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Fifth Circuit scrolls past Ninth Circuit “Server Test” for online copyright infringement

by Lois D. Mermelstein | Sep 10, 2026 | Copyrights

The US Court of Appeals for the Fifth Circuit rejected the Ninth Circuit’s “server test” for determining whether embedded online content infringes a copyright owner’s public display right and concluded that URLs are not categorically excluded from qualifying as copyright management information (CMI) under the Digital Millennium Copyright Act (DMCA). Emmerich Newspapers, Inc. v. Particle Media, Inc., Case No. 23-60550 (5th Cir. Aug. 27, 2026) (King, Higginson, Duncan, JJ.)

Emmerich Newspapers publishes local news content online. Particle Media operates NewsBreak, a news aggregation website and application that links to content from various publishers, including Emmerich. One NewsBreak feature, called Framed View, allowed users to view a live version of an Emmerich webpage within a frame appearing in the NewsBreak interface.

Emmerich sued Particle for copyright infringement, alleging that Framed View violated Emmerich’s exclusive right under 17 USC § 106(5) to publicly display its copyrighted content. Emmerich also asserted a DMCA claim, contending that its URLs constituted CMI and that Particle improperly removed or altered that information when Emmerich content appeared under NewsBreak URLs.

The district court granted summary judgment to Particle. Applying the Ninth Circuit’s server test, first articulated in Perfect 10 v. Amazon.com (2007), the district court concluded that Particle did not infringe Emmerich’s display right because Particle did not store copies of Emmerich’s content on its own servers and instead linked to content transmitted from Emmerich’s servers. The district court also concluded that URLs could not constitute CMI because they primarily function as internet addresses. The Fifth Circuit accepted an interlocutory appeal addressing whether the server test provides the proper standard for display-right infringement and whether URLs may constitute CMI.

The Fifth Circuit declined to adopt the server test. Under that test, an entity that does not store a copy of a work on its own server generally does not “display” the work even if the entity embeds or frames content stored elsewhere. The Court concluded that this approach improperly transforms the Copyright Act’s requirement that a work be “fixed” into a requirement that the alleged infringer possess a copy of the work. The statutory definition of “fixed,” the Court explained, does not impose such a possession requirement.

Instead, the Fifth Circuit focused on the statutory requirement that a public display involve transmitting the work. The Court explained that determining whether this “transmit requirement” is satisfied requires identifying where the transmission originates and whether the transmission was permitted.

Applying that framework to Framed View, the Fifth Circuit concluded that Particle did not itself transmit Emmerich’s content. The transmission originated from Emmerich’s server, while NewsBreak merely sent a request for that content. The Court also emphasized that Emmerich’s server could have rejected the request. Thus, although the Court rejected the server test’s doctrinal basis, it concluded that Particle’s use of Framed View did not violate Emmerich’s public display right.

The Fifth Circuit cautioned that its finding was limited to the circumstances before it, suggesting that the analysis might differ where a copyright owner lacks the technological ability to reject [...]

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No venue, no problem: Improper venue doesn’t bar district court from deciding validity challenge

by Vincent Li, PhD | Sep 10, 2026 | Patents

The US Court of Appeals for the Federal Circuit affirmed a district court’s dismissal on both improper venue and patent eligibility grounds, finding no abuse of discretion in the district court’s decision to decide a Rule 12 (b)(6) patent eligibility challenge after first determining that venue was improper. AML IP, LLC v. Bath & Body Works Direct, et al., Case No. 2025-1280 (Fed. Cir. Aug. 28, 2026) (Prost, Bryson, Reyna, JJ.)

AML IP sued Bath & Body Works Direct in the US District Court for the Eastern District of Texas, alleging infringement of a patent directed to e-commerce methods. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(3) for improper venue and Rule 12(b)(6) for failure to state a claim, arguing that the asserted patent claims were ineligible under 35 USC § 101. The district court first determined that AML had failed to establish proper venue under 28 USC § 1400(b), concluding that “[f]or this reason alone, the case should be dismissed.” It nevertheless proceeded to the defendants’ Rule 12(b)(6) arguments and concluded that the asserted claims were patent ineligible under § 101. AML appealed.

