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DMCA safe harbor: Prelude to a Supreme Court encore?

by Jodi Benassi | Sep 18, 2025 | Copyrights

The US Court of Appeals for the Second Circuit granted in part and denied in part Capitol Records’ petition for reconsideration of the Court’s January 13, 2025, decision in Capitol Records v. Vimeo. In that ruling, the Court determined that Capitol Records had waived the argument that Vimeo’s encouragement of users to make infringing lip-dub videos may constitute a form of right and ability to control infringement – an apparent forfeiture of the safe harbor provided by the Digital Millennium Copyright Act (DMCA). In its reconsideration decision, the Court removed a footnote regarding whether the “right and ability to control” argument was preserved for Supreme Court review. Capitol Records, LLC, et al. v. Vimeo, Inc., et al., Case Nos. 21-2949; -2974 (2d Cir. Sept. 9, 2025) (Leval, Parker, Merriam JJ.)

Capitol Records filed a petition for reconsideration of the Second Circuit’s decision, which found that Capitol had waived its argument under Metro-Goldwyn-Mayer Studios v. Grokster. A central issue was application of the Grokster precedent, which addressed inducement of copyright infringement. Capitol Records argued that Vimeo’s encouragement of users to create infringing lip-dub videos constituted a “right and ability to control” infringement, potentially forfeiting the DMCA safe harbor protection.

In its earlier ruling, the Second Circuit found that Capitol Records had waived this argument by not adequately presenting it in the appellate brief, despite having discussed it in the fact section. The Court emphasized that the argument was not developed in the argument section of the brief and, in a footnote, noted that Capitol Records had acknowledged that the argument was foreclosed by a prior ruling. Capitol Records argued that its waiver was not of the Grokster-based theory of forfeiture of the safe harbor, but rather of a claim under Grokster for induced infringement. The Court was not persuaded, noting that Capitol Records’ opening brief made no distinction between a Grokster-based inducement claim and a Grokster-based theory for forfeiting DMCA safe harbor protection. As a result, the Court rejected Capitol Records’ argument that the Grokster-based theory had not been waived.

In its most recent ruling, the Second Circuit granted Capitol’s petition to remove language from a footnote in the Court’s prior ruling that suggested Capitol’s Grokster inducement theory, based on the “right and ability to control,” was barred from Supreme Court review.

Practice note: The Second Circuit’s decision to partially grant and deny the petition for reconsideration clarifies the procedural requirements for preserving arguments on appeal and reinforces the complexities of applying traditional copyright principles to digital platforms. As the case progresses, stakeholders in the music and technology industries should monitor developments and implications for the DMCA and copyright enforcement.

Oh brother: Draft settlement agreements carefully

by Ashley K. Justice | Sep 18, 2025 | Copyrights, Trademarks

The US Court of Appeals for the Eighth Circuit affirmed a district court judgment, finding that the plaintiff failed to sufficiently prove damages for its copyright claim, the jury instructions accurately applied the sophisticated consumer exception to initial-interest confusion, and the district court properly submitted ambiguous contract language to the jury for interpretation. Hoffmann Brothers Heating and Air Conditioning, Inc. v. Hoffmann Air Conditioning & Heating LLC, Case No. 24-1289 (8th Cir. Sept. 8, 2025) (Graza, Stras, Kobes, JJ.)

Brothers Tom and Robert Hoffmann were partners in Hoffmann Brothers. After Robert bought out Tom, they entered into a settlement agreement that included a four-year restriction barring Tom from using the name “Hoffmann” in connection with an HVAC business. After four years, Tom began using “Hoffmann Air Conditioning & Heating, LLC” (Hoffmann AC). Hoffmann AC’s advertising agency later mistakenly used pictures of Hoffmann Brothers. Hoffmann Brothers sued for trademark and copyright infringement. Hoffmann AC prevailed on some issues at summary judgment, and the jury reached a mixed verdict on the remaining claims. Both parties were denied attorneys’ fees, and Hoffmann Brothers appealed.

