IP UPDATE

Headnote to self: Third Circuit rejects fair use defense for AI training

by Hannah Hurley | Oct 15, 2026 | Copyrights

The US Court of Appeals for the Third Circuit affirmed a grant of partial summary judgment in favor of Thomson Reuters, finding that Westlaw’s editorial headnotes were copyrightable and that use of those headnotes to train an artificial intelligence (AI) legal-research platform did not constitute fair use. Characterizing the dispute as “no more than an ordinary copyright case,” the Court emphasized that its decision did not resolve broader questions concerning generative AI training. Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc., Case No. 25-2153 (3d Cir. Sept. 29, 2026) (Restrepo, Montgomery-Reeves, Bove, JJ.)

Thomson Reuters operates Westlaw, a legal-research platform that provides judicial opinions accompanied by editor-written headnotes summarizing key points of law. Although judicial opinions are not copyrightable, Thomson Reuters claimed copyright protection in the headnotes, which its editors prepare under detailed guidelines requiring them to identify and summarize significant legal principles in concise standalone statements.

ROSS developed a non-generative-AI legal-research platform designed to respond to users’ legal questions by identifying relevant passages from about 10 million judicial opinions. To train its platform, ROSS retained LegalEase Solutions to prepare about 25,000 memoranda, each containing a legal question and four to six responsive judicial opinions. LegalEase used thousands of Westlaw headnotes to formulate the questions. ROSS intended to compete directly with Westlaw and marketed its platform at comparable prices.

Thomson Reuters sued ROSS for copyright infringement. The district court granted partial summary judgment, finding that 2,243 headnotes identified by Thomson Reuters’ expert were sufficiently original to warrant copyright protection and that ROSS’s use of those headnotes was not fair use. The district court certified the originality and fair use issues for interlocutory appeal.

The Third Circuit first addressed copyrightability. Applying the “extremely low” originality threshold established in the Supreme Court’s 1991 Feist Publications, Inc. v. Rural Telephone Service Co. decision, the Third Circuit concluded that the headnotes contained sufficient creativity because editors exercised judgment in selecting which legal principles to summarize and how to express them. The Third Circuit rejected ROSS’s argument that copyright protection would effectively grant Thomson Reuters a monopoly over the law, explaining that judicial opinions remained freely available. The Court also rejected ROSS’s merger doctrine argument, finding that the underlying legal principles could be expressed in many ways.

Turning to fair use, the Third Circuit considered the four statutory factors under 17 U.S.C. § 107:

As to the purpose and character of the use, the Court found ROSS’s use commercial and, at most, minimally transformative because both platforms served the same purpose, which was helping users locate relevant legal materials. Although ROSS used the headnotes to train its AI platform rather than displaying them, it could have relied on freely available judicial opinions instead. This factor weighed against fair use.
The nature of the copyrighted work weighed slightly in ROSS’s favor because the headnotes primarily conveyed factual information and legal principles. The Court noted, however, that this factor generally carries limited weight.
The amount and substantiality of the portion used weighed against fair use [...]

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Clearing the air: Impossibility is an enablement problem, not an indefiniteness problem

by Vincent Li, PhD | Oct 15, 2026 | Patents

The US Court of Appeals for the Federal Circuit affirmed a judgment of patent invalidity on alternative grounds. The Court found that claims reciting a scientific impossibility were not indefinite because their scope was clear but were invalid for lack of enablement. Satius Holding, LLC v. Samsung Electronics Co., Ltd., Case No. 25-1446 (Fed. Cir. Oct. 1, 2026) (Moore, Lourie, Hughes, JJ.)

Satius sued Samsung for infringement of a patent directed to a communications apparatus that uses a coupler to match the characteristic impedance of air to that of a wireless transmitter and receiver. A representative claim recited “[a] communications apparatus for transmitting electric or electromagnetic signals over air.” The district court found the claims indefinite because transmitting electric signals over air is scientifically impossible. Satius appealed

The Federal Circuit first construed “transmitting electric . . . signals over air” to require transmission of signals through air in electric form, which the parties agreed was impossible. Satius argued that the limitation instead described converting electric signals into electromagnetic signals for transmission over air. The Court rejected that interpretation, explaining that transmitting signals over air differs from communicating signals to air. Adopting Satius’ interpretation would improperly rewrite the claims to add a conversion step.

Turning to indefiniteness, the Federal Circuit explained that “[i]ndefiniteness is not the same as impossibility.” A claim is indefinite only if it fails to inform skilled artisans of its scope with reasonable certainty. Here, the impossible limitation appeared in both the claims and specification, and its meaning was clear. The Federal Circuit therefore rejected the district court’s conclusion that scientific impossibility rendered the claims indefinite.

