Litigating Trade Secret Cases: A Strategic Guide for In-House Counsel
When faced with trade secret misappropriation, swift and strategic action is crucial.
For in-house counsel, understanding the litigation process and available remedies can mean the difference between protecting valuable intellectual property and watching it lose its protected status.
This guide focuses on key litigation strategies and the critical role of injunctive relief in trade secret cases.
The Race to the Courthouse
Trade secret cases often begin with a race to secure immediate court intervention.
Unlike other intellectual property disputes that might benefit from lengthy pre-litigation investigation, trade secret cases frequently require immediate action to prevent irreparable harm. The first 48 to 72 hours after discovering potential misappropriation are critical.
Immediate Action Items
Before or contemporaneous with filing suit, in-house counsel should immediately:
Implement a litigation hold and preserve all relevant evidence
Engage digital forensics experts (internal or external) to document unauthorized access or downloads
Review all relevant agreements (NDAs, employment contracts, etc.)
Document the specific trade secrets at issue and their value
Gather evidence of protection measures in place
Consider whether to engage criminal authorities
Identify key witnesses to provide affidavits supporting injunction filings
Draft preservation letters to all potential parties and witnesses
Remember, courts will scrutinize your company’s response time. Delays in seeking protection can undermine claims of irreparable harm and make obtaining injunctive relief more difficult.
Choosing Your Forum
Trade secret cases generally can be filed in either federal or state court, as the federal Defend Trade Secrets Act (DTSA) does not preempt state law claims. This choice requires careful strategic consideration.
Federal courts may offer advantages in cases involving interstate commerce or international parties, while state courts might provide faster injunctive relief or more favorable precedent.
For cases in North Carolina, the North Carolina Business Court has developed substantial trade secret jurisprudence and can be an attractive venue. It provides some of the features of a federal court, such as a single judge assigned to hear all aspects of the case, expedited discovery, dispute resolution, formal briefing for most substantive motions, along with an overall case management order.
Trade secret cases in state court with amounts in controversy over $5 million must be designated to the Business Court, while those under $5 million may be designated there by either party.
Securing Injunctive Relief
Temporary restraining orders (TROs) and preliminary injunctions are crucial tools in trade secret litigation. However, obtaining them requires careful preparation and specific evidence. Courts typically won’t grant injunctive relief based on mere suspicion or generalized allegations of misappropriation.
Elements of a Strong Injunction Motion
Your motion should clearly establish:
The specific trade secrets at issue
How the trade secret derives value from being secret
The reasonable measures taken to maintain secrecy
Clear evidence of misappropriation
Threat of immediate and irreparable harm
Why monetary damages are inadequate
Balance of hardships favoring an injunction
Public interest considerations
Most importantly, be specific about what relief you’re seeking.
Courts are increasingly rejecting vague injunction requests that simply reference “confidential information” or “trade secrets” without more detail.
Crafting Effective Injunctive Relief
Consider requesting specific provisions such as:
Orders to isolate and sequester devices containing trade secret information
Prohibition on accessing or deleting potentially misappropriated information
Required submission of devices for forensic examination
Certification of compliance with injunctions by counsel
Restrictions on specific work activities by former employees that could lead to disclosure
Prohibition on product distribution incorporating trade secrets
Requirements for return or destruction of trade secret information
Remember that courts generally do not prohibit a former employee from working for a competitor solely based on a non-disclosure agreement.
Instead, focus on preventing the use of specific trade secrets while allowing the employee to use their general skills and knowledge.
Discovery Strategies
Trade secret litigation demands a sophisticated approach to discovery, particularly given the complex electronic evidence often involved. A critical threshold issue is the pre-discovery identification of trade secrets.
Many courts require plaintiffs to identify their trade secrets with particularity before obtaining discovery of defendants’ confidential information. This requirement serves to balance the protection of legitimate trade secrets against the risk of plaintiffs using discovery as a fishing expedition to learn competitors’ secrets.
The identification process requires careful consideration of competing interests. You must be specific enough to support your claims and meet court requirements while avoiding public disclosures that could jeopardize trade secret status. Working with outside counsel to obtain entry of an appropriate protective order that allows you to file sensitive information under seal often provides the best solution to this challenge.
The time-sensitive nature of trade secret cases frequently necessitates expedited discovery, particularly in conjunction with temporary restraining orders or preliminary injunction proceedings.
To secure expedited discovery, you must demonstrate why standard discovery timelines would prove inadequate, specifically identify crucial early-stage discovery needs, and explain how the requested discovery relates to preventing irreparable harm. Courts will weigh these factors against the burden expedited discovery would impose on defendants.
When electronic evidence plays a central role, as it often does in trade secret cases, establishing a proper forensic examination protocol becomes essential.
An effective protocol should address the selection and compensation of neutral forensic experts, define the scope of examination, establish procedures for handling privileged and confidential information, and set clear timelines and reporting requirements.
The protocol should anticipate potential disputes and provide mechanisms for their resolution.
Criminal Implications and Parallel Proceedings
The criminal implications of trade secret misappropriation add another layer of complexity to civil litigation strategy.
While potential criminal liability under federal and state law can provide significant leverage, it requires thoughtful handling to avoid ethical pitfalls. Timing of criminal referrals can impact civil discovery and may lead to stays of civil proceedings. Individual defendants may invoke Fifth Amendment protections, complicating both discovery and settlement discussions.
In-house counsel must work closely with outside counsel to navigate these parallel proceedings effectively.
Protective Orders in Trade Secret Cases
Trade secret litigation requires particularly robust protective orders that go beyond standard confidentiality provisions.
Effective orders typically establish multiple tiers of confidentiality, including “attorney’s eyes only” designations for the most sensitive information. They should carefully define access restrictions for individual defendants and establish concrete requirements for information storage and transmission.
The order should anticipate the entire lifecycle of confidential information, from initial disclosure through post-litigation destruction or return.
The Role of Expert Witnesses
Expert testimony plays a pivotal role in trade secret litigation, with three types of experts proving particularly valuable.
Digital forensics experts provide analysis of electronic evidence and documentation of misappropriation patterns. Their work often proves decisive in preliminary injunction proceedings and shapes the overall trajectory of the case.
Damages experts help quantify losses and establish both trade secret value and the improper benefit gained by a defendant.
Industry experts provide essential context about technical aspects, the value of information, and help courts value and distinguish between protected trade secrets and general industry knowledge.
The timing of expert engagement can significantly impact case outcomes. Early involvement of experts, particularly forensic specialists, often proves crucial in preliminary injunction proceedings and shapes the development of the overall case strategy.
These experts can help identify key evidence, develop preservation protocols, and guide discovery requests.
Looking Ahead
The complexity of trade secret litigation demands a balanced approach that combines urgency with strategic planning. While immediate action remains critical, hasty or poorly planned litigation can prove counterproductive.
Success requires gathering key evidence and developing a coherent strategy while moving quickly enough to prevent irreparable harm and preserve available remedies.
AIPLA Conference on Trade Secret Litigation Recap: Part 1
At the recent AIPLA Trade Secret Summit, one of the nation’s premier conferences on trade secret law, critical issues surrounding the protection of confidential business information took center stage. The discussions reinforced the importance of safeguarding trade secrets and proprietary data against theft, liability, and employee mismanagement—particularly during key employment transitions such as hiring, active employment, and separation. These considerations are essential for companies striving to maintain their competitive edge while navigating complex legal and ethical challenges.
Hearing firsthand how companies handle these issues reinforced just how vital it is to stay proactive and ahead of the curve. Our team has put together a series of key take aways from the event that may help companies to guard against unfair competition and trade secret theft. Our first topic for consideration is joint representation.
Joint Representation
Representing an onboarding employee and the company concerning the hiring of the individual can be a tricky proposition. There are good reasons for engaging in a joint representation with proper warnings and there are definite pitfalls.
One of those pitfalls is the appearance that the new employee and the new employer are joined at the hip relating to the conduct of the employee exiting a former employer (especially if the former employer is a direct competitor). When this situation occurs, the first step is to review the representation from an ethical standpoint under existing Ethics and Professionalism rules.