AML did not challenge the merits of either ruling. Instead, it argued that once the district court determined that venue was improper, it should have stopped and dismissed the case solely on that basis rather than addressing patent eligibility.

Because AML’s challenge concerned the district court’s docket-management authority (an issue not unique to patent law), the Federal Circuit applied Fifth Circuit law and reviewed the district court’s decision for abuse of discretion. The Federal Circuit emphasized that AML did not contend that the district court lacked authority to decide the Rule 12(b)(6) motions after finding venue improper. Rather, AML argued only that the district court should have declined to do so.

The Federal Circuit rejected AML’s reliance on cases stating that venue motions should receive “top priority.” Those cases, the Court explained, generally require a district court to address venue before proceeding to substantive matters, but they do not necessarily restrict what a district court may do after determining that venue is improper. The district court here complied with that principle by resolving venue first and even staying the litigation while the dismissal motions were pending.

The Federal Circuit also noted that the “top priority” principle is intended primarily to protect a party challenging venue from being forced to litigate substantive issues in an objectionable forum. Here however, it was AML – the plaintiff that had selected the Eastern District of Texas – that sought to invoke the priority principle, rather than the defendants that had challenged venue.

AML separately relied on district court decisions in which courts resolved venue motions without deciding pending merits motions. The Federal Circuit found those decisions distinguishable. They reflected the “common-sense principle” that district courts ordinarily should decide venue first when transfer may be appropriate so that the transferee court can resolve substantive issues. No transfer was at issue here. The district court dismissed for improper [...]

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Chemical structure, formula, and name support written description of pharmaceutical genus

by Ashley K. Justice | Sep 10, 2026 | Life Sciences, Patents

The US Court of Appeals for the Federal Circuit affirmed that a patent’s specification provided adequate written description support for genus claims directed to crystalline cabozantinib (L)-malate salts because it disclosed structural features common to the claimed genus. Exelixis, Inc. v. MSN Laboratories Private Ltd., Case No. 25-1236 (Fed. Cir. Aug. 31, 2026) (Stoll, J.; Moore, C.J.; Moore, District J., sitting by designation).

Exelixis holds the New Drug Application for Cabometyx®, a cancer treatment containing cabozantinib (L)-malate. MSN sought US Food and Drug Administration approval to market a generic cabozantinib (L)-malate product. Exelixis asserted three related patents directed, respectively, to crystalline cabozantinib (L)-malate salts, pharmaceutical formulations containing those salts, and methods of treating cancer using the salts. The patents share a common specification. Exelixis also asserted a separate patent directed to cabozantinib (L)-malate compositions containing low levels of a genotoxic impurity. MSN sought FDA approval to market a generic cabozantinib (L) malate product.

MSN conceded infringement of the crystalline malate salt patents but argued that the asserted claims were invalid for lack of written description under 35 USC § 112(a). After a bench trial, the district court rejected that challenge. As to the low-impurity formulation patent, the district court found no infringement and concluded that MSN had failed to establish invalidity based on inherent obviousness. MSN appealed.

Addressing written description, the Federal Circuit applied the framework for genus claims set forth in its 2010 Ariad Pharmaceuticals. v. Eli Lilly & Co decision. A specification may demonstrate possession of a genus by disclosing either a representative number of species or structural features common to the genus that allow a skilled artisan to visualize or recognize its members.

The Federal Circuit found no clear error in the district court’s determination that the common specification adequately disclosed structural features of the claimed genus. In particular, the specification identified the chemical name and formula of cabozantinib (L)-malate and specified that the claimed salt had a crystalline structure. The claims were correspondingly limited to crystalline cabozantinib (L)-malate salts. The specification also disclosed processes for preparing crystalline and amorphous forms, although the Court noted that those disclosures were not dispositive of written description.

