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Criminal counterfeiters beware: Second Circuit affirms prison sentence, restitution for counterfeit trafficking

by Taylor MacDonald | Nov 12, 2026 | Trademarks

The US Court of Appeals for the Second Circuit affirmed a 24-month prison sentence and more than $111,000 in restitution for trafficking in counterfeit luxury goods, finding that the defendant’s supervisory role and the value of the counterfeit goods supported sentencing enhancements. The Court also concluded that harm to intangible trademark rights can support restitution under the Mandatory Victims Restitution Act (MVRA), including expenses incurred investigating the counterfeiting. United States v. Sow, Case No. 25-2621-cr (2d Cir. Nov. 3, 2026) (Leval, Wesley, Bianco, JJ.)

Adama Sow pleaded guilty to trafficking counterfeit goods after law enforcement seized more than 80,000 items bearing counterfeit luxury trademarks from storage units she rented at a Manhattan facility. At a sentencing hearing, the district court heard testimony from two storage facility employees concerning Sow’s role in the operation and from an expert retained by the affected luxury brands concerning the value of the counterfeit goods.

The district court applied a two-level sentencing enhancement based on Sow’s supervisory role and a 20-level enhancement based on the value of the counterfeit goods, which it determined exceeded $9.5 million but did not exceed $25 million. These enhancements resulted in an advisory sentencing guidelines range of 70 to 87 months’ imprisonment. The district court nevertheless imposed a substantially reduced sentence of 24 months’ imprisonment and ordered Sow to pay $111,419.32 in restitution to the luxury brands for expenses associated with the expert’s investigation and testimony. Sow appealed.

Sow argued that 28 U.S.C. § 994(j) favored a noncustodial sentence because she was a first-time offender convicted of a nonviolent crime. The Second Circuit rejected that argument, explaining that § 994(j) directs the Sentencing Commission to recognize the general appropriateness of noncustodial sentences for certain first-time offenders but does not require courts to impose such sentences. The Second Circuit found that the district court properly considered the relevant sentencing factors, including the seriousness and duration of Sow’s counterfeiting operation, and exercised its discretion by imposing a sentence substantially below the advisory guidelines range.

The Second Circuit also affirmed both enhancements. The storage facility employees testified that Sow directed at least one assistant who regularly handled merchandise and performed tasks on her behalf. Although Sow challenged the testimony as unreliable and based partly on hearsay, the Court explained that sentencing courts may consider hearsay evidence bearing sufficient indicia of reliability. The employees’ firsthand observations and the district court’s credibility findings supported the supervisory role enhancement.

The Second Circuit likewise upheld the district court’s valuation enhancement. The district court credited expert testimony estimating the street value of the seized counterfeit goods and reduced that estimate by 10% to account for sales in locations such as Canal Street rather than traditional retail stores. The valuation was supported by evidence linking the seized goods to Sow and financial records reflecting millions of dollars flowing through her bank accounts. The Second Circuit found that the district court’s methodology provided a reasonable estimate of the counterfeit goods’ value.

Sow argued that the luxury brands had not established [...]

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The whey forward: Losing product-of-nature defense doesn’t make case exceptional

by Keval Amin | Nov 12, 2026 | Patents

The US Court of Appeals for the Federal Circuit reversed an attorneys’ fee award, finding that the district court erred in treating Supreme Court precedent on the patent eligibility of isolated natural products as dispositive of a dispute where additional issues regarding the claimed compositions’ characteristics and utility were involved. The Federal Circuit concluded that the patentee’s unsuccessful eligibility arguments were not exceptionally meritless under 35 U.S.C. § 285. ChromaDex, Inc. v. Elysium Health, Inc., Case No. 25-1227 (Fed. Cir. Oct. 30, 2026) (Prost, Chen, Stoll, JJ.) (nonprecedential).

ChromaDex and the Trustees of Dartmouth College (collectively, ChromaDex) owned patents directed to dietary supplement compositions containing isolated nicotinamide riboside (NR), a form of vitamin B3, formulated for oral administration to increase nicotinamide adenine dinucleotide (NAD+) biosynthesis. NR occurs naturally in cow’s milk, but only in trace amounts bound to a whey protein that prevents its bioavailability. Milk nevertheless increases NAD+ biosynthesis through another compound, tryptophan.

