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Exploring the latest in intellectual property law
IP UPDATE
Exploring the latest in intellectual property law
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No Article III Appellate Standing Under the Sun

by | May 15, 2025 |

The US Court of Appeals for the Federal Circuit dismissed Incyte’s appeal of a Patent Trial & Appeal Board decision, holding that a disappointed validity challenger lacked appellate standing to challenge the Board’s final written decision. Incyte Corp. v. Sun Pharmaceuticals Industries, Inc., Case No. 23-1300 (Fed. Cir. May 7, 2025) (Moore, C.J.; Hughes, Cunningham, JJ.) (Hughes, J., concurring).

After the Board upheld the validity of challenged claims of a patent owned by Sun Pharmaceuticals in a post-grant review proceeding (PGR), Incyte appealed and sought a determination that the claims were unpatentable. Sun Pharmaceuticals challenged whether Incyte had Article III standing to support an appeal to the Federal Circuit based on a lack of injury-in-fact.

The Federal Circuit focused on its jurisdiction to hear the appeal as a threshold issue and whether Incyte, as the party seeking review, met its burden of establishing Article III standing at the time it filed its appeal.

As context, the Federal Circuit noted that standing requires a concrete, actual, or imminent injury that is traceable to the challenged conduct and likely to be redressed by the court’s decision. Incyte asserted it had standing to appeal based on potential infringement liability and under the competitor standing doctrine.

Addressing potential infringement liability, the Federal Circuit noted Incyte’s reliance on a supplemental declaration from an in-house business development leader submitted during briefing. Noting that Incyte’s Article III standing was “not self-evident,” the Court ruled that Incyte should have presented evidence prior to its reply brief and declined to consider the supplemental evidence. Incyte was on notice that its appellate standing was challenged, and that evidence of its standing should have been submitted at the earliest possible opportunity. Finding no good cause for the delay, the Court declined to exercise its discretion to consider Incyte’s supplemental evidence and, based only on earlier submitted evidence, found that Incyte failed to establish that it had “concrete plans for future activity” that would create a “substantial risk of future infringement.”

In its discussion of the competitor standing doctrine, which allows competitors to challenge patents that could harm their competitive position, the Federal Circuit found the doctrine inapplicable because Incyte failed to show it would suffer economic harm from the Board’s ruling on patent validity. Rather, the Board’s ruling upholding specific patent claims “does not, by the operation of ordinary economic forces, naturally harm a [challenger] just because it is a competitor in the same market as the beneficiary of the government action (the patentee).” As the Court explained, “it is not enough to show a benefit to a competitor to establish injury in fact; the party seeking to establish standing must show a concrete injury to itself.”

The Federal Circuit held that because Incyte had not shown it was currently engaged in or had non-speculative plans to engage in conduct covered by the challenged patent, it was unable to establish injury-in-fact.

In his concurrence, Judge Hughes stated that while Incyte lacked Article III standing, he believed that Federal Circuit precedent was [...]

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Designated Informative: PTO Director Declines IPR Institution Following District Court § 101 Invalidation

by | May 15, 2025 |

The US Patent & Trademark Office (PTO) designated a recent Director Review decision as informative, signaling its significance for future proceedings. The decision emphasizes that a final district court ruling invalidating a patent weighs heavily against instituting inter partes review (IPR) under the Fintiv framework, reinforcing the agency’s stance on minimizing duplicative litigation. Hulu LLC v. Piranha Media Distribution LLC, IPR2024-01252; -01253 (PTAB Director Review Apr. 17, 2025) (Stewart, PTO Dir.)

Piranha requested Director Review of the Patent Trial & Appeal Board’s decision granting institution of two IPRs filed by Hulu. Piranha argued that the decision should be reversed and the IPRs denied institution, citing a district court final judgment invalidating the challenged claims under 35 U.S.C. § 101 issued before the institution decision was made. Hulu argued that Director Review was unwarranted.

In the district court litigation, Piranha asserted that Hulu infringed claims from two patents related to integration of advertising content into digital media streams. Hulu moved to dismiss the complaint, arguing that the asserted patents were ineligible for patenting under § 101. The district court determined that the asserted claims were directed to the abstract idea of “displaying an advertisement in exchange for access to copyrighted material, as well as the abstract idea of receiving, organizing, and displaying data,” and contained no inventive concept. The district court granted Hulu’s motion to dismiss and held the claims patent ineligible and therefore invalid under § 101.