The Federal Circuit rejected MSN’s argument that the specification failed to describe the genus because different crystalline polymorphs could possess different properties, such as density, melting point, and solubility. The Court explained that those characteristics were not claimed and that MSN had not shown why differences in unclaimed properties undermined the district court’s finding that the specification identified structural features common to the claimed genus.

The Court therefore affirmed the district court’s determination that the crystalline malate salt claims satisfied the written description requirement.

The Federal Circuit separately addressed MSN’s appeal concerning the low-impurity formulation patent. The district court had found the asserted claim not infringed and not invalid, concluding that MSN failed to prove that the prior art inherently produced a formulation containing no more than the claimed level of a genotoxic impurity. Exelixis initially appealed the noninfringement ruling but later dismissed [...]

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Shared function sufficient for a proper Markush group

by Anisa Noorassa | Sep 10, 2026 | Patents

In a recently designated informative decision, the Patent Trial & Appeal Board reversed an examiner’s rejection of claims reciting structurally distinct microRNAs (miRNAs) as an improper Markush group. The Board found the claimed alternatives sufficiently related because they performed similar functions in the context of the invention. Ex parte Chowdhury, Appeal No. 2025-002261 (PTAB Feb. 5, 2026) (Flax, Katz, Hardman, A.P.JJ.) (designated informative Aug. 25, 2026).

The patent application at issue concerns methods for assessing and treating radiation-induced damage using levels of particular miRNAs in a patient’s serum. The claims recited groups of different miRNAs whose measured levels could be used to assess radiation damage and inform treatment decisions.

The examiner rejected the claims as containing improper Markush groupings. The examiner found that the recited miRNAs did not share substantial structural similarity because each had a different nucleotide sequence. Their only structural similarity was that each comprised nucleotides. The examiner also found that the miRNAs did not belong to a recognized chemical class that would have been expected to behave similarly or to be interchangeable for achieving the same result.

The Board reversed. It explained that a proper Markush group generally requires the listed alternatives to belong to a recognized physical or chemical class or to be sufficiently related by a common property or function. In assessing that requirement, however, the relevant inquiry is whether the alternatives are interchangeable for the purposes of the claimed invention.

The Board found that the claimed miRNAs satisfied that standard. Although the individual miRNAs were structurally different and did not necessarily perform the same biological function, the claims did not depend on those biological functions. Instead, each miRNA served the same claimed purpose: its serum level could be quantified and used as an indicator relevant to radiation-induced damage and treatment.

As the Board explained, the listed miRNAs did not need to function biologically in the same manner or produce the same biological result. They needed only to be quantifiable and interchangeable as markers for the purposes of the claimed method. Because the specification described the recited miRNAs as performing that common function, the Board found that they constituted a proper Markush grouping.

Result-oriented claims fail to pass § 101 muster; industry standards may prove individual claim limitations

by Courtney Seams | Sep 10, 2026 | Patents

The US Court of Appeals for the Federal Circuit concluded that claims broadly directed to optimizing signal constellations for a particular result were patent ineligible, but upheld claims directed to specific constellations. The Court also confirmed that industry standards may be used on a limitation-by-limitation basis to prove infringement. Constellation Designs LLC v. LG Electronics Inc., et al., Case No. 24-1822 (Fed. Cir. Aug. 31, 2026) (Stoll, Lourie, JJ.; Oetken, District J., sitting by designation).

Constellation Designs sued LG for infringement of four patents directed to digital communication systems using signal constellations to transmit and decode data. Constellation accused LG televisions compatible with the ATSC 3.0 over-the-air television broadcast standard, specifically its A/322 protocol. The asserted claims fell into two groups: claims reciting geometrically spaced symbol constellations optimized for capacity using parallel decode (PD) capacity (optimization claims) and claims reciting specific non-uniform constellations (constellation claims).

The district court granted Constellation summary judgment that all asserted claims were patent eligible under 35 USC § 101. Following trial, a jury found that LG willfully infringed the asserted claims and awarded Constellation about $1.68 million in damages. The district court denied LG’s post-trial motions challenging infringement and damages, and entered an ongoing royalty of $6.75 per television. LG appealed.

