U.S. Court of Appeals for the Federal Circuit Affirms Published Patent Applications Become Prior Art on Their Filing Date
Lynk Labs, Inc. v. Samsung Electronics Co., Ltd. concerns an appeal of a decision from the United States Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (Board) that upheld the refusal of claims in a patent application filed by Lynk Labs, Inc. (the ’400 patent) in view of another application (the Martin application) that was filed before the ’400 patent’s filing date, but was published after the ’400 patent application’s filing date.
Those familiar with the patent application process will recognize that prior art can render a claim, or even an entire application, unpatentable. For those new to patenting, if the USPTO finds that an invention is public or if public information makes the new invention obvious, the patent claim will not be allowed. The Board had ruled that the Martin application, though published after the ’400 patent’s filing date and later abandoned, had an effective prior art date of its filing date. Lynk Labs argued that documents become prior art when they are published, and so the Martin application’s effective prior art date was its publication date, because it was not publicly accessible prior to that point.
The DecisionThe Lynk Labs court agreed with the Board, noting that while typical documents, such as journal articles and the like, become prior art on their publication date, patent applications operate under a separate rule when determining prior art. Where printed publications such as journal articles are governed by section 102(a) and (b), patent applications are governed by section 102(e)(1), which notes that the patent application would serve as prior art if it were filed before the claimed invention. Accordingly, even if it were published and publicly accessible only after the filing of the claimed invention, it could still serve as prior art and be used to deny claims.
The Lynk Labs decision has marked consequences for clients with business before the USPTO. First, it underscores the importance of securing an early filing date, as even the most robust patentability search may not be able to find unpublished applications that may serve as prior art if there is delay. Second, the Lynx Labs decision opens opportunities for clients looking to secure and defend their intellectual property rights against potential infringers and competitors by affirming the wider scope of a patent application in being able to prevent others from claiming rights to the same invention. Ultimately, however, it makes clear that there is no safe harbor from others’ patent applications, and so entities are advised to secure early filing dates to protect their intellectual property.
Clarifying the Copyrightability of AI-Assisted Works
The U.S. Copyright Office’s long-awaited second report assessing the issues raised by artificial intelligence (AI) makes clear that purely AI generated works cannot be copyrighted, and the copyrightability of AI-assisted works depends on the level of human creative authorship integrated into the work.
With the rise of mainstream generative AI platforms, clarity has been sought by creators, artists, producers, and technology companies concerning whether works created with AI may be entitled to copyright protection. In its most recent report, the Copyright Office concludes that existing copyright legislation and principles are well-suited for the issue of AI outputs’ copyrightability and suggests that AI may be used in the creation of copyrighted works as long as there is the requisite level of human creative expression. The Copyright Office’s report also makes clear that copyright protection will not extend to purely computer-generated works. Instead, copyrightability must be assessed on a case-by-case basis analyzing whether a work has the necessary human creative expression and originality to be copyrightable. Such intensive analysis equips existing U.S. copyright law to adapt to works made with emerging technologies.
In the process of crafting the report, the Copyright Office considered input from over 10,000 stakeholders seeking clarity on the protection of works for licensing and infringement purposes. This report does not address issues relating to fair use in training AI systems or copyright liability associated with the use of AI systems; these topics are expected to be covered in separate publications.
Report on Copyrightability of AI Outputs
The Copyright Office’s report examines the threshold question of copyrightability, or whether a work can be protected and endowed with rights that are enforceable against subsequent copiers, which raises important policy questions on the incentives of copyright law and the history of emerging technologies. Overall, the Copyright Office makes clear that tangential use of AI technology will not disqualify any subsequent work of authorship from protection, but rather the level of protection hinges on the nature and extent of the human expression added to the work.
I. Scope of the Report
The Copyright Office sought to clarify several overarching questions on the copyrightability of AI outputs, including:
Whether the Copyright Clause of the Constitution protects AI-generated works.
Whether AI can be the author of a copyright.
If additional protection for AI generations is recommended, and if so what additions.
If revisions to the human authorship standard are necessary.
II. The Copyrightability Standard and Current AI Technology
Human Authorship –There is a low level of human creativity or “authorship” needed to create copyright protection in a work, and the Copyright Office believes existing legal frameworks are relevant to the assessment of AI-generated outputs. Specifically, the Copyright Office believes that determining whether the authorship standard for copyrightability has been met depends on the level of human expressive intervention in the work.
For example, a photographer’s arrangement, lighting, timing, and post-production editing are all indications of the human expression required for copyright protection, even though, technologically, the camera “assists” to capture the photo.[1] On the other hand, photos taken by animals do not create authorship in the animal because of their non-human status.[2] Similarly, “divine messages” from alleged spirits do not contain the requisite human creativity to amount to authorship.[3] In the context of AI, like a photographer using a camera, the use of new technology does not default to a lack of authorship, but like a monkey taking a picture, non-human machines cannot be authors and therefore the expressions created solely by AI platforms cannot be copyrighted.
Assistive AI – The report further comments on the incorporation of AI into creative tasks, like aging actors on film, adding or removing objects to a scene, or finding errors in software code, and concludes that protection of works using such technology would depend on how the system is being used by a human author and whether a human’s expression is captured by the resulting work.
Protection of Prompts – The Copyright Office concludes that prompts alone do not form a basis for claiming copyright protection in AI-generated outputs (no matter how complex they may seem), unless the prompt itself involves a copyrightable work. At its core, copyright law does not protect ideas because copyright seeks to promote the free flow of ideas and thought. Rather, copyright law protects unique human expressions of the underlying ideas which are fixed in some tangible medium. The Copyright Office explains that prompts do not provide sufficient human control to make AI-users authors. Instead, prompts function as instructions that reflect a user’s conception of the idea but do not control the expression of that idea. Primarily, gaps between prompts and resulting outputs demonstrate that lack of control a user has in the expression of those ideas.
