IP UPDATE

A costly discovery misstep: Untimely damages evidence excluded

by Nicholas J. DiRoberto | Jun 18, 2026 | Copyrights

The US Court of Appeals for the Fourth Circuit affirmed a district court’s exclusion of damages evidence under Federal Rule of Civil Procedure 37(c)(1) and the resulting grant of summary judgment against the plaintiff on all claims. Deque Sys. Inc. v. BrowserStack, Inc., Case No. 25-1534 (4th Cir. June 5, 2026) (Agee, Traxler, Floyd, JJ.)

Deque Systems develops software that helps businesses make websites accessible to users who have visual and hearing impairments. Deque sued competitor BrowserStack for copyright infringement, false advertising, breach of contract, and unjust enrichment, alleging that BrowserStack reverse-engineered Deque’s software to develop a competing product and falsely advertised it as “5x faster” than Deque’s flagship offering.

Under the district court’s scheduling order, initial disclosures were due on June 7, 2024; expert disclosures were due on August 9, 2024; and fact discovery closed on October 11, 2024. Although Deque timely served its Rule 26(a)(1) initial disclosures, it failed to provide a computation of damages as required by Rule 26(a)(1)(A)(iii). When BrowserStack later served an interrogatory seeking the categories and calculations of Deque’s claimed damages, Deque again declined to provide a damages computation, stating only that it intended to seek all available damages and that its calculations remained incomplete.

Deque also failed to serve a damages expert report by the August 2024 expert disclosure deadline. After retaining new counsel, Deque disclosed a $30 million damages calculation on October 8, 2024, just three days before the close of discovery. BrowserStack moved to exclude the damages evidence and sought summary judgment.

The district court excluded Deque’s damages evidence under Rule 37(c)(1), finding that Deque failed to comply with Rule 26’s disclosure requirements. Because Deque could no longer prove damages and failed to establish entitlement to injunctive relief, the district court granted summary judgment in BrowserStack’s favor on all claims. Deque appealed.

The Fourth Circuit affirmed. The Court explained that Rule 37(c)(1) “gives teeth” to Rule 26’s disclosure requirements by prohibiting a party from using information that was not properly disclosed during discovery. The Court found that Deque had “indisputably failed to comply” with Rule 26(a)’s damages disclosure requirements by failing to provide a damages computation in its initial disclosures, expert disclosures, or interrogatory responses. The Court rejected Deque’s argument that its disclosure of damages in a rebuttal expert report three days before the close of discovery constituted a timely disclosure.

Turning to the propriety of the sanction, the Fourth Circuit applied the five-factor test set forth in its 2003 Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co. decision:

Surprise to the opposing party
Ability to cure the surprise
Disruption of trial
Importance of the evidence
Explanation for the nondisclosure

The Fourth Circuit concluded that all five factors favored exclusion. BrowserStack was plainly surprised by Deque’s $30 million damages claim, which was disclosed only days before discovery closed. Curing that surprise would have required reopening discovery and significantly delaying the proceedings. Although the damages evidence was important, Deque failed to offer any meaningful justification for its repeated failure [...]

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Tick tock: Related trade secrets have single accrual date under DTSA statute of limitations

by Tori Lazerson | Jun 11, 2026 | Trade Secrets

The US Court of Appeals for the Federal Circuit reversed a judgment awarding damages and a permanent injunction, finding that the plaintiff’s trade secret misappropriation claims were barred by the statute of limitations under the Defend Trade Secrets Act (DTSA). Insulet Corp. v. EOFlow, Co. Ltd., Case No. 25-1807 (Fed. Cir. May 28, 2026) (Dyk, Reyna, JJ.) (Prost, J., dissenting).

Insulet manufactures the Omnipod, an adhesive wearable insulin patch pump currently sold in 25 countries. EOFlow developed a competing product, the EOPatch 2, marketed in Europe and South Korea. On August 3, 2023, Insulet filed suit against EOFlow alleging trade secret misappropriation under the DTSA and patent infringement.

The misappropriation allegedly occurred when EOFlow hired several former Insulet employees to develop the EOPatch 2. The employees included Steve DiIanni, former director of mechanical engineering at Insulet, who possessed “detailed technical information” about the Omnipod. Between March and May 2018, DiIanni provided EOFlow with computer-aided design (CAD) files and information regarding the Omnipod’s soft cannula and occlusion-detection algorithm.

The district court bifurcated the DTSA and patent claims. At trial on the DTSA claims, the jury found misappropriation of four trade secrets, including the Omnipod CAD files, and concluded that none of Insulet’s claims were barred by the statute of limitations. The jury initially awarded $170 million in compensatory damages and more than $280 million in exemplary damages. These amounts were reduced to $26 million and $34 million, respectively, with the district court’s grant of a permanent injunction. Insulet’s patent claims were dismissed without prejudice.

