pharm. Products R&D, Inc. et al. v. Amneal Pharms. Of New York, LLC et al.,[2] Teva sued Amneal for patent infringement based on Amneal’s Abbreviated New Drug Application to market a generic version of ProAir® HFA (albuterol sulfate).  In response, Amneal asserted several antitrust counterclaims, alleging that the asserted patents, U.S. Patent Nos. 8,132,712, 9,463,289, 9,808,587, 10,561,808, and 11,395,889 (the “Inhaler Patents”), were improperly OB-listed.  Id. at *1.  Teva moved to dismiss Amneal’s antitrust counterclaims, alleging that antitrust law does not provide a cause of action for improper OB-listings.  Id.  In its June 10, 2024 ruling, the court rejected Teva’s arguments and denied Teva’s motion to dismiss the antitrust counterclaims.  Id. at *5.  In addition, the court noted that “[t]here [wa]s no dispute that the Inhaler Patents contain no claim for the active ingredient at issue[.],” but instead “are directed to components of a metered inhaler device.”   Id. at *6, *7.  Therefore, the court granted Amneal’s motion for judgment as a matter of law on its “delisting” counterclaims, requiring Teva to withdraw all of the asserted patents from the Orange Book listing for its ProAir® product.  Id. at *8.

On June 11, 2024, Teva filed an expedited appeal to the Federal Circuit, challenging the court’s finding that Teva’s patents are improperly listed in the Orange Book, and Teva also moved to stay the court’s order to delist those patents pending resolution of the appeal. D.I. 90, 92.  According to Teva, a “stay pending appeal will allow the Federal Circuit to address de novo questions as to the scope of 21 U.S.C. § 355(b)(1)(A)(viii) (the “Listing Statute”).”  D.I. 109 at 6.  “Specifically, Teva raises the question whether the phrase ‘claims the drug for which the [NDA holder] submitted the application’ in the Listing Statute should be read to require explicit recitation of the active ingredient in the NDA product, as [the district court] held, or whether a patent that ‘reads on’ the drug that is subject of the NDA is sufficient . . . .”  D.I. 109 at 9.  On July 1, 2024, the Federal Circuit granted Teva’s motion to expedite the appeal, setting the following schedule: the opening brief is due July 30, 2024; the responsive brief is due August 30, 2024; the reply brief is due September 11, 2024; and oral argument will be scheduled in November 2024.