Expressive Inputs – The Copyright Office uses two examples in its report to illustrate this point. The first prompt, detailing the subject matter and composition of a cat smoking a pipe, was considered uncopyrightable because the AI system fills in the gaps of a user’s prompt. Here, the prompt does not specify the breed or coloring of the cat, its size, the pose, or what clothes it should be wearing underneath the robe. Without these particular instructions in the user’s prompts, the AI system still generated an image based on its own internal algorithm to fill in the gaps, thus stripping away expressive control from the user.
In contrast, the second prompt, asking the AI system to generate a photorealistic graphic of a human-drawn sketch, was considered copyrightable because the original elements of the sketch were retained in the AI-generated output. In assessing copyrightability, the Copyright Office pointed to the copyright in the original elements of the sketch as evidence of authorship, and any output depicting identifiable elements of the sketch (directed by the human author) was viewed by the Office as a derivative work of the sketch’s copyright. The artist’s protection in the AI output would overlap with the protectable elements in the original sketch, and like other derivative rights, the AI output would require a license to the original sketch.
In sum, where a human inputs their own copyrightable work into an AI system, they will be the author of that portion of the work still perceptible in the output; the individual elements must be identifiable and traceable to the initial human expression.
The Copyright Office views the current use of prompts as largely containing unprotectable (or public domain) ideas but notes that extensive human expression could potentially make prompts protectable, just not with currently available technology. Additionally, the Copyright Office notes that current technology is unpredictable and inconsistent, often producing vastly different outputs from the same prompts, which in its view shows that prompts lack the requisite clear direction of expression to rise to the level of human authorship.
Arrangement and Modification of AI Works –The Copyright Office also concludes that human authorship can be shown by the additions to, or arrangement of, AI outputs, including the use of AI adaptive tools. For example, a comic book “illustrated” with AI but with added original text by a human author was granted protection in the arrangement and expression of the images in addition to any copyrightable text because the work is the product of creative human choices. The same reasoning applies to AI generated editing tools which allow users to select and regenerate regions of an image with a modified prompt. Unlike prompts, the use of these tools enables users to control the expression of specific creative elements, but the Copyright Office clarifies that assessing the copyrightability of these modifications depends on a case-by-case determination.
III. International AI Copyright Decisions
In its review of international responses to AI copyright questions, the U.S. Copyright Office notes the general consensus of applying existing human authorship requirements to determine copyrightability of AI works.
Instructions from Japan’s Cultural Counsel underline the case-by-case basis necessary for assessing copyrightability and noted examples of human AI input that may rise to a copyrightable level. These include the number and type of prompts given, the number of attempts to generate the ideal work, selection by the user, and any later changes to the work.
A court in China found that over 150 prompts, along with retouches and modifications to the AI’s output, resulted in sufficient human expression to gain copyright protection.
In the European Union, most member states agree that current copyright policy is equipped to cover the use of AI, and similar to the U.S., most member states require significant human input into the creative process to qualify for copyright protection.
Canada and Australia have both expressed a lack of clarity on the issue of AI, but neither has taken steps to change legislation.
Unlike other countries, some commonwealth jurisdictions like the United Kingdom, India, New Zealand, and Hong Kong enacted laws before modern generative AI allowing for copyright protection for works created entirely by computers. With recent developments in technology, the United Kingdom has considered changing this law, but other countries have yet to clarify whether their existing laws would apply to AI-generated works.
IV. Policy Implications for Additional Protection
Incentives – One of the key components of copyright policy, as written in the U.S. Constitution, is to “promote science and the useful arts.” Comments to the Copyright Office varied on whether providing protection for AI-generated work would incentivize authorship; proponents of increasing copyright protection argued that it would promote emerging technologies, while opponents note the quick expansion of these technologies shows incentivization is not necessary. The Copyright Office finds the current legal framework as sufficiently balanced, stating that additional laws are not needed to incentivize AI creation because the existing threshold requirement of human creativity already protects and incentivizes the works of human authorship that copyright law seeks to promote.
Staying Internationally Competitive – Commentators noted that without underlying copyright protection, U.S. creators would be impacted by weaker protection for AI-generated works. The Copyright Office counters that similar protections are available worldwide and align with the U.S.’s standards of human authorship.
Clarity on AI-Generated Protection – Commentators petitioned Copyright Office officials for some legal certainty that works created with AI could be licensed to other parties and be registered with the Copyright Office. The Copyright Office’s report provides assurance that works made with assistance from AI platforms may be registered under existing copyright laws and notes the difficulty of any further clarity due to the case-by case nature of copyright analysis.
Conclusion and Considerations[4]
The foundations of U.S. copyright law have been applied consistently to emerging technologies, and the Copyright Office believes those doctrines will apply equally well to AI technologies. With the Copyright Office’s affirmation that purely AI-generated works cannot be copyrighted, and that AI-assisted works must involve meaningful human authorship, businesses leveraging AI systems must consider several key legal and strategic factors:
Maintain detailed records of human prompts and modifications, such as arranging, adapting, or refining AI outputs.
Focus on enhancing human-made, copyrightable works with AI systems rather than generating works solely through uncopyrightable prompts.
For companies commissioning AI-assisted work, specify in contracts that employees or contractors provide sufficient human control, arrangement, or modification of AI works to ensure copyrightability.
For companies offering AI-assisted work as part of their services, consider mitigating risks by excluding AI generated works from standard IP representations/warranties, and further disclaiming any liability in relation to the use of such works.
Consider variations in international AI copyright laws to assess the impact on global IP strategies.
