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Prosecution Disclaimer Alive and Well, Especially in Closed Claim

by | Apr 17, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s noninfringement determination, finding that the presence of a disclaimed compound in the accused product precluded infringement. Azurity Pharm., Inc. v. Alkem Lab’ys Ltd., Case No. 23-1977 (Fed. Cir. Apr. 8, 2025) (Moore, Chen, Murphy, JJ.)

Azurity owns a patent directed to a nonsterile, stable liquid formulation of vancomycin hydrochloride, specifically designed for oral administration to treat Clostridium difficile infections. Following Alkem’s submission of an Abbreviated New Drug Application (ANDA), Azurity brought a Hatch-Waxman Act claim against Alkem for infringement of certain claims of the patent. The district court found that Azurity had disclaimed the presence of propylene glycol in the claimed formulation during the prosecution. Since Alkem’s ANDA product contained propylene glycol, the district court held that it did not infringe. Azurity appealed.

The Federal Circuit affirmed, focusing on the patent’s prosecution history and noting that Azurity used the lack of propylene glycol to distinguish its claimed invention from the prior art. The Court noted that this distinction was made during prosecution multiple times in response to the examiner’s rejections, and that Azurity had added negative claim limitations that specifically omitted propylene glycol from the scope of the claims.

The Federal Circuit also noted that Azurity used a “consisting of” transitional phrase to narrow the claims and relied on the closed transition to overcome the prior art. The Court explained that “consisting of” is a closed transition that limits the claim scope to only the recited components. By using this transition and not including propylene glycol as one of the claim components, Azurity effectively disclaimed propylene glycol from the invention. Therefore, the Court found that omission of propylene glycol during patent prosecution was “clean, unambiguous, and complete.”

Azurity argued that a pretrial stipulation between the parties, which stated that “[s]uitable flavoring agents for use in the asserted claims include flavoring agents with or without propylene glycol,” should preclude the application of the disclaimer. The Federal Circuit did not find this argument persuasive, concluding that the stipulation did not alter the clear and unambiguous disclaimer made during prosecution, nor did it affect the noninfringement finding. Since Alkem’s ANDA product contained propylene glycol and Azurity disclaimed inclusion of propylene glycol, there was no infringement.



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When Is a Trade Secret Accessible? As Soon as It Can Be Reverse Engineered

by | Apr 10, 2025 |

Although the US Court of Appeals for the Federal Circuit upheld a damages award for trade secret misappropriation and breach of a confidentiality agreement, it found that the district court erred in its determination of when the trade secret became publicly accessible for the purpose of applying a reverse engineering defense. The Federal Circuit also vacated and remanded the prejudgment interest award, finding that interest should not accrue on future sales. ams-OSRAM USA Inc. v. Renesas Elect. America, Inc., Case No. 22-2185 (Fed. Cir. Apr. 4, 2025) (Taranto, Schall, Chen, JJ.)

In 2008 ams sued Renesas for patent infringement, trade secret misappropriation, and breach of contract for using information that ams revealed in confidence. In 2015 a jury found for ams, and the district court entered judgment for trade secret misappropriation damages, but not for breach of contract. The district court determined that the breach award was duplicative of the misappropriation award. On appeal, in 2018 the Federal Circuit affirmed Renesas’ liability for misappropriation on a more limited basis than had been presented to the jury. The Court vacated the misappropriation award and remanded, instructing that disgorgement of profits damages should be decided by the judge, not the jury.

On remand, ams argued that it was entitled to “re-elect its remedy” and narrowed to the misappropriation and contract claims, which required the case to be retried. The new jury also found in favor of ams. The district judge then determined the monetary award for trade secret misappropriation, consisting of disgorgement of profits for one product and exemplary damages of double that sum. On ams’s breach of contract claim, the jury awarded a reasonable royalty on sales of products, other than the one subject to disgorgement damages. ams was also awarded prejudgment interest on both its misappropriation and contract claims, and attorneys’ fees on its breach of contract claim. Both parties appealed.