On appeal, the Eighth Circuit affirmed that Hoffmann Brothers did not sufficiently prove damages for its copyright claim based on Hoffmann AC’s use of its photographs. Because the photographs were unregistered works, Hoffmann Brothers was required to prove actual damages and/or additional profits of the infringer attributable to the infringement. Hoffmann Brothers’ only evidence of actual damages was Hoffmann AC’s monthly fee paid to its marketing agency. The Court found that using the monthly fee was too speculative because it did not reflect the benefit to Hoffmann AC or the harm to Hoffmann Brothers. For evidence of additional profits, Hoffmann Brothers’ expert report failed to link the use of the photographs to Hoffmann AC’s gross revenue. The Court explained that the Hoffmann Brothers could have linked additional profits attributable to the use of the photographs by, for example, demonstrating that:

Hoffmann AC gained customers because of the ads.
The photographs actually influenced purchasing decisions.
There was spike in monthly revenue that coincided with use of the photographs.

Regarding Hoffmann Brothers’ trademark claim, the jury found that the names were not so similar as to cause confusion. Hoffmann Brothers appealed, arguing that the district court erred in its jury instructions. The Eighth Circuit rejected the argument, finding the instructions fair and legally adequate. The instruction was directed to the issue of initial-interest confusion (a concept not adopted by Missouri courts), which occurs when consumer confusion arises at the outset, even if no sale ultimately results. The Court explained that under Eighth Circuit precedent, a sophisticated consumer exception applies to this theory, meaning that consumers who exercise a high degree of care are less likely to be initially confused. Here, the district court instructed the jury to consider initial-interest confusion only if it found that Hoffmann Brothers’ customers were not sophisticated. While the Eighth Circuit acknowledged some hesitation about the assumption that sophisticated consumers are never susceptible to initial-interest [...]

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Penny for your characters? Victorian tropes not so striking or protectable

by Anisa Noorassa | Sep 18, 2025 | Copyrights

The US Court of Appeals for the Ninth Circuit affirmed a district court’s dismissal of a copyright infringement claim finding that the plaintiff had not plausibly alleged copying of protected characters. Anna Biani v. Showtime Networks, Inc. et al., Case No. 24-3949 (9th Cir. Sept. 8, 2025) (Nguyen, Mendoza, Kernodle, JJ.)

Biani sued Showtime alleging that the series “Penny Dreadful” infringed on three original characters she created for an online role-playing forum. Biani claimed that Showtime incorporated various aspects of her characters into two of the show’s characters and alleged that the defendants had access to her work because of the similarities between the characters. The district court dismissed the complaint, finding that Biani failed to plausibly allege that Showtime had a reasonable opportunity to copy her work. The district court applied the extrinsic test for protectable material under copyright, filtering out characteristics considered to be stock aspects of the Victorian-era England genre, and found that any remaining similarities were not striking enough to preclude the possibility of independent creation. Biani was granted leave to amend but chose not to, leading to the dismissal of the case with prejudice. Biani appealed.

The Ninth Circuit affirmed the dismissal of Biani’s complaint for failure to state a claim. The Court explained that to state a claim for copyright infringement, a plaintiff must plausibly allege both ownership of a valid copyright and that the defendant copied protected aspects of the work, which includes factual copying and unlawful appropriation. Biani did not challenge the district court’s determination that she failed to plausibly allege evidence of access. Instead she argued that the similarities between the works were so striking as to preclude independent creation. While the panel concluded that the district court improperly filtered out unprotectable elements of the works, it found this error was harmless because Biani’s allegations were insufficient to plausibly infer copying. The Court found that any resemblance between the characters was not extensive enough to preclude the possibility of coincidence, independent creation, or prior common source.