ChromaDex sued Elysium Health for patent infringement. The district court granted summary judgment that the asserted claims were ineligible under § 101 because they were directed to a product of nature, and the Federal Circuit affirmed (ChromaDex I).

Elysium subsequently sought attorneys’ fees under § 285, arguing that ChromaDex had pursued its infringement claims without meaningfully addressing the Supreme Court’s 2013 decision in Association for Molecular Pathology v. Myriad Genetics, which held that merely isolating naturally occurring DNA does not render it patent eligible. The district court agreed, characterizing Myriad as dispositive and faulting ChromaDex for citing the decision only once in its summary judgment opposition. The district court awarded Elysium more than $9.1 million in attorneys’ fees, including $3.9 million incurred before the claim construction hearing. ChromaDex appealed.

The Federal Circuit concluded that the district court erred by treating Myriad as resolving the entire eligibility dispute. Although Myriad established that isolating NR from milk was insufficient, standing alone, to confer patent eligibility, ChromaDex had advanced a broader argument. Relying on the Supreme Court’s 1980 decision in Diamond v. Chakrabarty and the Federal Circuit’s 2019 decision in Natural Alternatives International v. Creative Compounds, ChromaDex argued that isolating NR made it bioavailable, giving the claimed compositions markedly different characteristics and significant utility compared with naturally occurring milk. ChromaDex also supported its position with expert testimony.

The Federal Circuit explained that rejecting ChromaDex’s eligibility arguments in ChromaDex I required analysis beyond Myriad. In particular, the Court considered whether the claims required a particular quantity of isolated NR, whether they attributed increased NAD+ biosynthesis to the isolated NR, and whether the district court’s construction of “isolated” necessarily required bioavailability. The Court also considered that milk itself increases NAD+ biosynthesis through tryptophan. None of these issues was resolved by Myriad alone.

Regarding the attorneys’ fee award, the Federal Circuit emphasized that an unsuccessful legal position does not necessarily make a case exceptional under § 285. The relevant inquiry is the substantive strength of the party’s position, not whether it ultimately prevailed. Because ChromaDex’s eligibility arguments required substantive analysis and [...]

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Forum contacts must be linked to alleged trade secret misappropriation to establish personal jurisdiction

by Amol Parikh | Nov 12, 2026 | Trade Secrets

The US Court of Appeals for the Tenth Circuit affirmed the dismissal of federal and state trade secret misappropriation claims against three out-of-state defendants for lack of personal jurisdiction, finding that although the defendants purposefully directed activities toward Colorado, the plaintiffs failed to establish that their alleged injuries arose out of or related to those contacts. Flux Drive Inc. v. Rong, Case Nos. 25-1308; 26-1013; -1292 (10th Cir. Oct. 30, 2026) (Matheson, McHugh, Federico, JJ.)

Flux Drive alleged that a former senior design engineer, Michael Sparks, conspired with John Qiang Rong, Rong’s wife Leigh Wang, and Zyrcon Global Strategies to misappropriate proprietary technology related to industrial drive equipment and transfer it to PRD Technologies, a Chinese manufacturer. According to Flux, Rong facilitated the alleged scheme by serving as a technical liaison between Sparks and PRD, transmitting a master services agreement under which Sparks performed engineering work for PRD, and helping provide financing to Sparks.

Rong and Wang, both Illinois residents, maintained that Rong merely assisted with communications between Sparks and PRD, and that the $23,000 transferred to Sparks’ Colorado bank account was a short-term bridge loan that was repaid within a month.

Flux sued in the District of Colorado, asserting claims under the Defend Trade Secrets Act (DTSA), the Colorado Uniform Trade Secrets Act, and several common law theories. Rong, Wang, and Zyrcon moved to dismiss for lack of personal jurisdiction. The district court granted the motion and subsequently awarded the defendants attorneys’ fees under Colorado Revised Statutes § 13-17-201, which mandates reasonable attorneys’ fees when certain tort actions are dismissed on a pretrial motion under Rule 12(b). Flux appealed both the dismissal and the fee awards.

