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District of Delaware Considers Scope of Injunction in Jazz v. Avadel Remand

Fish & Richardson

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In May 2025, in Jazz Pharms., Inc. v. Avadel CNS Pharms., Inc., the Federal Circuit considered the scope of a permanent injunction that prohibited a drug manufacturer from conducting certain clinical and regulatory activities.1 The U.S. District Court for the District of Delaware had earlier enjoined Avadel from: (1) initiating new clinical trials for its drug LUMRYZ; (2) offering open-label extensions of the drug in ongoing clinical trials; and (3) seeking Food and Drug Administration (FDA) approval or marketing of LUMRYZ for the treatment of idiopathic hypersomnia (“IH”).2 The Federal Circuit found certain aspects of the district court’s injunction overbroad and an abuse of discretion and remanded the case for the lower court to determine whether Avadel’s submission of a paper New Drug Application (NDA) under § 505(b)(2)for LUMRYZ for the treatment of IH or any other indication is an act of infringement under § 271(e)(2).3

On remand, the district court considered whether Avadel’s seeking FDA approval for an IH indication for LUMRYZ should be enjoined.4

Federal Circuit’s decision concerning Avadel’s seeking FDA approval for an IH indication for LUMRYZ

By way of short background, the Federal Circuit considered whether the injunction was overbroad in preventing Avadel from applying for FDA approval of LUMRYZ for IH.5 On appeal, Avadel argued that its FDA submission was not an act of infringement under § 271(a), or if it were a “use” under that statute, its conduct was within the safe harbor.6 The court did not address the potential safe harbor issue. The court, however, agreed that submission of an FDA application is not infringement under § 271(a); however, it is an act of infringement under § 271(e)(2), a proposition that neither party meaningfully addressed:

It shall be an act of infringement to subject an application under section 505(j) of the [FDCA] or described 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.7

This issue was only raised at oral argument and not briefed.8 Accordingly, the court remanded the case for the district court to determine whether Avadel’s submission of its paper NDA for LUMRYZ was an act of infringement under § 271(e)(2).9 Resolution of that question will necessarily determine whether the district court’s injunction was overbroad.10 If the district court finds that Avadel’s FDA submission was an act of infringement under § 271(e)(2), then the injunction prohibiting Avadel from seeking FDA approval exceeded the remedies provided by § 271(e)(4).11 If, however, the district court finds that Avadel’s FDA submission was not an act of infringement under § 271(e)(2), the court would not be limited by § 271(e)(4) remedies. The court would have to consider whether the injunction was necessary to prevent infringement, an issue which it did not address in the first opinion.12

Factual background

On remand, Jazz filed a renewed motion for a permanent injunction, arguing that Avadel should be enjoined from seeking FDA approval for an IH indication for LUMRYZ prior to the expiration of the asserted ʼ782 patent.13 Jazz’s proposed order included the requirement that “[i]n any communication with the FDA regarding IH, Avadel must inform the FDA that Avadel is enjoined from seeking approval for an IH indication for Lumryz until February 19, 2036, and Avadel must ensure it does not receive approval for IH during the term of this injunction.”14 Interestingly, despite the Federal Circuit’s grappling with the issue, both parties agreed that Avadel’s seeking FDA approval for an IH indication for LUMRYZ was not an act of infringement.15

The district court’s second decision

Previewing its denial of the newly requested injunction, the district court quoted a recent Supreme Court decision stating, “[I]n equity, ‘the broader and deeper the remedy the plaintiff wants, the strong the plaintiff’s story needs to be.”16 The court then noted “Jazz seeks equitable relief that is unprecedented under both Federal Circuit law and Third Circuit law,” and found that “Jazz has not established that its story warrants such relief.”17

Jazz’s attempt to directly enjoin noninfringing activities is impermissible under Federal Circuit precedent