The Ninth Circuit also held that Biani’s claim failed under the “unlawful appropriation” analysis, agreeing with the district court that Biani failed to allege substantial similarity in protectable expression. The Court applied the extrinsic test to assesses the objective similarities of the two works, focusing only on the protectable elements of the plaintiff’s expression. The Court found that many of the characteristics that Biani alleged were unique to her characters (such as their age, strength, beauty, and engagement in witchcraft) were actually unprotectable elements, common in the public domain, and a standard aspect of Victorian-era-based fiction. The Court thus concluded that Biani failed to allege substantial similarity in protectable expression and thus affirmed the district court’s dismissal.

Surprise? Last-minute new theory leads to new trial

by Dexter Hamilton | Sep 18, 2025 | Patents

The US Court of Appeals for the Federal Circuit reversed a district court’s denial of a new trial after the defendant introduced a new noninfringement theory on the eve of trial based on test results it previously refused to produce, saying they were not necessary. Magēmā Technology LLC v. Phillips 66, Phillips 66 Co., and WRB Refining LP, Case No. 2024-1342 (Fed. Cir. Sept. 8, 2025) (Moore, Stoll, Bumb, JJ.)

Magēmā owns a patent directed to a solution to desulfurize fuel used to power cargo ships. Magēmā entered into licensing discussions with Phillips, but after the parties failed to reach an agreement, Phillips modified its hydrotreater reactors to implement what Magēmā believed was an infringing desulfurization process. Magēmā sued.

The governing fuel standard required a flashpoint of at least 140 degrees, meaning fuel with a pre-hydroprocessing flashpoint below that threshold would not infringe. The parties disagreed on where at the refinery the flashpoint should be tested. Phillips provided data from one sampling point while Magēmā requested data from a location closer to the hydrotreater reactor. Phillips refused, citing safety concerns, and argued that Magēmā could estimate the flashpoint using an accepted formula. The district court denied Magēmā’s motion to compel, agreeing that the formula sufficed. However, after discovery closed, Phillips moved to supplement the summary judgment record with new flashpoint test results from a different sampling station. The district court denied the motion, finding Phillips had no reasonable explanation for failing to sample earlier, and that introducing the evidence late would be unduly prejudicial, especially since Phillips had previously said Magēmā could rely on the formula. Yet shortly before jury selection, Magēmā learned that Phillips intended to argue that the formula was inadequate and that only actual testing could prove infringement (evidence Magēmā lacked), effectively shifting the burden. Magēmā objected, but the district court overruled the objection.

At trial, Philips told the jury that the standard required actual flashpoint testing and that Magēmā could not prove infringement without test samples. Magēmā requested a curative instruction, which the district court denied. The district court also barred Magēmā from explaining why it had relied on a formula rather than actual testing data. The jury returned a general verdict of noninfringement. Although the district court acknowledged that Phillips’ arguments were “improper and prejudicial,” it denied Magēmā’s motion for a new trial, finding that the misconduct did not affect the outcome. Magēmā appealed.

Phillips argued that Magēmā had failed to timely object, but the Federal Circuit disagreed, citing to Magēmā’s pre-jury selection objection, request for a curative instruction, and motion for a new trial. Finding that the district court abused its discretion in denying a new trial, the Federal Circuit agreed that Phillips’ argument was “improper and prejudicial,” characterizing it as a “bait-and-switch.”

Because the jury returned a general verdict form, the Federal Circuit could not determine the basis for the noninfringement finding and, given the repeated emphasis Phillips placed on its improper argument, the Court concluded it would be unjust to let the [...]

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Solidarity: Union’s commercial use may be Lanham Act violation

by Cecilia Choy, Ph.D. | Sep 18, 2025 | Trademarks

The US Court of Appeals for the Ninth Circuit reversed and remanded a district court’s dismissal of a Lanham Act action, finding that this case was not the rare instance where there was no plausible likelihood that a reasonably prudent consumer would be confused about the origin of the goods that allegedly bore the distinctive marks at issue. Trader Joe’s Co. v. Trader Joe’s United, Case Nos. 24-720; -2826 (9th Cir. Sept. 8, 2025) (Sanchez, Thomas, Donato, JJ.)