The Tenth Circuit first addressed whether the defendants had sufficient contacts with Colorado to support specific personal jurisdiction. The Court explained that the DTSA does not independently authorize nationwide service of process and that Flux therefore had to establish personal jurisdiction under Colorado law and constitutional due process principles.

The Tenth Circuit concluded that Flux had made a prima facie showing that the defendants purposefully directed activities toward Colorado. Rong repeatedly communicated with Sparks, knowing that Sparks resided in Colorado; Sparks testified that Rong was someone to whom he was expected to report; and the defendants transferred $23,000 to Sparks’ Colorado bank account. Those contacts were sufficient to satisfy the purposeful-direction requirement at the preliminary stage.

Flux nevertheless failed to establish that its claims arose out of or were related to those contacts. Although Rong allegedly transmitted the master services agreement, Flux did not explain how that agreement facilitated the theft of its trade secrets. Similarly, Flux offered no evidence that the $23,000 loan was used to purchase equipment employed in the alleged misappropriation, or that the defendants knew or controlled how the funds would be used. The Tenth Circuit emphasized that allegations of a supervisory relationship or participation in a broader scheme, without a factual connection between the forum contacts and the claimed injuries, were insufficient to establish specific jurisdiction. It therefore [...]

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Ownership of compilation doesn’t mean ownership of individual copyrights

by Jolie B. Schenerman | Nov 5, 2026 | Copyrights

The US Court of Appeals for the Seventh Circuit affirmed summary judgment of noninfringement, finding that ownership of a copyright in a compilation does not confer rights in its individual components and that a subsequent copyright assignment remains subject to a previously granted irrevocable oral license. Center for Gestalt Development, Inc. v. Bowman, Case No. 25-3336 (7th Cir. Oct. 26, 2026) (Scudder, Pryor, Maldanado, JJ.)

Dr. Frederick Perls, a pioneer of gestalt therapy, authored an unpublished article titled “Psychopathology of Awareness.” In 1991, his widow’s estate granted the Center for Gestalt Development exclusive rights to publish a collection of Perls’ unpublished manuscripts, including the “Psychopathology” article. The Center did not publish the collection until 2021. Meanwhile, Charles Bowman and Jean-Marie Robine published the article in a 2019 book accompanied by commentary from other gestalt therapists. In 2019 or 2020, Perls’ children, who had inherited the copyright in the article, orally authorized Bowman and Robine to use the article in exchange for royalties. In 2021, the children settled a separate lawsuit with the Center by assigning their rights in the article to the Center for the duration of the litigation. The Center sued Bowman and Robine for copyright infringement. The district court granted summary judgment in favor of Bowman and Robine, finding that the Center’s original rights extended only to the collection and that its subsequent acquisition of the article’s copyright was subject to the earlier oral license. The Center appealed.

The Seventh Circuit affirmed, explaining that the Copyright Act distinguishes between ownership of a compilation and ownership of the individual works the compilation contains. Under § 103(b), a compilation copyright protects only the original material contributed by the compiler, such as the selection, coordination, or arrangement of the underlying works. Section 201(c) further provides that copyright in an individual contribution is distinct from copyright in the collective work as a whole. Relying on the US Supreme Court’s decisions in Feist Publications, Inc. v. Rural Telephone Service Co. (1991) and New York Times Co. v. Tasini (2001), the Seventh Circuit explained that the Center’s 1991 agreement conveyed rights in the collection’s “selective curation,” not in the article standing alone. Because Bowman and Robine reproduced only the article, rather than the collection, their use did not infringe the Center’s compilation copyright.

The Seventh Circuit next addressed the Center’s acquisition of the article’s copyright in 2021. By that time, Perls’ children had already granted Bowman and Robine a nonexclusive oral license to publish the article. The Court explained that although § 204(a) of the Copyright Act, sometimes called the Statute of Frauds, requires transfers of copyright ownership to be in writing, nonexclusive licenses are exempt from that requirement under § 101. The license was also irrevocable because Bowman and Robine had paid royalties in exchange for permission to use the article. Accordingly, the Center acquired the article’s copyright subject to the existing license and could not revoke Bowman and Robine’s authorization to continue publishing it.

The Seventh Circuit also rejected the Center’s argument [...]