The Director explained that since a district court had already ruled the patent claims invalid, launching separate IPRs to assess their patentability on other grounds was unnecessary. The Director noted that if the Federal Circuit overturned the district court’s decision, Hulu could still pursue its invalidity arguments during remand proceedings. Declining to institute review was the more efficient and practical path under the circumstances, the Director said.

While the Board applied the Fintiv framework in its institution decision, the Director observed that the framework does not align neatly with the facts of this case, where a final district court judgment under § 101 preceded the Board’s decision. The Director ultimately concluded that a second review proceeding was unwarranted given the claims’ current invalid status.



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Breaking New Grounds to Limits of IPR Estoppel

by | May 15, 2025 |

In a matter of first impression, the US Court of Appeals for the Federal Circuit found that inter partes review (IPR) estoppel does not preclude a petitioner from relying on the same patents and printed publications as evidence in asserting a ground that could not have been raised during the IPR proceeding, such as that the claimed invention was known or used by others, on sale, or in public use. Ingenico Inc. v. IOENGINE, LLC, Case No. 23-1367 (Fed. Cir. May 7, 2025) (Dyk, Prost, Hughes, JJ.)

IOENGINE owns patents directed to a portable device, such as a USB thumb drive, that includes a processor that causes communications to be sent to a network server in response to user interaction with an interface on a terminal. Ingenico filed a declaratory judgment action against IOENGINE after one of Ingenico’s customers was sued for infringement based on Ingenico’s products. Ingenico filed IPR petitions challenging the asserted patents, which resulted in final written decisions that held most of the challenged claims unpatentable.

Back at the district court, IOENGINE proceeded with the remaining claims. At summary judgment, IOENGINE moved, under 35 U.S.C. § 315(e)(2), to preclude Ingenico from relying on “documentation related to DiskOnKey Upgrade software,” arguing that Ingenico reasonably could have been expected to raise that prior art during the IPR proceedings. The district court ruled that “Ingenico will be estopped from relying on those documents [to prove invalidity] except to the extent . . . that they form part of a substantively different combination of references that could not reasonably have been raised in the IPRs.”

At trial, Ingenico introduced evidence of a prior art USB device known as the DiskOnKey. The DiskOnKey device was offered with various software applications, including an application called Firmware Upgrader, and was equipped with capabilities described in a Software Development Kit (together, the DiskOnKey system). Ingenico argued that the DiskOnKey system invalidated the asserted claims as anticipated or obvious because it was either “on sale” or “in public use” under 35 U.S.C. § 102(b), or “known or used by others . . . before the date of the invention” under 35 U.S.C. § 102(a). The jury returned a verdict finding the patents were infringed but invalid as anticipated and obvious. Both parties appealed.

IOENGINE did not dispute the jury’s finding that the DiskOnKey system invalidated the claims-at-issue as anticipated or obvious if the DiskOnKey system was prior art, but instead argued that the jury’s finding that the Firmware Upgrader portion of the DiskOnKey system was either “on sale” or “in public use,” or “known or used by others . . . before the invention.”

The Federal Circuit found that the jury’s finding that the Firmware Upgrader was accessible to the public was supported by substantial evidence. Specifically, Ingenico had introduced a press release promoting the launch of the Firmware Upgrader and a website from which the Firmware Upgrader was available for download. IOENGINE argued that this evidence did not show actual use, but the Court rejected [...]

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Hatch-Waxman or Not, Clinical Trials Aren’t Subject to Injunction

by | May 15, 2025 |

Analyzing the permissible scope of an injunction under the Hatch-Waxman Act, the US Court of Appeals for the Federal Circuit reversed the district court’s prohibitions on an open-label extension (OLE) of a then-running clinical trial and new clinical trials and remanded for further consideration of whether prohibiting a request for an additional indication was appropriate. Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals LLC, Case No. 24-2274 (Fed. Cir. May 6, 2025) (Lourie, Reyna, Taranto, JJ.)

This appeal is one of several disputes between Jazz and Avadel regarding their competing sodium oxybate products. Jazz markets two such products: Xyrem, approved for treating excessive daytime sleepiness and certain cataplexy, and Xywav, which, in addition to Xyrem’s indications, also may be used for treating idiopathic hypersomnia. Avadel filed a § 505(b)(2) new drug application (NDA) to market its own product, Lumryz. During the pendency of the Lumryz application, Jazz obtained a patent and asserted that Avadel infringed it under 35 U.S.C. § 271(e)(2), part of the Hatch-Waxman Act, based on its filing of the Lumryz NDA. The patent was never Orange Book listed, so Avadel did not need to submit any patent certification.