The Federal Circuit nevertheless affirmed invalidity for lack of enablement. Although the district court had not decided that issue, the Federal Circuit found it appropriate to do so because the relevant facts were undisputed and the parties had fully briefed the question. The specification must enable the full scope of the claimed invention. Because the claims expressly covered transmitting “electric or electromagnetic signals over air,” and transmitting electric signals over air is scientifically impossible, the specification could not enable the full claim scope. The claims therefore failed to meet the enablement requirement.

Practice note: A scientifically impossible claim limitation does not necessarily render a claim indefinite if its scope is reasonably certain. However, expressly claiming an impossible alternative can invalidate the claim for lack of enablement, even if other claimed alternatives are operable.

Saved by the bell: Class certification isn’t the time to have a mini-trial on the merits

by Cecilia Choy, PhD | Oct 8, 2026 | Technology

The US Court of Appeals for the Ninth Circuit declined to disturb a district court’s certification of damages and injunctive classes asserting violations of California’s statutory right of publicity. The Ninth Circuit rejected challenges based on predominance and adequacy. Nolen v. PeopleConnect, Inc., Case No. 24-3894 (9th Cir. Sept. 24, 2026) (Berzon, Friedland, Mendoza, JJ.)

PeopleConnect operates Classmates.com, which maintains a searchable database containing more than 450,000 yearbooks. Users may access the site as unregistered visitors, free members, or paid subscribers. The dispute centered on subscription advertisements that allegedly used individuals’ names in connection with paid membership offers. Nolen advanced two theories to obtain class certification: a “sequence theory,” under which a visitor searching for a person could encounter a subscription advertisement after registering for a free account, and a “banner theory,” under which free members could see subscription advertisements while searching the site.

Nolen alleged that PeopleConnect violated California Civil Code § 3344 by using individuals’ names without consent in connection with advertising for paid subscriptions. She argued that the alleged commercial use occurred by making individuals’ identities searchable within the advertising flow, regardless of whether a particular name had actually been searched. The district court conditionally certified damages and injunctive classes, and the Ninth Circuit granted interlocutory review under Rule 23(f).

PeopleConnect argued that predominance was lacking because the district court had misconstrued § 3344 by permitting claims based on mere searchability. The Ninth Circuit rejected that argument as an improper attempt to litigate the merits at class certification. The Court emphasized that certification is not a “mini-trial on the merits” and that the relevant question is whether the issue is susceptible to common proof, not whether the plaintiff is ultimately likely to prevail. Because the alleged connection between the use of class members’ identities and advertising presented a common factual question, the Court concluded that the district court did not abuse its discretion in finding predominance.

The Ninth Circuit also rejected PeopleConnect’s argument that damages would require individualized proof of injury. It concluded that if PeopleConnect used class members’ names in direct connection with advertising, a factfinder could reasonably infer that those names had at least some economic value. The Court distinguished between the commercial value of the names and the resulting economic injury, concluding that both issues were capable of class-wide resolution.

PeopleConnect further argued that the proposed classes included individuals who might ultimately be ineligible for relief, including persons who had consented to certain uses of their identities, were not readily identifiable, had registered as members, or had donated yearbooks, or whose names were not searchable. The Ninth Circuit concluded that these issues did not defeat certification. Some of those factors went to predominance while others implicated manageability. The Court reiterated the presumption against denying class certification based solely on manageability concerns and explained that Rule 23 does not require a plaintiff to establish an administratively feasible method for identifying every class member at the certification stage.

The Court also rejected PeopleConnect’s adequacy challenges. PeopleConnect [...]

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Rule 54(b) doesn’t permit slicing patent’s claims into separate final judgments

by Yuhe Liu, PhD | Oct 8, 2026 | Patents

The US Court of Appeals for the Federal Circuit concluded that Federal Rule of Civil Procedure 54(b) does not permit entry of partial final judgment on some asserted claims of a patent while other asserted claims of the same patent remain unresolved. The Court explained that infringement of different claims of the same patent generally constitutes a single cause of action. ParkerVision, Inc. v. Qualcomm Inc., Case Nos. 26-1033; -1035 (Fed. Cir. Sept. 30, 2026) (Prost, Chen, Stark, JJ.)

ParkerVision sued Qualcomm in 2014 for infringement of two patents directed to electromagnetic signal conversion. One patent included asserted claims directed to down-conversion (receiver claims). The other patent included both receiver claims and asserted claims directed to up-conversion (transmitter claims).