Addressing patent eligibility, the Federal Circuit distinguished between the optimization claims and the constellation claims. At step one of the Alice framework, the Court concluded that the optimization claims were directed to the abstract idea of optimizing a constellation for PD capacity. The claims recited a desired result (improved capacity at a reduced signal-to-noise ratio) but did not recite how to achieve that result. The Court analogized the claims to the result-oriented claims found ineligible in other cases, explaining that the claims broadly covered essentially all ways of optimizing a constellation for PD capacity.

Although the specification described techniques for performing the optimization, the claims did not recite those details. The Federal Circuit explained that the § 101 inquiry focuses on the claim language and that technical details disclosed only in the specification cannot be imported into the claims to establish eligibility. At Alice step two, the Court found no inventive concept because Constellation’s alleged inventive concept (optimizing non-uniform constellations based on PD capacity) was the abstract idea itself. The Court therefore vacated the district court’s summary judgment of eligibility as to the optimization claims.

The Federal Circuit reached a different conclusion as to the constellation claims. Those claims did not broadly claim optimization but instead recited specific constellations developed using techniques described in the patents. The Court found that this distinction “makes all the difference” because the constellation claims recited a concrete implementation of a technological improvement directed to overcoming limitations in constellation capacity. The Court therefore affirmed the district court’s finding that those claims were patent eligible.

The Federal Circuit also affirmed the denial of LG’s motion for judgment as a matter of law of noninfringement. At trial, Constellation relied on the ATSC 3.0/A/322 standard to establish that the accused device met [...]

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Settlement wipes out exceptional-case fee award in exceptional fashion

by Dexter Hamilton | Sep 3, 2026 | Trademarks

The US Court of Appeals for the Third Circuit granted the parties’ joint motion to vacate a district court’s attorneys’ fee rulings after the parties settled while the second fee appeal was pending. The Court concluded that the case presented the rare “exceptional circumstances” warranting vacatur after mootness resulting from settlement. Lontex Corp. v. Nike, Inc., Case Nos. 24-3284; -3358 (3d Cir. Aug. 20, 2026) (Chagares, C.J.; Freeman, Bove, JJ.)

The appeals arose from fee proceedings following the Third Circuit’s earlier decision in Lontex v. Nike (2024). There, the Court addressed the standard for determining whether a trademark case is “exceptional” for purposes of awarding attorneys’ fees and remanded for further proceedings. On remand, the district court again found the case exceptional and awarded Lontex attorneys’ fees and costs. Nike appealed, and Lontex cross-appealed.

After oral argument and mediation, the parties settled and jointly sought vacatur of the district court’s fee rulings. The Third Circuit emphasized that settlement alone does not warrant vacatur. Because judicial decisions are presumptively correct and may have value beyond the immediate parties, vacatur following settlement remains an extraordinary equitable remedy requiring exceptional circumstances.

The Third Circuit found such exceptional circumstances in this case. Most importantly, the challenged decisions applied the legal standard established in the Third Circuit’s precedential 2024 decision in the case, which remains intact. The public therefore retained the benefit of the appellate decision establishing the governing legal principles, reducing the public interest in preserving the district court’s application of those principles on remand. Both parties also challenged the district court’s rulings, and the settlement (reached following court-encouraged mediation) conserved further judicial resources.

Balancing those considerations, the Third Circuit concluded that the benefits of settlement outweighed the remaining public interest in preserving the district court’s rulings. The case therefore presented the unusual circumstances in which vacatur following settlement is appropriate.

Now you know the limits on patent rights: Diversion of resources doesn’t establish standing

by Cecilia Choy, PhD | Sep 3, 2026 | Patents

Concluding that an organization cannot establish standing to seek prospective relief merely by alleging that it diverted resources in response to challenged conduct, the US Court of Appeals for the Federal Circuit affirmed dismissal of claims brought by inventor-advocacy organizations challenging language on the cover of issued patents because the organizations lacked both organizational and associational standing. US Inventor, Inc. v. Squires, Case No. 24-2378 (Fed. Cir. Aug. 21, 2026) (Moore, Cunningham, Kovner (sitting by designation), JJ.)

