NEWS
Jazz Loses the Tune: Courts Strike a Sour Note on System Patents
In a decision that could ripple through the pharmaceutical industry, the Federal Circuit recently ruled on Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals, LLC, clarifying the limits of injunctive relief and patent listings under the Hatch-Waxman Act. The May 6, 2025 ruling emphasized a key point: even when a company is found to infringe a valid pharmaceutical patent, courts can’t stop it from engaging in clinical trials or offering open-label drug extensions—so long as those activities fall under the Act’s “safe harbor” provision.
A Closer Look at the Case
The controversy centered around Jazz’s blockbuster narcolepsy drug, Xyrem, which contains GHB, a powerful sedative also known for its abuse potential. Jazz had patented a single-pharmacy distribution system for tracking and dispensing the drug. This system was at the heart of their patent dispute with Avadel, who sought approval for a competing GHB-based drug, FT218—but with a once-nightly dose and a different distribution method.
When Avadel submitted its New Drug Application (NDA), the FDA still required them to certify against Jazz’s listed patent. Jazz then sued for infringement. Avadel fired back, challenging the patent’s inclusion in the FDA’s Orange Book (a listing of patents related to approved drugs), arguing that Jazz’s patent didn’t actually claim a drug or a method of using one—which are the only categories eligible for listing.
The District Court Sides with Avadel
The district court agreed with Avadel, finding that Jazz’s patent claims were for a “system,” not a method of use or a drug itself. That distinction matters: only drug compositions and methods of use are valid for listing in the Orange Book. The court ordered Jazz to delist its patent, and Jazz appealed.
The Federal Circuit Weighs In
On appeal, Jazz argued two main points:
- That its patent did in fact claim a method of using the drug.
- That even if it didn’t, the FDA’s broader regulatory language should apply, allowing system claims to count as method claims.
The Federal Circuit wasn’t persuaded. It upheld the lower court’s reasoning, explaining that:
- Patent law requires method claims to involve specific steps. Simply describing a system—even one that enables a method—is not the same.
- The FDA regulation does not override that fundamental distinction in patent law.
- Jazz’s system patent couldn’t be reclassified as a method-of-use patent simply because it was related to conditions for prescribing the drug.
What About Clinical Trials?
An additional issue was whether Jazz could stop Avadel from continuing clinical research activities related to FT218. The appellate court clearly stated: No. Even when infringement is found, a district court cannot block clinical trials or open-label extensions if they’re protected by the Hatch-Waxman Act’s safe harbor—a provision designed to encourage innovation and expedite FDA approvals.
Why This Matters
This ruling reinforces a critical boundary between commercial infringement and regulatory research activities. It also tightens the standards for what can be listed in the Orange Book—potentially preventing brand-name drugmakers from using system patents to block competition unfairly.
For biotech and pharma companies, this is a strong reminder: if your patent doesn’t claim a drug or a method of using it, it doesn’t belong in the Orange Book. And for generics and 505(b)(2) applicants, it’s a win that helps preserve the streamlined pathway to market entry—even when innovative system-based solutions are at play.
PatChat is now operational
We have added some AI functionality to our website in the form of a personalized Chat GPT-based AI agent.
You can access the chatbot at the lower righthand corner of the website.
The AI is trained on Bob’s books, and the FAQs from our website, so asking it questions will be like talking to Bob himself.
Have fun with it, but don’t bother asking non-IP related questions, it’s trained to stick to IP related topics.
IP Updates in Korea
Korea has added exporting an invention to the list of what constitutes “practicing an invention”. This means patent holders can claim damages from overseas sales more actively.
Korea has also introduced two limitations on patent term extensions: a patent term can’t be extended over 14 years from the date of receipt of marketing approval, and only one patent becomes eligible for patent term extension per approval.
In trademark litigation, the Korean Supreme Court has clarified standards for consumer surveys, used as evidence of consumer recognition or perception.
USPTO discontinues the Accelerated Examination program
Given the long wait times for patent prosecution, the USPTO had offered several ways to speed the process up. One of those, Accelerated Examination, offered the option of having the attorney certify much of the examination work in advance. We used the accelerated examination process several times, and got quite good at it. In one instance we received notice of allowance in less than a month! Nevertheless, it seems many attorneys did a poor job of searching (intentionally or unintentionally), so the original premise of faster prosecution was faulty.
Track One, or Prioritized Examination, is still an option for speeding up the prosecution process.
Copyright Office Report on AI Training and Fair Use
Can AI systems use copyrighted materials under the fair use doctrine?
The fair use doctrine is a provision of copyright law that allows for limited usage of copyrighted material in certain situations without needing to obtain permission from the copyright holder. There is a four-factor test used to determine fair use: the character of the use, nature of the work, amount used, and effect upon the market. These are general guidelines and use for one of these purposes is not automatically fair, while other purposes beyond these might be considered fair.
