Federal Circuit Touches on Appellate Standing and Prior Art Determinations in the Context of Post-Grant Review Proceedings
In CQV Co. Ltd. v. Merck Patent GmbH, the Federal Circuit addressed (1) the interaction of indemnification agreements with Article III standing for appeals of post-grant review decisions of the Patent Trial and Appeal Board; and (2) whether all evidence must be addressed by the Board when qualifying prior art.
Background
Merck Patent GmbH (“Merck”) owns U.S. Patent No. 10,647,861 (the “’861 Patent”), which is directed to the composition of an additive flaking for paints, industrial and automotive coatings, printing inks, cosmetics, and effect pigments. Merck sold pearlescent pigments utilizing the invention of the ’861 Patent under the trademark Xirallic.
CQV Co. Ltd. (“CQV”) sells a competing pearlescent pigment under the trademark Adamas. Merck sent communications to CQV customers alleging that CQV’s Adamas products potentially infringed Merck’s ’861 Patent. CQV petitioned the Board for post-grant review of the ’861 Patent in February 2021.
Before the Board, the parties disputed several issues. One of these issues was the prior art status of an early batch of Xirallic named “Sample C.” In its August 2022 final written decision, the Board held that CQV had not provided adequate evidentiary support to show that Sample C constituted prior art.
CQV appealed the decision to the Federal Circuit, arguing that the Board did not consider relevant evidence. Merck challenged CQV’s Article III appellate standing.
Issues
Did CQV have adequate Article III standing to appeal the Board’s final written decision to the Federal Circuit?
Did the Board err in finding that CQV failed to show, by a preponderance of the evidence, that Sample C constituted prior art against Merck’s ’861 Patent?
Reasoning and Outcome
(1) CQV did have adequate Article III standing to appeal the Board’s final written decision to the Federal Circuit.
As the party appealing a final written decision by the Board, CQV had the burden of showing that it suffered an injury in fact sufficient to confer Article III standing. Gen. Elec. Co. v. United Techs. Corp., 928 F.3d 1349, 1353 (Fed. Cir. 2019). To establish injury in fact, it is generally sufficient to show that the appellant “has engaged in, is engaging in or will likely engage in activity that would give rise to a possible infringement suit.” Grit Energy Sols., LLC v. Oren Techs., LLC, 957 F.3d 1309, 1319 (Fed. Cir. 2020).
CQV filed declarations alleging that CQV had entered into an indemnification agreement with at least one customer as a result of Merck’s communications. According to the Federal Circuit, although Merck’s communications did not identify any specific CQV product as infringing Merck’s ’861 Patent, standing does not require such a specific assertion of infringement by a patentee.
Because at least one customer purchased CQV’s Adamas product in the US, Merck communicated with that customer, and CQV formed an indemnity agreement with that customer, CQV had established Article III standing to appeal the Board’s final written decision.
(2) The Board erred in finding that CQV failed to show, by a preponderance of the evidence, that Sample C constituted prior art against Merck’s ’861 Patent.
In a post-grant review, the petitioner bears the burden to show that an asserted reference qualifies as prior art by a preponderance of the evidence. To meet this burden CQV presented several pieces of evidence relating to the prior art status of Sample C. The Board’s decision did not address two items of testimonial evidence: testimony that Xirallic could generally be purchased by customers after it was released by quality control, and testimony that the quality control for the Adamas products required two to three weeks. The Board held that the other pieces of evidence, taken together and unrebutted, failed to establish that Sample C was probably available to the public before the April 30, 2012 critical date.
“The Board is obligated to articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choice made.” Alacritech, Inc v. Intel Corp., 966 F.3d 1367, 1372 (Fed. Cir. 2020). “Failure to explicitly discuss every issue or every piece of evidence does not alone establish that the tribunal did not consider it,” Novartis AG v. Torrent Pharms. Ltd., 853 F.3d 1316, 1328 (Fed. Cir. 2017). The Federal Circuit characterized the testimony omitted by the Board as “highly material and unrebutted evidence” that Sample C was available to the public before the critical date.
