IP UPDATE

Keyword bidding alone doesn’t constitute trademark infringement

by Jolie B. Schenerman | Aug 13, 2026 | Trademarks

Addressing trademark infringement arising from online advertising, the US Court of Appeals for the Eleventh Circuit held that purchasing a competitor’s trademark as a keyword (keyword bidding), without displaying or otherwise referencing the mark in the resulting advertisement, does not constitute trademark infringement because the behind-the-scenes use is not likely to confuse consumers. The Court nevertheless upheld the jury’s infringement finding based on the defendant’s visible use of the protected mark in advertising copy, product descriptions, and customer communications. Deltona Transformer Corporation v. The NOCO Company, Case No. 24-13590 (11th Cir. Aug. 4, 2026) (Lagoda, Kidd, Newsom, JJ.)

Deltona Transformer Corporation manufactures vehicle battery chargers that charge a battery to capacity and then maintain the charge without overcharging it. Deltona owns federally registered trademarks for BATTERY TENDER and DELTRAN BATTERY TENDER. One of Deltona’s founders coined the term “battery tender,” drawing on the maritime use of “tender” for a vessel that services or supplies another vessel.

The NOCO Company makes similar battery chargers. Beginning in 2014, NOCO promoted its products using “battery tender” in several ways, including bidding on the term as a search keyword, placing the term in advertisements and product descriptions, and referring to its products as battery tenders in communications with customers and marketing firms. Deltona sued for federal and state trademark infringement and unfair competition. A jury found for Deltona and awarded damages, and the district court later ordered disgorgement of NOCO’s profits and entered a permanent injunction. NOCO appealed.

NOCO first argued that Deltona’s marks were generic and therefore unprotectable. The Eleventh Circuit disagreed. Federal registration provided prima facie evidence of validity, and the Court concluded that “battery tender” was at least descriptive (and potentially suggestive) because “tend” metaphorically rather than literally describes what the charger does. The Court further concluded that a reasonable jury could find secondary meaning based on Deltona’s decades of use, advertising, promotion, and industry recognition.

The Eleventh Circuit also rejected NOCO’s argument that “battery tender” had subsequently become generic. Although NOCO introduced survey evidence indicating that many respondents understood the term as identifying a type of product rather than a brand, the survey was not conclusive, and the jury was entitled to weigh it against the remaining evidence supporting trademark significance.

Turning to infringement, the Eleventh Circuit addressed for the first time whether purchasing another party’s trademark as an online advertising keyword can itself constitute infringement. The Court concluded that it cannot in circumstances such as those presented here. Keyword bidding occurs “behind the scenes,” meaning consumers do not see the purchased keyword and instead see the resulting advertisement. Accordingly, likelihood of confusion depends on what the consumer sees in the advertisement, not on the invisible mechanism that caused the advertisement to appear.

The result was different where NOCO visibly used Deltona’s marks. NOCO used “battery tender” and similar language in the text of advertisements, including advertisements describing NOCO products as battery tenders. The Eleventh Circuit found sufficient evidence for the jury to conclude that these uses were likely to [...]

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In the doghouse? Tarnishment requires proof of reputational harm

by Lauren Hong | Aug 13, 2026 | Trademarks

In the latest chapter of a long-running dispute, the US Court of Appeals for the Ninth Circuit vacated a permanent injunction against VIP Products’ “Bad Spaniels” dog toy, finding that Jack Daniel’s Properties, Inc., (JDPI) failed to establish that the parody was likely to harm the reputation of its famous marks. The Court also explained that although parody does not automatically escape dilution liability when used as a source identifier, a product’s parodic nature remains relevant to whether consumers are likely to form a damaging association with the famous mark. VIP Products LLC ⁠v. Jack Daniel’s Properties Inc., Case No. 25-2027 (9th Cir. August 4, 2026) (Berzon, Smith, Hurwitz, JJ.)

VIP Products sells a line of dog toys parodying well-known alcohol bottles. Its Bad Spaniels toy mimics the appearance of a Jack Daniel’s whiskey bottle but replaces “Jack Daniel’s” with “Bad Spaniels,” “Old No. 7” with “Old No. 2,” and “Tennessee Whiskey” with “Tennessee Carpet,” along with references to dog waste.

JDPI sued VIP for trademark infringement and dilution. The dispute ultimately reached the US Supreme Court, which in 2023 held that VIP could not invoke the Trademark Dilution Revision Act’s statutory parody exclusion because VIP used the challenged designations as source identifiers for its own goods.

On remand, the district court found no likelihood of confusion but concluded that Bad Spaniels diluted JDPI’s trademarks by tarnishment and entered a permanent injunction. VIP appealed.

The Ninth Circuit explained that a dilution-by-tarnishment claim requires the trademark owner to establish, among other things, that the asserted mark is famous and that the challenged use creates an association likely to harm the famous mark’s reputation. The Court emphasized that the analysis must be conducted on a mark-by-mark basis. Fame established for one mark cannot automatically be attributed to related marks.