Given the unique analysis copyright cases require, and the existing precedent requiring human input for protection, copyright law is well prepared to face the challenges posed by AI platforms. Due to the unique facts of each case, creators are encouraged to check with an experienced copyright attorney who can help evaluate whether an individual AI-assisted work includes enough human intervention to be protectable.
[1] Burrow-Giles Litho. Co. v. Sarony, 111 U.S. 53, 55–57 (1884).
[2] Naruto v. Slater, No. 15-cv-04324, 2016 U.S. Dist. LEXIS 11041, at *10 (N.D. Cal. Jan. 28, 2016) (finding animals are not “authors” within the meaning of the Copyright Act).
[3] Urantia Found. v. Kristen Maaherra, 114 F.3d 955, 957–59 (9th Cir. 1997) (holding that copyright law does not intend to protect divine beings, and protects the arrangement of otherworldly messages, but not the messages’ content).
[4] As noted above, the Copyright Office’s report does not address issues relating to fair use in training AI systems or copyright liability associated with the use of AI systems; these topics are expected to be covered in a separate publication.
Small-Market Segment Can Still Satisfy Domestic Industry Requirement
The US Court of Appeals for the Federal Circuit affirmed a US International Trade Commission finding, explaining that small-market segments can be significant and substantial enough to support the Commission’s domestic industry requirement. Wuhan Healthgen Biotechnology Corp. v. International Trade Commission, Case No. 23-1389, (Fed. Cir. Feb. 7, 2025) (Moore, Chen, Murphy, JJ.)
Ventria Bioscience Inc. owns a patent directed to cell-culture media, which supplies nutrients to cells grown in artificial environments. Ventria filed a complaint at the Commission alleging that Wuhan Healthgen Biotechnology violated § 337 of the Tariff Act by importing products that infringed the patent. The Commission ultimately found that Healthgen imported infringing products and that Ventria had satisfied the domestic industry requirement. Healthgen appealed.
The Federal Circuit affirmed the Commission’s domestic industry finding. The Court began by explaining the long-standing principle that patent infringement-based violations of § 337, which establishes unlawful import practices, require that “an industry in the United States, relating to the articles protected by the patent…exists or is in the process of being established.” This requirement is divided into economic and technical prongs. Here, Healthgen conceded that the technical prong was satisfied by a Ventria product (Optibumin) that practiced the patent.
The economic prong considers three factors, any of which are sufficient to satisfy the prong. As identified by the subsections of § 337(a)(3), “there is in the United States, with respect to the articles of the patent…(A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing.” The Commission found that each of these factors was met because, among other things, Ventria had 100% of its relevant investments in Optibumin located within the United States. The conclusion was further supported by a comparison of the investments to Obtibumin’s revenue.
Healthgen argued that the investments were too small to be significant or substantial, and that Optibumin’s revenue was low, which inflated investment-to-revenue ratios. The Federal Circuit rejected Healthgen’s argument, stating that “[s]mall market segments can still be significant and substantial enough to satisfy the domestic industry requirement.” The Court continued, stating that a domestic industry analysis “cannot hinge on a threshold dollar value or require a rigid formula; rather, the analysis requires a holistic review of all relevant considerations that is very context dependent.” Here, the Court found that “[t]hough the dollar amounts of Ventria’s Optibumin investments are small, the Commission found all of the investments are domestic, all market activities occur within the United States, and the high investment-to-revenue ratios indicate this is a valuable market.” The Court found that the Commission’s findings were supported by substantial evidence and affirmed the Commission.
Diamond in the Rough: Federal Circuit Polishes § 101’s Abstract Idea Test
The US Court of Appeals for the Federal Circuit reversed and remanded a determination by the US International Trade Commission regarding subject matter ineligibility under 35 U.S.C. § 101. The Court concluded that the Commission’s “loose and generalized” analysis did not adequately consider the specific and technical improvements specified by the claims. US Synthetic Corp. v. International Trade Commission, Case No. 23-1217 (Fed. Cir. Feb. 13, 2025) (Dyk, Chen, Stoll, JJ.)
US Synthetic Corp. (USS) filed a complaint with the Commission, alleging that several entities (intervenors) violated § 337 of the Tariff Act by importing and selling certain products that infringed five of USS’s patents. The patent at issue concerned a composition of a polycrystalline diamond compact (PDC) and disclosed an improved method for manufacturing PDCs.
An administrative law judge (ALJ) determined that several claims of the patent were valid and infringed under 35 U.S.C. §§ 102, 103, and 112. However, the ALJ found the claims patent-ineligible under § 101, deeming them directed to an abstract idea. The Commission affirmed this finding while rejecting the intervenors’ argument that the claims lacked enablement under § 112. Consequently, the only bar to a § 337 violation was the § 101 ruling. USS appealed, challenging the Commission’s patent ineligibility determination, while the intervenors argued that the claims were not enabled.
The Federal Circuit determined that the patent claims were directed to a specific technological improvement rather than an abstract idea. The Court had consistently explained that claims that provide a concrete technological solution to a recognized problem in the field are patent-eligible under § 101. Here, the claimed invention was not merely an implementation of an abstract idea on a generic computer; rather, it provided a particularized solution rooted in the physical composition of matter defined by constituent elements, dimensional information, and inherent material properties.
Applying the Supreme Court’s two-step Alice framework, the Federal Circuit reasoned that, under Alice step one, courts must determine whether the claims are directed to an abstract idea or a patent-eligible improvement. In this case, the Court found that the patent claims were not directed to an abstract idea because they recited a specific solution that was directed to a non-abstract composition of matter: PDC. Unlike claims found ineligible in prior cases, USS’s patent did not merely recite a mathematical algorithm or fundamental economic practice but instead provided a tangible technological advancement for an improved method for manufacturing PDCs.