Trade Secret Accessibility and Reverse Engineering

The district court ruled that ams’s trade secrets became accessible in January 2006 when Renesas successfully reverse engineered the trade secret embodied in ams’s product. The district court determined that the relevant inquiry for accessibility is what the misappropriator actually did rather than what the misappropriator or other parties could have done. Renesas argued that the trade secret first became accessible when it could have reverse engineered the trade secret in February 2005.

The Federal Circuit agreed with Renesas, explaining that the district court’s ruling was inconsistent with Texas law. Under Texas law, information that is generally known or readily available by independent investigation does not qualify as a trade secret. Citing Fifth Circuit precedent, the Federal Circuit emphasized that the public is free to discover and exploit trade secrets through reverse engineering of products in the public domain. The Court found that Renesas could have accessed ams’s trade secrets through proper and straightforward means by February 2005. While acknowledging that the trade secret may not have been immediately apparent through casual inspection, the Court pointed out that reverse engineering is a common [...]

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A Patent Without a Pulse: Provisional Rights Don’t Outlive the Patent

by | Apr 10, 2025 |

The US Court of Appeals for the Federal Circuit dismissed an appeal from a patent applicant seeking provisional rights on a patent that would issue only after it had already expired, finding that the applicant lacked the necessary exclusionary rights to support a claim for provisional rights. In re: Donald K. Forest, Case No. 23-1178 (Fed. Cir. Apr. 3, 2025) (Taranto, Schall, Chen, JJ.)

Donald K. Forest applied for a patent on December 27, 2016. Forest’s patent application claimed priority through a chain of earlier-filed patent applications dating back to March 27, 1995. If Forest’s patent application matured into a patent, it would have expired 20 years after the 1995 priority date (i.e., prior to the 2016 filing date). The patent examiner nevertheless examined and rejected the proposed claims. The Patent Trial & Appeal Board partially affirmed the examiner’s rejection of certain claims on grounds of obviousness and double patenting. Forest appealed.

The Patent & Trademark Office raised a threshold issue that since Forest’s application could only result in an expired patent, he lacked a personal stake in the appeal sufficient to establish jurisdiction. Forest countered that he could still acquire “provisional rights” under 35 U.S.C. § 154(d) – a limited right to royalties for certain pre-issuance activities – despite the expiration of any issued patent as it issued.

The Federal Circuit dismissed the appeal, explaining that since Forest could not be granted a patent until after the patent’s expiration date, he would never receive any exclusionary rights. The Court clarified that provisional rights only arise once a patent issues and crucially do not extend beyond the statutory patent term. Because Forest sought the issuance of a patent that would confer no enforceable rights – either exclusionary or provisional – the Court dismissed the appeal for lack of jurisdiction.

The Federal Circuit’s primary conclusion was predicated on the principle that provisional rights are only available when a patent issues with enforceable exclusionary rights, meaning the patent must issue before its expiration date. The Court emphasized that provisional rights under § 154(d) are expressly provided “in addition to other rights provided by” the patent statute. Because this statutory language indicates that provisional rights are not standalone, the Court determined that provisional rights depend on the existence of a valid, enforceable patent.

According to the Federal Circuit, the entire purpose of provisional rights is to provide temporary relief to the patentee during the gap between publication of a patent application and issuance of a patent. However, such rights only arise if the issued patent provides enforceable rights. The Court reasoned that provisional rights are meant to encourage early publication and protect patentees from pre-issuance infringement, but only as a precursor to full patent protection.

The Court rejected Forest’s interpretation of § 154(d), explaining it would create an anomalous situation where provisional rights could survive without any corresponding enforceable rights, allowing a patentee to collect royalties on a patent that could never be asserted in infringement litigation.

Practice Note: Patent rights, whether provisional [...]

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Impermissible Convoyed Sales Wash Away Damages Award

by | Apr 3, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s finding of infringement but vacated its damages award because the award improperly included auxiliary products lacking any functional relationship to the infringed patent claim. Wash World Inc. v. Belanger Inc., Case No. 2023-1841 (Fed. Cir. Mar. 24, 2025) (Stark, Lourie, Prost, JJ.)

Belanger owns a patent related to a spray-type car wash system. A competitor, Wash World, filed for a declaratory judgment that its car wash system did not infringe the patent.