It is considered ethical to simultaneously represent multiple clients whose interests may not ultimately be aligned if the law does not prohibit the representation and if no client asserts a claim against any other client involved in the proceeding.
First things first—obtain an acknowledgement from the new employee that there is no restrictive covenant impeding the employment, the employee has exited his former company without any trade secret/confidential/proprietary information, and the employee has not destroyed or spoliated any information that belongs to the former employer.
If these factors check out, proceed cautiously with the caveat that if it is learned that the acknowledgement is false, representation of the employee will end and representation of the company will continue. In this type of situation, informing each party of the risks of dual representation is key to continued representation of the company when bad facts present themselves. This is not to say that disqualification may still occur, particularly if privileged information obtained from the onboarding employee could assist the employer in defending any claims.
A key case to review before undertaking any dual representation is Upjohn v U.S, 449 U.S. 383 ( 1981).
Federal Circuit Upholds Major Trade Secrets and Contract Damages Award in Dispute Stemming from Failed Merger Talks
The recent Federal Circuit decision in AMS-OSRAM USA Inc. v. Renesas Electronics America, Inc. offers valuable lessons related to failed merger attempts, specifically the vast exposure that can result from a party breaching its confidentiality obligations. This protracted case—lasting more than 15 years and involving multiple trials and appeals—also highlights important principles about trade secret and contract remedies for the unauthorized use of proprietary technology.
After multiple trials and appeals, the Federal Circuit substantially affirmed an Eastern District of Texas judgment against the defendant, fka “Intersil,” for misappropriation the trade secrets of the plaintiff, fka “TAOS.” The dispute arose out of failed merger talks between the parties in 2004. The merger discussions were covered by a confidentiality agreement signed in June of 2004, and that agreement expired in June 2007. During the merger discussions, TAOS gave Intersil confidential business information regarding its ambient light sensor technology (the “CBI”). Shortly after the discussions ended in August of 2004, TOAS launched a product embodying the CBI and, contrary to the confidentiality agreement, Intersil began using the CBI to develop competing products, denoted “Primary Products” and “Derivative Products.” Intersil later sold sensor chips to Apple based on the CBI, after being approved as a vendor for specific products between September 2006 and March 2008. TAOS sued Intersil in November 2008 for patent infringement (a claim later dropped), for trade secret misappropriation, and for breach of the confidentiality agreement.
In the first trial in 2015, the jury found Intersil liable for misappropriation of trade secrets under Texas law and breach of the confidentiality agreement under California law, the choice of law in the agreement. The jury awarded disgorgement of TAOS profits of $48M and exemplary damages of $10M for the misappropriation, and a reasonable royalty of $12M for the breach. On appeal, the Federal Circuit in 2018 affirmed the bases of both liability and exemplary damages for misappropriation, but it remanded the case to the district court to determine the amount of damages. The Federal Circuit held, in part, that disgorgement is an equitable remedy for the district judge to decide, and that certain facts needed to be found, notably “the length of any head start period” Intersil gained by its misappropriation.
In the second remand trial in 2021, the jury provided an advisory verdict on disgorgement of profits of $8.5M for the Primary Products, finding the trade secret was not properly accessible to Intersil until January 2006, and that the head-start period was 26 months. In addition, the jury awarded exemplary damages of $64M and reasonable royalty damages of $6.7M for breach of the confidentiality agreement with respect to the Derivative Products. Post trial, in its findings of facts and conclusions of law, the district court agreed with the jury that the proper disgorgement award was $8.5M for the Primary Product but found that Texas law capped exemplary damages at twice the disgorgement sum, or $17.0M. The final judgment reflected this $25.5M trade secret award and $7.3M in reasonable royalty damages, along with $15M in prejudgment interest award and $3.9M in attorneys’ fees from work on the contract claim.
On the second appeal, the Federal Circuit substantially affirmed the monetary awards, except the prejudgment interest calculation. The court reversed the finding that the trade secret was not properly accessible until January 2006. It held that the lower court was wrong in concluding that proper accessibility should be based on when Intersil reverse-engineered TAOS’s trade secrets. Instead, the court concluded under Texas law that proper accessibility is based on when Intersil could have reverse-engineered the trade secrets, which was in February 2005, shortly after TAOS released its product embodying the trade secret. It observed that the lower court must “ensure that a trade secret remedy is tailored to preventing or negating the unfair advantage derived from improper acquisition.” Still, the court upheld the disgorgement award. First, it affirmed the 26-month head-start period finding, though measured from February 2005 (instead of January 2006) to April 2007. Second, it agreed that sales of the Primary Products after April 2007 were recoverable because Apple had approved the designs in September 2006, within the head-start period, and that the sales followed directly from the approval. Third, the court agreed that the entirety of the Primary Products profits were attributable to the misappropriation occurring during the head-start period.
The Federal Circuit also affirmed the reasonable royalty damages award. It first rejected Intersil’s argument that the award resulted in an impermissible double recovery, holding that the disgorgement remedy related solely to the Primary Products sales and the reasonable royalty remedy related solely to the Derivative Products sales. The court held that TAOS had a reasonable expectation of compensation in the form of a reasonable royalty for breach, and it rejected Intersil’s argument that the royalty award was unjustified because it was undisputed that the Derivative Products did not actually embody the trade secrets. It held that it was sufficient that there was substantial evidence that Intersil used TAOS’s confidential information to develop the Derivative Products. “Under California law, a plaintiff may recover for the defendant’s breach of a confidentiality agreement not only if the defendant wholly incorporated the plaintiff’s contractually protected information into its own products but also if the defendant used the plaintiff’s confidential information in the development or implementation of its own products.”
Notable takeaways from AMS-OSRAM USA are as follows. First, in drafting agreements covering proposed mergers or other types of business transactions involving a sharing of technical information, consider negotiating terms designed to limit exposure in the event of a breach, including short confidentiality periods, limitations on liability, choice of law, and forum selection. Business lawyers may want to consult their brethren IP litigators in considering hypothetical scenarios and would be wise to avoid so-called “standard agreements.” Second, in evaluating risk, legal advisors should consider that a bona fide claim of breach of a confidentiality agreement protecting technology is likely to be accompanied by a trade secret misappropriation claim, thus significantly increasing the risk of exposure because of the enhanced remedies available for misappropriation. Moreover, it is the author’s belief that juries persuaded that a breach has occurred are likely to also include that misappropriation has occurred, particularly when the breach is egregious and economic harm or unjust enrichment can be traced to the breach.
“Delete All IP law”? Why the Tech Titans Want to Pull Up the Ladder Behind Them
Recently, tech titans Jack Dorsey and Elon Musk made headlines by calling for the radical dismantling of the intellectual property (IP) system—urging us to “delete all IP.” Their stance may seem superficially appealing at a time when artificial intelligence (AI) is destabilizing traditional IP boundaries and intensifying legal uncertainty. But this perspective is not just short-sighted—it betrays the foundational American principle that innovation is best nurtured through enforceable rights.
The Constitutional Foundation of IP Law
Intellectual property is not a vestigial tool of corporate control or government overreach—it is embedded in the DNA of our constitutional system. Our Constitution grants Congress the power “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”1
Our Founders deliberately enshrined IP rights not to stifle creativity, but to spur it. Temporary monopolies promote disclosure, encourage commercialization, and ultimately fuel progress.
Why IP Matters Even More in the AI Age
The rise of AI magnifies challenges to IP regimes. Because AI replicates core human faculties like creativity and problem-solving, it complicates how we assign exclusive rights in inventions and creative works.2 Yet these complexities are not reasons to discard IP law—they are reasons to adapt and strengthen it. If Dorsey envisions “better ways to pay creators,” even those must rest on the foundational principle that creators own what they produce.