Trader Joe’s, a US grocery store chain, owns the red typeface logo and sells reusable tote bags and other branded goods bearing its marks. Trader Joe’s United (TJU), a labor union representing certain Trader Joe’s employees, markets (for profit) various products via its website, including reusable tote bags. Its website header features a logo that uses the distinctive red typeface and the concentric circle design in Trader Joe’s logo. The image below shows totes from Trader Joe’s (left) and TJU (right).

TJU allegedly began using Trader Joe’s marks in commerce, and Trader Joe’s sent TJU a cease-and-desist letter. Trader Joe’s noted that its demand was directed solely at TJU’s commercial use of the marks on merchandise sold to consumers on the TJU website, not the reference to Trader Joe’s to identify the union or discuss the union’s cause.

Trader Joe’s sued TJU, asserting several claims, including trademark infringement, and sought to permanently enjoin TJU from using Trader Joe’s trademarks in connection with the sale of commercial merchandise on the TJU website. Trader Joe’s also sought the destruction of all infringing merchandise and recovery of damages. TJU moved to dismiss, arguing that Trader Joe’s filed its trademark infringement complaint in retaliation over an ongoing labor dispute and asserting that there was no plausible likelihood that a consumer would believe that products sold on TJU’s website were sponsored, endorsed, or approved by Trader Joe’s.

Applying the Sleekcraft likelihood-of-confusion factors, the district court agreed with TJU and noted several differences between the marks. The district court also explained that Trader Joe’s does not sell many of the products sold on TJU’s website, including buttons, t-shirts, and mugs. The district court concluded that confusion about the origin of these products was unlikely for a reasonable consumer because TJU’s website clearly identified itself as a website of a labor union and was openly critical of Trader Joe’s labor practices. Trader Joe’s appealed.

The Ninth Circuit concluded that when the allegations were viewed in the light most favorable to Trader Joe’s, the district court erred when applying the fact-specific likelihood-of-confusion test. To prevail on a trademark infringement claim, Trader Joe’s would need to establish that it had a protectible ownership interest in the mark and that TJU’s use of the mark was likely to cause consumer confusion. To determine whether a reasonably prudent consumer [...]

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Fifth Circuit untangles damages in trademark battle

by Christian Tatum | Sep 18, 2025 | Trademarks

The US Court of Appeals for the Fifth Circuit reinstated a jury’s lost profits and breach damages awards that the district court set aside during post-trial proceedings, finding that sufficient evidence supported the awards. I&I Hair Corp. v. Beauty Plus Trading Co., Case No. 24-10374 (5th Cir. Sept. 5, 2025) (Haynes, Ho, Oldham, JJ.) (per curiam).

I&I Hair, the seller of EZBRAID synthetic braids, sued competitor Beauty Plus for trademark infringement, unfair competition, and breach of a 2019 settlement agreement that prohibited Beauty Plus from using the EZBRAID mark or confusingly similar terms. At trial, the jury awarded approximately $70,000 for infringement, $1.15 million in lost profits for unfair competition, and $1.3 million for breach of the settlement agreement.

After trial, the district court set aside the unfair competition and breach awards, concluding I&I failed to prove lost profits with reasonable certainty. I&I appealed.

The Fifth Circuit reversed, emphasizing that Texas law requires only competent evidence permitting a jury to determine lost profits with reasonable certainty, not precise proof of the exact amount awarded. The Court found that I&I had met this standard, highlighting evidence that EZBRAID sales surged by 400% in 2017 – 2018 and 70% in 2018 – 2019 but slowed to 10% growth in 2019 – 2020 after Beauty Plus began selling similar products. I&I’s sales declined further as Beauty Plus sold more than $5 million in infringing goods from 2019 to early 2022, with Beauty Plus making sales to nearly half of I&I’s customers. I&I also introduced revenue and profit margin data, as well as testimony that brand dilution and supply chain disruption amplified the harm. The Court concluded that the jury may have rationally considered I&I’s pre-infringement growth in revenue and net income, as well as testimony regarding customer confusion, to reach the damages awarded.