Applying that framework, the Ninth Circuit found that JDPI had established fame for the Jack Daniel’s word mark and registered trade dress, but not for certain other asserted marks, including “Old No. 7.” That distinction was significant because some of Bad Spaniels’ more overt scatological references corresponded to marks that JDPI had not independently shown to be famous.

The Ninth Circuit also found JDPI’s evidence of likely reputational harm insufficient. JDPI’s expert relied on general consumer psychology research suggesting that associations between food or beverages and defecation may produce disgust, but he did not conduct a study examining consumer reactions to Bad Spaniels itself. The Court concluded that such generalized evidence did not establish that consumers would transfer negative associations from the parody dog toy to JDPI’s famous marks.

The Ninth Circuit further faulted the tarnishment analysis for failing to account for the toy’s parodic character. Although parody is not categorically exempt from dilution liability when the challenged use itself functions as a trademark, the Court explained that parody remains relevant to whether consumers are likely to make an association that harms the famous mark’s reputation. Because Bad Spaniels unmistakably mocked Jack Daniel’s, as opposed to presenting itself as Jack Daniel’s, the Court [...]

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Safety-enhancing color is functional, not protectable as trademark

by Taylor MacDonald | Aug 13, 2026 | Trademarks

The US Court of Appeals for the Eighth Circuit affirmed cancellation of a trademark covering chartreuse-colored water hoses, finding that the color was functional because it improved visibility and therefore enhanced safety. The Court also affirmed a $3 million attorneys’ fee award based on the trademark owner’s lack of candor before the United States Patent & Trademark Office (USPTO), litigation conduct, and continued reliance on an incorrect interpretation of the functionality standard. Weems Industries, Inc. d/b/a Legacy Manufacturing Co. v. Teknor Apex Co., Case No. 25-2956 (8th Cir. July 30, 2026) (Colloton, Arnold, Grasz, JJ.)

Weems Industries sued competing water hose manufacturer Teknor Apex for trademark infringement and other claims. Weems asserted a federally registered trademark covering the chartreuse color used on its water hoses. Teknor countered that the color was functional and sought cancellation of the registration. Teknor also requested attorneys’ fees.

The district court agreed with Teknor, finding that chartreuse served a functional purpose because the bright color made hoses more visible against dark grass and therefore improved product safety. The district court also concluded that Weems had not established acquired distinctiveness in the color. It cancelled the registration and awarded Teknor approximately $3 million in attorneys’ fees. The district court based the fee award on three categories of conduct: Weems’ lack of candor before the USPTO, its conduct during the litigation and trial, and its continued reliance on an incorrect interpretation of trademark functionality. Weems appealed.

The Eighth Circuit reviewed the district court’s functionality determination for clear error. A product feature is functional and therefore not subject to trademark protection if it is essential to the product’s use or affects the product’s cost or quality. The Court explained that a feature that improves product safety may affect product quality and therefore be functional.

The record contained substantial evidence supporting the district court’s finding that chartreuse improved hose visibility. Weems’ own promotional materials described the visibility and safety benefits of the color. The record also included patent-related materials describing the utility of chartreuse and expert testimony addressing the color’s visibility.

The Eighth Circuit rejected Weems’ argument that a feature is functional only if it improves the mechanical operation of the product. Functionality, the Court explained, is not limited to whether a feature makes a product operate better. A feature that improves safety can also affect product quality and therefore fall within the functionality doctrine.

The Court also rejected Weems’ argument that chartreuse should remain protectable because Teknor could have selected a different highly visible color for its hoses. The availability of alternative colors did not require a competitor to design around a functional safety feature. Because the Court affirmed the finding that chartreuse was functional, it did not need to address whether the color had acquired distinctiveness.

The Eighth Circuit next considered the attorneys’ fee award. The Lanham Act permits fee awards in “exceptional cases,” which courts evaluate based on the totality of the circumstances. A case may be exceptional because of the substantive weakness of a party’s [...]

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Same patent, same light: Director vacates IPR decision at odds with ITC decision

by Hannah Hurley | Aug 13, 2026 | Patents

The director of the United States Patent & Trademark Office (USPTO) vacated a Patent Trial and Appeal Board final written decision finding challenged claims obvious where the US International Trade Commission, considering the same patent, parties, and obviousness theory, had reached the opposite conclusion. The director found that the Board had not adequately justified departing from the Commission’s analysis. Biofrontera Inc. v. Sun Pharmaceutical Industries Inc., IPR2024-01312 (USPTO Dir. July 29, 2026) (Squires, Dir.)

Biofrontera petitioned for inter partes review (IPR) of a Sun Pharmaceutical patent directed to a photodynamic dermatology device. The Board instituted review and ultimately found all challenged claims unpatentable as obvious.