The Federal Circuit noted that even if the claims were directed to an abstract idea under Alice step one, the claimed invention contained an inventive concept sufficient to transform the nature of the claim into patent-eligible subject matter under Alice step two. The Court explained that an inventive concept exists when the claims recite a specific, unconventional solution that goes beyond well-understood, routine, and conventional activities previously known in the field. Here, the Court determined that the claimed invention included an innovative combination of components (diamond, cobalt catalyst, and substrate) in conjunction with particular dimensional information (grain size) and material properties (magnetic saturation) to achieve an improved composition: PDC. Thus, the Court determined that USS’s patent claimed a specific and inventive technological improvement rather than an abstract idea.
Trade Dress Requires Separate Articulation and Distinctiveness Requirements
The US Court of Appeals for the Second Circuit vacated and remanded a district court’s dismissal of a complaint for trade dress infringement and unfair competition, finding that the district court erred in requiring the plaintiffs to articulate distinctiveness of trade dress infringement at the pleading stage. Cardinal Motors, Inc. v. H&H Sports Protection USA Inc., Case No. 23-7586 (2d Cir. Feb. 6, 2025) (Chin, Sullivan, Kelly, JJ.)
Cardinal is a designer and licensor of motorcycle helmets. At issue was the “Bullitt” helmet, which Cardinal exclusively licenses to Bell Sports and is “one of the most popular helmets made by Bell.” H&H manufactures and sells the “Torc T-1” helmet. Both the Bullitt and Torc T-1 helmets have “flat and bubble versions,” feature “metallic borders around the bottom and front opening of the helmet,” and “share similar technical specifications.”
Cardinal sued H&H in September 2020, alleging unfair competition and trade dress infringement. Cardinal amended its complaint twice but both amended complaints were dismissed for failure “to adequately plead the claimed trade dress with precision or with allegations of its distinctiveness.” In Cardinal’s third amended complaint, it included two alternative trade dresses – a “General Trade Dress” and “Detailed Trade Dress” – which listed features of the Bullitt at different levels of detail.
Despite the amendment, the district court dismissed the third amended complaint with prejudice. Based on the general trade dress, the district court reasoned that Cardinal failed to allege distinctiveness and therefore failed to allege a plausible trade dress claim. The district court extended its reasoning to “summarily conclud[e]” that the detailed trade dress also failed to articulate distinctiveness. Cardinal appealed.
Prior to making any determinations, the Second Circuit clarified that distinctiveness and the articulation requirement are separate inquiries, and that the articulation requirement is evaluated first. A plaintiff meets the articulation “requirement by describing with precision the components – i.e., specific attributes, details, and features – that make up its claimed trade dress.” The Court explained that the articulation requirement assists courts and juries to evaluate infringement claims, ensures the design is not too general to protect, and allows a court to identify what combination of elements would be infringing.
Focusing on distinctiveness, the Second Circuit explained that a trade dress plaintiff must specifically allege that its product design has acquired distinctiveness. Acquired distinctiveness is when the mark has a secondary meaning, where the public primarily associates the mark with the “source of the product rather than the product itself.” Separate from the elements of trademark, the plaintiff must meet the articulation requirement, which entails listing the components that make up the trade dress.
Having clarified the pleading requirements, the Second Circuit found de novo that the district court erred in mixing the articulation requirement with the distinctiveness requirement at the pleading stage. The Second Circuit determined that the district court erred in dismissing Cardinal’s complaint for failure to meet the articulation requirement. The Court found that Cardinal met the articulation requirement because the general trade dress was “sufficiently precise as to the specific combination of components that comprise the Bullitt’s trade dress.” The Second Circuit also found that the district court erred in assuming the detailed trade dress was inadequate on the grounds that it found the general trade dress inadequate. The Court noted that because the detailed trade dress included more components, the district court erred in failing to consider its sufficiency independently. Lastly, the Court found that the more precise detailed trade dress met the articulation requirement even if the general trade dress did not. Having concluded that Cardinal met the articulation requirement, the Second Circuit instructed the district court on remand to identify whether Cardinal sufficiently pleaded the elements of a trade dress infringement claim.
Practice Note: Complaints for trade dress infringement should include a specific list of components of its trade dress, “such as materials, contours, sizes, designs, patterns, and colors,” in addition to pleading the three elements of trade dress infringement.
China on the Move: Lessons from China’s 2024 National Negotiation of Drug Prices
China’s share of the global drug development pipeline grew from 3% in 2013 to 28% in 2023, positioning China as the second-largest region for clinical trials after the United States. Additionally, the proportion of drugs launched first in China increased from 9% in 2017 to 29% in 2023, placing China just behind the United States in terms of first-in-class launches. This trend highlights the contributions of domestic companies, whose pipelines are replenishing the global pharmaceutical landscape. As a result, NextPharma estimates that the combined value of China’s licensing-out deals reached around $46 billion in 2024, up from $38 billion in 2023 and $28 billion in 2022.
On the demand side, from 2019 to the first quarter of 2023, the National Healthcare Security Administration (NHSA) allocated 60% of savings from generic drug procurement to innovative drugs listed on the National Reimbursement Drug List (NRDL). This shift mirrors trends in developed markets where patented drugs dominate sales. By 2023, innovative drugs accounted for 15.1% of hospital drug expenditures in sample hospitals, up from less than 10% in 2018. However, affordability remains a challenge, which is significant as China continues to push for increased access to cutting-edge therapies.
The 2024 NRDL negotiations, which concluded in November 2024, offer insights into how China is addressing these affordability concerns while seeking to ensure access to innovative medicines. This GT Advisory explores five key takeaways from the 2024 NRDL negotiations and their potential implications for the future of innovative drug pricing and reimbursement in China.