The cover of each newly issued patent includes language tracking the Patent Act, stating that the patent “grants to the persons having title to this patent the right to exclude others from making, using, offering for sale, or selling” the invention throughout the United States or importing the invention into the US. Three inventor advocacy organizations – US Inventor, Inventors Association of South Central Kansas, and Inventors Network of Minnesota – sued the United States Patent and Trademark Office (USPTO) and its acting director, alleging that this language was misleading in light of the Supreme Court’s 2006 decision in eBay v. MercExchange.

Plaintiffs contended that eBay eliminated any absolute right of a patent owner to exclude others because injunctive relief is no longer automatic upon a finding of infringement. They sought an order requiring the USPTO to change the patent cover language, an injunction prohibiting the USPTO from representing that patent owners possess an unequivocal right to exclude, and a declaration that the existing language is unlawful. The district court dismissed the complaint for lack of standing. Plaintiffs appealed.

The Federal Circuit affirmed, concluding that plaintiffs had not adequately alleged a real and immediate threat of future injury sufficient to support prospective injunctive or declaratory relief.

First, the Federal Circuit concluded that plaintiffs lacked organizational standing. An organization suing on its own behalf must satisfy the ordinary requirements of Article III standing, including demonstrating a concrete and imminent threat of future injury. Relying on the Supreme Court’s 2024 decision in FDA v. Alliance for Hippocratic Medicine, the Court explained that an organization does not suffer a cognizable injury merely because challenged conduct causes it to spend additional “time, energy, and resources on advocacy and education.”

Plaintiffs relied on a similar diversion-of-resources theory, alleging that the USPTO’s patent cover language required them to devote resources to educating inventors about the effect of eBay, thereby impairing their ability to pursue their organizational missions. The Federal Circuit found those allegations insufficient.

The Federal Circuit also rejected plaintiffs’ reliance on the Supreme Court’s 1982 decision in Havens Realty v. Coleman. In Havens, the challenged conduct directly interfered with the organization’s core activities because racial steering practices caused the organization to receive false housing information that it then passed along to home seekers. Here, by contrast, plaintiffs were aware of eBay and therefore were not themselves misled by the patent cover language. Their alleged injury instead arose from their decision to educate unidentified inventors who might misunderstand that language. Rather than alleging that the USPTO directly impeded their [...]

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Floored: Rule 41(a)(2) dismissal supports appellate jurisdiction

by Taylor MacDonald | Sep 3, 2026 | Copyrights

The US Court of Appeals for the Fifth Circuit affirmed dismissal of a plaintiff’s Digital Millennium Copyright Act (DMCA) claims while vacating dismissal of its copyright infringement claims involving architectural floorplans, concluding that the Court had appellate jurisdiction despite the plaintiff’s voluntary dismissal under Fed. R. Civ. P. 41(a)(2). Kipp Flores Architects, LLC v. AMH Creekside Development, LLC, Case No. 23-50750 (5th Cir. Aug. 21, 2026) (Willett, J.) (Haynes, J., concurring) (Oldham, J., dissenting).

Kipp Flores Architects (KFA) owned copyrights in architectural building plans and technical drawings that it licensed to defendants for use in constructing buildings. The licenses required defendants to include specified copyright management information (CMI) when displaying the copyrighted works. KFA and defendant American Housing Ventures (AHV) later worked with other companies to develop floorplans and technical documents for AHV’s construction projects. Those documents did not contain the required CMI. AHV subsequently provided the floorplans to the remaining defendants for use in developing another building, and those defendants used the floorplans, still without CMI, in online marketing materials.