A jury returned a general verdict of infringement and awarded Belanger $9.8 million in lost profit damages. Wash World moved for judgment as a matter of law of noni  nfringement based on the positions it previously raised and challenged the damages award. Wash World argued that Belanger failed to prove entitlement to lost profits for convoyed sales. The district court rejected Wash World’s arguments. Wash World appealed, challenging the district court’s constructions of three claim terms that Wash World argued were dispositive to noninfringement and the damages award for improperly including nearly $2.6 million in ineligible convoyed sales.

The Federal Circuit concluded that for two of the three claim terms, the constructions Wash World argued for on appeal were materially different from the constructions it urged the district court to adopt. The Federal Circuit emphasized that while a party is not confined to the precise wording of the constructions it advances at the district court, it must still present essentially the same dispute on appeal. Finding no exceptional circumstances, the Court deemed Wash World’s appellate positions on the two claims to be forfeited. As to the remaining term, the Court found that while Wash World had preserved the issue for appeal, the district court’s interpretation was correct.

On the issue of remittitur, the Federal Circuit first found that Wash World had properly preserved the issue for appeal and that even if it had not, exceptional circumstances would justify reaching the merits. The Court stated that it could discern the precise damages the jury awarded based on convoyed sales, and that the requirements for lost profits on such sales were plainly not satisfied.

The Federal Circuit explained that entitlement to lost profits for convoyed sales exists only where the unpatented products (e.g., dryers sold together with a patented car wash system) and the patented product together constitute a “functional unit,” like parts of a complete machine. The Court found that no evidence in the record could support such a finding and that damages awarded for sales of the unpatented products were thus improper. The Court further rejected Belanger’s argument that the jury’s return of a general verdict insulated the award from further scrutiny. The Court noted that based on the evidence presented, it was overwhelmingly likely that the jury’s verdict included the impermissible damages for convoyed sales. Therefore, the Federal Circuit instructed the district court on remand to remit $2.6 million in damages corresponding to sales of the unpatented components.



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When Analyzing Likelihood of Confusion, It’s Not Just Location, Location, Location

by | Apr 3, 2025 |

The US Court of Appeals for the Fourth Circuit vacated a district court’s decision finding no infringement that focused on only the geographic distance between the physical locations of the two users without considering the factors bearing on any likelihood of confusion. Westmont Living, Inc. v. Retirement Unlimited, Inc., et al., Case No. 23-2248 (4th Cir. Mar. 18, 2025) (Niemeyer, Benjamin, Berner, JJ.)

Westmont Living, a California corporation that operates several retirement communities and assisted living facilities on the West Coast, sued Retirement Unlimited, a Virginia corporation that operates retirement communities and assisted living facilities on the East Coast, for trademark infringement. Westmont, which operates and markets its facilities using the mark WESTMONT LIVING, alleged that Retirement opened a new facility using the name The Westmont at Short Pump for services identical to those provided by Westmont.

The district court entered summary judgment for Retirement. The district court acknowledged that many factors are potentially relevant to determining the likelihood of confusion, but it concluded that because the parties’ physical facilities were located “in entirely distinct geographic markets,” as a matter of law “consumer confusion [was] impossible.” The district court based its holding on the Second Circuit’s 1959 decision in Dawn Donut v. Hart’s Food Stores, which held that when parties use their marks in separate and distinct markets, there can be no likelihood of confusion. Westmont appealed.

The Fourth Circuit found that the district court failed to address the parties’ competitive marketing, the locations from which they solicit and draw their customers, the scope of their reputations, and any of the nine factors for determining likelihood of confusion in the Fourth Circuit under its 2021 decision in RXD Media v. IP Application Dev. The Court explained that while not every factor necessarily needs to be considered in the analysis, the district court erred by relying solely on the fact that the parties’ physical facilities were on opposite coasts, without considering the many other factors that might bear on whether Westmont had shown a likelihood of confusion.