A Contradiction Between NRDL Outcomes and the Growing Influence of Chinese Companies in Global Innovation
Support for First-in-Class and Innovative Drugs
BMI Fund Sustainability
A Continuous Dilemma for Multinational Companies (MNCs)
Reimbursement Coverage Expansion: Category C and Commercial Health Insurance
Continue reading the full GT Advisory.
Collateral Estoppel Doesn’t Apply to Unchallenged IPR Claims
The US Court Appeals for the Federal Circuit found that despite a Patent Trial & Appeal Board determination that certain challenged patent claims were unpatentable based on a preponderance of the evidence standard, the patent owner is not collaterally estopped from asserting other, unreviewed claims of that patent in district court litigation. Kroy IP Holdings, LLC v. Groupon, Inc., Case No. 23-1359 (Fed. Cir. Feb. 10, 2025) (Prost, Reyna, Taranto JJ.)
Kroy sued Groupon for patent infringement. In response, Groupon filed two inter partes review (IPR) petitions challenging 21 claims of the patent at issue. After Groupon’s IPR deadline passed, Kroy amended its complaint to add additional claims from the challenged patent. The Board found all 21 challenged claims unpatentable. Kroy amended its complaint again, this time removing the 21 unpatentable claims and including only claims that were not at issue in the IPR proceedings.
In response, Groupon moved to dismiss the complaint, arguing that the Board’s prior IPR rulings on the unpatentable claims collaterally estopped Kroy from asserting the new claims. The district court agreed, finding that if the Board issues final judgment that a patent claim is unpatentable and another claim is immaterially different, then collateral estoppel applies to that other claim for purposes of invalidity. Applying that standard, the district court determined that the new claims were not materially different from the unpatentable claims in terms of invalidity and granted Groupon’s motion to dismiss with prejudice. Kroy appealed.
Kroy argued that collateral estoppel should not apply because the burden of proof for invalidity in an IPR proceeding (preponderance of the evidence) is lower than in the district court (clear and convincing). The Federal Circuit noted that this case presents a distinct question of collateral estoppel law; that is, whether a prior final written decision of the Board that certain patent claims are unpatentable precludes a patentee from asserting other claims from the same patent, even assuming the asserted claims are immaterially different from the unpatentable claims for purposes of invalidity.
Referring to its recent 2024 decision in ParkerVision v. Qualcomm, the Federal Circuit clarified that collateral estoppel does not apply to new claims that have not yet been adjudicated. The Court explained that Groupon must prove the invalidity of these new claims in the district court by clear and convincing evidence. The Court dismissed Groupon’s reliance on the 2013 Ohio Willow Wood decision, noting that this case addressed whether a prior district court’s invalidity ruling estopped the patentee from asserting claims in the district court that are immaterially different for purposes of invalidity. On the other hand, the Ohio Willow Wood estoppel scenario occurred in district courts involving the same burden of proof. Because the Board determined unpatentability on separate patent claims based on a preponderance of the evidence standard, courts cannot collaterally estop a patentee from asserting other, unadjudicated patent claims in district court litigation.
The Intellectual Property Enterprise Court
In the UK, intellectual property (IP) infringement claims and other disputes in which IP is a major concern can be brought in either the High Court or in many cases the specialist Intellectual Property Enterprise Court (IPEC). Based at the Rolls Building in central London, the IPEC has a more streamlined procedure than the High Court and employs a full-time specialist IP judge (currently Judge Hacon) and a number of specialist deputy judges, which aids the development of a consistent approach to cases that can often cost less than in the High Court.
Is IPEC Suitable for a Claim?
The IPEC can hear all types of IP disputes, including IP infringement claims along with other disputes in which IP is a major concern. Importantly, the court has the power to award all of the same remedies available in the High Court (interim injunctions, damages, delivery up etc.). Examples of the types of cases which have previously been heard in the IPEC include: IP infringement claims, amendments of patents, compensation for employees in respect of patented inventions created by them and claims relating to a breach of confidentiality including misuse of trade secrets.
However, limitations are placed on the value of claims which can be heard by the IPEC as it offers either a small claims track for low value disputes (where the amount in dispute is £10,000 or less) or a multitrack option for claims valued between £10,000 to £500,000, meaning that any claim above £500,000 must be brought in the High Court.
A number of procedural restrictions also apply for IPEC claims. As such, in practice the IPEC is generally best-placed to hear less complex IP disputes that do not involve very complex legal or fact heavy disputes as these restrictions include:
IPEC trials should last for two days or less (and in practice many cases are heard in a single day).
The default position is that there is no disclosure of documents as part of an IPEC trial unless IPEC orders that; however, IPEC may order the disclosure of “adverse” documents known by the parties to an IP dispute.
IPEC has strict controls regarding the cross-examination of witnesses, which is only permitted on topics which the judge deems necessary.
Orders for recovery of legal costs are capped at £60,000 meaning that the losing party will only ever have to pay the other party’s costs up to £60,000 (excluding court fees and wasted costs orders).
Whilst an important benefit of the streamlined IPEC procedure is improved access to justice for small and medium sized companies involved in IP disputes, it is important to remember that access to the IPEC is not limited only to small and medium-sized companies and is available to all claimants regardless of size. As such, at the outset of any IP dispute claimants should always consider whether the IPEC as opposed to the High Court may be the most suitable forum. For more details of IPEC click here.
Draft of Decree for Patent Linkage by the Mexican Government.
On February 12, 2025, the Federal Commission for Protection against Health Risks (COFEPRIS) and the Mexican Institute of Industrial Property (IMPI) published a draft of the technical collaboration mechanism between both entities, with the intention to comply with the United States-Mexico-Canada Agreement (USMCA).