The Fifth Circuit rejected each of Beauty Plus’ arguments. First, it rejected Beauty Plus’ claim that the unfair competition award improperly mirrored Beauty Plus’ profits, explaining that the question was whether the number fell within the range supported by evidence, not whether it matched I&I’s calculations precisely. Second, the Court dismissed Beauty Plus’ challenge to the breach award, noting that Texas law requires certainty only as to the fact of damages, not the exact amount. Finally, the Court found I&I had adequately preserved its opposition to Beauty Plus’ judgment as a matter of law motion.

Accordingly, the Fifth Circuit reinstated the jury’s full verdict and remanded the case for further proceedings on attorneys’ fees.

Prevailing party: Dismissal with prejudice will do it

by Kyle Sorenson, PhD | Sep 18, 2025 | Patents

The US Court of Appeals for the Federal Circuit found that a district court erred in denying fees and costs to the prevailing party (here, the defendant), but upheld the district court’s denial of Rule 11 sanctions. Future Link Sys., LLC v. Realtek Semiconductor Corp., Case Nos. 23-1056; -1057 (Fed. Cir. Sept. 9, 2025) (Stoll, Reyna, Bryson, JJ.)

Future Link sued Realtek for patent infringement in the Western District of Texas. Realtek challenged service and personal jurisdiction and subsequently moved for Rule 11 sanctions. During discovery, Future Link produced a licensing agreement with a third party, under which the third party had agreed to pay a lump sum if Future Link sued Realtek. Shortly afterward, Future Link entered into a separate licensing agreement with Realtek covering the accused products and voluntarily dismissed the case.

Realtek moved for attorneys’ fees under 35 U.S.C. § 285 and costs under Rule 54(d)(1), and asserted that Future Link had filed objectively baseless lawsuits. The district court denied Realtek’s motions for fees and sanctions, did not address the motion for costs, and converted Future Link’s voluntary dismissal to a dismissal with prejudice.

Fees and costs

To seek fees and costs, a party must qualify as “the prevailing party.” In reviewing the district court’s decision on fees and costs, the Federal Circuit addressed Realtek’s prevailing party status under both § 285 and Rule 54(d).

Applying de novo review, the Federal Circuit concluded that Realtek was the prevailing party, despite the voluntary dismissal, because the district court had converted that dismissal to one with prejudice. The Federal Circuit emphasized that prevailing party analysis turns on whether there has been a material alteration of the legal relationship between the parties. Citing its own precedent, the Court explained that a dismissal with prejudice constitutes such a change because it bars the plaintiff from reasserting the same claims against the same products.
The Court explained that a favorable ruling on the merits is not required. A defendant that successfully avoids liability, such as through dismissal with prejudice, can still be deemed the prevailing party.

Since the dismissal with prejudice prevented Future Link from reasserting its patent claims against the accused products, Realtek was the prevailing party. The Federal Circuit vacated the district court’s denial of attorneys’ fees under § 285 and remanded the issue for consideration of whether the case was exceptional and fees were warranted. It likewise remanded the Rule 54(d) costs issue for initial determination.

Rule 11 sanctions

The Federal Circuit affirmed the district court’s denial of Rule 11 sanctions. Realtek had argued that Future Link’s prefiling investigation was inadequate and that the lawsuit was improperly motivated by a third-party payment arrangement, making that arrangement the but-for cause of the lawsuit.

The Federal Circuit rejected both arguments. First, it found that Future Link’s pre-suit investigation met Rule 11 standards: Future Link obtained and analyzed three accused products, prepared claim charts comparing asserted patent claims to the accused products, and investigated relevant optional features that it reasonably believed [...]

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Striking a chord: Ninth Circuit revives copyright suit over liturgical music

by Hannah Hurley | Sep 11, 2025 | Copyrights

In a copyright case involving liturgical music, the US Court of Appeals for the Ninth Circuit affirmed in part, reversed in part, and remanded a district court summary judgment after finding triable issues of fact regarding access and similarity between two musical compositions. The Court upheld the exclusion of the plaintiff’s late-disclosed evidence on access. Ambrosetti v. Or. Cath. Press, et al., Case No. 24-2270 (9th Cir. Aug. 27, 2025) (Thomas, Smith, Rayes, JJ.)

