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  • The Narrow Pathway to Patent Eligibility in the Federal Circuit

    By Michael Borella —

    Federal Circuit SealThe last 11 years have taught us much about the Federal Circuit; namely, that a majority of the judges simply do not seem to appreciate software.  Given the statements that several have made in opinions, one might be able to go as far as saying that some of these judges appear to fundamentally misunderstand how software is developed and works in practice.

    Like creeping autocracy, those of us subject to their rule have watched the gradual erosion of what types of inventions are eligible for patenting under 35 U.S.C. § 101.  Initially, business methods were found largely ineligible, then software executable on a general purpose computer, then software executable on any platform, and then non-software inventions as well.  The consequences of the subjectivity the Court has engendered include a highly unpredictable examination process at the U.S. Patent and Trademark Office and that the validity of any invention under § 101 can be challenged with a straight face.

    The vast majority of those in the patent legal community are aware of this slow-moving coup, and their reactions vary from disapproving frowns to recoiling in shock.  The few voices in favor of the status quo include non-practitioners from academia and those who financially benefit from things remaining the way they are.  The piecemeal nature of this death by 1000 cuts results in absurd rulings occurring before the legal community is generally aware that the velociraptors were testing the fences.  And by then, mechanisms for reversing course are compromised.

    To put some numbers to the situation, we considered all substantive § 101 decisions that came down from the Federal Circuit in 2024.

    Table
    We considered 23 cases, of which only 2 involve claims that were found eligible.  Thus, the Federal Circuit determined that claims were not eligible an astounding 91.3% of the time.  To be fair, one of the cases in which claims remained eligible — EcoFactor, Inc. v. Google LLC — was decided on procedural grounds.  Thus its inclusion in this list is for purposes of completeness.  Recalculating with this case removed results in a 95.5% invalidity rate.

    The fact that the Federal Circuit is a brutal venue for patentees with § 101 challenges should come as no surprise.  The Court has been willing to view the exceptions of Alice v. CLS Bank Int'l expansively for years.  Despite the Supreme Court's warning to "tread carefully in construing this exclusionary principle lest it swallow all of patent law," said law is now curled up like the mythical ouroborous worm.

    Put in context, between 2021 and 2023, the USPTO's Patent Trial and Appeal Board (PTAB) affirmed examiner's § 101 decisions about 90% of the time.  Thus, the appeals process for § 101 offers scant hope that patents survive.

    But it is instructive to take a deeper dive into the one case where the Federal Circuit substantively reviewed the claims and found them eligible.  Claim 11 of Contour IP Holding LLC v. GoPro, Inc. recites:

    11.  A portable, point of view digital video camera, comprising:
        a lens;
        an image sensor configured to capture light propagating through the lens and representing a scene, and produce real time video image data of the scene;
        a wireless connection protocol device configured to send real time image content by wireless transmission directly to and receive control signals or data signals by wireless transmission directly from a personal portable computing device executing     an application; and
        a camera processor configured to:
            receive the video image data directly or indirectly from the image sensor, generate from the video image data a first image data stream and a second image data stream, wherein the second image data stream is a higher quality than the first image data stream,
            cause the wireless connection protocol device to send the first image data stream directly to the personal portable computing device for display on a display of the personal portable computing device, wherein the personal portable computing device generates the control signals for the video camera, and wherein the control signals comprise at least one of         a frame alignment, multi-camera synchronization, remote file access, and a resolution setting, and at least one of a lighting setting, a color setting, and an audio setting,
            receive the control signals from the personal portable computing device, and
            adjust one or more settings of the video camera based at least in part on at least a portion of the control signals received from the personal portable computing device.

    Here, the Court found that "when read as a whole, claim 11 is directed to a specific means that improves the relevant technology . . . an improved POV camera through its combination of claim limitations and requirement that the claimed POV camera processor be configured to record low- and high-quality data streams in parallel, followed by the low-quality data stream's wireless transfer to a remote device."  According to the Court, "[t]he claims thus require specific, technological means—parallel data stream recording with the low-quality recording wirelessly transferred to a remote device—that in turn provide a technological improvement to the real time viewing capabilities of a POV camera's recordings on a remote device."

    Notably, the District Court construed the claim term "generate" to require parallel recording of video streams.  Apparently, this led the Federal Circuit to find that the claim language was sufficiently specific.  The Court also looked to the specification to find that it "discloses improving POV camera technology through specific means of generating high- and low-quality video streams in parallel and transferring a low-quality video stream to a remote device, and the claims reflect this improvement."

    Accordingly, the claim is not directed to an abstract idea, and the Court did not need to opine on whether it included an inventive concept.

    Ultimately, this decision remains frustrating, as it does not clearly delineate what level of detail is required for a software-based claim to be patent eligible.  The claim certainly had a few factors going for it, including that it was reasonably narrow, directed to a physical device, benefited from a claim construction that invoked a technical improvement, and that the claim’s technical improvement was described as such in the specification.  A sampling of the other cases in the above table finds that the majority involve claims that are directed to business methods operating on general purpose computers, include eligibility arguments not supported by the claim language, omit describing the alleged technical improvement in the specification, and/or exhibit claim language that is outcome oriented.

    These distinctions reinforce what has become the norm in modern patent drafting — submit claims that are not overly broad or vague, explicitly recite a technical improvement not believed to be in the prior art, and describe how the technical improvement solves a technical problem.  Even by doing all of this, a determination of patent eligibility is not guaranteed in the presence of such an uncertain test, but it may push the odds in the applicant's favor.

  • Regents of the University of California v. Broad Institute, Inc. (Fed. Cir. 2025)

    By Kevin E. Noonan —

    Federal Circuit SealOnly a few days after the one-year anniversary of hearing oral argument, the Federal Circuit handed down its decision in Regents of the University of California v. Broad Institute, Inc. on Monday.  The opinion reviewed the Patent Trial and Appeal Board's decision in Interference No. 106,115 between Senior Party the Broad Institute, Harvard University, and MIT (collectively, "Broad") and against Junior Party the University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (collectively "CVC" before the PTAB, here, "Regents") over CRISPR (clustered regularly interspaced short palindromic repeats) technology for gene editing.

    To briefly recap, the '115 interference was the second interference between these parties after Interference No. 106,048 was dismissed for there being no interference-in-fact; see "PTAB Decides CRISPR Interference in Favor of Broad Institute — Their Reasoning" and affirmed by the Federal Circuit in Regents of the Univ. of Cal. v. Broad Inst., Inc., 903 F.3d 1286 (Fed. Cir. 2018).  The '115 interference was provoked by Regents to overcome the basis for the decision in the '048 Interference; specifically Regents filed additional continuation applications reciting eukaryotic embodiments of CRISPR technology, reading directly on eukaryotic CRISPR claims in Broad's granted patents.  The PTAB awarded priority to Broad in this interference based, inter alia, on Broad convincing the Board that putative failures by Regents in reducing to practice their conception indicated that Regents' conception was incomplete or defective and Broad's conception thus occurred before Regents'.  The specifics of this reasoning is set forth in the Board's decision (see "PTAB Grants Priority for Eukaryotic CRISPR to Broad in Interference No. 106,115") and the parties arguments and grounds for appeal set forth in their briefs (see "CVC Files Appeal Brief in Interference No. 106,115"; "CVC Files Response and Reply Brief in Interference No. 106,115 Appeal"; "Broad Files Reply Brief in Interference No. 106,115 Cross-Appeal").

    The Federal Circuit's opinion recites much of the factual and procedural background contained in these briefs and the history of the '115 interference (including the Board's decisions on the parties' Preliminary Motions; see "PTAB Decides Parties' Motions in CRISPR Interference"), but the opinion is significant for its decision that the Board erred as a matter of law on the priority question.  It is interesting to note that the panel is careful to describe in their explication what each party claims to be the case regarding their conception and reduction to practice of the claimed eukaryotic CRISPR embodiments.

    The opinion, by Judge Reyna joined by Judges Hughes and Cunningham, affirmed in part, vacated in part, and remanded, in consideration of these grounds of appeal.  Regents based its appeal on the Board's priority determination and that its earliest provisional applications (P1, filed May 2012 and P2, filed October 2012) failed to satisfy the written description requirement and thus Broad was designated Senior Party.  For Broad, its appeal was based on the Board's claim construction regarding the scope of the term "guide RNA" as being limited to single guide RNA species wherein the crRNA and tracerRNA components of the CRISPR-Cas9 complex were covalently linked, usually by a short spacer nucleic acid (a species of which, termed Chimera A, was the basis for Regents' earliest date of conception).

    The opinion begins with Regents' disputed date of conception and the completeness thereof.  The panel held that the basis for the Board's determination that Regents' conception was defective was legal error, because it "require[ed] Regents' scientists to know that their invention would work."  This amounted to a conflation of the "distinct legal standards for conception and reduction to practice."  Reciting established law, the opinion asserts "[t]here are three stages to the inventive process: (1) conception, (2) reasonable diligence, and (3) reduction to practice," citing Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577 (Fed. Cir. 1996).  Under Burroughs Wellcome Co. v. Barr Lab'ys, Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994), the panel states that "an inventor need not know that his invention will work for conception to be complete" because, inter alia, "[k]nowledge that the invention will work, 'necessarily, can rest only on an actual reduction to practice,'" citing Applegate v. Scherer, 332 F.2d 571, 573 (CCPA 1964), and Univ. of Pittsburgh of Commonwealth Sys. of Higher Educ. v. Hedrick, 573 F.3d 1290, 1299 (Fed. Cir. 2009).  Based on this precedent, the Board having denied Regents the benefit of its earliest conception date based on uncertainty on its operability was error according to the Federal Circuit.  The panel further noted that the evidentiary basis for the Board's decision was "almost exclusively . . . Regents' scientists' statements expressing uncertainty about whether the experiments had succeeded and suggesting modifications to their CRISPR-Cas9 system" and thus to conclude that they did not have a "definite and permanent idea" on this basis was error.  The Board improperly applied the Burroughs standard, which defined "[f]actual uncertainty [which] is when '[the subsequent course of experimentation, especially experimental failures, reveal uncertainty that so undermines the specificity of the inventor's idea that it is not yet a definite and permanent reflection of the complete invention as it will be used in practice.'"  The Board's error was in depending on the Regents' scientists statements rather than determining whether those statements were accompanied by "modifications in their experiments that substantively changed their original idea."

    Another basis for Board error was the failure to determine whether Regents' conception (i.e., the "plan" for performing CRISPR gene editing in eukaryotic cells) was used successfully by Regents scientists themselves or any other groups, using only routine skill and routine techniques.  Put another way, the opinion asserts that the proper analysis is to determine "whether [Regents' scientists] had formed the idea of [the invention's] use for [its intended] purpose in sufficiently final form that only the exercise of ordinary skill remained to reduce it to practice" "without extensive research or experimentation" under Burroughs.  The experiences of third parties is relevant both for their failures (citing Amgen, Inc. v. Chugai Pharm. Co., 927 F.2d 1200, 1207 (Fed. Cir. 1991)) and successes (citing Brand v. Thomas, 96 F.2d 301, 303 (CCPA 1938)).  Also relevant, according to the opinion was the course of conduct of the "alleged inventor" with regard to whether she "contemplated the use of routine skill or methods at an asserted conception date, or used such routine skill or methods during subsequent, successful experimentation conducted by [her]."  The Board's failure to consider routine methods or skill in reducing the invention to practice, and instead "focusing almost entirely on Regents' scientists' statements about perceived experimental difficulties and doubts about success" was another source of Board error.  This error was illustrated by the Board deciding that it was not enough that the Regents' inventors had "conceived of the mechanics" of the invention but instead must have had an "operative invention" to have conceived.  In doing so, the panel found that the Board had misapplied the Court's Hitzeman v. Rutter precedent, which concerned an instance where there was a "bare hope" for a result that had "never before [been] achieved," 243 F.3d 1345, 1358–59 (Fed. Cir. 2001).  The proper distinction in this case was that the claim limitations were not directed to a result but rather to whether CRISPR functions in a eukaryotic cell, according to the opinion.  Failing (refusing, according to the panel) to consider "whether a person of ordinary skill could have achieved the function of editing eukaryotic DNA" was error by the Board.  The proper standard is there being "more than a 'general hope,' but less than knowing with certainty that the invention would work" according to the opinion.

    The Court also held that the Board erred by failing to consider Regents' evidence of the success of others in using their conception to successfully reduce eukaryotic CRISPR to practice.  By focusing on the purported difficulties encountered by Regents' scientists in reducing the invention to practice the Board legally erred in not considering whether Regents' scientists "described routine methods or skill at the asserted conception dates and used those methods or that skill to achieve purported successes during subsequent experimentation."  The Board erred by assuming that the purported difficulties in reduction to practice indicated that the invention required undue experimentation to be carried out, according to the opinion.

    The opinion sets out its conclusions as to the scope and extent of the Board's error in its priority determination:

    In sum, the Board erred by failing to consider routine methods or skill, focusing almost entirely on Regents' scientists' perceived experimental difficulties and related statements of doubt.  We thus vacate the Board's decision on conception and remand for the Board to decide on conception under the proper application of the legal framework.  On remand, the later party to reduce to practice will have the opportunity to show, under a conception date established by the correct standard, either (1) it was "the first to conceive of the invention and that it exercised reasonable diligence in later reducing that invention to practice," Cooper v. Goldfarb, 154 F.3d 1321, 1327 (Fed. Cir. 1998), or (2) it had "prior conception of the claimed subject matter and communication of the conception to the adverse claimant."  Price v. Symsek, 988 F.2d 1187, 1190 (Fed. Cir. 1993).