The Patchwork of IP: Each Branch Serves a Distinct Purpose
The Dorsey-Musk critique flattens IP into a single, monolithic enemy. But IP law is a mosaic—each piece crafted to serve specific economic and societal purposes:
Patent law incentivizes disclosure and the advancement of science by awarding exclusive rights to inventors for novel and non-obvious inventions;
Copyright law incentivizes original expression by awarding exclusive rights to creative works;
Trademark law is about trust and consumer protection, not innovation per se. It ensures brand integrity and helps consumers make informed decisions; and
Trade secret law protects business-critical information that gives firms a competitive edge, especially when patenting is not feasible or desired.
Copyright enforcement typically requires proof of actual copying, making it a more direct and fact-specific inquiry. Patent enforcement, by contrast, can extend to independently developed inventions that merely practice a claimed method or apparatus—often ensnaring innovators unaware of the patent’s existence. Conflating the two overlooks the fundamental differences in enforcement and scope. Using the excesses of patent litigation to justify dismantling copyright law only further erodes the already fragile rights of creators in the digital age.
Climbing then Pulling up the IP Ladder Behind Them…
For startups, patent law is scaffolding—supporting their climb toward market viability. But for tech giants like Musk and Dorsey, who’ve already reached the summit, IP law may now feel like a constraint. Their proposal to “delete all IP” reads less like a call for open innovation and more like an effort to pull up the ladder behind them.
LLM and AI providers don’t depend on patents to protect their dominance. Their competitive edge lies in trade secrets—like model weights (the internal parameters of AI systems) and the massive, proprietary datasets used in training—which are nearly impossible to reverse engineer. Add to that their unmatchable first-mover advantages, and it’s clear why they no longer need IP—but smaller competitors still do.
A Responsible Path Forward: Reform, Not Repeal
Without intellectual property and laws to enforce it, companies would have no recourse against copycats or bad actors.
We do need to rethink IP in the age of AI, including the following reforms:
clearer standards for “sufficiency of human contribution” in AI-assisted inventions;
better rules to address copyright liability in training datasets; and
guidelines for AI’s role in generating patentable subject matter, especially under §101 eligibility rules that have grown increasingly narrow post-Alice.3
But these reforms depend on having a system to reform. We cannot foster the development of an AI ecosystem of startup or Small and Medium-sized Enterprise (SME) AI developers without providing enforceable rights so that they can protect their innovations—including against infringement and misappropriation by the AI behemoths, including Musk.4 Nor can we effectively regulate AI’s misuse, combat algorithmic bias, or hold dominant players accountable without the transparency that IP law—and especially patent law—can help facilitate. The Constitution doesn’t promise innovation despite IP; it promises innovation through IP.
1 U.S. Const., Art. I, Sec. 8, Cl. 8.
2 See Jim W. Ko & Paul R. Michel, Testing the Limits of the IP Legal Regimes: The Unique Challenges of Artificial Intelligence, 25 Sedona Conf. J. 389–541, at 433–82 (2024).
3 See id. at 540–41.
4 xAI, Musk’s artificial intelligence firm, acquired X in March 2025 and leverages the vast user data of the former Twitter to develop and enhance its AI models.
Federal Circuit: Machine Learning Patents Ineligible in Recentive Analytics, Inc. v. Fox Corp.
Go-To Guide:
The Federal Circuit ruled, in a case of first impression, that the machine learning patents at issue were ineligible under 35 U.S.C. § 101.
In its precedential decision, the court held that claims that merely apply “established methods of machine learning” to “new data environments” are ineligible for protection.
The court emphasized that iterative training and dynamic adjustments are inherent to the nature of machine learning and do not constitute an inventive concept.
The decision underscores the importance of disclosing specific implementations or improvements to machine learning processes in patent applications.
In a precedential decision addressing the intersection of machine learning and patent law, the Federal Circuit affirmed the district court’s dismissal of Recentive Analytics, Inc.’s patent infringement claims against Fox Corp. and its affiliates. The court held that Recentive’s patents merely applied generic machine learning techniques to the fields of event scheduling and network map creation, and thus were directed to abstract ideas that lacked an inventive concept sufficient to satisfy the requirements of 35 U.S.C. § 101. This decision underscores the challenges of securing patent protection for new applications of established machine learning techniques in various fields.
In a succinct statement of the Federal Circuit’s decision, Judge Dyk, writing for the panel that included Judge Prost and Chief District Judge Goldberg (sitting by designation), stated “[t]his case presents a question of first impression: whether claims that do no more than apply established methods of machine learning to a new data environment are patent eligible. We hold that they are not.”
Recentive Analytics, Inc. is the owner of four patents: U.S. Patent Nos. 10,911,811 (‘811 patent), 10,958,957 (‘957 patent), 11,386,367 (‘367 patent), and 11,537,960 (‘960 patent). These patents fall into two categories: the “Machine Learning Training” patents (the ‘367 and ‘960 patents) and the “Network Map” patents (the ‘811 and ‘957 patents). The Machine Learning Training patents claim methods for dynamically generating optimized schedules for live events using machine learning models, while the Network Map patents claim methods for creating optimized network maps for television broadcasters using similar techniques.
Recentive sued Fox Corp., Fox Broadcasting Company, LLC, and Fox Sports Productions, LLC (collectively, Fox) for infringement of these patents. Fox moved to dismiss the complaint, arguing that the patents were directed to ineligible subject matter under § 101. The district court granted the motion, finding that the patents were directed to abstract ideas and lacked an inventive concept. Recentive appealed to the Federal Circuit.
The Machine Learning Training patents focus on optimizing event schedules using machine learning models. Claim 1 of the ‘367 patent is representative and describes a method involving:
1.
Collecting Data: Receiving event parameters (e.g., venue availability, ticket prices) and target features (e.g., event attendance, revenue).
2.
Training the Model: Iteratively training a machine learning model to identify relationships between the event parameters and target features using historical data.
3.
Generating Output: Producing an optimized schedule for future events based on user-specific inputs.
4.
Updating the Schedule: Dynamically adjusting the schedule in response to real-time changes in data.
The specification emphasizes that the machine learning model can employ “any suitable machine learning technique,” such as neural networks, decision trees, or support vector machines. It also highlights the use of generic computing equipment to implement the claimed methods.
The Network Map patents address creating network maps for broadcasters, which determine the programming displayed on television stations in various geographic markets. Claim 1 of the ‘811 patent is representative and describes a method involving:
1.
Collecting Data: Receiving broadcasting schedules for live events.
2.
Analyzing Data: Generating a network map that optimizes television ratings across multiple events using machine learning techniques.
3.
Updating the Map: Dynamically adjusting the network map in real time based on changes to schedules or criteria.
4.
Using the Map: Determining program broadcasts based on the optimized network map.
Like the Machine Learning Training patents, the Network Map patents discuss the use of generic machine learning techniques and computing equipment.
The lower court applied the two-step framework established in Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), to assess patent eligibility. At step one, the court found that the claims were directed to abstract ideas—producing event schedules and network maps using known mathematical techniques. At step two, the court concluded that the claims lacked an inventive concept, as they merely applied generic machine learning techniques and relied on conventional computing devices. The court also denied Recentive’s request for leave to amend, finding that any amendment would be futile.
The Federal Circuit affirmed the district court’s decision, holding that Recentive’s patents were ineligible under § 101. The court’s analysis focused on both steps of the Alice framework.
At step one, the Federal Circuit examined whether the claims were directed to patent-ineligible abstract ideas. The court emphasized that the focus of the claimed advance over the prior art was the application of generic machine learning techniques to the fields of event scheduling and network map creation. It noted that Recentive had repeatedly conceded that its patents did not claim improvements to machine learning itself but merely applied existing machine learning methods to new environments.
The court observed that the Machine Learning Training patents relied on conventional machine learning techniques, such as neural networks and decision trees, and generic computing equipment. Similarly, the Network Map patents employed generic machine learning methods to optimize television ratings. The court concluded that the claims were directed to abstract ideas because they did not disclose any technological improvement or specific implementation of machine learning.