The US Food & Drug Administration (FDA) approved Lumryz. Avadel launched the product, and Jazz amended its complaint to assert traditional § 271(a) – (c) infringement. Ultimately, Avadel and Jazz stipulated infringement, the patent was determined not invalid, and the jury awarded damages based on the post-launch infringement. After further proceedings, the district court permanently enjoined Avadel from seeking an idiopathic hypersomnia indication for Lumryz, offering an OLE phase of its then-running Lumryz idiopathic hypersomnia clinical trial, and against initiating new clinical trials. Avadel appealed, arguing that each of these restrictions was improper.

The Federal Circuit largely agreed with Avadel, reversing the first two prohibitions, and remanded the case back to the district court for further consideration of the prohibition against any new clinical trials. Turning first to the prohibition on new clinical trials, the Court held that initiating new trials for the purposes of submission to the FDA fell squarely within the Hatch-Waxman Safe Harbor for experimentation (under § 271(e)(1)) and thus could not be enjoined (per §271(e)(3)). Jazz unsuccessfully argued that Avadel had waived its Safe Harbor position, which required factual development.

Next, the Federal Circuit rejected the district court’s injunction against an OLE, concluding that the district court had not applied the Supreme Court’s four-factor eBay (2006) test for injunctions when deciding the appropriateness of such extraordinary relief. Refusing to determine whether an OLE extension qualified as safe-harbored activity in the first instance, the Court explained that only if such activity were deemed to be infringing on an appropriate record could it be enjoined.

Finally, with respect to prohibiting Avadel from seeking an idiopathic hypersomnia indication for Lumryz, the Federal Circuit concluded that the propriety of that restriction may turn on whether the infringement qualified under the Hatch-Waxman Act, reasoning that an injunction might run afoul of the § 271(e)(4) limitation on the scope of injunctive relief. [...]

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New Administration, Same Patent Reform Bill

by | May 8, 2025 |

A bipartisan group of senators and congressional representatives reintroduced the Patent Eligibility Restoration Act (PERA), which aims to reform the law of patent eligibility under 35 U.S.C. § 101. PERA seeks to address the challenges posed by recent Supreme Court decisions and restore clarity and predictability in the US patent system.

PERA preserves the existing categories of subject matter currently enumerated in § 101 but adds several categories of excluded subject matter. PERA proposes to eliminate all judicial exceptions to patent eligibility, specifying that certain categories, such as mathematical formulas that are not part of an invention, processes that a human could perform, mental processes, unmodified human genes, and unmodified natural material, are not eligible for patents.

A separate bipartisan group of senators and congressional representatives reintroduced the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act, which aims to protect and increase the value of US intellectual property rights by making significant reforms to the Patent Trial & Appeal Board.

PREVAIL seeks to limit Board challenges to entities that have been sued or threatened with a patent infringement lawsuit, close the statutory bar joinder loophole to prevent time-barred entities from joining instituted inter partes review (IPR) proceedings, and prevent serial petitions by applying estoppel at the time the challenge is filed instead of when the Board issues its final written decision.



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“Payment Handler”: A Nonce Term Without Instructions

by | May 8, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s ruling that a software term was a “nonce” term that invoked 35 U.S.C. § 112, sixth paragraph (i.e., a means-plus-function claim element). The Court further found that the patent specification did not recite sufficient corresponding structure, rendering the claim element indefinite. Fintiv, Inc. v. PayPal Holdings, Inc., Case No. 23-2312 (Fed. Cir. Apr. 30, 2025) (Prost, Taranto, Stark JJ.)

Fintiv sued PayPal for infringing four patents related to cloud-based transaction systems, also known as “mobile wallet platforms,” “mobile financial services platforms,” or “electronic payment systems.” During claim construction, the district court ruled that the terms “payment handler” and “payment handler service” were indefinite. The court concluded that both terms were means-plus-function limitations governed by § 112, sixth paragraph. Although the claims did not use the word “means,” the district court found that PayPal had demonstrated that the terms were drafted in a format consistent with traditional means-plus-function language, effectively substituting “payment handler” for the word “means.” The court also found that the patent specifications failed to disclose corresponding structure capable of performing the claimed functions. As a result, the court held the claims invalid for indefiniteness and entered final judgment. Fintiv appealed.

Fintiv argued that the district court erred in concluding that the payment handler terms invoked § 112(f) and that the specifications failed to disclose the structure for the claimed functions. The Federal Circuit disagreed.