    The opinion then turned to Regents' appeal of the Board's decision in Preliminary Motions that Regents' earlier priority documents did not satisfy the written description requirement for determination of which party was entitled to be designated as the Senior Party.  The panel determined that the Board properly applied the rubrics regarding whether the P1 or P2 disclosures satisfied the requirement based on the complexity and unpredictability of the invention as understood by one having ordinary skill in the art. While acknowledging that working examples or description of an actual reduction to practice are not required under Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc), the panel also asserted that the determination depends on how the ordinarily skilled worker would understand what was described within "the four corners of the specification."  The Board here "properly tailored its analysis to the specific facts of this case, rather than applying a one-size-fits-all approach."  The Federal Circuit also rejected Regents' argument that the Board's decision violated the provisions of the Administrative Procedures Act for failing to consider disclosure that would have supported possession of the invention.  The Court saw no indication that the Board had improperly relied upon or only considered evidence of one route of practicing the invention (using expression vectors) and not others (microinjection) and thus upheld the Board's written description determination.

    Turning to Broad's appeal on claim construction grounds regarding the term "guide RNA," the panel held that the appeal is moot, because the Board made its determinations in denying Broad's Preliminary Motions on "independently sufficient grounds . . . unrelated to claim construction."  Under these circumstances, "the relief sought would not have an impact on the legal interests of the parties" and thus the appeal is moot.

    The decision was entirely in Regents' favor with regard to priority and amounts to almost a mandate in Regents' favor on remand.  The opinion criticized, found legal error, and vacated every basis upon which the PTAB panel awarded priority to Broad.  Of course, as a consequence the question of what group of inventors were the first to invent and thus are entitled to patents on eukaryotic versions of CRISPR remains undecided, with all the investment and licensing uncertainty that these circumstances create.  And it is unlikely that investors, licensees, or the public will have a definitive answer on this issue any earlier than one or two years from now.

    Regents of the University of California v. Broad Institute, Inc. (Fed. Cir. 2025)
    Panel: Circuit Judges Reyna, Hughes, and Cunningham
    Opinion By Circuit Judge Reyna

  • PocketPair Provides Post on Permutations to Palworld based on Pokémon Patents

    By Andrew Velzen —

    PocketPairI have previously written extensively on the ongoing legal battle between Nintendo / The Pokémon Company (referred to herein collectively as simply "Nintendo") and PocketPair over PocketPair's popular video game Palworld.[1]  This past week, PocketPair published a blog post addressing some of the recent and upcoming in-game changes.[2]  The PocketPair blog post is worth analyzing vis-a-vis Nintendo's recently filed U.S. patent applications.

    Before jumping into the meat of PocketPair's blog post, though, let's check in with the status of Nintendo's developing U.S. patent portfolio related to this case.  As I discussed in one of my previous posts, Nintendo has filed three patent applications that, on their face, are seemingly meant to target Palworld.[3]  To remain consistent with the nomenclature I have used previously, I will continue to refer to these three U.S. patent applications as:  U.S. App. No. 18/652,874 ("US-App-3"), U.S. App. No. 18/652,883 ("US-App-4"), and U.S. Pat. App. No. 18/776,729 ("US-App-5").  As I previously noted, two of these applications (US-App-3 and US-App-5) have both issued as U.S. patents (US-App-3 issued in December 2024 and US-App-5 issued in February 2025).

    There has also been additional activity in US-App-4 since my last post.  On December 4, 2024, a final Office Action issued in US-App-4 in which the Examiner rejected the pending claims as obvious under 35 U.S.C. § 103, but indicated one of the dependent claims (claim 22) as allowable.  On March 4, 2025, Nintendo filed a response with the U.S. Patent and Trademark Office (USPTO).  In the response, rather than accepting the allowable subject matter of claim 22, Nintendo responded by:  (i) submitting a further amendment that slightly narrowed the independent claims and (ii) arguing that the prior art did not render the claims obvious.  The patent examiner at the USPTO was persuaded by this response and issued a Notice of Allowance for US-App-4 on April 4, 2025.  Nintendo now has until July 7, 2025 to pay the issue fee, which would result in an issued U.S. Patent.[4]  To summarize, Nintendo now has two patents and will likely soon have a third, as well.

    Turning to PocketPair's blog post, PocketPair communicated three important things:  (1) that PocketPair "continue[s] to dispute these [patent infringement] claims and assert the invalidity of the patents in question"; (2) that PocketPair's v0.3.11 patch to Palworld (which "removed the ability to summon Pals by throwing Pal Spheres and instead changed it to a static summon next to the player" and implemented several changes to "other game mechanics") was "indeed a result of the ongoing litigation"; and (3) that PocketPair's upcoming v0.5.5 patch to Palworld (which will change "gliding" such that it is "performed using a glider rather than with Pals") represents "yet another compromise" in order to "prevent further disruptions to the development of Palworld."

    While the only currently pending litigation is in Japan (i.e., there is no counterpart patent infringement litigation currently pending in the U.S.), the U.S. patent applications described above are sister applications to the presently asserted Japanese patents and cover similar game mechanics.  Further, to my knowledge, the version of Palworld presently playable in Japan is identical to the version of Palworld playable in the U.S.  Hence, any changes made to Palworld to avoid Japanese patent infringement may also assist with (e.g., be done with the purpose of) avoiding U.S. patent infringement.

    On their face, the changes described in item (2) and (3) above from PocketPair's blog post do seem to relate directly to the claims issued (or allowed) in US-App-3, US-App-4, and US-App-5.  For example, the claims of the issued patents corresponding to US-App-3 and US-App-5, respectively, cover (i) "catching a field character" with a "catching item" and then later the "field character" fighting a "fighting character" and (ii) "catching a first virtual character" with a "virtual object" and then later launching the "virtual object" and displaying the "first virtual character" fighting a "second virtual character."[5]  Thus, the changes to Palworld in patch v0.3.11 could certainly assist in avoiding infringement of US-App-3 and US-App-5.  Likewise, the changes to Palworld in patch v0.5.5 could assist in avoiding infringement of US-App-4 (assuming US-App-4 ultimately issue as a patent), since the claims of US-App-4 relate to "causing [a] player character to board an air boarding object."[6]

    It is important to note, however, that PocketPair's modification of game mechanics is not an admission of infringement of the U.S. patents.  This is especially true when coupled with PocketPair's statement from the blog post that PocketPair "continue[s] to dispute" the patent infringement claims.  Further, while modification of game mechanics is not an admission of infringement, neither does it insulate PocketPair from liability for any previously committed acts of patent infringement.  Instead, PocketPair may simply be taking steps to mitigate risk moving forward.

    For example, should it ultimately be determined that PocketPair committed patent infringement in the U.S., multiple remedies could be applied.[7]

    A first type of remedy could include assessing damages against PocketPair in the form of a reasonable royalty.  A reasonable royalty depends on both a "royalty rate" (e.g., the monetary value per unit of infringing product sold that is attributable to the infringing feature) and a "royalty base" (e.g., the number of units of infringing product sold).  The shorter the amount of time that an infringing product is for sale, the less the so-called "royalty base."  For example, any copies of Palworld sold after any infringing feature has been removed from the game could not be included in the "royalty base" (since those copies were not infringing).  Hence, PocketPair could be amending the features to protect against a higher monetary judgment should it ultimately lose a patent infringement case.

    A second type of remedy could include an injunction.  PocketPair may be enjoined (i.e., judicially forbidden) from selling products in the future that include infringing features.  Thus, to prevent future software development / game design time being committed to removing infringing features, PocketPair may simply be proactively removing allegedly infringing features now.  Likewise, removal of such features upfront may both:  (i) preemptively adjust player expectations regarding those features and related features being included in-game; and (ii) prevent additional game features that rely on the underlying infringing features from being developed in the interim (i.e., between now and any infringement judgment).

    Appropriately thirdly, PocketPair may avoid treble damages in the U.S. by removing the features in question now (i.e., upon becoming aware of the U.S. patents in question).  According to 35 U.S.C. § 284, when there is a finding of patent infringement, "the court may increase the damages up to three times the amount found or assessed."  Treble damages are traditionally rendered as a result of the defendant's willful infringement (e.g., the defendant performing one or more actions that the defendant knows would be covered by a claim of a valid patent of which the defendant was aware).  Due to the presently ongoing legal battles (both in Japan and in the U.S.), PocketPair has almost assuredly been made aware of the two issued U.S. Patents (and allowed US-App-4).  For example, PocketPair may have received one or more threatening letters from Nintendo indicating that Nintendo believes PocketPair to be infringing Nintendo's U.S. patents (e.g., along with copies of the U.S. Patents in question).  This puts PocketPair on notice and, if PocketPair continues to infringe Nintendo's patents thereafter (without any other protections in place, such as a non-infringement opinion), should Nintendo ultimately prevail in a U.S. lawsuit, PocketPair could be on the hook for three times the amount for any infringing acts committed after being put on notice.

    As a result, it is very plausible that PocketPair maintains its innocence in terms of patent infringement liability, but for at least the three remedy-related reasons above, has decided to remove the features in question anyway.  This is speculation, but in addition to mitigating risk for the reasons above, PocketPair may also be changing in-game elements based directly on ongoing negotiations with Nintendo.  It is likely that settlement negotiations have at least been floated between the two parties (if not actively ongoing).  Further, part of those settlement negotiations would likely include PocketPair's agreement to remove certain game features from Palworld.  Thus, by removing the features from the game currently (and by issuing a public blog post about it), PocketPair may be negotiating in good faith with Nintendo.

    What happens from here on out will likely be based on PocketPair's appetite for a legal battle.  Nintendo is arguably in a relatively strong negotiating position at the moment, as it has already filed suit in Japan and has obtained two (likely soon-to-be three) related patents in the U.S.  Additionally, PocketPair has had immense success over the last year with Palworld.  It may be more of a risk than PocketPair is comfortable with to stake some of that success in a multinational litigation against Nintendo.  In other words, depending on the terms of a negotiated agreement, it may be safer for PocketPair to simply capitulate to Nintendo's requests (e.g., remove certain features from Palworld and pay Nintendo some amount of money), rather than fight the charges of infringement.[8]

    Should PocketPair desire to take this fight further, though, there are certainly avenues in the U.S. that could be pursued.  For example, PocketPair could haul Nintendo's U.S. patents back into the USPTO in an Inter Partes Review (IPR) proceeding or a Post Grant Review (PGR) proceeding in an attempt to invalidate the patents, as described in my previous pieces.

    Since its outset, this has been an interesting case to follow, with aspects touching on many different areas of intellectual property law.  Given the size of the parties involved (and the relative success of their respective games), I think the entire gaming industry is watching to see how it plays out.  Regardless of the outcome, this legal battle clearly highlights that patents remain an effective tool in the gaming space, even if their use has fallen out of vogue somewhat post-Alice.[9]

    [1] See https://www.patentdocs.org/2024/04/palworld-friend-or-foe.html; https://www.gamesindustry.biz/nintendos-patents-were-designed-to-take-on-palworld; https://www.mbhb.com/intelligence/snippets/what-the-pokemon-companys-patent-applications-are-evolving/.

    [2] https://www.pocketpair.jp/news/20250508.

    [3] https://www.gamesindustry.biz/nintendos-patents-were-designed-to-take-on-palworld; https://www.mbhb.com/intelligence/snippets/what-the-pokemon-companys-patent-applications-are-evolving/.

    [4] It is somewhat of an interesting side note that Nintendo has yet to pay the issue fee in US-App-4 (as of May 10, 2025).  Whereas in both US-App-3 and US-App-5, Nintendo paid the issue fee a week or two after getting a Notice of Allowance, in US-App-4, it has been over a month since the Notice of Allowance was issued and Nintendo has yet to pay the fee.

    [5] U.S. Pat. Nos. 11,179,111 and 12,220,638.

    [6] U.S. Pat. App. Pub. No. 2024/0286040.

    [7] See, e.g., 35 U.S.C. § 284.

    [8] Worth noting, should PocketPair and Nintendo come to terms on a settlement regarding the Japanese patent infringement suit, such a settlement agreement would most likely be written to avoid any patent litigation in the U.S., as well.  Said differently, if PocketPair agrees to a settlement with Nintendo, PocketPair would presumably be globally insulated against future litigation over related patents.

    [9] Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014).

  • Regents of the University of California v. Broad Institute (Fed. Cir. 2025)

    By Kevin E. Noonan —

    Federal Circuit SealOnly a few days after the one-year anniversary of hearing oral argument, the Federal Circuit handed down its decision in Regents of the University of California v. Broad Institute, Inc.  In short — and to be explicated more fully in a coming post — the decision was completely in the Regents' favor (except for the panel affirming the Patent Trial and Appeal Board's decision on Preliminary Motion denying Regents the benefit of the priority date of two earlier-filed provisional applications on written description grounds).  The opinion, by Judge Reyna joined by Judges Hughes and Cunningham, criticized, found legal error, and vacated every basis upon which the PTAB panel awarded priority to Broad.  The Federal Circuit also found moot Broad's cross-appeal seeking to have the language of the Count regarding "guide RNA" to encompass both single- and dual-guide embodiments.  The case was remanded to the PTAB, instructing the Board "to reconsider the issue of conception in a manner consistent with this opinion."

    Of course, as a consequence the question of what group of inventors were the first to invent and thus are entitled to patents on eukaryotic versions of CRISPR remains undecided, with all the investment and licensing uncertainty that these circumstances create.  And it is unlikely that investors, licensees, or the public will have a definitive answer on this issue any earlier than one or two years from now.

  • Valve Corp. v. Ironburg Inventions Ltd. (Fed. Cir. 2025)

    Steam Controller Litigation Makes Another Appearance before Federal Circuit

    By Andrew Velzen —

    Introduction

    On April 23, 2025, the Federal Circuit rendered an opinion in Valve Corp. v. Ironburg Inventions Ltd. surrounding U.S. Patent No. 9,289,688 (the '688 patent").  This marks the second time that the Federal Circuit has weighed in on this patent (the Federal Circuit has also issued an opinion in a related case between the same two litigants over U.S. Patent No. 8,641,525).  A proper discussion of the opinion, and of valuable takeaways therefrom, requires a review of the somewhat convoluted procedural history surrounding the litigation.

    Ironburg Inventions Ltd. ("Ironburg") is the intellectual property (IP) holding company for the renowned video gaming controller manufacturer SCUF Gaming.  According to SCUF:

    SCUF was founded in 2011 with one goal in mind: to create a better way to play so gamers can reach their fullest potential.  Our approach took one simple idea that ended up creating a whole new category of pro-performance products, that quite literally changed the game.

