The U.S. Court of Appeals for the Federal Circuit on July 1, 2026 affirmed the claim construction underlying a preliminary injunction that bars Hetero from launching a generic version of Nuedexta, while vacating the district court's decision to excuse the patent owner from posting a bond. In Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited, No. 2025-2016, a panel of Judges Dyk, Bryson, and Stoll issued a precedential opinion, written by Judge Bryson, that affirms in part, vacates in part, and remands. Judge Dyk dissented in part and concurred in part.

The appeal arises from the United States District Court for the District of Delaware, No. 1:25-cv-00647, before Judge Gregory Brian Williams. Otsuka America Pharmaceutical, Inc. and its subsidiary Avanir Pharmaceuticals, LLC (collectively, Otsuka) sued after Hetero Labs Limited, Hetero Labs Limited Unit-III, and Camber Pharmaceuticals Inc. signaled an intent to launch a generic product on or after July 10, 2025. The district court entered a temporary restraining order and, on July 23, 2025, granted a preliminary injunction, finding Otsuka likely to succeed on its claim that Hetero's product would infringe U.S. Patent No. 7,659,282, owned by Avanir. The court also waived the security requirement of Federal Rule of Civil Procedure 65(c). Hetero appealed both rulings.

The patent and the products

The '282 patent claims a method for treating pseudobulbar affect or emotional lability by administering dextromethorphan in combination with quinidine, with the quinidine serving to slow the liver's metabolism of the dextromethorphan. Independent claim 1 recites dosage ranges and adds a proviso that "the weight to weight ratio of dextromethorphan to quinidine is 1:0.5 or less." The patent is scheduled to expire on August 13, 2026.

Nuedexta capsules, the branded product, contain 20 mg of dextromethorphan hydrobromide and 10 mg of quinidine sulfate. The FDA approved Hetero's Abbreviated New Drug Application in August 2024 for a generic with the same indications and the same amounts of the two salts.

The construction dispute: salt form or free base

The central issue was how to calculate the weight-to-weight ratio in claim 1 when the two drugs are administered as salts. Hetero argued that the ratio must be computed from the weight of the active moiety components. Applying the patent's own conversion figures, 20 mg of dextromethorphan hydrobromide contains 15.4 mg of the dextromethorphan component and 10 mg of quinidine sulfate contains 8.7 mg of the quinidine component, yielding a ratio of about 1:0.56 for Hetero's product, which falls outside the claimed "1:0.5 or less." Otsuka argued that the ratio should be measured from the amounts of the compounds as administered, in which case both Nuedexta and Hetero's product come out at 1:0.5, within the claim.

Reviewing claim construction de novo under Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., the panel sided with the district court and with Otsuka. It reasoned that the terms "dextromethorphan" and "quinidine" are used throughout the claims and specification to encompass the salt forms. Dependent claims 7 and 8 expressly recite the compounds "in a form of a pharmaceutically acceptable salt," which, under claim-differentiation and consistent-usage principles from Phillips v. AWH Corp., indicates the independent claim terms include salt forms. The specification, the court added, defines the active ingredients as including both free base and salt forms across all sixteen embodiments.

While at first blush it is appealing to construe the terms “dextromethorphan” and “quinidine” to refer only to the free base forms of those compounds, a close analysis of the claims and specification of the ’282 patent leads us to construe those terms as referring to the compounds whether in free base or salt form.Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited, No. 2025-2016 (Fed. Cir. July 1, 2026)

Because the panel affirmed that construction, it left undisturbed the district court's finding that Otsuka was likely to succeed on the merits of infringement, and it affirmed the grant of the preliminary injunction under the deferential abuse-of-discretion standard. Judge Dyk dissented from the claim construction, the infringement conclusion, and the decision sustaining the injunction, writing that he would compare the active-moiety weights; he joined the majority on the bond issue.

The Rule 65(c) bond waiver, vacated

On the second issue, the panel applied Third Circuit law because the Rule 65(c) security requirement is not specific to patent law. The district court had waived the bond, finding the risk of financial harm to Hetero "speculative at best" and citing a concern about a "chilling effect on access to justice" if a multi-million-dollar bond were required. The Federal Circuit noted that in the Third Circuit, waiver of the bond requirement is "so rare that the requirement is almost mandatory," and that the Third Circuit has "never excused a district court from requiring a bond where an injunction prevents commercial, money-making activities."

Because Hetero's effort to enter the market with its generic product is a commercial, money-making activity, the panel held that the recognized Third Circuit exceptions did not apply. It vacated the bond waiver and remanded for the district court to reconsider an appropriate amount, observing that the court may account for the limited time before the '282 patent expires and that, under the District of Delaware's local rules, reasonable bond premiums can be taxed as costs. The court awarded no costs on appeal.

Disposition

The Federal Circuit affirmed the district court's construction of the disputed claim terms and its grant of the preliminary injunction, vacated the order waiving the Rule 65(c) bond, and remanded for reconsideration of the bond. The disposition is "Affirmed in part, vacated in part, and remanded."