It mainly establishes two “formats” that each authority will publish in their web page and specifies the information to be included in the Allopathic Medicines Gazette and information of the communication before COFEPRIS and IMPI.
It also mentions that COFEPRIS’ “format” for the technical cooperation must include the opposition format, along with the information provided by the patent owner or its licensee and/or sublicensee.
This implies that the notice and opposition opportunity will take place before COFEPRIS and not IMPI and we assume that it is going to be described in further formats or in any other law or regulation.
In conclusion, we consider that there are some positive considerations from this draft, as follows:
This was due since 2020; therefore, it is a good sign that they are moving forward.
Although there is not an express language including use patents, the wording is more positive than the current linkage regulation to include use claims, by IMPI or through litigation.
It clarifies the information to be included in both formats by each authority.
The negative aspect is that we consider that still there are no rules for an appropriate notice to the title holder. From the draft, it seems that neither the notice nor a described process. Additionally, it seems that it will take place before COFEPRIS and not IMPI, which in our view is not the best venue for a notice to be heard by the patent holder.
Definitively, at least in this publication, apparently no compliance with the USMCA of a proper notice is expressly considered.
Intellectual Property — 101: A User’s Guide
Intellectual Property (IP) is a valuable asset class. But what is IP? One answer is that the term refers to a class of intangible assets that are creations of the mind that may have commercial value and are protected by law. A slightly more comprehensive answer is that IP includes original written work, works of art, innovative technologies, and distinctive brand identities.
Defining Intellectual Property
There are four basic types of IP:
Patents protect new inventions, processes, and technological advancements, granting inventors exclusive rights to their innovations.
Trademarks safeguard brand names, logos, and other identifiers that distinguish goods or services in the marketplace.
Copyrights cover original works of authorship, such as literature, music, and software, protecting the expression of ideas.
Trade Secrets include confidential business information that provides a competitive edge, like proprietary formulas or business strategies.
Patents: Safeguarding Innovation
A patent grants the inventor the exclusive right to exclude others from making, using, or selling an invention for a limited period, typically 20 years for utility patents. Patents do not grant an exclusive right to use an invention but rather the right to prevent others from exploiting it.
Not every invention is automatically patentable. To qualify for patent protection, an invention must be:
Novel: The invention must be new and not previously disclosed.
Non-obvious: It should not be an evident improvement over existing products or processes.
Useful: The invention must have a practical application.
Patrick Reilly, Founder of the Intellectual Property Society, Associate Publisher of the Personal Data Journal, also highlights that companies should consider how patent ownership is structured, especially in employer-employee relationships, to avoid disputes over rights.
Trademarks: Protecting Brand Identity
Trademarks protect symbols, names, and slogans used to identify goods or services. They play a vital role in building brand recognition and consumer trust. Trademark strength is determined by its distinctiveness, which can be evaluated using the following criteria:
Fanciful or Coined: Made-up words with no prior meaning like KODAK®.
Arbitrary: Common words used in an unrelated context as in APPLE® for computers.
Suggestive: Indicates qualities of the product without directly describing it as in NETFLIX®.
Descriptive: Directly describes a characteristic or quality of the product and may require secondary meaning to be protectable as in AMERICAN AIRLINES®.
Generic: Common terms that cannot be trademarked (e.g., ‘coffee’ for a coffee brand).
Brian Landry, a partner at Saul Ewing, further explains that businesses should conduct trademark searches before launching a brand to avoid potential conflicts and legal challenges.
Copyrights: Securing Creative Works
Copyrights protect original works of authorship that are fixed in a tangible medium, such as books, music, and software. Protection is automatic upon creation, but registering the copyright offers additional benefits, including the ability to sue for infringement and seek statutory damages.
Allan Grafman, an investment banker with Oberon Securities, emphasizes that many businesses underestimate the importance of copyright protection, particularly in digital content. He recommends that companies establish clear agreements with freelancers and employees to ensure ownership rights are properly assigned.
Trade Secrets: Maintaining Competitive Advantage
Trade secrets consist of confidential information that provides a business with a competitive edge (formulas, practices, processes, etc.). Unlike patents, trade secrets do not require registration, however, they must be actively protected through measures like:
Non-Disclosure Agreements (NDAs): Legal contracts that prohibit parties from disclosing confidential information.
Restricted Access: Limiting access to sensitive information to essential personnel only.
Employee Training: Educating staff on the importance of confidentiality and the proper handling of sensitive information.
Grafman points out that companies often fail to implement adequate safeguards for trade secrets, making them vulnerable to theft and misappropriation. He stresses the importance of clear contractual obligations and internal security policies.
Intellectual Property Valuation: Assessing Worth
Valuing IP is a complex process that involves assessing the economic benefit derived from the IP asset. Common approaches to IP valuation include:
Income Approach: estimates the value based on the present value of future income streams attributable to the IP.
Market Approach: determines value by comparing the IP to similar assets that have been sold or licensed.
Cost Approach: calculates value based on the cost to recreate or replace the IP asset.
Reilly notes that understanding the financial worth of IP assets is critical for transactions such as mergers, acquisitions, and licensing agreements. He noted that failing to properly value IP can result in undervaluation during business negotiations.
Best Practices for IP Protection
To effectively protect intellectual property, businesses should implement the following strategies:
Conduct Regular IP Audits: Identify and assess all IP assets to ensure they are adequately protected and leveraged.
Secure Appropriate Registrations: File for patents, trademarks, and copyrights as applicable to establish legal rights.
Enforce IP Rights: Take legal action when and where necessary against infringements.