    (SCUF was acquired by Corsair in 2019, but still exists as a standalone brand widely recognized in the gaming industry).  SCUF is well-known for developing third-party controllers for Xbox, PlayStation, etc. over the previous decade that include added paddles on the backside, giving the player additional inputs.  For reference, an example of a SCUF PS4 controller is shown below (the paddles are the elements labeled with "SCUFIMPACT"):
    Image 1
    Procedural History

    The '688 patent (owned by Ironburg) issued on March 22, 2016 and is entitled "Games Controller."  Claim 1 of the '688 patent recites the following:

    1.  A games controller comprising:
        a case; and
        a plurality of controls located on a front end and a top of the case;
        the case being shaped to be held in both hands of a user such that the user's thumbs are positioned to operate controls located on the top of the case and the user's index fingers are positioned to operate controls located on the front end of the case; wherein
        the games controller further comprises at least one first additional control located on a back of the case in a position operable by a middle, ring or little finger of the user, the first additional control comprising a first elongate member displaceable by the user to activate a control function, wherein the first elongate member comprises a first surface disposed proximate an outer surface of the case and the first elongate member comprises a second surface opposing the first surface, the second surface being configured and arranged to be non-parallel with a portion of the outer surface of the back of the case to which the first elongate member is mounted. [emphasis added]

    As an example, Figure 5 of the '688 patent illustrates claim 1 above:

    Image 2
    The '688 patent clearly relates to some of the core innovations of SCUF controllers (namely, the paddles).

    On December 3, 2015, Ironburg filed suit in the Northern District of Georgia against Valve (a gaming industry giant, most widely recognized for its digital storefront, Steam) alleging infringement of U.S. Patent Nos. 8,641,525 and 9,089,770 based on Valve's Steam Controller (discontinued in 2019):

    Image 3

    Ironburg amended the complaint in the N.D. Georgia on May 16, 2016 to also allege infringement of the '688 patent.  In response, on February 7, 2017, Valve filed a petition for an Inter Partes Review ("IPR") with the Patent Trial and Appeal Board (PTAB) at the U.S. Patent and Trademark Office (USPTO) seeking to invalidate claims of the '688 patent.  The IPR was instituted over multiple claims of the '688 patent on grounds of unpatentability under 35 U.S.C. §§ 102(a)(1) and 103 over multiple references.  The challenges to the claims of the '688 patent addressed in the IPR are summarized below:

    Table 1In the final written decision of the IPR, the PTAB found that Uy anticipated many, but not all, of the claims of the '688 patent upon which IPR was instituted.  In particular, the PTAB found that Uy failed to anticipate claims 3, 26, and 29.  Further, the PTAB also concluded in the final written decision that Butler failed to anticipate claims of the '688 patent and that Burns could not be used as anticipatory prior art (since Valve allegedly failed to demonstrate that Burns adequately constituted a prior art printed publication).  As a result, in addition to claims 3, 26, and 29, claims 18, 19, and 21 were thus adjudicated in the final written decision as unanticipated by and non-obvious over the art cited by Valve.

    Thereafter, both Valve and Ironburg appealed to the Federal Circuit.  In particular, Valve appealed the PTAB's decision regarding Burns not constituting a prior art printed publication (and that determination's bearing on the unpatentability of dependent claims 18, 19, 21, 26, and 29) and Ironburg appealed the PTAB's decision that claim 1 was anticipated by Uy.

    In its first decision on appeal ("Valve I"), the Federal Circuit:  (1) affirmed the PTAB's determination that claim 1 was anticipated by Uy and (2) vacated the PTAB's determination that Burns did not constitute prior art (note — the argument regarding Burns properly or not properly constituting prior art almost exclusively centered on evidentiary rules of authentication, and does not warrant discussion here).  Based on these determinations, the case was then remanded to the PTAB to determine whether dependent claims 18, 19, 21, 26, and 29 were unpatentable (e.g., obvious) in light of the Burns reference.

    On remand, the PTAB issued an additional final written decision as to claims 18, 19, 21, 26, and 29.  In the additional final written decision, the PTAB determined that Valve failed to demonstrate that any of claims 18, 19, 21, 26, or 29 were anticipated or obvious (even when considering Burns).  In doing so, the PTAB indicated that "because all the claims to be addressed on remand depend directly from claim 1, . . . claim 1 is the only independent claim at issue."  The PTAB then found that claims 18, 19, 21, 26, and 29 were not demonstrated to be unpatentable by Valve based on the PTAB's determination that the combination of Burns and LaCelle did not render claim 1 unpatentable (and, therefore, could not render any of the dependent claims that depend on claim 1 obvious).  This determination was based on a purported lack of motivation to combine Burns and LaCelle.  Notably, the PTAB failed to address any of the specific claim features of claims 18, 19, 21, 26, and 29.

    Based on the above, Valve again appealed to the Federal Circuit.  Hence, at long last, we arrive at the present Federal Circuit decision ("Valve II").  In Valve II, the Federal Circuit addressed two major questions.  First, the court reviewed whether the PTAB acted improperly by reviewing the patentability of claim 1.  Second, the court also reviewed the PTAB's determination regarding a lack of motivation to combine Burns and LaCelle.  While it took some windup to get here, I think both of these issues are interesting and merit discussion.

    Regarding the PTAB's Review of the Patentability of Claim 1:

    In the first final written decision, the PTAB had found claim 1 to be anticipated by Uy and also found that Burns did not constitute proper prior art that merited consideration.  However, in remanding the case, the Federal Circuit explicitly instructed the PTAB that Burns was proper prior art that needed to be considered.  Hence, the question on remand for the PTAB was:  where do you start regarding claim 1 when analyzing dependent claims 18, 19, 21, 26, and 29?

    A first option would be to start from square one, but include the Burns reference in the analysis.  This would involve determining whether Burns, alone, anticipates claim 1 and, if Burns does not, whether LaCelle or Knight (provided by Valve in the original petition), in combination with Burns, render claim 1 obvious.  After evaluating claim 1, the PTAB could then start from Burns alone or a combination of Burns with LaCelle or Knight (depending on which of the dependent claims in question is being analyzed), and determine whether (i) Burns or (ii) LaCelle or Knight reads on the additional features of the dependent claims in question (assuming there exists a sufficient motivation to combine LaCelle and Knight with Burns).

    Option two would be to simply start directly from the Federal Circuit's conclusion; namely, that claim 1 is unpatentable (i.e., anticipated or obvious over at least some combination of the cited references).  Thereafter, the PTAB would only need to identify whether any of the dependent claims in question included features that rendered them patentably distinct from claim 1.

    The PTAB followed option one on remand.  If you read the PTAB's remand decision, it is clear that the administrative patent judges were under the misapprehension that the Federal Circuit in Valve I merely "reversed [the PTAB's prior] determination that Burns was not prior art."  As such, the PTAB reviewed the evidence and concluded that, even when Burns is properly included in the full "Winslow's tableau" of prior art, there are no references that can be combined with Burns to arrive at claim 1.  Because of this, in the PTAB's view, none of dependent claims 18, 19, 21, 26, and 29 could possibly be anticipated or obvious even with the inclusion of Burns (since they depend from claim 1, which is itself unanticipated by and non-obvious over all combinations including Burns).

    The Federal Circuit clearly thinks that this choice was incorrect.  Here in Valve II, the Federal Circuit indicates that Valve I represented much more than just a decision about what the proper realm of prior art was.  Instead, the court makes clear that the decision in Valve I "affirmed that claim 1 was unpatentable, and . . . required that the Board treat the patentability of claim 1 as no longer 'at issue'."  In saying as much, the Federal Circuit referenced issue preclusion doctrine and invoked the mandate rule sua sponte (though, notably, the concurrence in Valve II questions the wisdom in doing so).

    Per Valve II, and according to the mandate rule, the PTAB should have understood that unpatentability issues were:  "locked in on remand" (citing Atlanta Gas Light Co. v. Bennett Regul. Guards, Inc., 33 F.4th 1348, 1355 (Fed. Cir. 2022)) and foreclosed from being reconsidered (citing Amado v. Microsoft Corp., 517 F.3d 1353, 1364 (Fed. Cir. 2008)).  As such, it should have been an impossibility that dependent claims 18, 19, 21, 26, and 29 were unpatentable solely based on their dependence on claim 1, as claim 1 was already adjudicated unpatentable.

    Given the above, the PTAB should have followed option two described above.  In particular, the PTAB should simply have reviewed the added claim elements in the contested dependent claims and determined whether Burns, LaCelle, or Knight: (i) taught said additional element(s); and (ii) can be combined with one another.

    Regarding the PTAB's Determination Regarding a Lack of Motivation to Combine Burns and LaCelle:

    Probably the most important takeaway from Valve II, though, lies in the Federal Circuit's discussion of the PTAB's alleged lack of motivation to combine Burns and LaCelle.

    As noted above, according to the Federal Circuit, the PTAB improperly disregarded the mandate rule.  In doing so, the PTAB discussed the alleged lack of motivation to combine Burns and LaCelle.  However, even if the mandate rule had been properly applied by the PTAB, full consideration of claims 18, 19, 21, 26, and 29 would have required an analysis of whether Burns and LaCelle are properly combinable.  Thus, the Federal Circuit separately discussed the issue of combinability.

    According to the Federal Circuit in Valve II, the PTAB's determination of a lack of motivation to combine was "not supported by substantial evidence."  In its evaluation on remand, the PTAB determined that the technology involved was simple and that the level of ordinary skill in the art was "relatively low and did not require a college education."

    In the IPR, Valve pointed to LaCelle for the structure of a curved back control, arguing that this would serve to motivate a person of ordinary skill in the art to combine LaCelle with Burns.  In disregarding this argument, the Federal Circuit felt that the PTAB failed to address three main factual issues.  First, the Federal Circuit indicated that the PTAB failed to address the contention that LaCelle discloses controls on the back of a controller similar to Burns.  Second, the Federal Circuit felt that the PTAB did not acknowledge evidence of LaCelle's disclosure of features that are curved.  And third, the PTAB failed to give proper weight to Valve's expert's testimony regarding the predictable nature of the combination of the Burns and LaCelle.  Notably, the PTAB had refrained from considering some of the evidence related to the third factual issue on procedural grounds (as some of the evidence was submitted by Valve in a supplemental reply).  The Federal Circuit indicated that the additional evidence did not offer new theories of unpatentability and was therefore proper / should have been considered.

    At the end of the day, for the two primary reasons above, the Federal Circuit remanded the case back to the PTAB again for further consideration of claims 18, 19, 21, 26, and 29 in light of the Burns and LaCelle references.

    Takeaways

    There is obviously a lot going on here, both procedurally and substantively, both at the PTAB and at the Federal Circuit (not to mention the initial District Court proceedings and the litigation of related patents).  If I had to summarize the important points from this additional decision (Valve II), though, I would boil them down to the following:

    (1) Federal Circuit decisions regarding patentability in light of prior art are subject to the mandate rule and to the issue preclusion doctrine.  By definition, decisions regarding patentability made at the Federal Circuit level cannot be relitigated at the PTAB thereafter.  It goes a bit further than this statement, though.  Put succinctly, the PTAB (and litigants before the PTAB) should not render any decisions (or present any arguments) regarding dependent claims that modify the patentability analysis of an independent claim previously adjudicated unpatentable by the Federal Circuit.  In the present example, in Valve II, the Federal Circuit spent significant time discussing why the PTAB's analysis of claim 1 vis-a-vis Burns and LaCelle was inappropriate given the opinion rendered in Valve I.

    (2) The hurdle when it comes to demonstrating a motivation to combine under 35 U.S.C. § 103 remains relatively minimal.  This is particularly so when one or more of the following are true (and especially when all are true):  (i) the level of ordinary skill in the art is low; (ii) the pieces of art are from the same field; and (iii) experts testify to the predictability of the results of combining the art.  In the present case, both Burns and LaCelle relate to features on the backside of game controllers.  It does not necessarily matter what the intended use of the features are, especially since the features can be readily understood by a person with little technical ability.  This was further reinforced by the testimony of Valve's expert indicating that the results of combining the curvature in LaCelle with the back paddles of Burns would lead to a predictable result.

    (3) A picture is worth a thousand words.  Lastly, and this is my own viewpoint rather than anything explicitly stated in Valve II, sometimes it can be difficult to overcome viewpoints developed at first glance based on what seems to be relatively straightforward intuition.  For example, even if the PTAB's analysis on remand had been proper and/or Valve's reasoning regarding motivation to combine were unpersuasive, there still remains the hurdle of viewing two (or more) pieces of prior art side-by-side and concluding that someone of ordinary skill in the art would not understand how to combine them.

    This case is just another example of the age-old allure of hindsight bias.  This bias is particularly pronounced when looking at two drawings that seem very visually similar (and thus appear, on their face, to be readily combinable).  When reviewing the dependent claims in question, as well as the rest of this case, the Federal Circuit was confronted with the following two drawings from Burns and LaCelle.  It would arguably require some fairly impressive mental gymnastics to convince yourself that a person of ordinary skill in the art could not combine the curvature of LaCelle (top) with the paddles of Burns (bottom):

    Image 4

    Conclusion

    Based on a cursory review of the dependent claims in question, a cursory review of the Burns and LaCelle references, and the extended discussion in Valve II, I would be surprised if the remaining dependent claims are not found unpatentable on remand.  Regardless of how it ends, though, Ironburg's efforts in obtaining these patents were not in vain, even if all remaining claims of the '688 patent are invalidated on second remand to the PTAB.

    Back in 2021, Ironburg's infringement suit based on U.S. Patent No. 8,641,525 went to trial in the Western District of Washington (transferred from the Northern District of Georgia).  This resulted in a jury award of about $4M against Valve.  This result, coupled with the licensing deal that Ironburg purportedly had with Microsoft for $6M, demonstrates the value of the patents in question.