The Fourth Circuit disagreed with the district court’s reliance on Dawn Donut, explaining that the case stands for a narrow principle that where businesses use the same mark in physically distinct geographical markets, and their marketing and advertising are confined to those markets, there won’t be a likelihood of confusion. Given increased potential customer mobility, the internet, and the reduced influence of local radio and newspaper advertising, it is far less likely today that two businesses would operate in such physically distinct geographical markets as when the Dawn Donut rule was promulgated. In this case, both parties advertised nationwide on the internet. The Court noted that it may be especially difficult for a casual consumer to distinguish between the two companies when engaging in online research about retirement living, and the physical distance of the parties’ facilities does not eliminate that risk. The Fourth Circuit concluded that the district court’s reliance on only the geographic distance between the physical facilities of the two companies [...]

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Fintiv Guidelines for Post-Grant Proceedings Involving Parallel District Court Litigation

by | Apr 3, 2025 |

On March 24, 2025, the US Patent & Trademark Office (PTO) released new guidance that clarifies application of the Fintiv factors when reviewing validity challenges simultaneously asserted at the Patent Trial & Appeal Board and in district court or at the US International Trade Commission.

This guidance follows the PTO’s February 28, 2025, announcement reverting to its previous guidelines for discretionary denials of petitions for post-grant proceedings where district court litigation is ongoing. That announcement rescinded the PTO’s June 21, 2022, memorandum entitled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation,” which prevented the Board from rejecting validity challenges where there was “compelling evidence of unpatentability.”

Based on the new guidance, the Board is more likely to defer to the district court or the Commission if the Commission’s projected final determination date is earlier than the deadline for the Board’s final written decision. The PTO pointed out that a patent challenger’s stipulation not to raise the same invalidity arguments in other proceedings if the PTO institutes an inter partes review or post grant review is highly relevant but not dispositive.

This change in policy increases the likelihood that the Board will grant discretionary denials in situations involving parallel district court or Commission proceedings.



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Detour Ahead: New Approach to Assessing Prior Art Rejections Under § 102(e)

by | Apr 3, 2025 | ,

The US Court of Appeals for the Federal Circuit established a more demanding test for determining whether a published patent application claiming priority to a provisional application is considered prior art under pre-America Invents Act (AIA) 35 U.S.C. § 102(e) as of the provisional filing date, explaining that all portions of the published patent application that are relied upon by the US Patent & Trademark Office (PTO) to reject the claims must be sufficiently supported in the provisional application. In re Riggs, Case No. 22-1945 (Fed. Cir. Mar. 24, 2025) (Moore, Stoll, Cunningham, JJ.)

Several inventors who work for Odyssey Logistics filed a patent application directed to logistics systems and methods for the transportation of goods from various shippers by various carriers across different modes of transport (e.g., by rail, truck, ship, or air). PTO rejected the application under § 102(e) in view of Lettich, which claimed the benefit of a provisional application (Lettich provisional), and as obvious in view of Lettich in combination with the Rojek reference.

The inventors appealed the Lettich rejections to the Patent Trial & Appeal Board, arguing that Lettich did not qualify as prior art under § 102(e). The Board initially agreed with the inventors, but the Examiner assigned to the application requested a rehearing, asserting that the Board applied the incorrect standard for § 102(e) prior art. The Board ultimately issued its decision on the Request for Rehearing, stating that it had jurisdiction over the Examiner’s request and that the Examiner’s arguments regarding Lettich’s status as prior art under § 102(e) “[we]re well taken.” The Board amended its original decision “to determine that Lettich is proper prior art against the instant claims.” The Board then reviewed and affirmed the Examiner’s anticipation and obviousness rejections. The inventors appealed.

The Federal Circuit vacated and remanded the Board’s decision. With respect to whether Lettich qualified as § 102(e) prior art, the Court found that the Board’s analysis was incomplete. The Court concluded that the Board correctly applied the test set forth in the Federal Circuit’s 2015 decision in Dynamic Drinkware v. National Graphics by determining that the Lettich provisional supported at least one of Lettich’s as-published claims. However, the Court found that this test was insufficient because all portions of the disclosure that are relied upon by the PTO to reject the claims must also be sufficiently supported in the priority document. Although the PTO asserted that the Board had conducted this additional analysis, the Federal Circuit disagreed and vacated and remanded for the Board to determine whether the Lettich provisional supported the entirety of the Lettich disclosure that the Examiner relied on in rejecting the claims.