The Federal Circuit rejected Recentive’s argument that its patents were eligible because they applied machine learning to a new field of use. Citing precedent, the court reiterated that “[a]n abstract idea does not become nonabstract by limiting the invention to a particular field of use or technological environment.” The court also noted that applying existing technology to a novel database or data environment does not create patent eligibility.
At step two, the Federal Circuit considered whether the claims contained an “inventive concept” sufficient to transform the abstract idea into a patent-eligible application. Recentive argued that its patents introduced an inventive concept by using machine learning to dynamically generate optimized maps and schedules based on real-time data. The court rejected this argument, finding that the claimed methods merely described the abstract idea itself. The court emphasized that iterative training and dynamic adjustments are inherent to the nature of machine learning and do not constitute an inventive concept. It noted that the patents did not disclose any specific method for improving machine learning algorithms or achieving technological advancements. Instead, the claims relied on generic machine learning techniques and computing devices, which are insufficient to satisfy step two of the Alice inquiry.
The Federal Circuit also rejected Recentive’s argument that its patents were eligible because they performed tasks previously undertaken by humans with greater speed and efficiency. The court explained that increased speed and efficiency resulting from the use of computers do not render claims patent eligible unless they involve improved computer techniques.
Takeaways
The Federal Circuit’s decision highlights the court’s thinking on patent eligibility limits as applied to machine learning-based inventions. The court has now clarified that applying generic machine learning techniques to new data environments does not create patent eligibility unless the claims disclose specific technological improvements or inventive concepts. This holding is consistent with the Federal Circuit’s broader § 101 jurisprudence, which has repeatedly emphasized that abstract ideas do not become patent eligible simply by limiting them to a particular field of use or implementing them on generic computing devices. The decision also underscores the importance of disclosing specific implementations or improvements to machine learning processes in patent applications.
At its conclusion, the decision recognizes that “[m]achine learning is a burgeoning and increasingly important field and may lead to patent-eligible improvements in technology” and provides some hope that its decision will be cabined to specific facts by stating “[t]oday, we hold only that patents that do no more than claim the application of generic machine learning to new data environments, without disclosing improvements to the machine learning models to be applied, are patent ineligible under § 101.” It will remain to be seen how lower courts, and the U.S. Patent Office, apply this new decision.
For practitioners, the Recentive decision highlights the need to carefully draft claims that go beyond the mere application of existing machine learning techniques. Patent applicants should focus on demonstrating how their inventions improve machine learning models or achieve technological advancements. Without such disclosures, machine learning-based patents may face significant hurdles under § 101. As machine learning continues to play an increasingly important role in technological innovation, this decision serves as a reminder of the challenges of securing patent protection in this evolving field.
China’s Supreme People’s Court Releases “Status of Judicial Protection of Intellectual Property Rights in Chinese Courts (2024)” – Criminal IP Enforcement Up 24% in 2024
On April 21, 2025, China’s Supreme People’s Court released the “Status of Judicial Protection of Intellectual Property Rights in Chinese Courts (2024)” (中国法院知识产权司法保护状况(2024年)) providing a wealth of data regarding Chinese IP litigation in 2024. Criminal IP enforcement continues to grow in China with Chinese courts receiving 9,120 first-instance criminal cases involving infringement on IP and concluding 9,003 such cases, marking increases of 24.34% and 29.22% compared to 2023, respectively. Overall, Chinese courts received 529,370 IP cases and concluded 543,911 cases, representing a decrease of 2.67% and an increase of 0.001% respectively over 2023.
First Instance Civil IP Cases Received – 2024 vs. 2023
First Instance Criminal IP Cases Received – 2024 vs. 2023
Other statistics released include:
Punitive damages were applied in 460 cases involving seriously malicious infringement, marking a year-on-year(YoY) increase of 44.2%.
Newly received patent cases totaled 44,255, down 1.02% compared to the previous year;
trademark cases numbered 124,918, down 4.95% from the previous year;
copyright cases amounted to 247,149, down 1.8% compared to 2023;
technology contract cases reached 8,320, up 28.16% YoY;
competition-related cases totaled 10,567, up 3.29% YoY; and
other types of civil IP disputes amounted to 14,714, down 16.53% YoY.
Chinese courts accepted 20,849 administrative IP cases of the first instance and 27,745 were concluded, showing increases of 1.29% and 24.19% from 2023, respectively.
newly received patent cases totaled 1,679, down 15.63% YoY;
trademark cases numbered 19,130, up 3.08% YoY;
copyright cases stood at 9, decreasing by 2 cases compared to 2023; and
other types of cases totaled 31, up 29.17% YoY.
Chinese courts received 9,120 first-instance criminal cases involving infringement on IP and concluded 9,003 such cases, marking increases of 24.34% and 29.22% compared to 2023, respectively.
1 criminal case related to patent counterfeiting was newly received, and 2 such cases were concluded;
8,079 were criminal cases involving registered trademark infringement, and 8,017 such cases were concluded, representing YoY increases of 21.78% and 26.11%;
938 were criminal cases involving copyright infringement, with 913 such cases concluded, reflecting YoY increases of 49.6% and 68.14% respectively;
102 other criminal cases were newly filed, while 77 such cases were concluded in the same year, up 39.73% and 7.58% YoY, respectively.
The full text in Chinese and English is available here: 中国法院知识产权司法保护状况（2024).
Jepson Claims No Substitute for Written Description in Patents
Federal Circuit Holds That the Preamble of Jepson-Style Claims Must Be Supported by an Adequate Written Description
U.S. patent claims have a preamble, and, in most cases, the preamble is not limiting.[1] Jepson-style patent claims, however, do typically have a limiting preamble.[2] In Jepson-style claims, the preamble can be used to describe the “conventional or known” elements or steps, followed by a transition phrase such as “wherein the improvement comprises” and then an identification of the elements that “the applicant considers as the new or improved portion.”[3] In other words, the preamble can first recite the prior art and then claim an improvement over the prior art.[4]
In In re Xencor, Inc. (“Xencor”), the Federal Circuit recently held that the preamble in a Jepson-style patent claim must be supported by an adequate written description even though there is an implied admission that most, if not all, of the preamble is known, prior art.[5] Xencor is important because it precludes the use of Jepson-style claims to expand the scope of the written description contained in the patent specification by simply including additional information in the preamble and, thereby, implicitly asserting that the new information is well-known in the art. This is particularly significant for the so-called unpredictable arts, such as the life sciences and chemistry, where the written description requirements are often more stringent.[6]
In Xencor, the Federal Circuit considered whether the preamble of a Jepson-style claim must also meet the written description requirement for patents.[7] Under 35 U.S.C. § 112(a), the specification of a patent must “contain a written description of the invention.”[8] To satisfy the written description requirement of § 112(a), “the specification must describe an invention understandable to that skilled artisan and show that the inventor actually invented the invention claimed.”[9]
On March 13, 2025, in Xencor, the Federal Circuit rejected the patent applicant’s argument that because the “invention” in a Jepson claim is the improvement, only the improvement, and not the prior art in the preamble, needed sufficient written description.[10] Rather, the Federal Circuit held that the preamble in a Jepson claim requires an adequate written description.[11] In other words, “the applicant must establish that what is claimed to be well-known in the prior art is, in fact, well-known in the prior art.”[12]
In reaching this conclusion, the Federal Circuit explained that when the Jepson format is used, the preamble defines the claimed invention and limits the scope of the claims.[13] Although a Jepson claim is directed to the improvement made to the prior art, the Federal Circuit further explained that “the claim is a singular thing and cannot be separated; its totality is what must have written description support, which necessarily includes support sufficient to lead an ordinary artisan to understand that the inventor did, indeed, possess what the patent contends was in the prior art.”[14] According to the Federal Circuit, “[a] patentee cannot be permitted to use a Jepson claim to avoid the requirement that she be in possession of the claimed invention simply by asserting something is well-known in the art.”[15]
The Federal Circuit further explained that “[t]he amount and content of the disclosure that is necessary to supply an adequate written description will vary depending on factors including the level of knowledge of the person of ordinary skill in the art, the unpredictability of the art, and the newness of the technology.”[16] As with all written description inquiries, the finder of fact conducting a written description inquiry for a Jepson claim may consider not only the disclosures in the patent itself, but also evidence outside the patent in order to understand what a person of ordinary skill in the art would have known.[17]
The patent application at issue in Xencor was related to modifying antibodies with certain amino acid substitutions in order to provide for longer staying power in the body and reduce the need for more frequent treatment.[18] The application included a Jepson-style claim for an improvement of “a method of treating a patient by administering an anti-C5 antibody with an Fc domain.”[19] However, an appellate review panel (“ARP”) and administrative review board (“Board”) both determined that the limitation in the Jepson preamble, the anti-C5 antibodies, was not well-known in the art and the specification did not otherwise contain an adequate written description to support it.[20] As noted by the ARP, “[t]the Specification does not describe what patients with what diseases or conditions can be successfully treated with an anti-C5 antibody. Nor is there a single working example describing treatment of patients with a disease or condition with an anti-C5 antibody possessing the claimed Fc modifications.”[21] Ultimately, the Federal Circuit affirmed the ARP’s and the Board’s rejection of the Jepson claim as unpatentable for lack of written description.[22]
Even before Xencor, Jepson-style claims were infrequently used in U.S. patent applications. Following Xencor, the Jepson format may still prove beneficial in a few specific, limited circumstances. For example, a Jepson-style claim can be used to distinguish one claimed invention from another, particularly when seeking to overcome, or prevent, a double patenting rejection for a similar invention. Likewise, use of the Jepson format is common in some foreign countries, so U.S. applications that originate outside the United States sometimes include Jepson claims.