    Valve Corp. v. Ironburg Inventions Ltd. (Fed. Cir. 2025)
    Nonprecedential disposition
    Panel: Circuit Judges Lourie, Dyk, and Prost
    Opinion by Circuit Judge Dyk; opinion concurring in the result by Circuit Judge Prost

  • U.S. Trade Representative Releases 2025 Special 301 Report

    By Kevin E. Noonan —

    U.S. Trade RepresentativeOn April 29th, Ambassador Jamieson Greer, U.S. Trade Representative (USTR), issued the 2025 Special 301 Report.  In a press release (being quite different in tone from many over the past decade), the USTR stated that "[o]ur trading partners must address the concerns identified in the Special 301 Report and stop those stealing the intellectual property of hard-working businesses and individuals."  She credited the President with "ha[ving] a track record of empowering our innovators and workers," and in this vein in a somewhat threatening tone states that the Report provided "a basis for the United States to take trade enforcement action against those not playing fairly."

    The press release accompanying the Report notes that its review of Ukraine (which has been the subject of criticism in prior versions of the Report's "Watch List"; see below) continues to be suspended due to "full-scale invasion of Ukraine in February 2022."  It mentions removal of Turkmenistan from the Watch List due to a lack of "significant concerns" from stakeholder over IP protection of enforcement in that country.  On the other hand, Mexico was raised from the Watch List to the Priority Watch List (wherein a heightened level of scrutiny is applied) due to "long-standing and significant IP concerns that have not been resolved," ironically citing complaints regarding "Mexico's implementation of the United States-Mexico-Canada Agreement (USMCA)" (now having been abrogated by imposition of the Trump tariffs), followed by a litany of categories including "trademark counterfeiting and copyright piracy, protection of pharmaceutical-related IP, pre-established damages for copyright infringement and trademark counterfeiting, and plant variety protection."

    Also included in the press release are a number of "cross-cutting issues" highlighted in this year's Special 301 Report, that include online piracy, insufficient enforcement against counterfeiting, particularly from China, forced technology transfer amounting to "state-sponsored theft of trade secrets to the transfer under pressure from state actors," again citing China, aggressive promotion of the EU's exclusionary geographical indication policies, and concerns over protection of pharmaceuticals and medical devices.  (To be fair, these more general complaints echo similar concerns expressed for more than a decade in Special 301 Reports promulgated by prior administrations.)

    The Report is promulgated pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994).  The 1988 amendments were directed particularly "to provide for the development of an overall strategy to ensure adequate and effective protection of intellectual property rights and fair and equitable market access for United States persons that rely on protection of intellectual property rights" because "the absence of adequate and effective protection of United States intellectual property rights, and the denial of equitable market access, seriously impede the ability of the United States persons that rely on protection of intellectual property rights to export and operate overseas, thereby harming the economic interests of the United States."  The Report "provides an opportunity to put a spotlight on foreign countries and the laws, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers, which, in turn, harm American workers whose livelihoods are tied to America's innovation- and creativity-driven sectors."

    According to the Executive Summary of the Report itself, "[a] top trade priority for the Administration is to use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services and to provide adequate and effective protection and enforcement of intellectual property (IP) rights," the emphasis on "leverage" being new to this year's Report.  The Executive Summary further contains the exhortation that:

    This Report provides an opportunity to put a spotlight on foreign countries and the laws, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers, which, in turn, harm American workers whose livelihoods are tied to America's innovation- and creativity-driven sectors.

    Further contained in this portion of the Report is the warning that "this Administration continues to closely monitor developments in, and to engage with, those countries that have been on the Priority Watch List for multiple years," and that "[f]or countries failing to address U.S. concerns, USTR will take appropriate actions, which may include enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organization (WTO) or other trade agreement dispute settlement procedures."

    Specific concerns motivating the Report include:

    a) challenges with border and criminal enforcement against counterfeits, including in the online environment; (b) high levels of online and broadcast piracy, including through illicit streaming devices; (c) inadequacies in trade secret protection and enforcement in China, Russia, and elsewhere; (d) troubling policies on "indigenous innovation" and forced technology transfer (which can range from state-sponsored theft of trade secrets to transfer under pressure from state actors) that may unfairly disadvantage U.S. right holders in markets abroad; and (e) other ongoing, systemic issues regarding IP protection and enforcement, as well as market access, in many trading partners around the world.

    This litany seems to have been taken word-for-word from last year's Report, as was the assertion that "[c]ombating such unfair trade policies can foster American innovation and creativity and increase economic security for American workers and families."

    The Trade Representative is required under the Act to "identify those countries that deny adequate and effective protection for [intellectual property rights] (IPR) or deny fair and equitable market access for persons that rely on intellectual property protection."  The Trade Representative has implemented these provisions by creating a "Priority Watch List" and "Watch List."m  Placing a country on the Priority Watch List or Watch List is used to indicate that the country exhibits "particular problems . . . with respect to IPR protection, enforcement, or market access for persons relying on intellectual property."  These Watch Lists are reserved for countries having "the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products."

    Pursuant to the Act, the USTR reviewed "more than 100" of this country's trading partners and identified eight countries on a "Priority Watch List" (increased by one from last year) and another 18 countries on the "Watch List" (decreased from last year by transfer of Mexico to the Priority Watch List and removal of Turkmenistan from the Watch List), all relating to deficiencies in intellectual property protection in these countries.  The Priority Watch List in the 2025 Report includes Argentina, Chile, China, India, Indonesia, Mexico (newly added this year), Russia, and Venezuela.  On the Watch List this year are Algeria, Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Ecuador, Egypt, Guatemala, Pakistan, Paraguay, Peru, Thailand, Trinidad & Tobago, Turkey, and Vietnam.

    Public engagement noted in the Report includes there having been received written submissions from 45 non-governmental organizations (NGOs) and 19 foreign governments.  In addition, the USTR held a public hearing on February 19, 2025, with witnesses including representatives of "foreign governments, industry, and non-governmental organizations."  Submissions are available at www.regulations.gov, docket number USTR-2024-0023.

    The Report contains two Sections (on "Developments in Intellectual Property Rights Protection and Enforcement" and "Country Reports") and two Annexes on particular issues (the statutory bases of the Report, and government technical assistance and capacity building efforts).  Prefatory remarks to Section I include a discussion of the purpose and justifications (practical and statutory) of the Report.  These include its context in the USTR's mission, which includes "support[ing] and implement[ing] the Administration's commitment to protect American jobs and workers and to advance the economic interests of the United States."  These efforts are directed to "[f]ostering innovation and creativity," which is "essential to U.S. economic growth, competitiveness, and the estimated 63 million American jobs that directly or indirectly rely on intellectual property (IP)-intensive industries," citing USPTO, Intellectual Property and the U.S. Economy: Third Edition at 4 (Mar. 2022).  This sector represents "41% of the U.S. gross domestic product (GDP)" and "47.2 million workers that are directly employed in IP-intensive industries" who "also enjoy pay that is, on average, 60% higher than workers in non-IP-intensive industries."  These statistics support the Report's further assertions that "IP infringement, including patent infringement, trademark counterfeiting, copyright piracy, and trade secret theft, causes significant financial losses for right holders and legitimate businesses" and also "U.S. competitive advantages in innovation and creativity, to the detriment of American workers and businesses."  Specific topics set forth in this Section of the Report include:  "examples of initiatives to strengthen IP protection and enforcement; illustrative best practices demonstrated by the United States and our trading partners; U.S.-led initiatives in multilateral organizations; and bilateral and regional developments."

    The Report cites (and emphasizes) significant progress in several U.S. trading partners, including:

    • Peru, specifically enactment of measures to "criminalize the unauthorized camcording or reproduction of motion picture audiovisual works in cinemas or similar venues without requiring proof of commercial intent."

    • India, which finalized changes to its Patent Rules involving "amendments to the procedures for pre-grant oppositions, an update to the reporting form for patent working, and decreased reporting time for reporting foreign applications."  Also mentioned are withdrawal of portions of the Indian Copyright Act that would have had "severe implications for right holders who make their content available online."

    • Vietnam, where there was a first — a criminal conviction for online copyright infringement.  Also, local police partnered with the U.S. Department of Justice's International Computer Hacking and Intellectual Property (ICHIP) program and the Alliance for Creativity and Entertainment (ACE) to shut down movie piracy sites.

    • Chile, which approved a "side letter" under its bilateral free trade agreement with the U.S. permitting market access for U.S. meat and cheese products.

    The Report also notes that there are now 62 members of the 1991 Act of the International Union for the Protection of New Varieties of Plants Convention (UPOV 1991), which requires member countries to grant IP protection to new plant variety breeders.  Consequently, according to the Report, there should be "increased numbers of new plant varieties with improved characteristics, such as high-yield, tolerance to adverse environmental conditions, and better food quality" which helps "improve industry competitiveness in foreign markets, encourages the importation of foreign plant varieties, and enhances domestic breeding programs."  There are also now 114 signatories to the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty and 118 parties to the WIPO Copyright Treaty (WCT).  These treaties have "raised the standard of copyright protection around the world, particularly with regard to online delivery of copyrighted content."  In addition, the Report states that "Cameroon and Saint Kitts and Nevis have acceded to both of the WIPO Internet Treaties" since the 2024 Special 301 Report was published.

    Continuing on a positive note, the Report identifies "illustrative best IP practices" by U.S. trading partners.  These include "cooperation and coordination among national government agencies involved in IP issues is an example of effective IP enforcement," citing Brazil (citing its National Council on Combating Piracy and Intellectual Property Crimes), the Dominican Republic (citing its Interministerial Council of Intellectual Property), Ecuador (citing a digital manual from its National Service of Intellectual Rights for increasing custom enforcement efficiencies), Paraguay (citing its Intellectual Property Rights Interagency Coordination Center), and Thailand (citing a joint effort involving 16 governmental agencies to combat counterfeit goods).

    The Report also points out "specialized IP enforcement units" in Algeria (which instituted an IP academy in conjunction with WIPO), India (for further progress in specialty courts in IP matters), the Philippines (for launching a new e-Commerce Bureau for oversight of e-commerce activities) and Saudi Arabia (for establishing an IP Public Prosecution Department for training IP lawyers in criminal proceedings involving trademark, copyright, patent, and industrial design infringement).

    IP awareness and educational campaigns were also discussed, including those in Peru (where a series of 41 virtual and in-person training sessions were put on by the Copyright Directorate of the National Institute for the Defense of Free Competition and the Protection of Intellectual Property), the Philippines (where their IP office published and distributed a comic entitled the "Pirated Inferno), Spain (for campaigns against IP theft), Thailand (for establishing a "Business Class" program on cable and social media and a television quiz show), and the United Arab Emirates (for establishing a "centralized IP and intangible assets hub" for "innovators, artists, entrepreneurs, academics, and startups").

    Further noted were instances of "active participation of government officials in technical assistance and capacity building" in Algeria (involving members of their judiciary attending a workshop in Paris put on by the U.S. Patent and Trademark Office and the French national patent office); Bulgaria (for a workshop from Department of Justice's International Computer Hacking and Intellectual Property (ICHIP) program); Brazil (for participation of patent examiners from National Institute for Industrial Property in a USPTO-based workshop, joined by examiners from Argentina, Chile, Colombia, Ecuador, Mexico, Paraguay, and Peru for advanced biotechnology patent examination); India (for hosting a South Asia Judicial Conclave on IP, joined by representatives from Bangladesh, Bhutan, the Maldives, Nepal, and Sri Lanka); Pakistan (for participating in a "best practices" roundtable on digital piracy with members of the USPTO, FBI, FCC and DHS); the Philippines (for conducting National Judicial Colloquium on Intellectual Property Adjudication); and Türkiye (for specialized police training for custom officials).

    The important role of micro, small, and medium-sized enterprises (MSMEs) in the global economy, and efforts by U.S. trading partners (India, Liberia, and the United Kingdom) to provide technical and other assistance, to these entities was also mentioned.

    Multilateral and bilateral initiatives are discussed in the Report.  This section of this year's Report focuses on initiatives under the World Trade Organizations, which the Report states "are critical, as stakeholders have raised concerns regarding the use of multilateral institutions to undermine IP rights by some member countries."  Specifically, the Report describes the U.S. Intellectual Property and Innovation agenda before the TRIPS Council, and in particular work done by the Friends of Intellectual Property and Innovation (FOII) group which in 2024 "focused on how protecting and enforcing copyright can benefit creators and other workers in the creative industries."  Bilateral efforts cited in the 301 Report include Trade and Investment Framework Agreements (TIFAs) with more than 50 U.S. trading partners, which include Argentina (citing its eighth Innovation and Creativity for Economic Development (ICED) Forum), Bangladesh (which held an Investment Cooperation Forum Agreement (TICFA) Council and "discussed issues such as high levels of counterfeiting in Bangladesh and efforts to update IP laws in Bangladesh"), Egypt (which discussed "developments in Egypt's IP framework and the country's future-looking National IP Strategy"), India (regarding several meetings "discussing India's efforts to modernize its patent system and exchanging ideas on other patent, copyright, and trademark issues"), Nepal (which held a meeting on "updates to draft IP legislation in Nepal, technical assistance and trademark issues"), Paraguay (which reviewed implementation of the 2022 Intellectual Property Work Plan), the Philippines (which held a technical meeting in June to discuss IP issues raised under the United States-Philippines TIFA), and Saudi Arabia (citing a meeting to discuss "opportunities for cooperation on IP enforcement").

    Regional initiatives discussed in the Report include the Asia-Pacific Economic Cooperation (APEC) Intellectual Property Experts Group discussing ways "to build capacity and raise standards for the protection of IP rights in the Asia-Pacific region."  In particular, topics discussed included increasing effectiveness of enforcing IP rights against illicit streaming. Workshops by this group in August 2024 and February 2025 were held that "highlighted the benefits of leveraging the work products of other offices, such as to reduce patent application backlogs, increase patent quality, reduce costs, and reduce time to obtaining patents."

    Regarding what the Report terms "trade preference programs" are the Generalized System of Preferences (GSP) program, the African Growth and Opportunity Act, the Caribbean Basin Economic Recovery Act, and the Caribbean Basin Trade Partnership Act.  The Report mentions pending reviews under these programs of IP practices in South Africa and Indonesia.