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Hatch-Waxman Litigation Expenses Are Deductible Under Internal Revenue Code § 162(a)

by | Apr 3, 2025 |

The US Court of Appeals for the Federal Circuit upheld a US Court of Federal Claims ruling that Hatch-Waxman Act litigation expenses are ordinary and necessary business expenses under § 162(a) of the Internal Revenue Code, entitling an abbreviated new drug application (ANDA) filer to deduct litigation expenses incurred defending against a patent infringement lawsuit. Actavis Labs. FL, Inc. v. United States, Case No. 23-1320 (Fed. Cir. Mar. 21, 2025) (Chen, Cunningham, Stark, JJ.)

Actavis filed ANDAs with the US Food and Drug Administration (FDA) seeking approval to market and sell a generic version of a drug already offered for sale in the United States. Per the Hatch-Waxman Act, filing an ANDA is an act of patent infringement where the ANDA holder seeks FDA approval prior to the expiration of the new drug application (NDA) holder’s patent. Following Actavis’s filing, the NDA holder brought a patent infringement lawsuit against Actavis.

Actavis subsequently treated litigation expenses incurred in defending the patent infringement lawsuit as ordinary and necessary expenses. Actavis deducted those litigation expenses on its tax returns for that year. However, the Internal Revenue Service (IRS) considered these expenses to be nondeductible capital expenditures since they were incurred “in pursuit of an intangible capital asset: namely, FDA approval to lawfully market a generic drug product in this country.”

Actavis eventually paid its tax liability but then sued the IRS in the Court of Federal Claims to recover what Actavis considered an overpayment of its taxes. The claims court agreed with Actavis, holding that Hatch-Waxman litigation expenses were deductible as ordinary and necessary business expenses. The IRS appealed.

The Federal Circuit affirmed. When determining whether Hatch-Waxman litigation expenses are deductible under Code § 162(a), the Federal Circuit uses two tests to settle the issue: the “origin of the claim” test and the “most significant benefit” test. However, as the Court emphasized, regardless of which test applied, Actavis prevailed.

The Federal Circuit first explained that Actavis prevailed under either test because patent infringement (not the FDA approval process) is what triggers incurring litigation expenses. Further evidence that the “origin of the claim rests in the patentholder’s decision to sue, and not in the ANDA filer’s decision to seek drug approval from the FDA, is the fact that infringement litigation cannot provide the ANDA filer what it wants – only the FDA can,” the Court stated.

Relying on the Third Circuit’s 2023 decision in Mylan v. Comm’r of Internal Revenue, the Federal Circuit delved into the fairness aspect of allowing Hatch-Waxman litigation expenses to be deductible. Citing Mylan, the Court explained that generic manufacturers defending against patent infringement suits “obtain no rights from a successful outcome. They acquire neither the intangible asset of a patent nor an FDA approval.” The Court also noted that brand-name drug companies in Hatch-Waxman lawsuits may deduct litigation expenses incurred while enforcing their patent rights. “[I]mposing very different tax treatment on the warring sides in an ANDA dispute, as the Commissioner advocates, is at odds with the careful statutory [...]

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The Clear and Unmistakable Standard for Applying Prosecution Disclaimer

by | Apr 3, 2025 |

The US Court of Appeals for the Federal Circuit found that a district court misconstrued claim terms based on a misapplication of the clear and unequivocal disavowal standard and vacated its noninfringement decision. Maquet Cardiovascular LLC v. Abiomed Inc., Abiomed R&D, Inc., Abiomed Europe GMBH, Case No. 23-2045 (Fed. Cir. Mar. 21, 2025) (Reyna, Taranto, Cunningham, JJ.)

Maquet owns a patent related to a system that provides greater precision in deploying a blood pump to a patient’s circulatory system. The district court construed three patent terms. The district court construed the term “guide mechanism comprising a lumen” to include a negative limitation that the guidewire lumen “is not distal to the cannula.” The court justified this limitation by citing to the prosecution history of a related patent where Maquet disclaimed the broader claim by merely accepting the examiner’s proposed revisions. The district court also construed both guide wire terms in two other claims to include another negative limitation: “the guide wire does not extend through the free space in between the rotor blades.” The district court similarly justified this negative limitation by citing to the parent patent’s prosecution history, finding that Maquet had given up a broader version of the claim. The district court’s construction effectively limited the scope of Maquet’s claims to exclude the accused products, and the parties stipulated to the entry of a final appealable judgment of noninfringement. Maquet appealed.

