Tuesday, February 28, 2023

CAFC does "Ballyhoop." Attorney fee issues.

An attorneyees issue:

Barracuda Tackle LLC, Florida Fishing Tackle Manufacturing Company, Inc., and David Burton Young (collectively, “Barracuda”) appeal the decision of the United States District Court for the Middle District of Florida that denied Barracuda attorney fees under 35 U.S.C. § 285. Dominguez v. Barracuda Tackle LLC, No 8:20-cv-1538- KKM-AEP, 2021 WL 5998127 (M.D. Fla. Dec. 20, 2021). For the reasons set forth below, we affirm.

Some details

Yunior Dominguez and Salt Addict, Inc. d/b/a The Ballyhoop (collectively “Ballyhoop”) filed a complaint against Barracuda for infringement of U.S. Patent No. 10,165,764 (“the ’764 patent”) in the United States District Court for the Southern District of Florida. The ’764 patent is directed to a collapsible fishing bait net, i.e., a net that can be used to capture small fish that can be used as bait to catch larger fish. ’764 Patent col. 1 ll. 12–42. Ballyhoop alleged that Barracuda’s bait nets infringed claims 1 and 3 of the ’764 patent directly or indirectly, either literally or under the doctrine of equivalents.1 Barracuda filed a motion to dismiss, arguing that Ballyhoop had failed to state a claim and that the Southern District of Florida constituted an improper venue for the suit. Barracuda also filed a motion for claim construction, a motion for summary judgment of non-infringement, and a motion seeking sanctions under Federal Rule of Civil Procedure 11 against Ballyhoop for bringing a purportedly frivolous claim. Ballyhoop responded only to the motion to (...)

(...) With regard to Barracuda’s motion for sanctions, the magistrate judge determined that Ballyhoop’s suit was not frivolous and that Ballyhoop had demonstrated an effort to engage in a pre-suit investigation of its infringement claim. “Further,” the magistrate judge noted, “a reasonable juror could conclude that the Accused Product and the collapsible bait net claimed in the ’764 Patent perform substantially the same function with substantially the same result but just not as to the way in which each achieves that result, especially in light of the claims construction.” Id. Accordingly, the magistrate judge recommended that Barracuda’s motion for sanctions be denied. Id.


After judgment was entered in its favor, Barracuda filed a motion seeking an award of attorney fees under 35 U.S.C. § 285. The magistrate judge issued a Report and Recommendation that Barracuda’s request be denied. J.A. 9–21. In reaching this conclusion, the magistrate judge rejected Barracuda’s argument that the case was exceptional because Ballyhoop’s infringement position was unreasonable, noting that, in the context of Barracuda’s motion for sanctions under Rule 11, the court had found Ballyhoop had maintained a nonfrivolous claim for patent infringement and had demonstrated an effort to engage in pre-suit investigation of the claim. J.A. 14–16. The magistrate judge also considered and rejected Barracuda’s argument that the case was exceptional because Ballyhoop had engaged in litigation misconduct and because Ballyhoop had bad-faith motivation in bringing the suit. J.A. 16–18.

Drug de-listing issue tackled by CAFC in Jazz v. Avadel

In Jazz v. Avadel:

Jazz Pharmaceuticals, Inc. (“Jazz”) appeals from an order of the United States District Court for the District of Delaware granting a motion for an injunction brought by Avadel CNS Pharmaceuticals, Inc. (“Avadel”). See Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, No. 21-cv00691, 2022 WL 17084371 (D. Del. Nov. 18, 2022) (“Decision”). The injunction directed Jazz to take measures to delist U.S. Patent 8,731,963 (“the ’963 patent”) from the U.S. Food and Drug Administration’s (“the FDA’s”) Approved Drug Products with Therapeutic Equivalence Evaluations publication, more colloquially known as the “Orange Book.” For the following reasons, we lift our stay of the injunction and affirm.

The drug at issue:

Jazz holds an approved New Drug Application (“NDA”) for the narcolepsy drug Xyrem®. J.A. 1445. Xyrem’s active ingredient is sodium gamma-hydroxybutyrate (“GHB”), which is also known as sodium oxybate. Id. GHB exerts a heavily sedating effect, which is theorized to grant deepened nighttime sleep, resulting in improved daytime wakefulness. GHB is prone to heavy misuse and is infamously known as a date-rape drug. Given that misuse, the FDA conditioned approval of Jazz’s NDA upon development of Risk Evaluation and Mitigation Strategies (“REMS”), which include protocols that must be followed prior to prescribing or dispensing Xyrem. Id. Xyrem’s REMS originally restricted distribution to a single-pharmacy system, although the FDA waived that requirement in 2017. J.A. 5660. The ’963 patent relates to Jazz’s single-pharmacy distribution system, which controls access to abuse-prone prescription drugs prescribed to narcolepsy patients through a central pharmacy and computer database by tracking prescriptions, patients, and prescribers.

Jazz loses:

Jazz asserts that, in 2014, the regulatory framework permitted Jazz to list the ’963 patent, which, it says, at a minimum fell into a category of patents neither required nor forbidden to be listed. According to Jazz, because it was permissive to list the ’963 patent in 2014, § 355(c)(3)(D)(ii)(I) does not provide Avadel with the power to request an order to delist it now. We disagree. As the district court correctly analyzed, the delisting statute does not require us to consider whether the patent holder violated the law by listing the patent in the first instance. 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. As the ’963 patent claims neither and has been asserted in a patent infringement action against Avadel, § 355(c)(3)(D)(ii)(I) provides Avadel with a delisting remedy. The district court therefore correctly ordered Jazz to seek delisting of the ’963 patent from the Orange Book. CONCLUSION We have considered Jazz’s remaining arguments and find them unpersuasive. For the foregoing reasons, we affirm and lift our stay of the injunction requiring Jazz to ask the FDA to delist the ’963 patent. As the original date to comply with the injunction has expired, we modify the injunction insofar as restarting the 14-day period for compliance prescribed by 21 C.F.R. § 314.53(f)(2)(i) to be within 14 days of this decision.