    Finally, in this subsection was discussed anticipated engagement with trading partners including the Group of Seven (G7), the World Intellectual Property Organization (WIPO), the Organisation for Economic Co-operation and Development (OECD), and the World Customs Organization.

    Turning to specific issues of concern*, trademark counterfeiting is said to harm "consumers, legitimate producers, and governments . . . particularly [with regard to] medicines, automotive and airplane parts, and food and beverages that may not be subject to the rigorous good manufacturing practices used for legitimate products."  The Report accuses infringers, motivated by higher profit margins, of disregarding product quality and performance.  The Report recites a litany of negative consequences to legitimate producers and their employees (including diminished revenue and investment incentives), adverse employment impacts, and reputational damage when consumers purchase fake products, as well as increased costs for firms to enforce their intellectual property rights and loss of tax revenues generated by legitimate businesses to governments.  The potential for health and safety risks associated with counterfeiting are further discussed in the 2023 Review of Notorious Markets for Counterfeiting and Piracy according to the Report.

    Countries particularly called out in the Report in this regard include China, India, and Türkiye, from whom counterfeit "semiconductors and other electronics, chemicals, medicines, automotive and aircraft parts, food and beverages, household consumer products, personal care products, apparel and footwear, toys, and sporting goods" enter the global stream of commerce.  Vietnam is also mentioned as a manufacturer of such counterfeit goods.

    Also involved are "transit hubs" in countries including Chile, Hong Kong, Kyrgyz Republic, Singapore, Türkiye, and the United Arab Emirates that distribute counterfeit goods to third-country markets that include Brazil, Kenya, Mexico, Nigeria, Paraguay, and Russia.  Citing a 2021 Organisation for Economic Co-operation and Development (OECD) and European Union Intellectual Property Office (EUIPO) study entitled Global Trade in Fakes:  A Worrying Threat, the Report states that the "global trade in counterfeit and pirated goods reached $464 billion in 2019, accounting for 2.5% of the global trade in goods for that year," with China (and Hong Kong) being the largest country of origin for counterfeit and fake goods.  Also of concern in the Report is Singapore border enforcement for weakness and "lack of coordination between Singapore's Customs authorities and the Singapore Police Force's Intellectual Property Rights Branch" (concerns voiced last year and earlier) and Bangladesh as "one of the top five source economies for counterfeit clothing globally."

    Counterfeit pharmaceuticals remain a particular concern as a growing problem with "important consequences for consumer health and safety [that are] exacerbated by the rapid growth of illegitimate online sales . . . [and] contributes to the proliferation of substandard, unsafe medicines that do not conform to established quality standards."  Most of these goods confiscated by the U.S. were sourced from India, China, including Hong Kong, the United Arab Emirates, and Singapore, the Report alleges, and transshipped through China, India, Indonesia, Pakistan, the Philippines, and Vietnam.  The Report also states that counterfeit U.S. brand-name medicines amount to 38% of global counterfeit medicine seizures and that "substandard or falsified medical products comprise 10% of total medical products in low- and middle-income countries" (although the Report qualifies this statement with the caveat that "it may not be possible to determine an exact figure" for the latter statistic).  These trends are increasingly exacerbated by use of on-line pharmacies, with illicit providers comprising "between 67% to 75% of web-based drug merchants" according to a 2020 study.  And these counterfeit items are being distributed by "legitimate express mail, international courier, and postal services to ship counterfeit goods in small consignments" rather than large cargo ships, amounting to 90% of counterfeit goods seized at the U.S. border and making detection and enforcement more difficult.  The Report cites the Issue Focus section of the 2024 Review of Notorious Markets for Counterfeiting and Piracy (Notorious Markets List) for further information in this regard.  The Report also asserts that "[c]ounterfeiters also increasingly sell counterfeit goods on online marketplaces, particularly through platforms that permit consumer-to-consumer sales" and urge e-commerce platforms to take "proactive and effective steps to reduce piracy and counterfeiting," with suggestions on how to do so.

    The Report addresses these concerns by summarizing U.S. efforts to combat these counterfeits:

    The United States continues to urge trading partners to undertake more effective criminal and border enforcement against the manufacture, import, export, transit, and distribution of counterfeit goods.  The United States engages with its trading partners through bilateral consultations, trade agreements, and international organizations to help ensure that penalties, such as significant monetary fines and meaningful sentences of imprisonment, are available and applied to deter counterfeiting.  In addition, trading partners should ensure that competent authorities seize and destroy counterfeit goods, as well as the materials and implements used for their production, thereby removing them from the channels of commerce.  Permitting counterfeit goods, as well as materials and implements, to re-enter the channels of commerce after an enforcement action wastes resources and compromises the global enforcement effort.

    The Report identifies countries such as Canada, Columbia, Ecuador, Indonesia, Pakistan, Türkiye, and Turkmenistan as having practices that fall short of adequate efforts to stem the flow of counterfeit goods across borders.  Additionally, the emergence of more complicated supply chains and increase segmentation provides more opportunities for counterfeit goods to enter into the stream of commerce at multiple points according to the USTR.

    Online and broadcast piracy are also discussed, the Report noting that "[t]he increased availability of broadband Internet connections around the world, combined with increasingly accessible and sophisticated mobile technology, has led to the development of legitimate digital platforms for distribution of copyrighted content."  But such "technological developments have also made the Internet an extremely efficient vehicle for disseminating pirated content, thus competing unfairly with legitimate e-commerce and distribution services that copyright holders and online platforms use to deliver licensed content."  Sources of online piracy mentioned in the Report include Argentina, Bulgaria, Canada, Chile, China, Colombia, Ecuador, Guatemala, India, Mexico, the Netherlands, Pakistan, Poland, Romania, Russia, Switzerland, Thailand, and Vietnam, estimated as costing the U.S. economy "at least $29.2 billion and as much as $71 billion in lost revenue each year."

    A particular form of copyright piracy (particularly of music), termed "stream-ripping," is practiced (or ineffectively prevented) in Canada, Chile, India, Mexico, Nigeria, Russia, and Switzerland, the Report asserts.  Illicit streaming devices (ISDs) "continue to pose a direct threat to content creators, sports leagues, and live performances, as well as legitimate streaming, on-demand, and over-the-top media service providers" while illicit Internet Protocol Television (IPTV) services "unlawfully retransmit telecommunications signals and channels containing copyrighted content through dedicated web portals and third-party applications that run on ISDs or legitimate devices."  These technologies contribute "notable levels of piracy" in high levels in Algeria, Argentina, Brazil, Canada, Chile, China, Guatemala, Hong Kong, India, Indonesia, Jordan, Mexico, Morocco, Singapore, Switzerland, Taiwan, Thailand, the United Arab Emirates, and Vietnam, with China being identified as a "manufacturing hub" for these devices and Iraq as a source of satellite receivers "pre-loaded with pirate IPTV apps."  Signal theft remains a problem in Brazil, Argentina, and Honduras.

    Also noted were the use of camcorders to produce expropriated contend, in Russia, India, and China, with ineffective impediments to counteracting such illicit activities found in Argentina, Brazil, Ecuador, and Russia (which don't effectively criminalize such activities), in contrast to laws now in effect in Canada, Japan, Peru, the Philippines, and Ukraine (which the Report "urges countries to adopt laws and enforcement practices designed to prevent unauthorized camcording" similar to those adopted in these latter countries).  The Report cites approvingly a report from the Asia-Pacific Economic Cooperation (APEC) on effective practices for addressing these problems.

    The significance of the problem was synopsized in the Report as follows:

    In addition to the distribution of copies of newly released movies resulting from unauthorized camcording, other examples of online piracy that damage legitimate trade are found in virtually every country listed in the Special 301 Report and include: the unauthorized retransmission of live sports programming online; the unauthorized cloning of cloud-based entertainment software through reverse engineering or hacking onto servers that allow users to play pirated content online, including pirated online games; and the online distribution of software and devices that allow for the circumvention of technological protection measures, including game copiers and mod chips that allow users to play pirated games on physical consoles.  Piracy facilitated by online services presents unique enforcement challenges for right holders in countries where copyright laws have not been able to adapt or keep pace with these innovations in piracy.

    Difficulties in trade secret protection have its own subsection of the Report.  The problems of adequately protecting trade secrets have arisen "in a wide variety of industry sectors, including information and communications technology, services, pharmaceuticals and medical devices, environmental technologies, and other manufacturing sectors, [that] rely on the ability to protect and enforce their trade secrets and rights in proprietary information" and include theft of "business plans, internal market analyses, manufacturing methods, customer lists, and recipes" that "are often among a company's core business assets," according to the Report.  Trade secret protection is particularly important for small businesses, according to the Report, which "often rely on trade secret protection to preserve the secrecy and value of their technology" because "[s]mall businesses may not have the resources to obtain and enforce patents, which require disclosure of the technology and risk infringement by others, and therefore rely on the protection of trade secrets for their proprietary technology."  The Report states that trade secret protection (or lack of it) is a particular problem in Russia, China, and India, and "effective remedies appear to be difficult to obtain" in these countries (including an absence of criminal penalties).  "Lack of legal certainty regarding trade secrets also dissuades companies from entering into partnerships or expanding their business activities in these and other countries" the Report states.  While "[t]he United States uses all trade tools available to ensure that its trading partners provide robust protection for trade secrets and enforce trade secrets laws," according to the Report, only Taiwan was mentioned as having made successful efforts in protecting trade secrets since the last Special 301 Report.

    The United States-Mexico-Canada Agreement (USMCA) has "the most robust protection for trade secrets of any prior U.S. trade agreement" according to the Report.  The United States-China Economic and Trade Agreement (Phase One Agreement) has several trade secret commitments, the Report states, including "expanding the scope of civil liability, covering acts such as electronic intrusions as trade secret theft, shifting the burden of producing evidence, making it easier to obtain preliminary injunctions to prevent use of stolen trade secrets, allowing criminal investigations without need to show actual losses, ensuring criminal enforcement for willful misappropriation, and prohibiting unauthorized disclosure of trade secrets and confidential business information by government personnel or third-party experts."  Nevertheless, the Report also states that "USTR has been assessing China's lack of compliance with certain commitments in the Phase One Agreement, including with respect to trade secrets, and is considering potential responses."

    The Report reiterates the U.S. government's support for continued work by international organizations (including the Organisation for Economic Co-operation and Development) to support trade secret protections ("[a]ction in international organizations is . . . crucial") and cites several studies on trade secret protection regimes.

    Another subsection of the Report involves "forced" technology transfer, indigenous innovation, and preferences for indigenous IP.  The Report sets forth examples of circumstances and government activities involved in such "forced" technology transfer and the deleterious consequences on IP, market access, and situations where reciprocal disclosure on U.S. industries.  These examples include the following activities, many of which involved governmental action and all of which were mentioned in the 2022, 2023, and 2024 Special 301 Reports:

    • Requiring the transfer of technology as a condition for obtaining investment and regulatory approvals or otherwise securing access to a market or as a condition for allowing a company to continue to do business in the market;

    • Directing state-owned enterprises in innovative sectors to seek non-commercial terms from their foreign business partners, including with respect to the acquisition and use or licensing of IP;

    • Providing national firms with an unfair competitive advantage by failing to effectively enforce, or discouraging the enforcement of, U.S.-owned IP, including patents, trademarks, trade secrets, and copyright;

    • Failing to take meaningful measures to prevent or to deter cyber intrusions and other unauthorized activities;

    • Requiring use of, or providing preferences to, products or services that contain locally developed or owned IP, including with respect to government procurement;

    • Manipulating the standards development process to create unfair advantages for national firms, including with respect to participation by foreign firms and the terms on which IP is licensed; and

    • Requiring the submission of unnecessary or excessive confidential business information for regulatory approval purposes and failing to protect such information appropriately.

    China and Indonesia are particularly recognized for such practices.

    As in other years, geographical indications (i.e., country or region of origin limitations primarily for wine and foodstuffs) are discussed, specifically in the EU.  This is particularly troubling for trademarks, the Report stating that "[t]he EU GI agenda remains highly concerning because it significantly undermines protection of trademarks held by U.S. producers and imposes barriers on market access for U.S.-made goods that rely on the use of common names, such as parmesan or feta."  These practices are particularly troublesome for medium-sized enterprises (MSMEs), according to the Report, because their trademarks are "among the most effective ways for producers and companies . . . to create value, to promote their goods and services, and to protect their brands."  In addition, the Report asserts that "[t]rademark systems offer strong protections through procedures that are easy to use, cost-effective, transparent, and provide due process safeguards" and "[t]rademarks also deliver high levels of consumer awareness, significant contributions to gross domestic product and employment, and accepted international systems of protection," all of which are impeded by EU GI practices which "may result in consumer confusion to the extent that it permits the registration and protection of GIs that are confusingly similar to prior trademarks."  The Report specifically calls out EU protections for cheese varieties (including feta, danbo, and Havarti) as instances where EU protections fly in the face of these names having been used extensively throughout the world (Argentina, South Africa, and Uruguay for danbo; Australia, New Zealand, the United States, among others, for havarti), which actions undermine the benefits of international standards under the Codex Alimentarius.  The resulting trade deficits between the U.S. and EU caused by these restrictions are also mentioned, wherein the EU exported more than $1.4 billion of cheese to the United States last year while the United States exported only about $6.3 million of cheese to the EU.

    The EU's efforts are expanding the reach of these GIs from agricultural products and foodstuffs to "apparel, ceramics, glass, handicrafts, manufactured goods, minerals, salts, stones, and textiles," according to the Report.  The U.S. "continues to remain concerned about certain changes to the EU's Common Agricultural Policy, adopted in November 2021 and entered into force on January 1, 2023, which would transfer much of the GI application review process to interested EU Member States and sharply reduce the period for filing a reasoned basis in support of an opposition to register a GI."  The EU has also used instruments of international organizations (like WIPO) through the Lisbon Agreement for the Protection of Appellations of Origin and the Geneva Act thereof to expand the reach of GIs.