KFA asserted claims for DMCA violations, copyright infringement, conversion, and specific performance. The district court dismissed all of KFA’s DMCA and conversion claims, along with some of its remaining claims against certain defendants. Seeking to appeal the dismissals, KFA moved under Rule 41(a)(2) to voluntarily dismiss its remaining claims, and the district court granted the motion. KFA then appealed.

The Fifth Circuit first considered whether the Rule 41(a)(2) dismissal created an appealable final judgment. Rule 41(a) permits dismissal of an action, not individual claims. The Court nevertheless concluded that the district court’s error in permitting dismissal of KFA’s remaining claims did not deprive the Fifth Circuit of appellate jurisdiction. The error was a “reversible error, not an unappealable nullity.”

The Fifth Circuit also distinguished its precedent involving Rule 41(a)(1). Unlike a Rule 41(a)(1) dismissal, which is self-effectuating, a Rule 41(a)(2) dismissal requires a court order. The district court’s order granting KFA’s motion therefore constituted a “legally operative act of dismissal” sufficient to create appellate jurisdiction.

Turning to the merits, the Fifth Circuit addressed KFA’s copyright infringement and DMCA claims. The Architectural Works Copyright Protection Act (AWCPA) protects architectural works while earlier copyright law separately protected architectural plans as pictorial, graphic, or sculptural (PGS) works. Section 120(a) of the Copyright Act creates a safe harbor for pictures or other pictorial representations of architectural works embodied in buildings located in or ordinarily visible from a public place. Although § 120(a) does not apply to rights arising solely from PGS works, the Court concluded that KFA’s floorplans could fall within the safe harbor as far as they depicted copyrighted architectural works. The Court also concluded that § 120(a) can apply to representations created before a building becomes publicly visible but distributed or displayed afterward.

The Fifth Circuit nevertheless determined that the district court erred in dismissing KFA’s infringement claim under § 120(a). KFA was not required to plead facts negating the safe harbor because § 120(a) operates as an affirmative defense. KFA’s [...]

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A prescription for liability: Injunction in gray-market drug case based on material differences

by Ian J. Howard | Aug 27, 2026 | Life Sciences, Trademarks

Affirming a preliminary injunction, the US Court of Appeals for the Fourth Circuit found that companies importing foreign-market pharmaceuticals for domestic patients were likely liable for trademark infringement, and that healthcare administrators and pharmacy benefit managers that continued facilitating those transactions despite reason to know of the infringement were likely liable for contributory infringement. Gilead Sciences, Inc. v. Meritain Health, Inc., Case No. 25-1828 (4th Cir. Aug. 13, 2026) (Agee, Harris, Keenan, JJ.)

Gilead sued a group of companies involved in filling US patient prescriptions for the HIV drug Biktarvy® with a Gilead-branded version of the drug intended for Turkey. Gilead alleged that the defendants’ importation and distribution of the Turkish-market product infringed its trademarks under the Lanham Act. In addition to suing companies directly involved in sourcing and supplying the prescriptions, Gilead sued Meritain Health, the third-party administrator of the relevant healthcare plan, and ProAct, a pharmacy benefit manager, for contributory infringement.

Shortly after filing suit, Gilead moved for a temporary restraining order and then a preliminary injunction enjoining the defendants from importing gray-market versions of Biktarvy®. The district court granted the requested relief, finding that Gilead had demonstrated a likelihood of success on its direct infringement claims against certain defendants and its contributory infringement claims against others. Meritain, ProAct, and the other defendants appealed.

The defendants first argued that the Federal Food, Drug, and Cosmetic Act (FDCA) precluded Gilead’s Lanham Act claims. Although the Turkish version of Biktarvy® was not US Food and Drug Administration approved, Gilead did not premise its trademark claims on that fact. The Fourth Circuit therefore concluded that adjudicating Gilead’s claims did not require enforcement or interpretation of the FDCA.