Jepson-style claims, however, have several disadvantages. In contrast to the general rule, the preamble of a Jepson claim is not only limiting, but Xencor now also requires an adequate written description to support it.[23] In addition, use of the Jepson format is often taken as an implied admission that the previous invention described in the preamble is prior art.[24] While the implied admission can be rebutted, this typically occurs only when the Jepson format was used to avoid a double patenting rejection in a co-pending application.[25]
These potential disadvantages, including the new written description requirement for the preamble, should be considered by a practitioner when deciding whether to draft a claim using the Jepson format. The Xencor decision makes it clear that including a limitation in the preamble of a Jepson-style claim does not automatically mean that it is well-known in the art. Instead, patent practitioners should ensure that there is adequate support to satisfy the written description requirement for the preamble of a Jepson-style claim, either in the patent itself or through extrinsic evidence that conclusively establishes the knowledge of a person of ordinary skill in the art.
Footnotes
[1]E.g., Am. Med. Sys., Inc. v. Biolitec, Inc., 618 F.3d 1354, 1358-59 (Fed. Cir. 2010) (quoting Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1346 (Fed. Cir. 2002)). Nonetheless, a preamble may limit a claim “if it recites essential structure or steps, or if it is ‘necessary to give life, meaning, and vitality’ to the claim.” Catalina Mktg. Int’l, Inc. v. Coolsavings.com, Inc., 2839 F.3d 801, 808 (Fed. Cir. 2001) (quoting Piney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1305 (Fed. Cir. 1999)).
[2] E.g., Catalina Mktg. Int’l, Inc., 289 F.3d at 808 (“Jepson claiming generally indicates intent to use the preamble to define the claimed invention, thereby limiting claim scope”).
[3] Artic Cat Inc. v. GEP Power Prods., Inc., 919 F.3d 1320, 1330 (Fed. Cir. 2019) (quoting 37 C.F.R. § 1.75(e)). This practice was approved in Ex parte Jepson, 243 Off. Gaz. Pat. Office 525, 528 (1917) (“When an applicant presents a claim, as in this case, which does particularly point out his exact invention, there is certainly nothing in the law to interdict his doing it by including the old parts of the structure in a preamble and set apart from the structure which constitutes the real invention.”). The practice has since been codified in 37 C.F.R. § 1.75(e):
When the nature of the case admits, as in the case of an improvement, any independent claim should contain in the following order, (1) a preamble comprising a general description of all the elements or steps of the claimed combination which are conventional or know, (2) a phrase such as “wherein the improvement comprises,” and (3) those elements, steps and/or relationships which constitute that portion of the claimed combination which the applicant considers as the new or improved portion.
[4] Dow Chemical Co. v. Sumitomo Chemical Co., Ltd., 257 F.3d 1364, 1368 (Fed. Cir. 2001).
[5] In re Xencor, Inc., 130 F.4th 1350, 1361 (Fed. Cir. 2025).
[6] E.g., Juno Therapeutics, Inc. v. Kite Pharma, Inc., 10 F.4th 1330, 1341 (Fed. Cir. 2021).
[7] In re Xencor, Inc., 130 F.4th at 1360-63.
[8] 35 U.S.C. § 112(a).
[9] E.g., Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010); United Therapeutics Corp. v. Liquidia Techs., Inc., 74 F.4th 1360, 1370 (Fed. Cir. 2023).
[10] In re Xencor, Inc., 130 F.4th at 1360-61.
[11] Id. at 1361.
[12] Id. at 1362.
[13] Id. at 1361 (“The invention is not only the claimed improvement, but the claimed improvement as applied to the prior art, so the the inventor must provide written description sufficient to show possession of the claimed improvement to what was known in the prior art.”) (emphasis in original).
[14] Id.
[15] Id. at 1362.
[16] Id.
[17] Id.
[18] Id. at 1354.
[19] Id. at 1354-55.
[20] Id. at 1362.
[21] Id. at 1356.
[22] Id. at 1362-63.
[23] Id. at 1361.
[24] In re Fout, 675 F.2d 297, 301 (C.C.P.A. 1982) (“We hold that appellants’ admission that they had actual knowledge of the prior Pagliaro invention described in the preamble constitutes an admission that it is prior art to them.”); see also Application of Ehrreich, 590 F.2d 902, 909-10 (C.C.P.A. 1979) (“We agree that the preamble elements in a Jepson-type claim are impliedly admitted to be old in the art, but it is only an implied admission.”) (citations omitted).
[25] See Ehrreich, 590 F.2d at 909-10.
Summer Concert (Seizure) Season
The summer concert season is almost here. As the weather warms, artists and fans alike are gearing up for highly anticipated tours, like the Oasis reunion, as well as annual festivals, such as Lollapalooza in Chicago, IL, both of which sold out in under an hour. Undoubtedly, John Doe, bootleg merchandiser, is gearing up too, ready to sell counterfeit summer tour t-shirts outside venues. A recent case out of the Central District of California suggests that if artists want to crack down on John Doe’s sales this summer, it may be wise to wait until the tour is underway and the knock-off sales have begun.
On March 24, 2025, rock band AC/DC filed a complaint and ex parte application for a temporary restraining order (“TRO”), seeking nationwide relief against anticipated but yet-to-be-identified Doe defendants. See Leidseplein Presse, B.V. v. Various John Does, Jane Does, and XYZ Companies, No. 2:25-cv-02585 (C.D. Cal. Filed 03/24/2025). The band sought to seize counterfeit merchandise at the opening date of its upcoming tour and to restrain bootleggers from engaging in further sales across the country. However, on April 4, the federal district court in Los Angeles denied AC/DC’s TRO application on the basis that any injury to plaintiff was hypothetical at this point as the complaint and TRO application did not identify particular individuals or repeat offenders, even though the identities of bootleggers are almost never known, and difficult to ascertain.
To counteract the proclivity of bootlegging, touring artists and promoters employ a creative combination of Federal Rule of Civil Procedure 65 and the Trademark Counterfeiting Act of 1984 to seize and restrain ongoing sales of counterfeit merchandise. This mechanism combines five unusual, often disfavored, litigation tactics: 1) emergency proceedings; 2) ex parte seizure orders; 3) seizure without deprivation hearings; 4) Doe defendants; and 5) nationwide restraining orders. Courts are often uncomfortable with the mechanism, consistently expressing due process concerns, even when granting such orders.