    While having little luck dissuading the EU from continuing and expanding its GI practices, the Report cites several bilateral agreements (with Argentina, Australia, Brazil, Canada, Chile, China, Ecuador, Indonesia, Japan, Kenya, Korea, Malaysia, Mexico, Moldova, New Zealand, Paraguay, the Philippines, Singapore, Taiwan, Thailand, Uruguay, and Vietnam, and others) that have a number of provisions aimed at curtailing some of the deleterious effects of GI protection as set forth in detail in the Report.  The Report also sets forth several U.S. "goals" in this regard:

    • Ensuring that the grant of GI protection does not violate prior rights (for example, in cases in which a U.S. company has a trademark that includes a place name);

    • Ensuring that the grant of GI protection does not deprive interested parties of the ability to use common names, such as parmesan or feta;

    • Ensuring that interested persons have notice of, and opportunity to oppose or to seek cancellation of, any GI protection that is sought or granted;

    • Ensuring that notices issued when granting a GI consisting of multiple terms identify its common name components; and

    • Opposing efforts to extend the protection given to GIs for wines and spirits to other products.

    With regard to pharmaceuticals and medical devices and market access for U.S. products, the Report contends that the USTR has been "engaging with trading partners to ensure that U.S. owners of IP have a full and fair opportunity to use and profit from their IP, including by promoting transparent and fair pricing and reimbursement systems."  (Gone from the Report is any mention of COVID-19 or the prior administration's acquiescence to international agreements foreswearing IP protection for vaccines or therapeutic products directed to the pandemic.)  In its stead are efforts to support this sector and U.S. business's stake in it, specifically to "(1) ensure robust IP systems; (2) reduce market access barriers to pharmaceutical products and medical devices, including measures that discriminate against U.S. companies, are not adequately transparent, or do not offer sufficient opportunity for meaningful stakeholder engagement; and (3) enable trading partners to appropriately recognize the value of innovative medicines and medical devices so that trading partners contribute their fair share to research and development of new treatments and cures."

    Specific countries whose practices regarding pharmaceuticals and medical devices fell under USTR's scrutiny include China (regarding (1) commitments for early resolution of patent disputes and (2) patent term extensions to compensate for "unreasonable patent office and marketing approval delays"); Canada and Mexico (with regard to compliance with relevant provisions of the USMCA); Japan (citing engagement regarding opportunities for private sector companies to provide public comments on medical pricing and reimbursement rules); and India (regarding market access barriers affecting U.S. companies that rely on IP protection).  "Serious concerns" are raised by "trading partners to unfairly issue, threaten to issue, or encourage others to issue compulsory licenses" the Report asserts.  Regarding compulsory licenses, the Report states that "governments should use compulsory licenses only in extremely limited circumstances and after making every effort to obtain authorization from the patent owner on reasonable commercial terms and conditions."  Such licenses specifically should not be used "as a tool to implement industrial policy" (which includes "providing advantages to domestic companies") or "or as undue leverage in pricing negotiations between governments and right holders."  The Report further states that the U.S. "will continue to monitor developments and to engage, as appropriate, with trading partners, including Colombia, India, Indonesia, Russia, and Türkiye.  Also mentioned are statistics showing that "large developing countries" such as Brazil, India, and Indonesia have the highest tariffs for pharmaceutical products.

    Exacerbating these problems are "unreasonable regulatory approval delays and non-transparent reimbursement policies" that "discourage the development and marketing of new drugs and other medical products" according to the Report.  The U.S. in the past year has monitored, enforced, or engaged with trading partners (Australia (concerning delays in a notification product required under the U.S.- Australian Free Trade Agreement), Brazil, Canada, China, Colombia, Japan (regarding a lack of transparency on pricing and reimbursement policies), Korea (also regarding a lack of transparency on pricing and reimbursement policies), Mexico, Russia, and Türkiye) in efforts to remedy these impediments to efficient global access to medicines while protecting IP rights.

    Trademark issues are also noted in the Report for China and Indonesia or a variety of impediments for protecting trademarks, and in Belize, Ecuador, Egypt, and Turkmenistan, which "frequently impose unnecessary administrative and financial burdens on trademark owners and create difficulty in the enforcement and maintenance of trademark rights."  Formalities and "documentation requirements" (such as "obtaining traditional pen-and-ink signatures, notarized or legalized powers of attorney, and original documents") were noted for China, Indonesia, Iraq, and the United Arab Emirates.  Other countries "do not provide the full range of internationally recognized trademark protections," including Argentina, Barbados, Belarus, and Indonesia, still others have "reportedly have slow opposition or cancellation proceedings" (India, Malaysia, Pakistan, and the Philippines) or no such proceedings at all (Belarus and Panama), and Iraq and South Africa have "extreme delays" in processing trademark applications.  Finally, "absence of adequate means for searching trademark applications and registrations, such as by online databases, makes obtaining trademark protection more complicated and unpredictable" according to the Report.

    In copyright matters, the Report cites "flawed or non-operational" copyright management organizations in several countries, naming India, Kenya, and Nigeria, despite efforts in countries including the United Arab Emirates to improve matters in this regard.  The Report also notes that "it is important for right holders of a work or phonogram to be able to freely and separately transfer their economic rights by contract and to fully enjoy the benefits derived from those rights" and "unclear limitations" in this regard can diminish the effectiveness of these rights.

    Software concerns included in the Report involve government use of unlicensed software (costing at least $46 billion globally in 2018 according to The Software Alliance).  This issue is particularly noted in Argentina, China, Ecuador, Guatemala, Indonesia, Moldova, Pakistan, Paraguay, Romania, Turkmenistan, Uzbekistan, Venezuela, and Vietnam.  The United States "urges trading partners to adopt and implement effective and transparent procedures to ensure legitimate governmental use of software."  Under the heading of "Other Issues," the Report notes that the U.S. stakeholders have raised concerns regarding the EU's Copyright in the Digital Single Market and will continue to monitor copyright issues in the EU stemming from implementation thereof, without calling out any particular EU member.

    The Report spends less time than in other years on IP and the environment (under the heading of "Intellectual Property and Sustainability) and has a more extensive section on IP and health.  In this subsection, the USTR says the U.S. "recognizes the important role of voluntary licensing in promoting greater access to health products" (in contrast with last year's discussion of the COVID IP waiver).  Such voluntary acquiescence include voluntary licensing agreements with the Medicines Patent Pool (MPP) or directly with generic manufacturers.  In an entirely different context from the 2024 Special 301 Report, what follows these broad policy assertions is a rather extensive discussion of how the WTO under the TRIPS regime has adapted to the dichotomy between international health concerns and IP protection, citing the Doha Declaration as an example (stating that "the United States respects a trading partner's right to protect public health and, in particular, to promote access to medicines for all").  However the Report further states with regard to the IP waiver under the Ministerial Decision on the TRIPS Agreement in June 2022 "[t]his five-year waiver has not increased access to COVID-19 vaccines but instead may actually negatively impact the development of new treatments and cures for the next pandemic by weakening the standard for IP protections and furthering a false narrative about the role of IP and access to medicines."  This section also emphasizes that the United States "is firmly of the view" that agreements like TRIPS "have sufficient flexibility to allow trading partners to address the serious public health problems that they may face."  And further, the Report asserts that "[t]he United States supports the WTO General Council Decision on the Implementation of Paragraph 6 of the Doha Declaration."  Finally, the Report states that the U.S. "works to ensure" that trade agreements (bilateral and regional) and "engagement in international organizations" (including World Intellectual Property Organization (WIPO) and the World Health Organization (WHO)) "are consistent with U.S. policies concerning IP and health and do not impede its trading partners from taking measures necessary to protect public health."

    This general portion of the Report concludes with a section on WTO implementation of the TRIPS agreement (emphasizing the "certain minimum standards" required of member countries) and one on dispute settlement and (IP) enforcement, wherein is announced that "[t]he United States will use all available means to resolve concerns, including bilateral dialogue and enforcement tools such as those provided under U.S. law, the World Trade Organization (WTO), and other dispute settlement procedures, as appropriate" (displaying the stick that is the alternative to the policy "carrots" extended in other portions of the Report).  Specifically mentioned are efforts towards China and the EU for activities set forth in other sections of the Report that the U.S. considers contrary to TRIPS IP provisions.

    Section II of the Report is a detailed, country-by-country discussion for each country on the Priority Watch List and the Watch List, relating to the activities (or lack thereof) of each country that results in placement of that country on these lists.

    As it has for the past several years (and across otherwise very different Administrations), the U.S. Trade Representative's 2025 Special 301 Report provides insights into both the concerns of U.S. IP rights holders and the Administration's intentions to work with other countries to increase protection for IP rights of U.S. IP rights holders.  It also reflects in some places the differences in temperament and character of this Administration.

    *Observant readers of earlier editions of the Special 301 Reports will recognize that the observations, arguments, examples, and topics in this Report echo (sometimes verbatim) analogous sections in earlier Reports, despite policy differences between different administrations.

    For additional information regarding this and other related topics, please see:

    • "U.S. Trade Representative Releases 2024 Special 301 Report," June 19, 2024
    • "U.S. Trade Representative Releases 2023 Special 301 Report," May 29, 2023
    • "U.S. Trade Representative Releases 2022 Special 301 Report," April 28, 2022
    • "U.S. Trade Representative Releases 2021 Special 301 Report," May 23, 2021
    • "U.S. Trade Representative Releases 2020 Special 301 Report," May 10, 2020
    • "U.S. Trade Representative Releases 2019 Special 301 Report," April 29, 2019
    • "U.S. Trade Representative Releases 2018 Special 301 Report," April 29, 2018
    • "U.S. Trade Representative Issues 2017 Special 301 Report," May 4, 2017
    • "U.S. Trade Representative Issues 2016 Special 301 Report," May 19, 2016
    • "U.S. Trade Representative Issues 2015 Special 301 Report," April 30, 2015
    • "U.S. Trade Representative Issues 2014 Special 301 Report," May 19, 2014
    • "U.S. Trade Representative Issues 2013 Special 301 Report," May 30, 2013
    • "U.S. Trade Representative Issues 2012 Special 301 Report," May 1, 2012
    • "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 4, 2011
    • "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 19, 2010
    • "New Administration, Same Result: U.S. Trade Representative's Section 301 Report," May 6, 2009
    • "Congressmen Criticize U.S. Trade Representative over Special 301 Report," July 1, 2008
    • "U.S. Continues Efforts to Protect Patent Rights Abroad," April 29, 2008

  • Metacel Pharmaceuticals LLC v. Rubicon Research Private Ltd. (Fed. Cir. 2025)

    By Kevin E. Noonan —

    Federal Circuit SealThe Federal Circuit affirmed a District Court decision that the label for a generic drug obtained from an ANDA would not induce infringement by reciting optional drug storage conditions the read on the NDA holder's Orange Book-listed patents, in Metacel Pharmaceuticals LLC v. Rubicon Research Private Ltd. (non-precedential).

    The matter arose in ANDA litigation over Rubicon's generic version of Metacel's Ozobax® product (an oral solution of baclofen at a dosage strength of 5 mg/5 mL; in a footnote the opinion states that this version of the drug is no longer available in the U.S.).  The drug is used to treat spasticity consequent to multiple sclerosis including "relief of flexor spasms and concomitant pain, clonus, and muscular rigidity."  The Orange Book-listed patent asserted by Metacel, U.S. Patent No. 10,610,502, contains two claims, claim 1 reciting:

    1.  A method of relaxing muscles or treating spasticity in a subject in need thereof comprising administering to the subject an effective amount of an aqueous oral solution comprising (i) baclofen, (ii) a buffer comprising citric acid, a salt of citric acid, or any combination thereof, and (iii) optionally one or more preservatives, wherein . . . the oral solution is stored . . . at from about 2 to about 8° C.

    (where the italicized language was at issue and being the purported patentable distinction over the prior art).  For its part, Rubicon's label for its ANDA-approved generic version of Metacel's drug contained these storage temperature specifications:

    Store at 20° to 25°C (68° to 77°F); excursions permitted to 15° to 30°C (59° to 86°F) [See USP Controlled Room Temperature].  It can also be stored at 2°C to 8°C (36°F to 46°F).

    (where again the italicized language was at issue).  The distinctions in storage temperature formed inter alia the basis for Rubicon's assertions in its Paragraph IV letter that its generic drug would not infringe the '502 patent under 21 U.S.C. § 355(j)(2)(A)(vii)(IV), (B)(i).

    The language in Rubicon's label was the basis for Metacel's infringement allegations that Rubicon's generic product would induce physicians and other healthcare providers to infringe the '502 patent.  Rubicon countered by filing a summary judgment motion asserting that there was no genuine issue of material fact that its product would not infringe.  Rubicon distinguished its label by arguing that inducement of infringement under 35 U.S.C. § 271(b) required the label to "to instruct or encourage, and not merely permit, infringement."  According to Rubicon, storage at temperatures encompassed in Metacel's claim language was optional and the label recommended room temperature storage conditions.  Metacel countered that Rubicon in its ANDA filing had made statements to the effect that "[t]here is no difference in [Rubicon's] storage temperature statement compare[d]" to Ozobax's label, and that Rubicon's "[s]torage [s]tatement contained in its ANDA filing also instructs" storage "at from about 2 to about 8° C."

    The District Court granted Rubicon's motion for summary judgment, based on users being guided by the label and not by statements in Rubicon's ANDA, citing  HZNP Meds. LLC v. Actavis Lab'ys UT, Inc., 940 F.3d 680, 701–02 (Fed. Cir. 2019).  After denying Metacel's request for reconsideration based on there being genuine issues of material fact and alleged procedural defects, the District Court entered judgment and this appeal followed.

    The Federal Circuit affirmed, in an opinion by Judge Lourie joined by Judges Chen and Hughes.  Because the question before the Court was summary judgment, the panel applied the law of the Third Circuit, under Frolow v. Wilson Sporting Goods Co., 710 F.3d 1303, 1308 (Fed. Cir. 2013), while reserving questions limited to patent law to Federal Circuit law under Amarin Pharma, Inc. v. Hikma Pharms. USA Inc., 104 F.4th 1370, 1376 (Fed. Cir. 2024).  Metacel argued that the District Court had neglected to consider evidence that raised genuine issues of material fact and reasserted its procedural objections that had failed before the District Court.  Neither argument prevailed before the Federal Circuit.