Define IP Ownership Clearly: Ensure that contracts with employees, contractors, and partners explicitly state the ownership of IP created during the relationship.
Landry advises that businesses take a proactive approach to IP enforcement, as failing to address potential infringements can weaken IP rights over time. He also suggests leveraging licensing agreements as a strategy to monetize IP without full divestment.
Conclusion: The Imperative of IP Protection
Intellectual property is more than just a legal concept; it is a fundamental asset that drives innovation, economic growth, and corporate success. By adopting a strategic approach to IP management, companies can mitigate risks, enhance valuation, and capitalize on their innovations.
To learn more about this topic view Intellectual Property 101 / IP-What Every Lawyer & Every Client Must Understand. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested to read other articles about intellectual property.
This article was originally published on here.
©2025. DailyDACTM, LLC. This article is subject to the disclaimers found here.
Federal Circuit Clarifies § 101 Patent Eligibility for Composition-of-Matter Claims
In a significant decision, the Federal Circuit reversed the U.S. International Trade Commission’s (ITC) finding that claims of U.S. Patent No. 10,508,502 (502 Patent) were invalid under 35 U.S.C. § 101. The opinion addresses critical issues in patent eligibility jurisprudence, particularly regarding composition-of-matter claims and provides additional clarity for patent owners facing § 101 challenges.
Background of the Case
The case, US Synthetic Corp. v. ITC, involves petitioner’s allegations that various companies violated Section 337 of the Tariff Act by importing products that infringed its 502 Patent. The 502 Patent pertains to polycrystalline diamond compacts (PDCs) used in drilling applications.
At issue was Claim 1 of the 502 patent, which describes the structural and magnetic properties of the PDC as follows:
A polycrystalline diamond compact, comprising:
a polycrystalline diamond table, at least an un-leached portion of the polycrystalline diamond table including:
a plurality of diamond grains bonded together via diamond-to-diamond bonding to define interstitial regions, the plurality of diamond grains exhibiting an average grain size of about 50 μm or less; and
a catalyst including cobalt, the catalyst occupying at least a portion of the interstitial regions;
wherein the un-leached portion of the polycrystalline diamond table exhibits a coercivity of about 115 Oe to about 250 Oe;
wherein the un-leached portion of the polycrystalline diamond table exhibits a specific permeability less than about 0.10 G∙cm3/g∙Oe; and
a substrate bonded to the polycrystalline diamond table along an interfacial surface, the interfacial surface exhibiting a substantially planar topography;
wherein a lateral dimension of the polycrystalline diamond table is about 0.8 cm to about 1.9 cm.
The ITC’s Ruling
The ITC’s Administrative Law Judge (ALJ) ruled the claims were patent-ineligible under § 101, reasoning that while the claimed PDC was a physical product, its claimed magnetic properties—coercivity, specific permeability, and specific magnetic saturation—were merely side effects of the manufacturing process and did not define structural elements. The ALJ concluded that the claims were directed to an abstract idea, namely: unintended “results or effects” of the manufacturing process. A divided Commission affirmed, rejecting petitioner’s argument that magnetic properties are structural or indicative of structure, and instead agreeing with the ALJ that the claimed properties were not a sufficiently concrete structure but rather a reflection of natural phenomena.
The Federal Circuit’s Analysis
The Federal Circuit’s decision, delivered by Judge Chen, reversed the ITC’s ruling on patent eligibility, holding that the claimed invention was not directed to an abstract idea but instead to a specific, non-abstract composition of matter, namely, a PDC defined by its constituent elements.
The court rejected the ITC’s reasoning that the magnetic properties were merely side effects of a manufacturing process, and instead found that the relationship between the measured properties and the structure of the PDC was sufficiently disclosed in the patent specification and magnetic properties such that the claimed magnetic properties further define the structural characteristics of the claimed product. In this regard, the Federal Circuit clarified that patent claims do not need a “perfect proxy” for structural properties to survive § 101 scrutiny. The court noted, “The disclosed relationship here is sufficient for § 101, where we are trying to ascertain as a matter of law whether a patent claim is directed to a specific implementation of an idea or merely just the idea itself.”
The ruling also noted that the ITC’s reliance on cases involving software and algorithmic patents, was inappropriate. Unlike those cases, which involved performing functions using generic computer components, the 502 Patent’s composition-of-matter claim defined a tangible, physical product. The Federal Circuit drew a clear distinction, stating, “The claimed PDC is not an abstract result of generic computer functionality, but instead is a physical composition of matter defined by its constituent elements, dimensional information, and inherent material properties.”
Why this Case is Important
This decision has significant implications for composition-of-matter claims. It provides another foothold for protecting physical inventions, particularly in materials science, chemistry, and engineering. Had the ITC’s ruling stood, it could have set a dangerous precedent, casting doubt on patents that define materials by their measurable properties rather than their physical structure. The ruling also provides additional clarity on how § 101 considerations apply to composition-of-matter patents, pushing back against overbroad interpretations of the “abstract idea” exception.
This decision also draws a line against extending the applicability of software and business method jurisprudence into cases where patents define physical structures or claimed parameters that are concrete, objective measurements for defining the invention.
Ultimately, this case serves as an important precedent for patent owners, particularly those in industries where innovations are defined by measurable material properties. By reaffirming the eligibility of composition-of-matter patents, the Federal Circuit provided a clearer path for protecting physical innovations under § 101.
Key Takeaway
The Federal Circuit makes clear that the broader context of the entire patent is important in the analysis. When including claims using non-structural properties, be sure that the specification describes a sufficient correlation between the claimed effects/results and any unclaimed physical characteristics. These correlations should be concrete and meaningful, rather than merely speculative. The specification should sufficiently disclose the relationship between the claimed properties and the structure.