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Computer metadata corroborates conception

by Dexter Hamilton | Oct 29, 2026 | Patents

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board decision finding that Google failed to establish unpatentability of challenged claims because the patent owner successfully antedated the asserted prior art reference using inventor testimony corroborated by metadata. Google LLC v. Valtrus Innovations Ltd., Case No. 2024-1945 (Fed Cir. Oct. 19, 2026) (Hughes, Cunningham, Burroughs, JJ.)

Valtrus owns a patent directed to methods for merging search results from multiple search engines. Google petitioned for inter partes review (IPR) of the patent, asserting four grounds for obviousness. Each ground relied on the same primary prior art reference, Bushee. Although Bushee was filed about five weeks before the application for Valtrus’ patent, the patent was governed by pre-America Invents Act (AIA) law. Pre-AIA 35 U.S.C. § 102(e) permitted Valtrus to antedate Bushee by establishing conception before Bushee’s filing date and reasonably continuous diligence from just before that date until Valtrus filed its patent application.

Valtrus submitted an inventor declaration, original invention disclosure documents, and associated Microsoft Word metadata to establish conception before Bushee’s filing date. The Board found that the disclosure documents and metadata corroborated the inventor’s testimony, and that Valtrus had demonstrated reasonably continuous diligence through the filing of its patent application. The Board determined that Bushee was not prior art under pre-AIA § 102(e) and that Google had failed to establish the unpatentability of any challenged claim. Google appealed.

Reviewing the Board’s legal conclusions de novo and its factual findings for substantial evidence, the Federal Circuit affirmed. Google argued that the invention disclosure documents and accompanying metadata could not independently corroborate the inventor’s testimony because both were entirely within the inventor’s control. The Federal Circuit disagreed, relying on its 2025 decision in Global Health Solutions v. Selner, which recognized that automatically generated metadata is independent of an inventor’s own statements and documents. Assuming without deciding the metadata’s authenticity, the Court explained that the Microsoft Word metadata was not authored by the inventor and contained authorship and timestamp information consistent with his asserted conception date. The Court distinguished such metadata from unwitnessed inventor-created documents, which cannot independently corroborate conception testimony, and noted Google’s acknowledgment at oral argument that corroboration need not come from a human source. Applying the rule of reason, the Court concluded that substantial evidence supported the Board’s finding that the disclosure documents and metadata corroborated the inventor’s testimony.

Google also challenged the Board’s finding that the inventor exercised reasonably continuous diligence in reducing the invention to practice. The Federal Circuit explained that although reasonable diligence must be established throughout the critical period, it need not be perfectly continuous, and evidence of activity on each day of the diligence period is unnecessary if the record provides a satisfactory explanation for any gaps. Google disputed only the approximately 11 business days between August 8 and August 27, 2001, when the patent application was filed. The Court found substantial evidence supporting diligence during that period, including the time required to mail the last inventor’s signed [...]

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Headnote to self: Third Circuit rejects fair use defense for AI training

by Hannah Hurley | Oct 15, 2026 | Copyrights

The US Court of Appeals for the Third Circuit affirmed a grant of partial summary judgment in favor of Thomson Reuters, finding that Westlaw’s editorial headnotes were copyrightable and that use of those headnotes to train an artificial intelligence (AI) legal-research platform did not constitute fair use. Characterizing the dispute as “no more than an ordinary copyright case,” the Court emphasized that its decision did not resolve broader questions concerning generative AI training. Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc., Case No. 25-2153 (3d Cir. Sept. 29, 2026) (Restrepo, Montgomery-Reeves, Bove, JJ.)

Thomson Reuters operates Westlaw, a legal-research platform that provides judicial opinions accompanied by editor-written headnotes summarizing key points of law. Although judicial opinions are not copyrightable, Thomson Reuters claimed copyright protection in the headnotes, which its editors prepare under detailed guidelines requiring them to identify and summarize significant legal principles in concise standalone statements.

ROSS developed a non-generative-AI legal-research platform designed to respond to users’ legal questions by identifying relevant passages from about 10 million judicial opinions. To train its platform, ROSS retained LegalEase Solutions to prepare about 25,000 memoranda, each containing a legal question and four to six responsive judicial opinions. LegalEase used thousands of Westlaw headnotes to formulate the questions. ROSS intended to compete directly with Westlaw and marketed its platform at comparable prices.