On appeal, Insulet moved to transfer to the Court of Appeals for the First Circuit. The Federal Circuit denied the motion, concluding that it retained jurisdiction because the dismissal of the patent claims functioned, at least in part, as a dismissal with prejudice, since the statute of limitations expired with respect to certain alleged acts of patent infringement. The Court then addressed two issues under the DTSA statute of limitations: when the statute of limitations begins to run and whether related trade secrets are subject to a single accrual date.

On the first issue, the parties disputed the applicable standard. EOFlow argued that the statute of limitations began to run under an inquiry-notice standard while Insulet contended that the Supreme Court’s 2010 decision in Merck & Co. v. Reynolds required application of a discovery standard under which the limitations period begins when the plaintiff discovers or reasonably should have discovered the facts underlying its claim. The Federal Circuit declined to decide which standard governed, concluding that Insulet’s claims were time-barred even under the more demanding Merck standard. Applying an access-plus-similarity framework, the Court found that, before the critical date, Insulet knew or should have known that EOFlow had access to its trade secrets through a former Insulet employee, and possessed sufficient information regarding similarities between the EOPatch 2 and Insulet’s trade secret technology to plead a misappropriation claim.

On the second issue, for which there was no controlling First Circuit authority, the Federal Circuit determined that the [...]

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E-I-E-I-No patents for data harvesting

by Ashley K. Justice | Jun 11, 2026 | Patents

Addressing patent eligibility and attorneys’ fees, the US Court of Appeals for the Federal Circuit affirmed a district court’s ruling that five farming data patents were directed to patent-ineligible subject matter, but vacated and remanded the district court’s unexplained determination that the case was not exceptional. AGI SureTrack LLC v. Farmers Edge Inc., Case Nos. 24-1730; -1830 (Fed. Cir. Jun. 2, 2026) (Moore, Mayer, Lourie, JJ.)

AGI SureTrack owns five patents directed to capturing farming operation data in real time using passive data collection devices attached to farming equipment while the equipment performs farming operations. The claimed systems process and share the collected data through an online farming data exchange system or server. AGI sued Farmers Edge and Farmers Edge (US) for patent infringement.

At summary judgment, the district court found the asserted patents invalid under 35 U.S.C. § 101, concluding that the claims were directed to patent-ineligible subject matter. The district court also ruled that the case was not exceptional under 35 U.S.C. § 285 for purposes of awarding attorneys’ fees. AGI appealed the invalidity ruling, and Farmers Edge cross-appealed the no-exceptionality ruling.

The Federal Circuit affirmed the § 101 ruling under the two-step Alice framework. At Alice step one, the Federal Circuit found that AGI’s claims were directed to the abstract idea of collecting, analyzing, and transmitting farming data. The Court explained that claims using conventional computer components to collect, analyze, and present data (activities that can be characterized as mental processes) are directed to an abstract idea. The Court rejected AGI’s argument that the patents claimed an unconventional hardware and software system that solved interoperability problems among distinct brands of farming equipment. The claim language did not recite such a technological solution, and the specification described the invention as a way to track, store, and profit from farming operation data.

The Federal Circuit also rejected AGI’s reliance on claims involving detection of communication protocols and the use of stored “implement profiles” to decode farming equipment information. In the Court’s view, those limitations merely combined abstract concepts and did not change the character of the claims as being directed to data collection, processing, and transmission.

At Alice step two, the Federal Circuit found no inventive concept sufficient to transform the abstract idea into patent-eligible subject matter. The claims relied on generic computer components performing conventional functions. The Court explained that although the claimed automation may have increased the speed and efficiency of collecting and analyzing farming data, improved speed from automation alone does not supply an inventive concept. Considering the claim elements individually and as an ordered combination, the Court concluded that the patents did not claim a patent-eligible application for tracking and collecting farming data.

The Federal Circuit reached a different result on attorneys’ fees. The district court had ruled that the case was not exceptional under § 285 but provided no explanation for that determination. The Federal Circuit vacated and remanded, explaining that while district courts need not always provide extensive reasoning, they must provide enough [...]

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Funked out: Sixth Circuit finds copyright ownership claim accrues upon plain and express repudiation

by Tyler Jackson | Jun 11, 2026 | Copyrights

Addressing when a copyright ownership claim accrues under the Copyright Act, the US Court of Appeals for the Sixth Circuit reversed a summary judgment grant, finding that genuine disputes of material fact remained as to whether a musician’s estate timely asserted joint ownership rights in certain sound recordings. The Court explained that an ownership claim accrues only when one party plainly and expressly repudiates another party’s ownership. Est. of Worrell v. Thang, Inc., Case No. 25-1863 (6th Cir. May 27, 2026) (Boggs, Batchelder, Moore, JJ.)

George Bernard (Bernie) Worrell, Jr. and George Clinton were members of Parliament-Funkadelic (P-Funk), the influential funk collective that began in the 1950s. Worrell collaborated with Clinton and P-Funk for approximately a decade before leaving the group in the 1980s. During that period, Worrell and Clinton allegedly operated under several informal and disputed agreements, including a purported 1976 agreement under which Worrell allegedly assigned ownership of certain sound recordings to Thang, Inc. (a company owned by Clinton) in exchange for royalty payments. The parties disputed whether the agreement was ever validly executed, and Worrell allegedly was not consistently paid under it.