For further details, patent professionals are encouraged to review the full court opinion and consider how this decision may influence their current and future portfolio and/or litigation strategies.
Fair Warning: AI’s First Copyright Fair Use Ruling, Thomson Reuters v. ROSS
Early last week, the first substantive US ruling on fair use in AI-related copyright litigation, Thomson Reuters v. ROSS Intelligence, No. 1:20-cv-00613 (D. Del.), was issued by Judge Stephanos Bibas. This landmark opinion marks a significant development in AI litigation, particularly concerning the use of copyrighted materials in training AI models.
However, while this decision focuses on the training of an AI model, it does not involve generative AI technology. Hence, it will be important for AI developers and deployers to continue to monitor future decision that address whether the subsequent steps of generating and distributing AI-generated content are considered fair use of the original works.
Key Takeaways
The court held that ROSS’s copying of Thomson Reuters’ content to build a competing AI-based legal platform is not fair use under the US Copyright Act.
The court found actual copying and substantial similarity of 2,243 Westlaw headnotes.
The court rejected ROSS’s defenses of innocent infringement, copyright misuse, merger, and scenes à faire.
ROSS’s commercial use weighed heavily against its fair use defense.
The court vacated its previous denial of summary judgment on the issue of fair use.
Background
Thomson Reuters owns Westlaw, one of the largest legal research platforms in the US. Through a subscription, Westlaw users are able to access a wide range of resources, including case law, state and federal statutes, state and federal regulations, practical guides, news, law review articles, legislative histories, and trial transcripts. A key feature of Westlaw is its headnotes, which summarize the key points of legal opinions. Additionally, West.aw includes the “Key Number System,” which organizes legal opinions.
ROSS Intelligence, a competitor, sought to license Westlaw’s content to develop its own legal AI-based tool. After Thomson Reuters refused, ROSS obtained “Bulk Memos,” created using Westlaw’s headnotes, through a third-party legal services vendor. Thomson Reuters discovered this and sued ROSS for copyright infringement based on its use of Westlaw content to train its AI model.
Overview of the Case
The court granted partial summary judgment to Thomson Reuters on direct copyright infringement, fair use, and other defenses, while denying summary judgment motions from Ross, analyzing the fair use factors. Under the US Copyright Act (17 § USC 107), there are four factors:
(1) the purpose and character of use, including whether the use is of a commercial nature or for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the likely effect of the use on the potential market for the copyrighted work.
Thomson Reuters prevailed on the first factor. In examining the purpose and character of ROSS’s use, the court focused on whether the use was commercial and transformative. ROSS acknowledged that its use was commercial but argued that it was transformative, as the headnotes in question were allegedly “transformed” into numerical data representing the relationship among legal words in its AI system. The court disagreed, noting that ROSS’s use did not have a further purpose or different character from Thomson Reuters’ use. ROSS also argued that its use was permissible under the doctrine of “intermediate copying,” but again the court disagreed, noting that the cited cases were inapt because they involved copying of computer code rather than written words and the code copying was necessary for competitors to innovate. By contrast, use of the headnotes was not necessary to achieve ROSS’s desired purpose.
The court resolved factor two in ROSS’s favor, finding that although Westlaw’s material has the minimal required originality, it is not highly creative. Further, while the headnotes involve some editorial creativity, the Key Number System is a factual compilation with limited creativity.
The court also ruled in favor of ROSS on factor three, despite the number of headnotes used, because the material available to the public did not include the Westlaw headnotes. According to the court, what matters is not the amount and substantiality of the portion used in making a copy, but rather the amount and substantiality of what is thereby made accessible to the public for which it may serve as a competing substitute. It determined there was no factual dispute, as ROSS’s output did not include Westlaw headnotes.
Finally—and most important in this case—the court emphasized that because ROSS could have developed its own product without infringing Thomson Reuters’ copyrights, the fourth factor weighs in favor of Thomson Reuters. The court examined the likely effect of ROSS’s copying on the market for Westlaw’s product and, while initially considering whether ROSS’s use served a different purpose by creating a new research platform, ultimately concluded that ROSS intended to compete with Westlaw, and failed to prove otherwise. Court have differed over the years on whether the first or the fourth fair use factor is the most important; here analysis of the fourth is crucial (but both favored Thomson Reuters).
Looking Ahead
The implications of this decision for AI copyright litigation and fair use arguments are significant.
First, many practitioners have been waiting for a decision whether creating an AI model is considered transformative and fair use, particularly since AI models store their intelligence as numerical weights that are updated during the training process. But even with such advanced technology, the court in this case declined to hold that the use was transformative, based largely on its ultimate purpose of competing with the owner of the original works.
Also noteworthy is that the court declined to find fair use for an AI technology that is not generative AI. Even though the output from ROSS’s AI system was uncopyrighted verbatim quotes from court opinions (and not the original copyrighted headnotes), there was no fair use.
This could have broader consequences for large language models (LLMs) and generative AI technologies. When judges in other pending generative AI cases consider both the training step (as in ROSS) and the output generation step for a generative AI technology (e.g., an AI-generated image), it could be even less likely that fair use will apply. Here, the court emphasized that “factor four is undoubtedly the single most important element of fair use.” So, if AI-generated content, including that produced by LLMs, is substantially similar to an original work and has a detrimental effect on the market for the original work (e.g., puts an artist out of business), a finding of fair use may be less likely.
Our “fair warning” is this: AI developers and deployers should continue to monitor ongoing AI litigation, while considering the market implications of the use of copyrighted materials for training AI models or distributing AI-generated output. Because fair use is heavily dependent upon the facts, we anticipate different rulings from different courts, particularly where the commercial use of the original content is not a clear-cut as here.