Thomson Reuters sued ROSS for copyright infringement. The district court granted partial summary judgment, finding that 2,243 headnotes identified by Thomson Reuters’ expert were sufficiently original to warrant copyright protection and that ROSS’s use of those headnotes was not fair use. The district court certified the originality and fair use issues for interlocutory appeal.

The Third Circuit first addressed copyrightability. Applying the “extremely low” originality threshold established in the Supreme Court’s 1991 Feist Publications, Inc. v. Rural Telephone Service Co. decision, the Third Circuit concluded that the headnotes contained sufficient creativity because editors exercised judgment in selecting which legal principles to summarize and how to express them. The Third Circuit rejected ROSS’s argument that copyright protection would effectively grant Thomson Reuters a monopoly over the law, explaining that judicial opinions remained freely available. The Court also rejected ROSS’s merger doctrine argument, finding that the underlying legal principles could be expressed in many ways.

Turning to fair use, the Third Circuit considered the four statutory factors under 17 U.S.C. § 107:

As to the purpose and character of the use, the Court found ROSS’s use commercial and, at most, minimally transformative because both platforms served the same purpose, which was helping users locate relevant legal materials. Although ROSS used the headnotes to train its AI platform rather than displaying them, it could have relied on freely available judicial opinions instead. This factor weighed against fair use.
The nature of the copyrighted work weighed slightly in ROSS’s favor because the headnotes primarily conveyed factual information and legal principles. The Court noted, however, that this factor generally carries limited weight.
The amount and substantiality of the portion used weighed against fair use [...]

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Clearing the air: Impossibility is an enablement problem, not an indefiniteness problem

by Vincent Li, PhD | Oct 15, 2026 | Patents

The US Court of Appeals for the Federal Circuit affirmed a judgment of patent invalidity on alternative grounds. The Court found that claims reciting a scientific impossibility were not indefinite because their scope was clear but were invalid for lack of enablement. Satius Holding, LLC v. Samsung Electronics Co., Ltd., Case No. 25-1446 (Fed. Cir. Oct. 1, 2026) (Moore, Lourie, Hughes, JJ.)

Satius sued Samsung for infringement of a patent directed to a communications apparatus that uses a coupler to match the characteristic impedance of air to that of a wireless transmitter and receiver. A representative claim recited “[a] communications apparatus for transmitting electric or electromagnetic signals over air.” The district court found the claims indefinite because transmitting electric signals over air is scientifically impossible. Satius appealed

The Federal Circuit first construed “transmitting electric . . . signals over air” to require transmission of signals through air in electric form, which the parties agreed was impossible. Satius argued that the limitation instead described converting electric signals into electromagnetic signals for transmission over air. The Court rejected that interpretation, explaining that transmitting signals over air differs from communicating signals to air. Adopting Satius’ interpretation would improperly rewrite the claims to add a conversion step.

Turning to indefiniteness, the Federal Circuit explained that “[i]ndefiniteness is not the same as impossibility.” A claim is indefinite only if it fails to inform skilled artisans of its scope with reasonable certainty. Here, the impossible limitation appeared in both the claims and specification, and its meaning was clear. The Federal Circuit therefore rejected the district court’s conclusion that scientific impossibility rendered the claims indefinite.

The Federal Circuit nevertheless affirmed invalidity for lack of enablement. Although the district court had not decided that issue, the Federal Circuit found it appropriate to do so because the relevant facts were undisputed and the parties had fully briefed the question. The specification must enable the full scope of the claimed invention. Because the claims expressly covered transmitting “electric or electromagnetic signals over air,” and transmitting electric signals over air is scientifically impossible, the specification could not enable the full claim scope. The claims therefore failed to meet the enablement requirement.

Practice note: A scientifically impossible claim limitation does not necessarily render a claim indefinite if its scope is reasonably certain. However, expressly claiming an impossible alternative can invalidate the claim for lack of enablement, even if other claimed alternatives are operable.