After Worrell died in 2016, his estate sued Thang in New York state court in 2019 for breach of contract. Thang prevailed, arguing that Worrell did not possess a countersigned copy of the 1976 agreement. In that litigation, Clinton submitted sworn testimony stating that Thang never signed the agreement and that Clinton himself did not sign either the original or a copy.

Two years later, the estate sued Thang in federal district court, seeking a declaration that Worrell jointly owned the sound recordings he created with P-Funk and requesting an accounting of royalties. The district court granted summary judgment to Clinton and Thang, finding that the Copyright Act’s statute of limitations barred the estate’s claims. The estate appealed.

The Sixth Circuit explained that a copyright ownership claim accrues only once and must be brought within three years of accrual. Following its own precedent and the approach of other circuits, the Court reiterated that an ownership claim accrues when there has been a “plain and express repudiation” of ownership by one party against another. The Court emphasized that the repudiation inquiry is fact-intensive and subject to equitable considerations.

Applying that standard, the Sixth Circuit found genuine disputes of material fact as to when, if ever, Clinton and Thang plainly and expressly repudiated Worrell’s alleged co-ownership. The Court reasoned that because the New York court had determined that Thang never executed the 1976 agreement, which was the agreement that purportedly exchanged Worrell’s ownership rights for royalty payments, a fact finder could conclude that Worrell never gave up his joint ownership rights in the recordings. The Sixth Circuit also found that the parties’ decades-long conduct in relation to the agreement complicated the limitations analysis and precluded summary judgment.

The Sixth Circuit also considered whether the estate had presented sufficient evidence of joint authorship. Under the Copyright Act, a joint work is one prepared by two or more authors [...]

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Hague Service Convention: A “closed universe” of permissible service methods

by Kelsey Wun | Jun 11, 2026 | Trademarks

The US Court of Appeals for the Seventh Circuit reversed a district court decision denying a motion to vacate a default judgment for lack of proper service under the Hague Service Convention, finding that where the Convention applies, it provides the exclusive means of valid service and prohibits email service in China. Kangol LLC v. Hangzhou Chuanyue Silk Import & Export Co., Ltd., Case No. 25-2205 (7th Cir. May 29, 2026) (Kirsch, Jackson-Akiwumi, Pryor, JJ.)

Kangol sued several defendants, including Hangzhou, for trademark infringement, counterfeiting, unfair competition, false designation of origin, and trademark dilution. Kangol moved for a temporary restraining order (TRO) and permission to serve Hangzhou by email, which the district court approved. Kangol sent an email to Hangzhou that included a link to the complaint, TRO, and additional documents, after which the parties engaged in settlement discussions.

Because Hangzhou did not appear before the district court, the court entered default judgment in favor of Kangol. Subsequently, Hangzhou filed a motion to vacate the default judgment, arguing that the judgment was void under Federal Rule of Civil Procedure 60(b)(4) because the Hague Service Convention does not permit service by email in China. The district court denied the motion, concluding that the Convention allows service by email in China. Hangzhou appealed.

Hangzhou argued that the judgment was void under Rule 60(b)(4) for lack of personal jurisdiction because email service violated the Convention. The Seventh Circuit reviewed the issue de novo and analyzed whether the Convention applied, and if so, whether it prohibits email service in China.

Before reaching the merits, the Seventh Circuit rejected Kangol’s arguments that Hangzhou had waived its service objection and that its motion to vacate was untimely. The Court explained that Hangzhou’s participation in settlement discussions did not create a reasonable expectation that it would defend the suit on the merits or otherwise constitute waiver of its jurisdictional objections. The Court also found that Hangzhou’s Rule 60(b)(4) motion was filed within a reasonable time under Federal Rule of Civil Procedure 60(c)(1), noting that Hangzhou sought relief shortly after Kangol successfully enforced a portion of the default judgment by collecting funds from one of Hangzhou’s online accounts.

Kangol argued that the Hague Service Convention did not apply because Article 1 excludes cases in which the address of the person to be served is not known, and Kangol maintained that Hangzhou’s address could not be reliably determined despite Kangol’s efforts to do so. In evaluating whether a defendant’s address is “not known,” district courts generally require plaintiffs to undertake reasonably diligent efforts to ascertain the defendant’s mailing address. The district court, however, did not determine whether Kangol’s efforts satisfied that standard, concluding instead that it need not resolve the Convention’s applicability because, even if the Convention applied, it permitted service by email in China.

The Seventh Circuit first analyzed the text and structure of the Hague Service Convention, relying on Supreme Court precedent (including Société Nationale Industrielle Aérospatiale v. US District Court for the Southern District of Iowa [...]

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