Touring artists and promoters see this strategy as one of the only ways to effectively stem the flood of illegal, bootleg merchandise by sellers who are not easily identifiable and who may not be susceptible to normal service of process and litigation practices. However, with increasing judicial skepticism of the practice, artists are put in a precarious position, especially when faced with lost revenue in the early legs of tours, before hard evidence of actual damages can be shown to a court.
The court declined to issue the TRO AC/DC requested because, in its view, while likely plausible, the potential abuse was not enough to persuade the court to grant the application as it read the complaint as making conclusory allegations based on past experience; i.e., that bootleggers would present themselves at the opening date of the tour. The court expressed concerns about granting nationwide seizure and restraining orders, echoing the due process concerns of other courts around the country.
By contrast, jam band Phish adopted a different strategy with a similar goal, making a motion in the District Court of Massachusetts in summer 2024. See Phish, Inc. v. Various John Does, Jane Does, and ABC Companies, No. 1:24-cv-11749 (D. Mass. Filed 07/08/2024). Phish succeeded in obtaining both a seizure order and a restraining order for the remainder of its tour, stretching from New York to Colorado. Phish made its motion after the tour had begun, once bootleggers were present and the injury was concrete and ongoing. Further, Phish specifically identified the remaining tour dates and cities in which it sought a restraining order, limiting the often-sweeping nature of the nationwide restraining order requests, and apparently alleviating courts’ common discomfort with the perceived lack of due process.
For artists and promoters embarking on summer tours who want to shut down merchandisers of counterfeit concert memorabilia, specificity and certainty are key, even if the offenders are unidentified John Does. The recent court decisions suggest that knowing an injury might occur—even if almost certain—may not be enough to persuade some courts of the need for immediate, temporary relief. Artists and promoters should be specific in the scope of their request, limiting the restraining order to the remaining dates and cities on the tour schedule. By working with courts’ sympathies for mark owners, while simultaneously alleviating courts’ common procedural and due process concerns, artists may be able to rid themselves of bootleggers this summer, and fans can be sure to be offered only the genuine article.
Federal Circuit Vacates Summary Judgement: Limitations from Specifications Should Not Have Been Imported Into the Claims
The Federal Circuit vacated and remanded the district court’s summary judgement of noninfringement, finding that the lower court had improperly construed the claim term “pull cord.” The district court had erroneously limited the term to a directly pulled cord that lacks a handle. The Federal Circuit determined that these restrictions were unsupported by the intrinsic evidence and directed the district court to apply the correct claim construction in accordance with the Federal Circuit’s guidance and redetermine infringement using the correct claim construction.
Case Background
IQRIS Technologies LLC sued Point Blank Enterprises, Inc. and National Molding, Inc. in the Southern District of Florida, alleging infringement of U.S. Patent Nos. 7,814,567 and 8,256,020. These two patents share a common specification and are both directed to quick release systems on tactical vests, designed to allow soldiers and first responders to quickly remove their vests in emergency situations. According to the patent specifications, removal and reassembling of prior art tactical vests are time-consuming, and the asserted patents overcome these problems by providing a protective garment with “a reduction in operating parts, faster release, and quicker reassembly than the systems currently in use.”
The accused products – Point Blank’s tactical vests equipped with National Molding’s “Quad Release” and “Evil Twin” quick-release systems – use Bowden cables, which consist of a wire inside a sheath, to activate the trigger, which in turn disengage the vest by releasing the buckles.
During the litigation, the parties disputed the meaning of the team “pull cord” in the asserted claims. IQRIS argued the term should be construed as “a component which, when put into tension, can result in activating the releasable fastener,” while the defendants proposed construing the term as “a cord on the exterior of the ballistic garment grasped by a user that is capable of disengaging the releasable fastener or releasable hook when a user pulls on the pull cord.” The parties also disputed the location of the pull cord, but the district court did not address this issue, and instead construed the term to mean “cord that can be directly pulled by a user to disengage a releasable fastener or releasable hook.” The district court further decided that the patents “disparage” prior art systems that include “a handle that is attached to the cables[.]” Therefore, when analyzing infringement under the doctrine of equivalents, the district court interpreted “pull cord” to exclude pull cords that include a handle. Based on its construction of “pull cord”, the district court granted summary judgement of noninfringement, holding the accused products lacked a claimed “pull cord.”
Issues
The primary issue on appeal was whether the district court had erred in construing “pull cord” to (1) require a user to pull on the pull cord directly; and (2) exclude cords that include a handle.
Holding and Reasoning
1. Directly pulled
The Federal Circuit held that the district court erred in its construction of “pull cord” by imposing requirements that neither the claim language nor the specification supported. The court found that nothing in the claim explicitly required the pull cord to be directly pulled by a user. The claims merely suggest a “pull cord” is a cord that actuates a releasable hook when pulled, without specifying who or what pulls the cord, or whether the pulling is direct or indirect.
While the preferred embodiment depicted a pull cord that is directly pulled, Federal Circuit precedent instructed that limitations from specifications should not be imported into claims when the claims do not expressly require them.
2. Excluding a handle
The court also rejected the district court’s construction that a pull cord cannot include a handle. The patent figures depict a circular ball at the end of the pull cord, which suggests that the inventors contemplated cords with handles. Further, while the patent specification criticizes prior-art cutaway vests for requiring a time-consuming reassembly process, it does not disparage the use of handles. The district court had incorrectly inferred that the pull cord should exclude handles because the specification did not clearly disavow such claim scope where the pull cord includes handles.
Because the district court’s summary judgement was based on an erroneous claim construction, the Federal Circuit vacated the ruling. The court declined to decide whether the accused products infringe under the correct construction, and remanded for future proceedings.
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Whither Discretionary Denials? Read the Tea Leaves, or Follow the Bread Crumbs?(Part I)
Recent actions from the USPTO have engendered a great deal of discussion among the bar practicing before the Patent Trial and Appeal Board. On February 28, 2025, acting Director Stewart rescinded former Director Vidal’s Guidance Memorandum for handling discretionary denials in inter partes review proceedings before the Board. On March 24, 2025, Chief Judge Boalick issued a Guidance Memorandum on the rescission. On March 26, 2025, Director Stewart issued a memorandum on an interim procedure in which institution decisions are bifurcated between discretionary considerations and merits and other non-discretionary statutory considerations. Here, we examine the potential effects of Director Stewart’s rescission and the subsequent Boalick Guidance on post-grant proceedings. We will examine Director Stewart’s Guidance in a subsequent post.
Rescission of the Vidal Memo
In rescinding the Vidal Guidance, the USPTO restored the precedence of Fintiv and Sotera without modification, specifically identifying those two Board decisions in its rescission announcement. The USPTO did not provide any comment.
The Boalick Guidance
The Boalick Guidance clarifies how the Board will approach petitions for post-grant reviews going forward, including but not limited to those filed after the acting Director rescinded the Vidal Guidance.
Rescission of the Vidal Guidance does not apply to instituted cases that are outside the timescope for rehearing or Director Review of an Initial Determination (ID) on institution. Rescission does apply to any case where institution has not been determined, or any case where a request for rehearing or Director Review of the ID was timely filed and pending. “Absent extraordinary circumstances,” the Board will not revisit IDs otherwise.
However, it is unclear what would constitute “extraordinary circumstances.” For example, would reviews instituted based solely on the submission of a Sotera stipulation and with no evaluation of the Fintiv factors constitute an “extraordinary circumstance?” We revisit this question below in our discussion of Samsung v. Maxell.
In addition, and contrary to the Vidal Guidance, the Boalick Guidance instructs application of the Fintiv factors to proceedings before the International Trade Commission (ITC). Also contrary to the Vidal Guidance, the Boalick Guidance states that a Sotera stipulation is highly relevant and should be considered in balancing the Fintiv factors, but will not be dispositive. Finally, and contrary to the Vidal Guidance, compelling merits of a given IPR petition will not be dispositive in the Board’s Fintiv analysis.