Saved by the bell: Class certification isn’t the time to have a mini-trial on the merits

by Cecilia Choy, PhD | Oct 8, 2026 | Technology

The US Court of Appeals for the Ninth Circuit declined to disturb a district court’s certification of damages and injunctive classes asserting violations of California’s statutory right of publicity. The Ninth Circuit rejected challenges based on predominance and adequacy. Nolen v. PeopleConnect, Inc., Case No. 24-3894 (9th Cir. Sept. 24, 2026) (Berzon, Friedland, Mendoza, JJ.)

PeopleConnect operates Classmates.com, which maintains a searchable database containing more than 450,000 yearbooks. Users may access the site as unregistered visitors, free members, or paid subscribers. The dispute centered on subscription advertisements that allegedly used individuals’ names in connection with paid membership offers. Nolen advanced two theories to obtain class certification: a “sequence theory,” under which a visitor searching for a person could encounter a subscription advertisement after registering for a free account, and a “banner theory,” under which free members could see subscription advertisements while searching the site.

Nolen alleged that PeopleConnect violated California Civil Code § 3344 by using individuals’ names without consent in connection with advertising for paid subscriptions. She argued that the alleged commercial use occurred by making individuals’ identities searchable within the advertising flow, regardless of whether a particular name had actually been searched. The district court conditionally certified damages and injunctive classes, and the Ninth Circuit granted interlocutory review under Rule 23(f).

PeopleConnect argued that predominance was lacking because the district court had misconstrued § 3344 by permitting claims based on mere searchability. The Ninth Circuit rejected that argument as an improper attempt to litigate the merits at class certification. The Court emphasized that certification is not a “mini-trial on the merits” and that the relevant question is whether the issue is susceptible to common proof, not whether the plaintiff is ultimately likely to prevail. Because the alleged connection between the use of class members’ identities and advertising presented a common factual question, the Court concluded that the district court did not abuse its discretion in finding predominance.

The Ninth Circuit also rejected PeopleConnect’s argument that damages would require individualized proof of injury. It concluded that if PeopleConnect used class members’ names in direct connection with advertising, a factfinder could reasonably infer that those names had at least some economic value. The Court distinguished between the commercial value of the names and the resulting economic injury, concluding that both issues were capable of class-wide resolution.

PeopleConnect further argued that the proposed classes included individuals who might ultimately be ineligible for relief, including persons who had consented to certain uses of their identities, were not readily identifiable, had registered as members, or had donated yearbooks, or whose names were not searchable. The Ninth Circuit concluded that these issues did not defeat certification. Some of those factors went to predominance while others implicated manageability. The Court reiterated the presumption against denying class certification based solely on manageability concerns and explained that Rule 23 does not require a plaintiff to establish an administratively feasible method for identifying every class member at the certification stage.

The Court also rejected PeopleConnect’s adequacy challenges. PeopleConnect [...]

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Rule 54(b) doesn’t permit slicing patent’s claims into separate final judgments

by Yuhe Liu, PhD | Oct 8, 2026 | Patents

The US Court of Appeals for the Federal Circuit concluded that Federal Rule of Civil Procedure 54(b) does not permit entry of partial final judgment on some asserted claims of a patent while other asserted claims of the same patent remain unresolved. The Court explained that infringement of different claims of the same patent generally constitutes a single cause of action. ParkerVision, Inc. v. Qualcomm Inc., Case Nos. 26-1033; -1035 (Fed. Cir. Sept. 30, 2026) (Prost, Chen, Stark, JJ.)

ParkerVision sued Qualcomm in 2014 for infringement of two patents directed to electromagnetic signal conversion. One patent included asserted claims directed to down-conversion (receiver claims). The other patent included both receiver claims and asserted claims directed to up-conversion (transmitter claims).

In 2024, the Federal Circuit vacated an earlier summary judgment of noninfringement and remanded. Following claim construction on remand, the parties stipulated to noninfringement of the receiver claims, and the district court entered partial summary judgment. That ruling resolved all asserted claims of the patent directed only to down-conversion but left unresolved the transmitter claims of the patent covering both down-conversion and up-conversion. At ParkerVision’s request, and over Qualcomm’s objection, the district court entered judgment under Rule 54(b) as to the receiver claims and “severed and stayed” the transmitter claims pending appeal. ParkerVision appealed.