The Federal Circuit analyzed the “payment-handler” terms, which did not explicitly use the word “means.” Under § 112(f), there is a rebuttable presumption that a claim term does not invoke means-plus-function treatment unless the challenger can show that the term is a nonce term that lacks “sufficiently definite structure” or only recites a function without providing enough structure to perform that function. Fintiv contended that the payment handler terms, both individually and collectively, identified the required structure. However, the Court found that PayPal had successfully rebutted the presumption since the payment handler terms recited functions without reciting sufficient structure to perform those functions. The Court agreed with the district court that the term “handler” did not convey sufficient structure to a person of ordinary skill in the art.

Having determined that the payment handler terms invoked § 112(f), the Federal Circuit sought to identify the corresponding structure described in the specifications for performing the payment handler function but found none. The Court concluded that “without an algorithm to achieve these functionalities – and, more generally, given the specifications’ failure to disclose adequate corresponding structure – we hold the payment-handler terms indefinite.”



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PTO Accelerates Patent Issuance Timeline

by | Apr 24, 2025 |

The US Patent & Trademark Office (PTO) announced that it has shortened the time between the issue notification and the issue date for patents. Historically, the time between these two events averaged about three weeks. Seeking to provide earlier protection for inventions, the PTO intends to reduce that time to about two weeks. The PTO is making the move because publishing electronic grants via the PTO online platform has allowed the PTO to eliminate redundancies and reduce the time between grant notification and the issuance date. The shortened wait time has the added benefit of potentially allowing patent applicants to avoid the Quick Path Information Disclosure Statement (IDS), which attempts to streamline filing an IDS after payment of the issue fee.

Practice Note: Given the accelerated timeline, the PTO recommends that applicants file continuation applications before payment of the issue fee to ensure codependency.



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Broadcast Alert! Applying Conventional Machine Learning to New Data Isn’t Patent Eligible

by | Apr 24, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s ruling that patents applying established machine learning methods to new data are not patent eligible under 35 U.S.C. §101. Recentive Analytics, Inc. v. Fox Corp. et al., Case No. 23-2437 (Fed. Cir. Apr. 18, 2025) (Dyk, Prost, Goldberg, JJ.)

Recentive sued Fox, alleging infringement of four patents designed to tackle long-standing challenges in the entertainment industry – namely, optimizing the scheduling of live events and refining “network maps,” which determine the content aired on specific channels across various geographic markets at set times. These patents aim to streamline broadcast operations and enhance programming efficiency.

The patents at issue can be divided into two categories: network maps and machine learning training. The machine learning training patents focus on generating optimized event schedules by training machine learning models with parameters such as venue availability, ticket prices, performer fees, and other relevant factors. The network map patents describe methods for dynamically generating network maps that assign live events to television stations across different geographic regions. These methods utilize machine learning to optimize television ratings by mapping events to stations and updating the network map in real time based on changes to the schedule or underlying criteria. The patents’ specifications explain that the methods employ “any suitable machine learning technique” using generic computing machines.

Fox moved to dismiss on the grounds that the patents were subject matter ineligible under § 101. Recentive acknowledged that the concept of preparing network maps had existed for a long time. Recentive also recognized that the patents did not claim the machine learning technique. Nonetheless, Recentive argued that its patents claimed eligible subject matter because they involve using machine learning to generate custom algorithms based on training the machine learning model. Recentive characterized its patents as introducing “the application of machine learning models to the unsophisticated, and equally niche, prior art field of generating network maps for broadcasting live events and live event schedules.”

The district court disagreed and granted Fox’s motion. Applying the Alice framework, at step one, the court determined that the asserted claims were “directed to the abstract ideas of producing network maps and event schedules, respectively, using known generic mathematical techniques.” At step two, the court determined that the machine learning limitations were no more than “broad, functionally described, well-known techniques” that claimed “only generic and conventional computing devices.” The court denied Recentive’s request for leave to amend because it determined that any amendment would be futile. Recentive appealed.

For the Federal Circuit, this case presented a question of first impression: whether claims that do no more than apply established methods of machine learning to a new data environment are patent eligible.

Step One

While Recentive claimed that its machine learning approach was uniquely dynamic and capable of uncovering hidden patterns in real time, the Federal Circuit found these features to be merely standard aspects of how machine learning operates. The Court explained that iterative training and model updates are not [...]