    On the merits, the panel held that there was no genuine issue of material fact regarding the label instructing users that storage at temperatures reading on the '502 patent claims was optional.  The standard for inducement applied by the Court was that the ANDA applicant's label must "'encourage, recommend, or promote infringement" under HZNP Meds. LLC v. Actavis Lab'ys UT, Inc., and not "merely describe the infringing use."  By its plain language, claim 1 of the '502 patent requires refrigeration while the panel appreciated Rubicon's label not to so encourage refrigeration.  According to the opinion:

    [T]he label indicates that if a downstream user decides to refrigerate the product, despite instructions to store the product at room temperature (which is noninfringing), then it should store the product at temperatures from 2°C to 8°C.  That is not inducement [emphases in opinion].

    This interpretation was similar to the issues before the Court in HZNP Meds. LLC, according to the opinion in its "if/then" factual posture.  Permissive statements such as these "do[] not encourage infringement, particularly where the label does not require subsequent application," under HZNP Meds. LLC according to the Court.

    Like the District Court, the panel also disregarded any statements limited to Rubicon's ANDA.  While acknowledging that "given the proper facts, circumstantial evidence may lend support to a finding of specific intent in drug label cases," under AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1060 (Fed. Cir. 2010), the "pertinent question is whether the proposed label instructs users to perform the patented method," under AstraZeneca LP and  Grunenthal GmbH v. Alkem Lab'ys Ltd., 919 F.3d 1333, 1339–40 (Fed. Cir. 2019).  Circumstantial evidence cannot override plain language where the label is unambiguous according to the Court, citing Bayer Schering Pharma AG v. Lupin, Ltd., 676 F.3d 1316, 1324 (Fed. Cir. 2012), and that is the situation here.  The Court also considered, as did the District Court, that the statements purported by Metacel to raise material fact issues were not available to the individuals who would be induced (i.e., healthcare workers).  And the panel agreed with the District Court that Metacel had not presented this evidence in full (omitting disclosure that did not support their argument, for example).  Finally, regarding these arguments, the panel discounted Metacel's expert testimony because it relied on Metacel's label as evidence of Rubicon's intent to induce infringement.

    On the procedural questions under Third Circuit law, the panel was unpersuaded by Metacel's arguments that the District Court abused its discretion in denying Metacel's reconsideration request.  This decision was based on Metacel raising the issue for the first time in its reconsideration motion.

    Metacel Pharmaceuticals LLC v. Rubicon Research Private Ltd. (Fed. Cir. 2025)
    Nonprecedential disposition
    Panel: Circuit Judges Lourie, Chen, and Hughes
    Opinion by Circuit Judge Lourie

  • Recentive Analytics, Inc. v. Fox Corp. (Fed. Cir. 2025)

    By Michael Borella —

    Federal Circuit SealFor the last several years, patentees and patent practitioners have been waiting for the Federal Circuit to weigh in on the patent eligibility of machine learning models.  There was an expectation that, like any other technology, the patentability under 35 U.S.C. § 101 of inventions that incorporate machine learning would need to be evaluated on a case by case basis.  But there was also some hope that the Court would provide the public with at least some hint of what aspects of machine learning might signal eligibility.  In Recentive Analytics, Inc. v. Fox Corp., these signals are weak at best.

    Patent eligibility was historically not a major concern until the Supreme Court's judicially-imposed patent eligibility test[1] of Alice Corp. Pty. Ltd. v. CLS Bank Int'l that came down in 2014.  A valid criticism of Alice is that it behaves like the proverbial nose of wax — the test exhibits a large degree of inherent subjectivity.  Depending on who is applying the test, what case law they are considering, and perhaps the phase of the moon, virtually any claim under review can be viewed as both eligible and ineligible.

    To that point, the Alice opinion made it crystal clear that the computer-controlled rubber mold of Diamond v. Diehr was still patent-eligible.  Even though Diehr was not overturned and remains good law, the Alice test as currently applied by the Federal Circuit and USPTO can easily be used to establish a strong position that the claims of Diehr were in fact ineligible.[2]

    As a consequence, the last decade has seen patent assets take on the nature of Schrodinger's Cat.  Any issued patent is in a quantum superposition — both valid and invalid — until its eligibility is "observed" by a judicial body.  This uncertainty has real-world anti-competitive consequences, making patent acquisition more expensive yet less effective for small businesses while allowing incumbent technology companies to develop into monopolies or cartels of two-three major players who never assert their patents against one another.  Why does the United States — ostensibly a proud capitalist society that welcomes competition — have such a weak patent law?  As a stated in the film version of All the President's Men, "Follow the money."

    In any event, Recentive sued Fox for infringement of U.S. Patent Nos. 10,911,811, 10,958,957, 11,386,367, and 11,537,960 in the United States District Court for the Eastern District of Pennsylvania.  According to the Federal Circuit:  "The patents purport to solve problems confronting the entertainment industry and television broadcasters: how to optimize the scheduling of live events and how to optimize network maps, which determine the programs or content displayed by a broadcaster's channels within certain geographic markets at particular times."

    The Court divided the four Recentive patents into two categories:  machine learning training and network maps.  The former are directed to (in the words of the Court):

    (i) a collecting step (receiving event parameters and target features); (ii) an iterative training step for the machine learning model (identifying relationships within the data); (iii) an output step (generating an optimized schedule); and (iv) an updating step (detecting changes to the data inputs and iteratively generating new, further optimized schedules).

    The latter are directed to (again in the words of the Court):

    (i) a collecting step (receiving current broadcasting schedules); (ii) an analyzing step (creating a network map); (iii) an updating step (incorporating real-time changes to the data inputs); and (iv) a using step (determining program broadcasts using the optimized network map).

    Despite the Court's summarization of the claim language at a high level, the actual claims are quite lengthy and narrow.  They are reproduced in the appendices below.

    Fox moved to dismiss for failure to state a claim, alleging that the patents were invalid under § 101.  The District Court agreed, finding that the claims were "directed to the abstract ideas of producing network maps and event schedules, respectively, using known generic mathematical techniques" and further lacked an inventive concept "because the machine learning limitations were no more than broad, functionally described, well-known techniques and claimed only generic and conventional computing devices."

    On appeal, the Federal Circuit affirmed.  In doing so, the Court relied heavily on admissions from Recentive that its iterative training was a known technique, fundamental to development of a machine learning model.  But the Court when further, dismissing Recentive's argument that the invention comprised a technical improvement by noting that "neither the claims nor the specifications describe how such an improvement was accomplished."  The Court also quickly disposed of Recentive's argument that the claims were eligible because they apply machine learning to specific acts of event planning.  Indeed, the Court illustrated its reductionist, myopic view of patent eligibility by stating "patents may be directed to abstract ideas where they disclose the use of an already available technology, with its already available basic functions, to use as a tool in executing the claimed process."

    The Court also found no inventive concept in the claims.  Recentive argued for "using machine learning to dynamically generate optimized maps and schedules based on real-time data and update them based on changing conditions."  Here, the Court provided a rather substance-free and conclusory analysis, stating that:

    [T]his is no more than claiming the abstract idea itself.  Such a position plainly fails to identify anything in the claims that would 'transform' the claimed abstract idea into a patent-eligible application . . . .  [W]e perceive nothing in the claims, whether considered individually or in their ordered combination, that would transform the Machine Learning Training and Network Map patents into something significantly more than the abstract idea of generating event schedules and network maps through the application of machine learning.

    Accordingly, all four Recentive patents were found to be ineligible under § 101.

    This decision, like § 101 jurisprudence as a whole, leaves itself open to criticism on numerous fronts.  Let's discuss just a few.

    First, the claim language of the machine learning patents involved updating the models based on a "real-time change to the one or more user-specific event parameters."  Once trained, models are typically used for quite a while before being retrained.  Thus, it could have been argued that this feature is unconventional.  The opinion never specifically addressed the feature, and did not appear to appreciate this nuance.

    Second, continuing a disturbing trend, the Court appears to ignore its older holdings (notably, BASCOM Global Internet Services v. AT&T Mobility) finding that computer-implemented inventions can be eligible even when involving only a combination of generic components and claimed at a high level.

    Finally, the Court fails to articulate exactly what is required for us to consider claims as an "ordered combination."  Here, as in many § 101 decisions over the years, the Court's reasoning amounts to no more than "Because we said so."

    It is a cliché that bad facts make bad law.  In an effort to stave off the worst types of overreach that might follow because of this decision, let's make it clear what the Court did not hold.

    • That all machine learning inventions are ineligible (the Court hinted that more detail in the claim and the specification regarding the technical improvement provided may be sufficient to establish eligibility);

    • That any claim reciting a machine learning process at a high level is ineligible (such a claim could be eligible based on its other elements);

    • That any claim applying a machine learning model to a new field of data is ineligible (the Court leaves open the possibility that the model or its training process can be the technical improvement if explained in enough detail).

    Nonetheless, § 101 is still a mess.  This case does nothing to change today's irrational, arbitrary, and mine-ridden patent eligibility landscape.

    Appendix A: Claim 1 of the '367 Patent

    1.  A computer-implemented method of dynamically generating an event schedule, the method comprising:
        receiving one or more event parameters for series of live events, wherein the one or more event parameters comprise at least one of venue availability, venue locations, proposed ticket prices, performer fees, venue fees, scheduled performances by one or more performers, or any combination thereof;
        receiving one or more event target features associated with the series of live events, wherein the one or more event target features comprise at least one of event attendance, event profit, event revenue, event expenses, or any combination thereof;
        providing the one or more event parameters and the one or more event target features to a machine learning (ML) model, wherein the ML model is at least one of a neural network ML model and a support vector ML model;
        iteratively training the ML model to identify relationships between different event parameters and the one or more event target features using historical data corresponding to one or more previous series of live events, wherein such iterative training improves the accuracy of the ML model;
        receiving, from a user, one or more user-specific event parameters for a future series of live events to be held in a plurality of geographic regions;
        receiving, from the user, one or more user-specific event weights representing one or more prioritized event target features associated with the future series of live events;
        providing the one or more user-specific event parameters and the one or more user-specific event weights to the trained ML model;
        generating, via the trained ML model, a schedule for the future series of live events that is optimized relative to the one or more prioritized event target features;
        detecting a real-time change to the one or more user-specific event parameters;
        providing the real-time change to the trained ML model to improve the accuracy of the trained ML model; and
        updating, via the trained ML model, the schedule for the future series of live events such that the schedule remains optimized relative to the one or more prioritized event target features in view of the real-time change to the one or more user-specific event parameters.

    Appendix B: Claim 1 of the '811 Patent

    1.  A computer-implemented method for dynamically generating a network map, the method comprising:
        receiving a schedule for a first plurality of live events scheduled to start at a first time and a second plurality of live events scheduled to start at a second time;
        generating, based on the schedule, a network map mapping the first plurality of live events and the second plurality of live events to a plurality of television stations for a plurality of cities,
        wherein each station from the plurality of stations corresponds to a respective city from the plurality of cities,
        wherein the network map identifies for each station (i) a first live event from the first plurality of live events that will be displayed at the first time and (ii) a second live event from the second plurality of live events that will be displayed at the second time, and
        wherein generating the network map comprises using a machine learning technique to optimize an overall television rating across the first plurality of live events and the second plurality of live events;
        automatically updating the network map on demand and in real time based on a change to at least one of (i) the schedule and (ii) underlying criteria,
        wherein updating the network map comprises updating the mapping of the first plurality of live events and the second plurality of live events to the plurality of television stations; and
        using the network map to determine for each station (i) the first live event from the first plurality of live events that will be displayed at the first time and (ii) the second live event from the second plurality of live events that will be displayed at the second time.

    [1] For sake of completeness, the test was explained by the justices as "First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts [(i.e., laws of nature, natural phenomena, and abstract ideas)]. If so, we then ask, '[w]hat else is there in the claims before us?' To answer that question, we consider the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements 'transform the nature of the claim' into a patent-eligible application. We have described step two of this analysis as a search for an 'inventive concept'—i.e., an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'"

    [2] Michael Borella, Could Alice Be Used to Invalidate Diehr? Of Course It Could, Patent Docs, Apr. 20, 2021.

    Recentive Analytics, Inc. v. Fox Corp. (Fed. Cir. 2025)
    Panel:  Circuit Judges Dyk and Prost and Chief District Judge Goldberg
    Opinion by Circuit Judge Dyk

  • Sage Products, LLC v. Stewart (Fed. Cir. 2025)

    By Kevin E. Noonan —

    Federal Circuit SealWhen a prevailing challenger withdraws from an appeal in post-grant proceedings, the Director can intervene under 35 U.S.C. § 143, which is what happened in an appeal in Sage Products, LLC v. Stewart after Challenger Becton Dickinson & Co. ("BD") withdrew after prevailing in having all challenged claims invalidated for anticipation or obviousness.

    The case arose as an inter partes review (IPR) of Sage Products' U.S. Patent Nos. 10,398,642 and 10,688,067 directed to antiseptic compositions comprising chlorhexidine for disinfecting skin.  Claims 1-3, 5-8, 10-18, and 20 of the '642 patent and claims 1-3, 5-8, and 10-19 of the '067 patent were challenged, and representative challenged claims of the '642 patent are set forth in the opinion:

    1.  A sterilized chlorhexidine product for topical dis- infection, said sterilized chlorhexidine product comprising:
        a sterilized chlorhexidine gluconate composition;
        an applicator for facilitating application of the sterilized chlorhexidine composition; and
        a receptacle containing the sterilized chlorhexidine gluconate composition to provide the sterilized chlorhexidine gluconate composition to impregnate the applicator when the receptacle is compromised;
        wherein the sterilized chlorhexidine gluconate composition comprise s chlorhexidine gluconate and alcohol.

    7.  The sterilized chlorhexidine product of claim 1, wherein the sterilized chlorhexidine gluconate composition further comprises one or more additives selected from the group consisting of a sterilized surfactant, a sterilized pH adjuster, sterilized odorant, a sterilized colorant, a sterilized stabilizer, a sterilized skin protectant, a sterilized preservative, or combinations thereof.