The Federal Circuit concluded that Rule 54(b) did not authorize entry of final judgment as to only some asserted claims of the patent covering both receiver and transmitter functionality. Rule 54(b) permits entry of final judgment only as to one or more “claims” for relief, coupled with an express determination that there is no just reason for delay. The Court explained that a “claim” under Rule 54(b) means a cause of action, not an individual patent claim.

Relying on 35 U.S.C. §§ 271(a) and 281 and Federal Circuit precedent, the Court explained that infringement of different claims of the same patent generally constitutes a single cause of action. ParkerVision’s complaint likewise pleaded a single infringement count for the patent covering both down-conversion and up-conversion and did not separately plead causes of action directed to the receiver and transmitter claims. The Court explained that because the receiver and transmitter claims were part of the same cause of action and the transmitter claims remained unresolved, the district court had not entered a final judgment subject to appellate review.

The Federal Circuit also rejected ParkerVision’s alternative jurisdictional arguments. ParkerVision contended that the judgment was final at least as to the patent directed only to down-conversion because all asserted claims of that patent had been resolved. The Court disagreed, explaining that the district court had not been asked to enter a Rule 54(b) judgment limited to that patent and had not made the required express determination that there was “no just reason for delay” as to that patent. Without a valid Rule 54(b) judgment as to the down-conversion patent, there was also no basis for pendent appellate jurisdiction over issues involving the patent covering both down-conversion and up-conversion.

The Federal Circuit [...]

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Epic omission: District court must address pre-suit notice of potential patent ineligibility when denying sanctions, fees

by Richard (Rick) Evans | Oct 8, 2026 | Patents

Addressing a district court’s denial of motions for Rule 11 sanctions and attorneys’ fees and costs, the US Court of Appeals for the Federal Circuit vacated and remanded, finding that the district court had not adequately explained why a patentee’s pre-suit notice of potential invalidity under 35 U.S.C. § 101 did not render its infringement suit unreasonable. Epic Tech, LLC v. Pen-Tech Associates, Inc., Case No. 25-1624 (Fed. Cir. Sept. 30, 2026) (Moore, C.J.; Cunningham, J.; Subramanian, Distr. J., sitting by designation).

Epic Tech owns a patent directed to an electronic gaming system that connects gaming terminals to a server network so that an initial game can run while a secondary game operates in the background. After the patent issued in 2013, several related applications encountered validity problems during prosecution. One related application was rejected on nonstatutory double patenting grounds over claims of the issued patent. After the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank International, the United States Patent and Trademark Office (USPTO) rejected claims in that application and two other related applications under § 101. Epic Tech ultimately abandoned all three applications.

Epic Tech later asserted another related patent in the US District Court for the Southern District of Texas. That district court found the asserted claims patent ineligible under § 101, although the decision was later vacated.

In 2020, Epic Tech sued Pen-Tech in the District Court for the Northern District of Georgia for infringement of the gaming system patent. On summary judgment, the district court found the asserted claims ineligible under § 101 under the two-step Alice framework. Pen-Tech then sought Rule 11 sanctions against Epic Tech and its counsel, as well as attorneys’ fees and costs under 35 U.S.C. § 285, 28 U.S.C. § 1927, and the court’s inherent authority.

Pen-Tech argued that several developments should have put Epic Tech and its counsel on notice that the asserted patent faced a serious § 101 problem before suit was filed, including the Supreme Court’s decision in Alice, the USPTO’s § 101 rejections in related applications, and the district court’s ineligibility decision involving another related patent. According to Pen-Tech, those circumstances required Epic Tech to conduct a meaningful pre-suit validity investigation.

The district court denied the motions, concluding that Epic Tech’s and its counsel’s positions were not frivolous, that the case was not exceptional, and that the litigation had not been pursued unreasonably or vexatiously. Pen-Tech appealed.

The Federal Circuit vacated, finding that the district court’s explanation was insufficient to permit meaningful appellate review. The Court emphasized that the combination of Alice, the USPTO’s post-Alice rejections of related claims, and the prior district court ineligibility ruling created a “compelling concern over the validity” of the asserted claims. Two of the related applications were particularly significant because the USPTO had previously found their claims patentably indistinct from the asserted patent.

The Federal Circuit found that the district court had not meaningfully addressed Pen-Tech’s notice theory. The district court relied in part on Epic Tech’s pre-suit [...]

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