The same patent was also at issue in a Section 337 investigation before the Commission. Sun Pharmaceutical had accused Biofrontera of importing certain photodynamic therapy systems that infringed two patents. An administrative law judge (ALJ) found infringement and recommended an exclusion order. The ALJ also found that Biofrontera had not shown the claims of the patent at issue in the IPR to be obvious.

Before the Board, Biofrontera argued that the ALJ’s determination did not warrant deference because it was not yet final, remained subject to Commission review, and was based on a different evidentiary record and burden of proof. The Board agreed and reached the opposite conclusion on obviousness.

On Director Review, the director rejected the Board’s explanations and vacated the final written decision. The director concluded that the Board had not identified a sufficient basis for reaching a patentability determination inconsistent with the Commission’s assessment of the same obviousness theory.

The director first rejected the Board’s reliance on the non-final status of the ALJ’s determination. By the time of Director Review, the full Commission had upheld the ALJ’s conclusion that Biofrontera had not shown the claims obvious, eliminating the finality concern on which the Board had relied. The director further explained that even a non-final ALJ determination may remain relevant when the Board considers whether parallel proceedings justify terminating or otherwise declining to continue an IPR.

The director also found that differences in the evidentiary records did not adequately explain the conflicting results. Although the IPR included expert testimony that had not been presented at the Commission, the Board did not sufficiently explain why that testimony warranted reaching a different conclusion on the same prior art combination.

Nor did the differing burdens of proof resolve the inconsistency. The director acknowledged that an IPR applies the preponderance-of-the-evidence standard, while a Commission respondent challenging patent validity faces a higher burden. But the difference in standards, standing alone, did not explain why the two tribunals reached conflicting factual conclusions regarding the same claim limitation and prior art combination.

Finding no adequate justification for the divergence, the director vacated the Board’s final written decision and dismissed the IPR petition rather than remanding for further proceedings.

Practice Note: Parties litigating patent validity in parallel Board and Commission proceedings should expect prior findings from one forum to receive meaningful consideration in the other, particularly where the same parties, prior [...]

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Unplugged: Claim construction errors, presumption of harm short-circuit preliminary injunction

by Yuhe Liu, PhD | Aug 13, 2026 | Patents

The US Court of Appeals for the Federal Circuit vacated a preliminary injunction, finding that the district court improperly imported a spatial limitation into the claim term “backplate” and erroneously treated the structural term “pin” as a means-plus-function limitation. The Court also reiterated that in preliminary injunction proceedings, a strong showing of validity and infringement does not give rise to a presumption of irreparable harm. Socket Solutions, LLC v. Import Global, LLC, Case No. 25-1121 (Fed. Cir. Aug. 4, 2026) (Moore, C.J.; Prost, J.; Seeborg, Distr.J. (sitting by designation)).

Socket Solutions owns a patent directed to an indoor electrical outlet cover designed to conceal an outlet’s contact openings while permitting continued use of the outlet. Socket Solutions sued Import Global, alleging that Import Global’s Neat Socket product infringed. Socket Solutions also moved for a preliminary injunction. Adopting a magistrate judge’s reports and recommendations, the district court granted the injunction, barring Import Global from making, using, selling, offering to sell, or importing the accused product. Import Global appealed.

The Federal Circuit first addressed the district court’s construction of “backplate.” The district court construed the term as the component of the cover opposite the frontplate that included at least one set of electrical prongs. Import Global argued that the backplate instead referred to the portion of the cover closest to the wall outlet.

The Federal Circuit rejected both constructions because each imposed a spatial relationship not required by the specification. Looking to the written description, the Court explained that the backplate was used to define the thickness of the outlet cover. The Court therefore construed “backplate” as the component that, together with the frontplate, formed the cover such that the cover’s maximum thickness was measured between the frontplate and that component at the cover’s central portion. The Court also declined to require the backplate itself to include electrical prongs. Because the asserted claim separately recited that limitation, incorporating it into the construction of “backplate” would improperly render other claim language superfluous.

The Federal Circuit next concluded that the district court erred by construing “pin” as a means for making an electrical connection between a wire and a corresponding prong, effectively treating the term as a means-plus-function limitation under Section 112(f). Because the claim did not use the word “means,” the presumption against application of Section 112(f) applied. The Court found that the presumption was not overcome because the specification described a “pin” structurally, and the parties agreed that a skilled artisan would understand a pin to identify structure.

The Federal Circuit rejected Socket Solutions’ proposed purely functional construction as too broad because not every structure capable of connecting a wire to a prong is necessarily a pin. It likewise rejected Import Global’s proposed “mechanical system” construction as unsupported by the specification. Finding neither lexicography nor disavowal, the Court concluded that “pin” should receive its plain and ordinary meaning.

Finally, the Federal Circuit addressed the district court’s irreparable harm analysis. Although the Court did not decide whether Socket Solutions had established irreparable harm, [...]

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