Maquet argued that the district court erred in its construction of the three terms by misapplying the law of prosecution disclaimer. The Federal Circuit agreed, finding that the district court incorrectly relied on Maquet’s prosecution history to reach its conclusions on claim construction. The district court cited to an amendment made in a different (but related) patent prosecution and a different claim. The Federal Circuit explained that although the prosecution history of a related patent may be relevant, the claim limitations in the two applications must be similar in order for the prosecution disclaimer doctrine to apply. Here, the Court found that the amendment in the related patent was not sufficiently similar to the limitation at issue to constitute a disclaimer for the claim at issue. The related case claim did not claim a guide mechanism, nor did it require the lumen be in a specific position. The Federal Circuit found that the district court erred in its construction by improperly applying prosecution disclaimer.

The Federal Circuit also determined that the district court erred in its construction of the guide wire claim terms by applying prosecution disclaimer and interpreting a restriction on their scope. The Court found that while the prosecution history of the parent patent’s claims was sufficiently similar and thus relevant, Maquet did not disavow either claim’s scope during the relevant prosecution. The Court noted that mere silence in response to a notice of allowance typically does not rise to clear and unmistakable claim disavowal. The Court also observed that statements made during an inter partes review (IPR) proceeding may be used to support a [...]

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Human Authorship Required: AI Isn’t an Author Under Copyright Act

by | Mar 27, 2025 |

The US Court of Appeals for the District of Columbia upheld a district court ruling that affirmed the US Copyright Office’s (CO) denial of a copyright application for artwork created by artificial intelligence (AI), reaffirming that human authorship is necessary for copyright registration. Thaler v. Perlmutter, Case No. 23-5233 (D.C. Cir. Mar. 18, 2025) (Millett, Wilkins, Rogers, JJ.)

Stephen Thaler, PhD, created a generative AI system that he named the Creativity Machine. The machine created a picture that Thaler titled, “A Recent Entrance to Paradise.” Thaler applied to the CO for copyright registration for the artwork, listing the Creativity Machine as the author and Thaler as the copyright owner.

The CO denied Thaler’s application because “a human being did not create the work.” Thaler twice sought reconsideration of the application, which the CO denied because the work lacked human authorship. Thaler subsequently sought review in the US District Court for the District of Columbia, which affirmed the CO’s denial of registration. The district court concluded that “[h]uman authorship is a bedrock requirement of copyright.” Thaler appealed.

The DC Circuit reaffirmed that the Creativity Machine could not be considered the author of a copyrighted work. The Copyright Act of 1976 mandates that to be eligible for copyright, a work must be initially authored by a human being. The Court highlighted key provisions of the Copyright Act that only make sense if “author” is interpreted as referring to a human being. For instance:

  • A copyright is a property right that immediately vests in the author. Since AI cannot own property, it cannot hold copyright.
  • Copyright protection lasts for the author’s lifetime, but machines do not have lifespans.
  • Copyright is inheritable, but machines have no surviving spouses or heirs.
  • Transferring a copyright requires a signature, and machines cannot provide signatures.
  • Authors of unpublished works are protected regardless of their nationality or domicile, yet machines do not have a domicile or national identity.
  • Authors have intentions, but machines lack consciousness and cannot form intentions.

The DC Circuit concluded that the statutory provisions, as a whole, make human activity a necessary condition for authorship under the Copyright Act.

The DC Circuit noted that the human authorship requirement is not new, referencing multiple judicial decisions, including those from the Seventh and Ninth Circuits, where appellate courts have consistently ruled that authors must be human.

Practice Note: Only humans, not their tools, can author copyrightable works of art. Images autonomously generated are not eligible for copyright. However, works created by humans who used AI are eligible for copyright depending on the circumstances, how the AI tool operates, and to what degree the AI tool was used to create the final work. Authors whose works are assisted by AI should seek advice of counsel to determine whether their works are copyrightable.



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