Vincent Ambrosetti, a prolific composer of sacred music, alleged that Bernadette Farrell copied his 1980 composition “Emmanuel” when writing her 1993 hymn “Christ Be Our Light.” Both works are widely used in Catholic liturgy, and Farrell’s song has become a staple in worship settings around the globe. Ambrosetti claimed that Farrell had access to “Emmanuel” through her association with Oregon Catholic Press (OCP), which published her work and had received copies of Ambrosetti’s music in the 1980s. He also pointed to striking musical similarities between the two compositions.

The district court excluded key evidence (letters from OCP’s then-publisher Owen Alstott acknowledging receipt of Ambrosetti’s music) as a sanction for late disclosure and barred Ambrosetti from arguing that Farrell accessed “Emmanuel” through those letters. Without that theory of access, and finding no striking similarity, the district court granted summary judgment for OCP. Ambrosetti appealed.

The Ninth Circuit affirmed the exclusion of the letters, finding that the sanctions were not “claim dispositive” since Ambrosetti could still pursue other theories of access and striking similarity. However, the panel reversed the summary judgment ruling, concluding that triable issues of fact existed as to whether Farrell had access to “Emmanuel” based on her and Alstott’s attendance at music conventions where Ambrosetti performed.

The Ninth Circuit also found that there was a genuine issue of material fact as to whether “Emmanuel” and “Christ” were substantially similar. According to Ambrosetti’s expert, 23 similarities in pitch, rhythm, and melodic development supported a finding of substantial similarity, with the district court noting that while individual elements may not be protectable, the unique combination could be. In vacating the summary judgement, the Ninth Circuit noted that summary judgment is “not highly favored” in copyright cases involving musical works where the evidence relied on is primarily competing expert testimony.

The Ninth Circuit upheld the exclusion of Alstott’s letters as a discovery sanction but found a genuine issue of material fact on the issue of access remained, thus precluding summary judgement.

Claims barred by laches: Prosecution delay doesn’t pay, nor does skipping evidence of concrete injury

by Courtney Seams | Sep 11, 2025 | Patents

The US Court of Appeals for the Federal Circuit affirmed a district court’s judgment for the US Patent & Trademark Office (PTO) on application of prosecution laches in an action under 35 USC § 145. The Federal Circuit also agreed that the district court lacked Article III jurisdiction over certain claims because the plaintiff failed to provide evidence of concrete injury when challenged after initial pleadings. Hyatt v. Stewart, Case Nos. 2018-2390; -2391; -2392; 2019-1049; -1038; -1039; -1070; 2024-1992; -1993; -1994; -1995 (Fed. Cir. Aug. 29, 2025) (Reyna, Wallach, Hughes, JJ.) (precedential).

Gilbert Hyatt filed four GATT bubble patent applications, all of which had claims rejected by the examiner. Hyatt appealed those rejections to the Patent Trial & Appeal Board, which affirmed various rejections of others. Following the Board decisions, Hyatt filed four separate actions in district court under 35 U.S.C. § 145, challenging the PTO rejections. In response, the PTO asserted prosecution laches as an affirmative defense and, in the alternative, invalidity, based on anticipation and lack of written description.

The district court initially ruled in Hyatt’s favor, finding that the PTO’s affirmative defenses failed with respect to the claims for which the Board affirmed the examiner’s rejection. The district court concluded that it lacked Article III jurisdiction over the remaining claims (those for which the Board reversed the examiner) because there was no final agency action as to those claims.

The PTO appealed, arguing that prosecution laches barred all of the claims or, in the alternative, that the claims were invalid. Hyatt cross-appealed, contending that prosecution laches did not apply in § 145 actions or that the district court abused its discretion in applying laches in these specific § 145 actions.