Jazz argued that the injunction preventing Avadel from seeking an IH indication for LUMRYZ was “‘necessary to prevent future infringement’ in the IH population.”18 Jazz put forward four facts in support: “(1) unless Avadel is enjoined from requesting FDA approval to treat IH, once Avadel’s trial is completed next year, Avadel will submit an application for IH; (2) Avadel expects the application will be swiftly approved; (3) an IH indication will be included on Lumryz’s label and Avadel will be marketing for IH, inducing physicians to prescribe and patients to use Lumryz for IH in violation of the injunction; and (4) Avadel admits that FDA approval will result in the current injunction being violated.”19

The district court first addressed whether Avadel could be enjoined from seeking FDA approval for an IH indication for LUMRYZ — conduct that both parties agreed was noninfringing.20 Reviewing seemingly conflicting Federal Circuit precedent, the district court found the Federal Circuit’s holding in Joys Techs., Inc. v. Flakt, Inc., 6 F.3d 770 (Fed. Cir. 1993) instructive.21 There, the Federal Circuit stated that “[j]udicial restraint of lawful competitive activities [] must be avoided.”22 Post e-Bay, the Federal Circuit interpreted Joy Techs as “h[olding] that noninfringing acts may not be enjoined.”23

For the same reasons, the district court found that the first two eBay factors were not met, concluding that “[an] injunction [enjoining noninfringing acts] [is not] necessary to prevent infringement” under the facts presented to the court.24

Jazz failed to meet its burden under the eBay factors

The district court then considered both parties’ arguments in view of eBay.25 While the court noted that it was “unclear” if an eBay analysis was necessary in view of its decision to decline enjoining noninfringing activities, it addressed the eBay factors “in the interest of thoroughness and to facilitate appellate review.”26

eBay Factors 1 and 2: Irreparable injury and remedies at law are inadequate to compensate for such injury

The court considered eBay factors 1 and 2 together. Jazz argued that Avadel’s seeking an IH indication for LUMRYZ will cause it irreparable harm because it will “inevitably result” in: (1) Jazz losing market share to Avadel, a direct competitor; (2) Jazz suffering price erosion; and (3) Jazz suffering irreparable reputational harm.27 Jazz argued that these outcomes showed that monetary damages would not be adequate compensation.28

The court initially found that Jazz failed to carry its burden to prove irreparable harm, finding any alleged harm was speculative.29 The court credited Avadel’s argument that Jazz faced a speculative injury given that Avadel’s obtaining an IH indication for LUMRYZ was not guaranteed.30 As Avadel explained, its clinical study on IH could fail and/or FDA may not grant the IH indication even if the trial succeeds.31

The court also credited Avadel’s “protective measures.”32 Avadel had explained that it proactively took steps to prevent infringing sales for IH.33 LUMRYZ is only distributed through specialty pharmacies, and Avadel has worked with these specialty pharmacies to ensure that they decline prescriptions for LUMRYZ for IH.34 Avadel also informed pharmacy benefit managers and group purchasing organizations of the injunction to prevent sales of LUMRYZ for IH.35 Even if Avadel did obtain an IH indication for LUMRYZ, such use would still be enjoined, and Avadel would take similar steps with the specialty pharmacies, pharmacy benefit managers, and group purchasing organizations to prevent the enjoined use of LUMRYZ.36 Given these proactive and future measures, the court found that they “‘temper[ed] [P]laintiff’s need for injunctive relief’ enjoining noninfringing activities.”37 The district court thus found that Jazz failed to meet its burden to prove eBay factors 1 and 2.38

eBay Factor 3: Considering a balance of hardships, a remedy in equity is warranted

While the court did not need to consider the remaining eBay factors, it did so “in the interest of thoroughness and to facilitate appellate review.”39 As explained earlier in its opinion, there was no evidence demonstrating that an injunction was necessary to avoid hardship to Jazz.40 Given Jazz’s failure to prove that the balance of hardships weighed in its favor, the district court again found that injunctive relief was unwarranted.41

eBay Factor 4: Public interest would not be disserved by an injunction

Regarding the fourth eBay factor, Avadel argued that an injunction enjoining noninfringing activities would be against the public interest “because Lumryz offers a potentially superior treatment.”42 Relying on these facts and its earlier analysis, the district court found that the public interest weighed in favor of denying an injunction that would prevent Avadel from seeking FDA approval for new indications for LUMRYZ.43