In 2024, the Federal Circuit vacated an earlier summary judgment of noninfringement and remanded. Following claim construction on remand, the parties stipulated to noninfringement of the receiver claims, and the district court entered partial summary judgment. That ruling resolved all asserted claims of the patent directed only to down-conversion but left unresolved the transmitter claims of the patent covering both down-conversion and up-conversion. At ParkerVision’s request, and over Qualcomm’s objection, the district court entered judgment under Rule 54(b) as to the receiver claims and “severed and stayed” the transmitter claims pending appeal. ParkerVision appealed.

The Federal Circuit concluded that Rule 54(b) did not authorize entry of final judgment as to only some asserted claims of the patent covering both receiver and transmitter functionality. Rule 54(b) permits entry of final judgment only as to one or more “claims” for relief, coupled with an express determination that there is no just reason for delay. The Court explained that a “claim” under Rule 54(b) means a cause of action, not an individual patent claim.

Relying on 35 U.S.C. §§ 271(a) and 281 and Federal Circuit precedent, the Court explained that infringement of different claims of the same patent generally constitutes a single cause of action. ParkerVision’s complaint likewise pleaded a single infringement count for the patent covering both down-conversion and up-conversion and did not separately plead causes of action directed to the receiver and transmitter claims. The Court explained that because the receiver and transmitter claims were part of the same cause of action and the transmitter claims remained unresolved, the district court had not entered a final judgment subject to appellate review.

The Federal Circuit also rejected ParkerVision’s alternative jurisdictional arguments. ParkerVision contended that the judgment was final at least as to the patent directed only to down-conversion because all asserted claims of that patent had been resolved. The Court disagreed, explaining that the district court had not been asked to enter a Rule 54(b) judgment limited to that patent and had not made the required express determination that there was “no just reason for delay” as to that patent. Without a valid Rule 54(b) judgment as to the down-conversion patent, there was also no basis for pendent appellate jurisdiction over issues involving the patent covering both down-conversion and up-conversion.

The Federal Circuit [...]

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Epic omission: District court must address pre-suit notice of potential patent ineligibility when denying sanctions, fees

by Richard (Rick) Evans | Oct 8, 2026 | Patents

Addressing a district court’s denial of motions for Rule 11 sanctions and attorneys’ fees and costs, the US Court of Appeals for the Federal Circuit vacated and remanded, finding that the district court had not adequately explained why a patentee’s pre-suit notice of potential invalidity under 35 U.S.C. § 101 did not render its infringement suit unreasonable. Epic Tech, LLC v. Pen-Tech Associates, Inc., Case No. 25-1624 (Fed. Cir. Sept. 30, 2026) (Moore, C.J.; Cunningham, J.; Subramanian, Distr. J., sitting by designation).

Epic Tech owns a patent directed to an electronic gaming system that connects gaming terminals to a server network so that an initial game can run while a secondary game operates in the background. After the patent issued in 2013, several related applications encountered validity problems during prosecution. One related application was rejected on nonstatutory double patenting grounds over claims of the issued patent. After the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank International, the United States Patent and Trademark Office (USPTO) rejected claims in that application and two other related applications under § 101. Epic Tech ultimately abandoned all three applications.

Epic Tech later asserted another related patent in the US District Court for the Southern District of Texas. That district court found the asserted claims patent ineligible under § 101, although the decision was later vacated.

In 2020, Epic Tech sued Pen-Tech in the District Court for the Northern District of Georgia for infringement of the gaming system patent. On summary judgment, the district court found the asserted claims ineligible under § 101 under the two-step Alice framework. Pen-Tech then sought Rule 11 sanctions against Epic Tech and its counsel, as well as attorneys’ fees and costs under 35 U.S.C. § 285, 28 U.S.C. § 1927, and the court’s inherent authority.

Pen-Tech argued that several developments should have put Epic Tech and its counsel on notice that the asserted patent faced a serious § 101 problem before suit was filed, including the Supreme Court’s decision in Alice, the USPTO’s § 101 rejections in related applications, and the district court’s ineligibility decision involving another related patent. According to Pen-Tech, those circumstances required Epic Tech to conduct a meaningful pre-suit validity investigation.

The district court denied the motions, concluding that Epic Tech’s and its counsel’s positions were not frivolous, that the case was not exceptional, and that the litigation had not been pursued unreasonably or vexatiously. Pen-Tech appealed.

The Federal Circuit vacated, finding that the district court’s explanation was insufficient to permit meaningful appellate review. The Court emphasized that the combination of Alice, the USPTO’s post-Alice rejections of related claims, and the prior district court ineligibility ruling created a “compelling concern over the validity” of the asserted claims. Two of the related applications were particularly significant because the USPTO had previously found their claims patentably indistinct from the asserted patent.

The Federal Circuit found that the district court had not meaningfully addressed Pen-Tech’s notice theory. The district court relied in part on Epic Tech’s pre-suit [...]

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