The defendants also challenged the district court’s likelihood-of-confusion finding, emphasizing that Gilead itself manufactured the Turkish version of Biktarvy® and that the product bore authentic Gilead trademarks. The Fourth Circuit disagreed, explaining that goods bearing a genuine trademark may nevertheless be considered nongenuine for trademark purposes if they materially differ from the authorized domestic product or are sold outside the trademark owner’s quality-control procedures.

Although the Turkish and US versions of Biktarvy® were chemically identical, the Fourth Circuit found material differences between them. Among other things, the Turkish product contained foreign-language labeling and lacked certain warnings and patient information provided with the US version. The Turkish product also was not transported through Gilead’s quality-control system. Those differences were sufficient to support the district court’s finding of material differences.

The Fourth Circuit also rejected Meritain and ProAct’s challenges to the contributory infringement ruling. The Court explained that contributory infringement does not require actual knowledge of another party’s infringement. Liability may arise where a defendant knew or should have known of the infringement and nevertheless continued supplying products or services that facilitated it.

The Fourth Circuit further rejected Meritain and ProAct’s argument that contributory infringement required proof that they exercised control over the direct infringers. In doing so, the Court declined to adopt the Ninth Circuit’s control requirement. The Fourth Circuit also concluded that even if [...]

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Off the mark: NPE licensees must comply with patent marking for pre-suit damages

by Keval Amin | Aug 27, 2026 | Patents

Affirming dismissal of a patent infringement complaint and an award of attorneys’ fees, the US Court of Appeals for the Federal Circuit reiterated that a nonpracticing entity (NPE) seeking pre-suit damages cannot disregard its licensees’ obligations under the patent marking statute, and that a pattern of abusive litigation conduct supports an exceptional case finding under 35 U.S.C. § 285. VDPP, LLC v. Volkswagen Group of America, Inc., Case No. 24-2226 (Fed. Cir. Aug. 19, 2026) (Moore, Lourie, Cunningham, JJ.)

VDPP, an NPE, sued an auto manufacturer for infringement of a patent directed to electrically controlled spectacles. The district court dismissed the complaint under Rule 12(b)(6) and denied leave to amend as futile. Because VDPP sought pre-suit damages, it was required to plead compliance with 35 U.S.C. § 287(a), including compliance by its licensees.

VDPP had entered into 11 settlement agreements that included patent licenses, but its proposed amended complaint did not allege that any licensee had marked its products. Instead, VDPP relied on its status as an NPE and asserted that it had no products of its own to mark. VDPP appealed the district court’s dismissal and fee award.

The Federal Circuit affirmed. Although a patentee that does not make or sell patented products may not have products of its own to mark, its licensees remain subject to § 287’s marking requirements. The Court rejected VDPP’s attempt to distinguish licenses granted through settlement agreements, explaining that a settlement license is no different for marking purposes from any other patent license. The Court noted that all 11 settlement agreements were structured as licenses and that one expressly stated that the licensee had no obligation to mark. Because VDPP could not plausibly allege that it made reasonable efforts to ensure compliance by its licensees, the Court affirmed the denial of leave to amend as futile.

The Federal Circuit also affirmed the district court’s exceptional case determination and fee award under § 285. The district court relied on several aspects of VDPP’s litigation conduct, including seeking future damages and injunctive relief on an expired patent, failing to disclose relevant settlement agreements despite being reminded of them, and advancing positions the district court characterized as frivolous.

The Federal Circuit rejected VDPP’s argument that conduct must independently satisfy Rule 11 before it may support an exceptional case finding. It also concluded that the district court properly considered VDPP’s broader pattern of filing patent infringement suits followed by low-value settlement demands, noting that such a pattern is relevant to an exceptional case determination where adequate evidence of an abusive litigation strategy is presented.

The Federal Circuit dismissed the appeal as to sanctions imposed on VDPP’s counsel for lack of jurisdiction. VDPP’s counsel’s notice of appeal listed only VDPP as the appellant, and the counsel’s name appeared only incidentally within a description of the orders being appealed. Corrected notices filed more than 90 days after entry of the orders came too late. The Court also rejected VDPP’s argument that it had standing to contest its own counsel’s [...]

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