Some of the purposes where fair use is generally allowed are: criticism, comment, news reporting, teaching, scholarship, and research. So, for example, quotes from a copyrighted book can be published in a critique of the book without having to obtain permission from the copyright holder.
Of course, generative artificial intelligence (AI) systems train on looking at large amounts of data, including copyrighted materials. Can this be considered fair use and avoid infringement? This was the scope of the recent study put out by the United States Copyright Office (the USCO).
Do AI models Infringe Training Data?
The USCO report finds that generative AI systems implicate several of the exclusive rights granted to copyright owners. The report also addresses whether the model’s weights are themselves infringing copies of the underlying works. This is disputed, with developers asserting that models are merely comprised of strings of numbers, while others assert as evidence to the contrary that models sometimes generate outputs substantially similar to the training data. The report concludes that where generated outputs are substantially similar, it is a strong argument that copying the model’s weights implicates the reproduction and derivative work rights of the original works.
The Application of the Fair-Use Defense
The key issue when analyzing fair use has been whether the use is “transformative”. There is of course a spectrum, and where the output is based on a diverse dataset, it is more likely to be transformative, but where it is trained to generate outputs substantially similar to copyrighted works, then it is “at best, modestly transformative”. The USCO rejected arguments that AI training is inherently transformative, because it is analogous to human learning. The report asserts that the analogy rests on a faulty premise that fair use is a defense for all acts if those acts are used for learning. But an example was given that a student couldn’t rely on fair use to copy all of the books at a library. The analogy also fails because humans retain only imperfect impressions of the works experienced, filtered through their unique personalities and limitations. AI involves training on the creation of perfect copies. The structure of exclusive copyright rights is premised on certain human limitations.
There are more than 40 cases currently pending related to the issue of AI using copyrighted materials. There won’t be a single answer whether unauthorized use is fair use. There is an ongoing discussion of some form of licensing scheme for AI training data, but for now, the recommendation is to continue development without government intervention.
Revised Policy on Same-Day Dual Filings in China: Invention and Utility Model Applications
There are two types of patent protection in China: Invention patents, which are similar to utility patents in the US; and utility model patents (similar to petty or minor patents), which may be granted for technical solutions that relate to shapes or structures of a product.
Under Chinese patent law, when the same applicant files both an invention patent application and a utility model application for the same invention on the same day (i.e., same filing date), it is considered a same-day dual filing. Whether these applications relate to the same invention is determined based on a declaration made in the request form.
To obtain a patent for the invention, the applicant must waive the corresponding utility model right. The previous practice of amending the invention application to distinguish it from the utility model is no longer permitted under the revised rules.
Background (Previous Practice):
Previously, if the utility model right was still valid and a declaration was submitted at the time of filing, applicants had two options:
- Modify the invention application to differentiate it from the utility model, or
- Waive the utility model right.
Current Practice (Amended Rules):
Now, only the second option—waiving the utility model right—is allowed. This amendment is intended to streamline examination procedures and reduce the burden on both applicants and the patent office.
Implications for Applicants:
At the time of filing in China, applicants should carefully assess:
- Whether dual filing (for both invention and utility model) is necessary—especially if the scopes of protection are the same.
- If the scopes are identical, whether to pursue protection via a utility model or an invention patent.
What Did Those Claims Consist Of?
This is a very weird case interpreting “consisting of”. The Federal Circuit recently affirmed a ruling of non-infringement in Azurity Pharmaceuticals v. Alkem Laboratories. Azurity had sued Alkem for allegedly infringing patent claims related to a drinkable antibiotic.
The patent at issue—Azurity’s U.S. Patent No. 10,959,948—was a continuation of an earlier application that had been rejected due to prior art referencing the ingredient propylene glycol. To overcome that rejection, Azurity amended its claims to disclaim propylene glycol, arguing that its absence distinguished the invention from the prior art. Instead, Azurity used the more generic term “flavoring agent.”
At trial, both parties stipulated that “flavoring agents” in the asserted claims could include substances with or without propylene glycol. Azurity argued that this meant a product containing a flavoring agent with propylene glycol would still infringe, regardless of the claim’s “consisting of” language.
The district court disagreed. It held that Alkem’s product—though it did contain propylene glycol—did not infringe the asserted claims because Azurity had clearly and unmistakably disclaimed that ingredient during prosecution.
As a reminder, in patent claim language:
- “Comprising” means the invention includes the listed elements, but may also include others.
- “Consisting of” is much narrower—it limits the invention strictly to the elements explicitly listed, excluding anything else.
The court concluded that Azurity’s use of “consisting of,” along with its prosecution history, was clear enough to exclude propylene glycol—and, by extension, Alkem’s product—from the scope of the claims.