Consistent with the Vidal Guidance, the Boalick Guidance allows the Board to consider median time-to-trial and judge case load, without regard for whether such evidence is presented by the parties. The Board’s Fintiv analysis may include “any evidence…that bears on the proximity of the district court’s trial date or the ITC’s final determination target date, including median time-to-trial.”
The Potential Effects of Rescinding the Vidal Guidance
One of the most discussed aspects of the Vidal Guidance was its instruction to consider whether a petition’s merit is compelling when Fintiv Factors 1 through 5 indicate that the Board should exercise its discretion to deny the petition. Compelling merits could override the remaining Fintiv factors. The rescission appeared to negate that instruction. For example, under the Boalick Guidance, it is clear that the Board may deny institution even in the face of a petition with compelling merits. Such denial would leave the determination of validity solely in the hands of a district court or jury, and would prevent administrative patent judges (APJs) who are familiar with patent law and technology, from adjudicating validity.
Additionally, the rescission allows the Board to deny institution even when the petitioner files a Sotera stipulation, agreeing not to present in district court litigation any invalidity challenges that are or could have been presented to the Board. Such a denial may be a missed opportunity to reduce litigation costs, as review by the Board could, for example, simplify invalidity contentions and expert opinions, reduce the number of dispositive motions, and reduce trial time.
A third effect of recission is consideration of time to trial. Fintiv Factor 2 specifically identifies “the court’s trial date” as the date to be considered against the Board’s projected statutory deadline. The Vidal Guidance required the Board to consider median time-to-trial for the relevant district, as well as “number of cases before the judge in the parallel litigation and the speed and availability of other case dispositions.” Vidal Guidance at 9. This approach took into account the realities of litigation by recognizing that trial dates slip routinely. If Fintiv Factor 2 is strictly interpreted, the rescission could remove median time-to-trial and the district court judge’s case load from consideration, forcing the Board instead to consider an artificially early trial date and prompting discretionary denial. This again misses an opportunity to reduce litigation costs, and fails to leverage the legal and technical expertise of APJs.
Recent Examples Regarding the Current Analysis
Petitioners and Patent Owners are already starting to see the effects of the rescission, and the Boalick Guidance. Here are some examples.
Daiichi Sankyo v. Seagen (PGR2021-00030)
Here, we have a PGR proceeding that was instituted over two years after its petition was filed. It is entirely possible that this PGR finally was instituted because of the Vidal Guidance. After initially denying institution in June 2021, the Board instituted PGR on April 7, 2022, followed one day later by the jury verdict that the challenged claims were valid on the same grounds presented in the petition. Because of the jury verdict, in July 2022 the Board denied institution. However, the Precedential Opinion Panel then required the Board to review the merits without considering the jury verdict. The Board then found compelling merits. Pursuant to the Vidal Guidance, the Board re-instituted review in February 2023.
This resulted in a final written decision that invalidated all challenged claims, contrary to what a jury found in the parallel district court proceeding on identical grounds as those in the petition—written description, enablement, and anticipation by the same prior art. The patent owner appealed to the Federal Circuit. Less than one year later, the Vidal Guidance was rescinded.
Samsung v. Maxell (IPR2024-00867)
The Board instituted review based solely on the petitioner’s submission of a Sotera stipulation, without applying any of the other Fintiv factors. In early January 2025, the patent owner requested Director Review of institution, but the Director denied the request. After rescission of the Vidal Guidance, the patent owner requested Director Review a second time. The timing of the request was outside of the filing allowances established by the Boalick Guidance but was submitted before the Boalick Guidance. The Director Review request is pending. There are other, similar cases, including Apple v. Masimo (IPR2024-00244), Motorola v. STA Group (IPR2023-01295), and Provisur v. Weber (IPR2024-00235).
Motorola v. Stellar (IPR2024-01205)
Petitioner submitted a Sotera stipulation and, as a result, the Board granted the petition in February 2025 after weighing the other Fintiv factors. In early March 2025, immediately after the rescission of the Vidal Guidance, patent owner requested Director Review of the institution decision. On March 28, Director Stewart vacated the institution decision and denied the petition. The Director noted the district court’s and the parties’ substantial investment in the litigation (Fintiv factor 3) (the parties having already served extensive contentions and opening and rebuttal expert reports, conducted depositions, and the Court having held a claim construction hearing and construed disputed claim terms). The Director also noted that the scheduled trial date was eleven months before the statutory deadline for the final written decision (Fintiv factor 2). Additionally, the Director identified significant overlap between invalidity issues at the Board and in district court (Fintiv factor 4), despite the Sotera stipulation—the defendant (being one and the same as the petitioner) was putting forth invalidity arguments in the district court that combined prior art asserted in the petition with system prior art (which is not available in IPR proceedings). As such, the IPR no longer could function as a “true alternative” to the district court proceeding.
Beijing Intellectual Property Court: Artificial Intelligence Models Can Be Protected with the Anti-Unfair Competition Law, Not the Copyright Law
In what is believed to be a case of first impression in China, on March 31, 2025, the Beijing IP Court, on appeal, ruled that Douyin (TikTok) was entitled to protection of its artificial intelligence (AI) transformation model under Article 2 of the Anti-Unfair Competition Law but not under Copyright Law. Specifically, the Beijing IP Court upheld the original judgement against the defendant/appellant Yiruike Information Technology (Beijing) Co., Ltd. (亿睿科信息技术（北京）有限公司) for violating Douyin’s competitive interest in its transformation model with the B612 app.
Example transformations. Column 1: Selfie, Column 2: Baidu; Column 3: Douyin; Column 4: Yiruike .
The transformation special effects model (including architecture and parameters) was trained by Douyin Company using animated character data hand-drawn by artists and corresponding real-life data, and the model architecture and parameters were continuously adjusted. The model is used for the transformation special effects function in the Douyin application, which can convert photos and videos taken by users in real time into animated character styles. The B612 application operated by Yiruike later launched the animated girl character special effects function, which can also achieve real-time conversion of animated character styles. Douyin believes that Yiruike’s animated girl character special effects model and its transformation animated character special effects model are highly similar in architecture, parameters, etc., constituting infringement, and requested damages and an injunction. After comparison, Beijing IP Court ruled that the models of both parties are highly identical in architecture, convolutional layer data, etc. and Yiruike failed to submit evidence of substantial differences.
The Beijing IP Court pointed out that the competitive interest claimed by Douyin Company in this case is protected by Article 2 of the Anti-Unfair Competition Law and includes the transformation animated character special effects model (the architecture and parameters claimed by the plaintiff in this case). According to the evidence in the case, it can be determined that Douyin Company has invested a lot of resources in the research and development of the transformation special effects model, and the model of the transformation special effects (architecture and parameters) has obtained innovative advantages, operating income and market benefits for Douyin Company, which should constitute a competitive interest protected by the Anti-Unfair Competition Law. Based on the facts ascertained in this case, it can be determined that Yiruike Company directly used the architecture and parameters of the transformation special effects model of Douyin Company without permission. The alleged behavior violated the recognized business ethics in the field of artificial intelligence models, infringed the legitimate rights and interests of Douyin Company, disrupted the market competition order and damaged the long-term interests of consumers, and constituted unfair competition under Article 2 of the Anti-Unfair Competition Law.
Accordingly, the Beijing IP Court upheld the lower court’s decision.
The case numbers are (2023）京73民终3802号 and (2023）京73民终3803号. A redacted copy of the decision can be found here (Chinese only) courtesy of 知产宝.
The Non-Compliant Cat in the Hat
So, just before Easter, in 1957, a little book you may have heard of, called The Cat in the Hat, made its first appearance. Theodore Geisel — writing under the name “Dr. Suess” — later said that of all his children’s books, he was proudest of this one, because “it had something to do with the death of the Dick and Jane primers,” which he thought would bore any child to tears. In honor of this occasion, here are a few “fun facts” about the book that has taught millions of children how to read:
Geisel was given a word list by his publisher and told that he needed to work them into his book. He was so frustrated with this approach that he decided to scan the list and instead create a story based on the first two words he saw that rhymed, which were “cat” and “hat.”