Finding all four eBay factors weighed against granting an injunction, the district court denied Jazz’s renewed motion for a permanent injunction.44

Conclusion

While it may seem that the litigation between Jazz and Avadel is nearing an end, there is still more to come. The parties must meet and confer to discuss whether the preexisting injunction order complied with Federal Rule of Civil Procedure 65(d) such that it provides “clear notice as to what [an enjoined] party must do or refrain from doing.”45 As of the date of this writing, the parties have yet to inform the court on their positions regarding this issue. On September 15, 2020, the district court issued an opinion, perhaps relating to the safe harbor issues considered by the Federal Circuit.46 That opinion has not yet been released to the public as of the date of this writing.

  1. Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, No. 24-2274, 2025 U.S. App. LEXIS 10831, 136 F.4th 1075 (Fed. Cir. May 6, 2025) (hereinafter, “Appeal”). For detailed background of the appeal and the scope of the Federal Circuit’s decision, please review Brian Coggio and Kelly Allenspach Del Dotto’s blog post, “Federal Circuit Reverses Injunction That Barred Clinical Trials in Jazz v. Avadel,” available at Federal Circuit Reverses Injunction That Barred Clinical Trials in Jazz v. Avadel.

  2. Appeal, at 1082.

  3. Appeal, at 1089.

  4. Jazz Pharms., Inc. v. Avadel CNS Phams.m LLC, No. 21-cv-691-GBW, D.I. 772 at *4 (D. Del. Sept. 15, 2025) (hereinafter, “Post-Remand”). The scope on remand was narrower than the Federal Circuit’s discussion because, in a joint status report, the parties presented the issue as “whether Avadel should and/or can be enjoined from seeking FDA approval for an idiopathic hypersomnia (‘IH’) indication for LUMRYZTM prior to the expiration of the ʼ782 patent in light of the Federal Circuit’s decision.” See Jazz Pharms., Inc. v. Avadel CNS Phams.m LLC, No, 21-cv-691-GBW, D.I. 733 at *1 (D. Del. May 23, 2025).

  5. Appeal, at 1085.

  6. Id. at 1085-86.

  7. Id. at 1086 (citing § 271(e)(2)(A) (emphasis in original)).

  8. Id. at 1087.

  9. Id. at 1089.

  10. Id. at 1088-89.

  11. Id.

  12. Id. at 1089.

  13. Jazz Pharms., Inc. v. Avadel CNS Phams. LLC, No, 21-691-GBW, at *4 (D. Del. Sept. 15, 2025) (hereinafter, “Post-Remand”).

  14. Post-Remand, at *4.

  15. Id. at *11.

  16. Id. at *6 (citing Trump v. CASA, Inc., 145 S. Ct. 2540, 2558 (2025)).

  17. Id. at *6.

  18. Id. at *7.

  19. Id.

  20. Id. at *11.

  21. Id. at *14.

  22. Id. at *11 (citing Joy Techs, 6.F3d at 777.)

  23. Id. at *12 (citing Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1314 (Fed. Cir. 2007)).

  24. Id. at *15 (quoting Appeal, at 136 F.4th at 1088).

  25. Id. at *4-*25.

  26. Id. at *15.

  27. Id. at *8.

  28. Id.

  29. Id. at *16-*19.

  30. Id. at *18.

  31. Id.

  32. Id.

  33. Id. at *19.

  34. Id. at *19-*20.

  35. Id.

  36. Id.

  37. Id. at *21.

  38. Id. at *21-*22.

  39. Id. at *22.

  40. Id.

  41. Id. at *23.

  42. Id. at *24.

  43. Id. at *25.

  44. Id.

  45. Id. (citing Abbott v. Perez, 585 U.S. 579, 598 (2018)).

  46. See Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, No. 1:21-cv-69-GBW, D.I. 773 (D. Del. Sept. 15, 2025).

The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.