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Transatlantic Terminology: Skilled Artisan Could Equate UK, US Word Meanings

by | Apr 24, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board unpatentability determination, finding that a skilled artisan would have found the term “sterile” in a UK publication to mean the same as the term “sterilized” in the United States. Sage Products LLC v. Stewart, Case No. 23-1603 (Fed. Cir. Apr. 15, 2025) (Reyna, Cunningham, Stark, JJ.)

Sage owns two patents related to a sterilized chlorhexidine product in a package, such as an applicator filled with an antiseptic composition for disinfecting skin. Becton, Dickinson and Company petitioned for inter partes review (IPR) of both patents. The Board relied on four key pieces of prior art, including one that was a UK publication, to find the challenged claims unpatentable. In instituting the IPR and evaluating the petition, the Board construed the term “sterilized” to mean that “the component or composition has been subjected to a suitable sterilization process such that sterility can be validated.” In the final written decision, the Board found that a skilled artisan at the time of the invention would have known, through education and experience, that the term “sterile,” as used in the UK prior art publication, is equivalent to the term “sterilized,” as used in the US and particularly in the Sage patents. Reviewing the totality of the evidence before it, including both parties’ experts’ reports and testimony, the Board determined the challenged claims were unpatentable. Sage appealed.

The Federal Circuit declined to overturn the Board’s findings, affirming the Board’s definition of a person of ordinary skill in the art and their understanding of the term “sterilized” at the time of the invention. The Court found that the Board did not ignore or disregard evidence but properly weighed the evidence before it, concluding that a skilled artisan having the education and experience required by the Board’s definition would know the differences between the US and UK regulatory standards for “sterile” and therefore would know that UK references to “sterile” items would satisfy the challenged claims’ requirement for “sterilized” items.



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New Rx for High Drug Prices? Senate Judiciary Committee Advances Six Bills With Heavy Dose of Options

by | Apr 17, 2025 | ,

The US Senate Judiciary Committee advanced to the full Senate six bills intended to reduce pharmaceutical prices and enhance market competitiveness. The package collectively targets several aspects of the pharmaceutical landscape, including pharmaceutical benefit manager (PBM) pricing practices, next-generation drug releases, patent portfolio assertions, and use of US Food and Drug Administration (FDA) regulatory mechanisms. Many of the bills’ proposals have been proposed before, but it is significant that the six bills were moved to the full Senate with bipartisan support.

The Affordable Prescriptions for Patients Act, if passed, would limit how many patents a reference product sponsor can assert in a Biologics Price Competition and Innovation Act (BPCIA) litigation against a biosimilar applicant, although such limits could be surpassed with court approval. A biologics license holder could assert up to 20 patents in a BPCIA case. Certain patents, such as method of treatment patents, would fall outside the limitation.

Against the backdrop of the Supreme Court’s 2013 holding in FTC v. Watson that certain “pay for delay” agreements are prohibited as anticompetitive, the Preserve Access to Affordable Generics and Biosimilars Act would add precision to the boundaries of permissible settlements in the pharmaceutical industry. The Federal Trade Commission (FTC) would have specific authority to institute a civil action to recover penalties, and certain presumptions would apply. For example, any agreement providing a generic or biosimilar applicant with “anything of value, including an exclusive license,” would be presumptively anticompetitive, with certain exceptions and exclusions. Terms that would remain permissible include a pre-expiration launch date, reasonable litigation expenses, and covenants not to sue for patent infringement.

Targeting the concern that branded small molecule and biologics drug manufacturers release new products with patent protection and withdraw or unfairly disincentivize older products to avoid generic competition, the Drug Competition Enhancement Act would deem the alleged practice of “product hopping” unfair competition subject to enforcement actions. The bill would define a hard switch as when a branded or biologics manufacturer discontinues or withdraws an application and introduces a follow-on product within a certain period relative to generic or biosimilar approval. It would define a soft switch as when the brand manufacturer took actions that “that unfairly disadvantage the listed drug or reference product relative to [a] follow-on product.” The bill would provide specific exclusions and justifications for branded manufacturer actions that would otherwise constitute a hard or soft switch.

Seeking to curb perceived abuses of the FDA citizen petition process, the Stop Significant and Time-Wasting Abuse Limiting Legitimate Innovation of New Generics (Stop STALLING) Act would grant the FTC the authority to bring a civil action against those filing “sham petitions” with the FDA, with penalties up to $50,000 per calendar day of review or the revenue earned by the seller of the branded product, whichever is greater. A petition could be classified as a sham based on its own objective unreasonableness, an intention to delay approval of a generic or biosimilar product, or as part of a series of covered petitions.

Based on [...]

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