The Cat in the Hat has been translated into 12 languages, including Latin, where it bears the title “Cattus Petasatus.”
In 1999, the U.S. Postal Service issued a stamp featuring the Cat in the Hat.
The NY Public Library’s list of “Top 10 Checkouts of All Time” shows The Cat in the Hat as number 2. But we imagine it would be ranked number 1 if Dr. Suess had stuck with his original text, which was titled …
The Non-Compliant Cat in the Hat
Work was all dreary, meetings set for all day,As we reviewed Outlook, grayed out all the way.I sat there with Sally, we sat there, we two.And I said, “How I wish we had something better to do!”
But with meetings and Zoom all we could do was to
Sit!Sit!Sit!Sit!
And these interns did not like it, not one little bit.
And then … something went BUMP!How that bump made us jump!We looked! And what we saw was better than our Slack chat!We looked! And we saw him! The Non-Compliant Cat in a Hat!
The hat was all crazy, it had slogans galore!That made fun of our procedures, and said “Compliance’s a snore!”And “internal controls, are great, for do-nothing bores!”And “training is worse than fourteen bedsores!”
And he threw the door aside, it clanged with a bang,In strutted a Cat with that hat that just sang!“Hello, my dear interns! Why so glum and so sad?I’ve come to bring fun, let’s make this less drab!”
Sally looked at the Cat with a skeptical stare,“Who are you, and what’s with that hat and that hair?”“Oh, I’m the Cat, and I’m here to have fun!Forget all the rules; let’s get this day done!”
But just then, from a bowl on the corner desk bright,Swam a Fish in a bowl, trying to bring compliance to light.“Please listen to me! Don’t let chaos unfold!The rules are important, their value is gold!”
But the Cat just laughed, waving a paw in the air,“Who’s heard of a CCO Fish? And why should we care?”There’s so many fun things, let’s send out this contract,To send goods to Iran, we won’t tell OFAC!”
“Compliance screening, well we’ll steer clear of that,And play a good game, it’s called ‘Let’s Ship It Fast!’We’ll send our great goods, to any place that will buy —Even to Iran, where demand’s flying high!”
The Fish started gasping: “You’d cause us much pain,Such shipping’s forbidden, compliance down the drain!Sanctions and penalties, fines and disgrace,If we follow your tricks, it’s jail we’d face!Hey! You two interns, can’t you see what’s at stake?If you follow this Cat, big trouble you’ll wake!”
“Oh, Fishy, relax! You’re such a drag,All you care about is waving the compliance flag!If you’re so scared of OFAC, let’s play ‘Let’s Bribe with a Fish,’In some places, it’s harmless, and really delish!”
But the Fish would not have it, his voice was quite stern,“Now, Cat, that’s a violation, and work we should spurn!Anti-corruption rules are clear, offering fishy quid pro quo,Could cause us all trouble, if about it we know!And what do you mean, when you say ‘its delish?’I especially dislike bribes that involve eating this Fish!”
“Have no fear!” said the Cat, “there’s so much we can do!If we are not stuck in the compliance glue!Let’s skip the audits! Who needs those old things?And trade secrets? Hacking’s fun, let’s see what that brings!Who needs policies, forms, and approvals galore?I’ll say it again, compliance’s a bore!”
And the Cat, then he said, “silly Fish, don’t be mad —I just want to show them some fun to be had!How about a game? We’ll call it ‘Price Fixing Fun!’We’ll chat with competitors to help everyone!How silly it is, to keep our prices so low,When a chat or a call could make profits grow!”
But the Fish swam around in his bowl, oh so fast,This new game made the CCO Fish quite aghast!“Antitrust law says ‘No way! Conspiring’s forbidden today!’You will all land in jail, price fixing’s illegal per se!”So, Cat, take your tricks to some other place!Your understanding of compliance is very off-base!”
But the Cat was undeterred, by our compliance construct,As he hopped and he jumped onto our Code of Conduct.“Look at me! Look at me! Look at me NOW!Non-compliance is fun, but you have to know how!”
“I can ship controlled goods, use a license that’s fake,Waiting for BIS, that would make my mind ache!I can cook these books! Hide agents all on the take!Accounting accuracy is for nerdy fruit cakes!”
“From your Code of Conduct, I can jump on this desk!Your mindless compliance, I find quite grotesque!I can bribe with aplomb, the hot line I’ll finesse!But that is not all. Oh, no. That is not all, I guess ….”
That is what the Cat said … then he fell on his head!Knocking off his hat, on the Code of Conduct he went!He knocked down the Fish, who fell into a pot!Who said, “Would HR approve Fish assault, no they would not!”
“Now look what you did,” said the Fish to the Cat.“Our compliance’s a mess, we’ll never get it back!You’ve bribed everyone, conspired to fix prices, too!Shipped goods to Iran, flushed our controls down the loo!”You SHOULD NOT be here, undermining our compliance, so true,It helps us control risk and makes sure fines don’t accrue!”
“You’ve crossed too many lines!” cried the Fish with despair,“Of our published red flags, you were never aware!The auditors are coming, and they won’t be so nice!You followed no rules, now you’ll pay a great price!”
“But I like to be here. Oh, I like it a lot!”Said the Cat who loves hats, to the Fish in the pot.“I will NOT go away. I do NOT wish to go!And so,” said the Cat, “so, so, so ….”
“I will show you another good game that I know!”
And then he ran out, he practically flew,Then he came back, with compliance gurus!“Now look at this trick,” said the Cat, with a grin,Let’s play one last game, called ‘Comply and We Win!’”
“The compliance gurus, named Risk One and Risk Two,Know compliance failures are things that could bite you.These compliance gurus, with their suits oh-so-neat,For controlling risk, their controls can’t be beat!”
And Sally and I, did not know what to do.So we had to shake hands, with Risk One and Risk Two.But CCO Fish said, “No! No! Those gurus, please make them flee,Risk is managed through our controls, and should always be!”
“Have no fear, little Fish,” said the Cat with the Hat.“Let Risk One and Risk Two work,” and he gave them a pat.“You will see they will say, what I did was not bad,Sure I skirted some rules, but you’ll see they’re not mad!”
But what they next said, turned the Cat’s words right on their head,As they surveyed the damage, they put his non-compliance to bed!“You see,” said Risk One, “This Cat’s right out of line!No checks, no controls, compliance far from divine!”And Risk Two added, “This Cat needs training, that much is clear!Policies are great, but only if everyone adheres!”
The Cat looked remorseful, his fun now all gone,And he stared at his Hat, that started the non-compliance run.He took a deep breath, as realization it dawned,That controlling risk, is everyone’s bond.“Let’s fix all the chaos, I now see what I’ve done,It never works out, doing compliance end runs!”
Then the CCO Fish said, “Look! Look!” And our Fish shook with fear,“The auditors are coming! They are on their way here!Oh, what will they do to us? What will they say?Oh, they will not like finding compliance circumvented this way!”
“So, DO something! Fast!” said the Fish. “Do you hear!I saw them. The auditors! The auditors are near!So, as fast as you can, think of something to do!Do your best, Risk One and Risk Two! Show you’re compliance gurus!”
So Risk One and Risk Two, moved at a fast pace,To reassert compliance, from last to first place!“You can’t ship to Iran!” Risk One said with a frown,“That’s OFAC’s rule, so let’s break it all down.”Risk Two wagged a finger, “No bribing with fish!With or without lemon, let’s cancel that wish!”
They sorted each paper, they checked every box,They tightened procedures, secured every lock.“Compliance,” they chanted, “is here to stay!We’ll make sure this company acts the right way!”Then Risk One and Risk Two, well they dragged out the bad Cat,Who barely managed to first grab his sad hat.
Then the auditors came in, and they said to us two,“Did you work very hard? Tell me. What did you do?Did you follow our controls, compliance earning all plaudits,What will we find, if we do a quick audit?”
And Sally and I did not know, what to say, what to do.Should we tell the things, that today we did do?Should we tell them about it? Now, what SHOULD we do?
Well … what would YOU do, if the auditors asked YOU?