In an earlier appeal, Hyatt I, the Federal Circuit vacated the district court’s rulings on prosecution laches, holding that the district court applied the wrong standard for prosecution laches and had the burden of proving that Hyatt engaged in unreasonable and unexplained delay in prosecuting his applications and that the delay was prejudicial. The panel remanded the case held the issue of Article III jurisdiction in abeyance. On remand, the district court reversed course and found in favor of the PTO on prosecution laches, concluding that Hyatt had unreasonably delayed prosecution in a manner that prejudiced the agency.

Hyatt appealed. The Federal Circuit consolidated the appeals with the earlier stayed jurisdictional issues. The Federal Circuit affirmed the district court’s application of prosecution laches, finding no clear error in its determination that Hyatt’s conduct met the standard for delay and prejudice. The Federal Circuit also agreed that the district court lacked Article III jurisdiction over claims that had not been finally rejected by the PTO, reinforcing that § 145 actions may only proceed where there is a final agency determination resulting in a justiciable controversy.

On the issue of prosecution laches, the Federal Circuit explained that it had already considered and rejected Hyatt’s argument that prosecution laches is unavailable in a § 145 action in Hyatt I, and [...]

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Derivation proceedings highlight race to file under AIA

by Brennen Baylor | Sep 11, 2025 | America Invents Act, Patents

In one of the first decisions regarding derivation proceedings under the America Invents Act (AIA), the US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s finding that an application earlier filer had not derived his claimed invention from a later-filing petitioner. Global Health Solutions, LLC v. Marc Selner, Case No. 2023-2009 (Fed. Cir. Aug. 26, 2025) (Stoll, Stark, JJ.) (Goldberg, J., sitting by designation).

Global Health Solutions (GHS) and Marc Selner filed patent applications governed by the AIA and covering similar subject matter. Selner filed his application first. GHS filed a petition to institute derivation under 35 U.S.C. § 135, alleging that Selner’s patent claims were derived from Burnam, the single inventor on the GHS application.

During Board proceedings, the parties submitted evidence regarding the timing of their respective conceptions of the claimed inventions, including several email communications. Based on Selner’s evidence, the Board determined that he could not have derived the claimed invention from Burnam. The Board also rejected GHS’s argument that actual reduction to practice was necessary to complete conception of the claimed invention. GHS appealed.

The Federal Circuit explained that while pre-AIA patent interference proceedings required a party alleging derivation to establish prior conception and communication of the invention to the opposing party, the AIA does not expressly define the evidentiary requirements for derivation petitions. Nevertheless, the Court, borrowing from its interference jurisprudence, reasoned that an AIA derivation proceeding similarly requires a showing of both conception and communication of the claimed invention. The Court emphasized, however, that standards articulated in case law from pre-AIA interference proceedings must be applied with caution and considered in light of the AIA’s distinct statutory framework.

The Federal Circuit determined that although the Board focused on which party had proof of the earliest conception (typically the dispositive issue in interference proceedings), it was harmless error. Under the AIA first-to-file framework, determination of the first to invent is not dispositive. The Court noted that because Selner was first to file, he only needed to show that his conception was independent of Burnam’s. Here, Selner’s proof of earlier conception was also proof of conception independent of Burnam, the Court noted.

The Federal Circuit also determined that the Board did not err in rejecting GHS’s argument that Selner failed to demonstrate invention in the absence of evidence of actual reduction to practice. The Court found that the Board appropriately addressed whether such a requirement (often applied in interference proceedings to complicated, unpredictable technology) applied to the invention at issue. The Court explained that Selner’s conception was complete either when he could define the invention by its method of preparation or when he had formed a definite and permanent idea of the complete and operative invention. Selner’s earlier email communication to Burnam supported the finding that Selner had reached the requisite understanding to establish complete conception without the need for actual reduction to practice. Accordingly, the Court affirmed the Board’s decision in favor of Selner, finding no derivation.

Practice note: [...]

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