    10.  The sterilized chlorhexidine product of claim 1, wherein said sterilized chlorhexidine article has a sterility assurance level [SAL] of from 10-3 to 10-9.

    (where italicized terms were at issue in the IPR).  The opinion notes that the specification defines the term "sterilized" to mean "where such sterility can be validated" and that sterilization can be achieved using heat and radiation treatment.

    Four prior art references were successfully asserted against Sage's claim:  first, a printed publication (termed "PAR") from the United Kingdom's Medicine and Healthcare Products Regulatory Agency ("MHRA"), which related to a specific product, ChloraPrep, comprising a marketing license grant and packaging materials related to the product approved by MHRA.  This document was relied upon in the Patent Trial and Appeals Board's (PTAB) Final Written Decision (FWD) for disclosing the ChloraPrep composition of 20 mg/mL chlorhexidine gluconate for disinfecting skin prior to medical procedures, including an applicator wherein a user breaks an interior ampule of this solution by squeezing.  Significant for the Federal Circuit's opinion is that ChloraPrep is a "sterile alcoholic antiseptic solution containing chlorhexidine gluconate and isopropyl alcohol in an applicator" (emphasis in opinion).  The second reference was a British governmental standard ("BS EN-556-1"), which sets forth specifications for labeling a medical device as being sterile (the relevant provision thereof specifies that "probability of there being a viable micro-organism on/in the device shall be equal to or less than 1 × 10-6").  The third reference was U.S. Patent Application Publication No. 2015/0190535 ("Degala"), which discloses sterilization using a "sterilizing antiseptic solution[]" and a sterilizing temperature of "about 85° C . . . to about 135° C" for "from about 1 minute to about 19 hours."  Finally, the opinion relates that the fourth reference was U.S. Patent Application Publication No. 2014/0371695 ("Chiang"), which discloses antiseptic composition applicators that include "one or more antimicrobial . . . materials in a single use applicator."  Importantly, regarding this reference, Sage's expert testified that the chlorhexidine gluconate composition in ChloraPrep was not sterilized.

    This art was asserted by BD on three grounds of invalidity.  First, that the PAR reference anticipated the challenged claims under Section 102; second, that the claims were rendered obvious under Section 103 by the PAR reference; and third, that the claims were made obvious by the PAR reference in view of Degala.  The Board construed the term "sterilized" to mean "subjected to a suitable sterilization process such that sterility can be validated."  The Board's FWD determined that the skilled worker would have understood the term "sterile" as used in the UK was the equivalent to "sterilized" as used in the U.S., and that under the totality of the evidence all of the challenged claims were invalid under all of the grounds asserted by BD.  This appeal followed.

    The Federal Circuit affirmed, in an opinion by Judge Stark, joined by Judges Reyna and Cunningham.  The Court applied a substantial evidence standard of review under IOENGINE, LLC v. Ingenico Inc., 100 F.4th 1395, 1402 (Fed. Cir. 2024); Intel Corp. v. PACT XPP Schweiz AG, 61 F.4th 1373, 1378 (Fed. Cir. 2023), and PAR Pharm., Inc. v. TWI Pharms., Inc., 773 F.3d 1186, 1196-97 (Fed. Cir. 2014); it also applied this standard to the Board's determination of the level of skill of the person of ordinary skill in the art, under Best Med. Int'l, Inc. v. Elekta Inc., 46 F.4th 1346, 1353 (Fed. Cir. 2022); and Innovention Toys, LLC v. MGA Entertainment, Inc., 637 F.3d 1314, 1324 (Fed. Cir. 2013).  The panel identified three principles under review: whether there was substantial evidence that the skilled artisan would have equated the disclosure of the PAR reference to teach a "sterilized" composition and a "sterilized" product; whether there was substantial evidence supporting the Board's determination that all elements recited in the challenged claims were also disclosed in the PAR reference; and finally whether there were procedural errors by the Board requiring appellate correction.  As put simply in the opinion after reciting the tasks the Court considered at issue the panel succinctly concluded that "Sage has not persuaded us there is any reversible error on any of these points."

    Regarding the question of whether the PAR reference taught a sterilized product, the Court rejected Sage's challenges to the Board's determinations concerning the level of skill of the ordinarily skilled worker, and specifically asserted that the artisan would have been "familiar with the challenges involved in the sterilization of chlorhexidine gluconate" and further would have had "a familiarity with UK regulations that Sage asserts the skilled artisan would lack."  These issues were part of the Board's factual findings on these questions and the competency of the skilled worker under the Board's construction regarding them (it being "implausible" for a worker having the level of skill determined by the Board not to have such an understanding).  These determinations by the Board were supported, according to the opinion, by expert testimony from BD that the Board accepted over testimony from Sage's expert, while crediting (albeit in a footnote) that apprehensions regarding the sterilization issue might have raised persuasive concerns that were quelled by the teaching of the secondary Degala reference.  The Court also found no support for Sage's contentions that the Board had "ignore[d]" or "disregard[ed]" evidence in reaching these conclusions.  Based on the equivalence the Board and the Federal Circuit understood between "sterile" in the PAR reference and "sterilized" as recited in the claims the panel also held that "the Board's conclusion that the PAR teaches a sterilized chlorhexidine product or article — that is, a sterilized chlorhexidine composition and an applicator — is also supported by substantial evidence," including in this regard the further teachings of the Chiang reference.  And the Court also affirmed the Board's conclusions regarding the qualifications of BD's expert and the Board's crediting of his conclusions over those proffered by Sage's expert.  In every regard the Court concluded that Sage had shown no reversible error by the Board.

    The opinion further addresses the Board's conclusions concerning limitations recited in challenged dependent claims and found no error there either.  These included the term "sterilized colorant" and that "sterilized chlorhexidine article has a [SAL] of from 10-3 to 10-9."  For the former the Board relied upon the parties' experts that these "inactive" ingredients would also need to be sterilized for the composition as a whole to be characterized as being "sterile," which determination the panel affirmed as being supported by substantial evidence.  Similarly, the Court held that BD's expert's testimony regarding the SAL range recited in certain of the challenged claims would be satisfied by the PAR prior art disclosure.

    Turning to Sage's arguments reciting procedural errors by the Board the opinion found none on several issues.  These included, for example, alleged abuse of discretion by the Board in understanding the petition to contend that "sterile," as used in the PAR, would be understood by the skilled artisan to mean "sterilized" as recited in the claims.  These contentions by Sage "simply repeat[], in procedural garb, the same factual challenge we have already discussed relating [to] the knowledge of the person of ordinary skill in the art" and were rejected by the panel for the same reasons.  Nor was the panel persuaded that the Board had erred in considering the expert testimony proffered by the parties, particularly BD's expert under Monsanto Tech. LLC v. E.I. DuPont de Nemours & Co., 878 F.3d 1336, 1345 (Fed. Cir. 2018), and Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1328 (Fed. Cir. 2001), or confirmatory testimony from BD employees knowledgeable regarding that the product sold in the UK contained sterilized chlorhexidine gluconate (while somewhat confusingly also holding that even if this testimony had been introduced in error Sage was not prejudiced by it).

    The opinion concludes with one further Sage objection, that the PAR reference was not enabling, which it must be under Bristol-Myers Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368, 1379 (Fed. Cir. 2001).  The panel's "brief" comment in rejecting this argument was that the Board had properly considered BD's expert testimony of what the skilled worker would understand regarding PAR's teachings; the disclosure in the Chiang reference that the product was sterilized with ethylene oxide; Sage's expert testimony regarding sterilization using ethylene oxide; and the Degala reference's testimony regarding more generally methods for sterilizing a solution of chlorhexidine gluconate.  None of these considerations raised any procedural issues according to the Federal Circuit that would justify disturbing the Board's decision that the claims of the '642 and '067 patents were invalid.

    Sage Products, LLC v. Stewart (Fed. Cir. 2025)
    Panel:  Circuit Judges Reyna, Cunningham, and Strark
    Opinion by Circuit Judge Stark

  • Recor Medical, Inc. v. Medtronic Ireland Mfg. (Fed. Cir. 2025)

    By Kevin E. Noonan —

    Federal Circuit SealThe inter partes review provisions of the Leahy-Smith America Invents Act have been criticized for the propensity of the Patent Trial and Appeal Board (PTAB) to find invalid all or at least some of the challenged claims, frequently on obviousness grounds.  Failure to so find, in addition to being less common has also often upheld on appeal, in view of the substantial evidence standard of review on factual questions involved in both novelty and obviousness questions before the Board.  The Federal Circuit's recent decision in Recor Medical, Inc. v. Medtronic Ireland Mfg. illustrates circumstances under which the Board's obviousness determination did not pass muster.

    Recor Medical and Otsuka Medical Devices Co. challenged claims 1-4 and 8-12 of Medtronic's U.S. Patent No. 8,845,629 on obviousness grounds under 35 U.S.C. § 103; the challenged claims concerned an apparatus used to disrupt or destroy renal nerves to treat diseases exemplified in the opinion as "heart failure, renal failure, and hypertension."  Claim 1 was set forth in the opinion as representative:

    1.  An ultrasound apparatus for thermally-induced renal neuromodulation, the apparatus comprising:
        a catheter sized and shaped for delivery within a blood vessel to a vicinity of neural fibers that contribute to renal function;
        an ultrasound transducer carried by the catheter, wherein the ultrasound transducer is configured to transmit ultrasound energy waves to target renal neural fibers outside of the blood vessel to thermally induce modulation of target neural fibers while protecting non-target tissue in the blood vessel wall from thermal injury; and
        an expandable member carried by a distal region of the catheter,
        wherein the expandable member is configured to vary between a reduced configuration for delivery and retrieval and an expanded deployed configuration, and
        wherein the ultrasound transducer is positioned on a shaft of the catheter and within the expandable member.

    Challengers asserted U.S. Patent App. Pub. No. 2003/0216792 ("Levin") and U.S. Patent No. 6,669,655 ("Acker") in combination, and on other grounds based on the Acker disclosure and the knowledge of those of ordinary skill in the art.  Levin was relied upon for teaching renal nerve ablation using a "catheter-based approach" combined with Acker for using an ultrasound catheter, which obviousness contention the PTAB rejected based on there being no motivation to combine these references' teachings nor it not being obvious to try using ultrasound for renal neuromodulation as claimed.  The Board applied similar reasoning to Challenger's obviousness contentions based on Acker as the sole prior art reference coupled with the knowledge of the ordinarily skilled artisan.  The Board issued its Final Written Decision and this appeal followed.

    The Federal Circuit vacated and remanded for further consideration by the PTAB, in an opinion by Judge Prost, joined by Judges Mayer and Lourie.  Challengers made two contentions before the Federal Circuit:  first, that the Board erred in not considering the Acker reference for "everything it teaches," citing Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015); and second that it would not have been "obvious to try" using ultrasound for this purpose.

    Regarding the first argument, the panel agreed that the Board erred for limiting its consideration of the Acker reference to pulmonary veins.  The Court considered this reference to teach using ultrasound catheters to deliver the energy used in the '629 patent to "a blood vessel" or "circulatory vessel" (emphasis in opinion).  This understanding of greater breadth of the Acker reference's teaching was supported by disclosure in Acker that ultrasound energy "can be used to ablate ring-like regions around other tubular anatomical structures" (which presumably could include blood vessels other than the pulmonary veins expressly disclosed in the Acker reference).  Failure to consider this broader scope was error according to the panel, citing Merck & Co. v. Biocraft Labs., Inc., 874 F.2d 804, 807 (Fed. Cir. 1989).  The panel further found error in a suggestion from the Board's reasoning that the art either "actually operate[d] to perform the claimed invention or that the prior art be enabled," citing Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989), and In re Etter, 756 F.2d 852, 859 (Fed. Cir. 1985) (en banc).  Under KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007), an obviousness determination must employ an "expansive and flexible approach" in which the person of ordinary skill is "a person of ordinary creativity, not an automaton," according to the opinion, and failure to apply these principles was error requiring the Board to reconsider the challenge on remand.

    With regard to Challengers' "obvious to try" contentions, the panel treated this as a question of fact for which the Board is entitled to "substantial evidence" review.  The argument was taken directly from the KSR decision, wherein the Court recognized the requirements that there be "(1) a design or market need to solve a particular problem, and (2) that 'there are a finite number of identified, predictable solutions'" for which there was a reasonable expectation of success.  In this case, the panel recognized that the methods in the prior art and the ultrasound energy source recited in the challenged claims of the '629 patent used thermal energy to ablate renal nerves, and that ultrasound was one of the finite number of alternatives that included "electrical, ultrasound, radiofrequency, cryogenics, microwave, laser, chemical, induction, radiation, and mechanical methods."  The panel rejected Medtronic's arguments that the failure of the prior art to suggest ultrasound put the claimed method outside the scope of the "finite number of alternatives" supporting an obviousness determination, on the grounds that KSR requires a consideration of whether the skilled person "ha[d] good reason to pursue the known options within his or her technical grasp."  Challengers provided "ample evidence" in that regard, according to the opinion, from the cited prior art as well as other references using catheters for renal neuromodulation that relied on other energy sources (Levin) and perhaps more persuasively, using ultrasound for neuroablation in blood vessels in other organs (Acker), as well as "DC current, AC current, radiofrequency, microwave, heating elements, light emitting elements, and ultrasound" disclosed in other prior art.  This universe of alternatives was sufficiently limited to satisfy the KSR rubrics for what is "obvious to try" for this panel, citing Valeant Pharms. Int'l, Inc. v. Mylan Pharms. Inc., 955 F.3d 25, 34 (Fed. Cir. 2020) (ten variables).  The Court also considered successful use of ultrasound to have been reasonably predictable, and thus that "a person of ordinary skill [would have] good reason to pursue [these] known options" under KSR.

    Recor Medical, Inc. v. Medtronic Ireland Mfg. (Fed. Cir. 2025)
    Nonprecedential disposition
    Panel: Circuit Judges Lourie, Mayer, and Prost
    Opinion by Circuit Judge Prost