Because the Board discarded this testimony evidence without explanation, the Federal Circuit could not reasonably discern whether the Board followed a proper path in determining that CQV failed to show that Sample C constituted prior art. The Federal Circuit vacated the Board’s decision and remanded with instructions for the Board to explain its reasoning with respect to all the evidence presented.
Make Protecting Your UK and EU Product Packaging and Labels Your New Year’s IP Resolution. Part 2: Combatting Dupes and Copycats in the United Kingdom
Everybody knows that trade marks are necessary to protect a brand’s logo and name, and a lot of people know that registered designs are a powerful tool in stopping counterfeit goods, but did you know these rights can also be used to help protect against unwanted “dupes” (also known as “copycat” or “lookalike” products)? Dupes/copycats deliberately mimic a successful product, and they imitate the look and feel to unfairly benefit from the goodwill attached to the product through the “halo effect,” i.e., the impression that if it looks like the original, it must be as good.
Dupes in the United Kingdom
However, there have been some useful cases over the last few years, including a very beneficial UK Court of Appeal case handed down in January this year, and each contains helpful guidance for brands looking to use registered designs and trade marks to protect against dupes and lookalikes:
There is ever a lament from brands that there are not enough legal tools in the United Kingdom to prevent copycats from using a hero product’s unique look, feel or effect to maximise their own sales. We can see this through a long line of caselaw where a passing off claim (an English law tort where a trader misrepresents its goods or services as being those of another) has failed to meet the high threshold of “misrepresentation,” i.e., consumers must actually be deceived and believe the goods to be those of the claimant.
In January 2025, Thatchers won its appeal against the decision in January 2024, and it successfully established that supermarket Aldi infringed its trade marks by selling a copycat cider with similar labelling to Thatchers’ cloudy lemon cider packaging (see our articles here and here).
Thatcher’s Trade MarkNote: The UK Court of Appeal found the judge had erred by not considering the three-dimensional use of the Thatchers’ mark as printed on the packaging and can.
Aldi’s Product
Key points to note:
The UK Court of Appeal found that the Aldi cider “rode on the coat-tails” of Thatchers’ cider, that Aldi purposefully intended to remind consumers of Thatchers’ trade mark, and that it was “entirely possible” to convey that a drink is lemon-flavoured without such a close resemblance; therefore, the similarity “cannot be coincidental.”
Aldi benefited by achieving significant sales with no promotional spending as a result of the “transfer of image,” which created an “unfair advantage.”
The Thatchers’ mark was found to have reputation despite a relatively short period of sales.
In March 2024, Lidl succeeded in upholding the decision that Tesco had infringed its trade marks (see our article here). Although this case it not a “dupe” or copycat case per se, it shows the power of clever trade mark registration strategies, as well as the importance of having trade mark registrations for key elements of branding.
Lidl’s Trade Marks
Tesco’s Sign
Key points to note:
The court found that a substantial number of customers would be misled into thinking that Tesco’s clubcard scheme and prices were a price-match to Lidl for equivalent goods.
In February 2024, the UK Court of Appeal upheld the decision that Aldi had infringed Marks & Spencer’s (M&S’s) registered designs, as their gin bottles did not create a different overall impression on the informed user (see our articles here and here).
M&S’s Design
Aldi’s Product
Key points to note:
The similarities between the designs were found to be “striking.”
A wide design freedom was found, which further highlighted the similarity between the products.
In 2021, William Grant & Sons, maker of Hendrick’s Gin, succeeded in its claim in Scotland for interim relief against the sale of Lidl’s Hampstead Gin. The claim was successful because they were able to show reputation in the Hendrick’s Gin trade mark and that the Hampstead product took unfair advantage of, or was damaging to, the distinctive character or the repute of the Hendrick’s Gin trade mark.
Key points to note:
The claim failed on passing off and a pure infringement claim.
Similarity was found in the dark, apothecary-style bottle, as well as the diamond label shape.
The claim was ultimately successful because of the reputation in the Hendrick’s Gin bottle, so there was no need to demonstrate customer confusion.
Key Learning for Brands
Designs
For new products, register a design wherever possible, as it is easier to succeed in a claim for infringement, and there is also no initial validity review of designs by the UKIntellectual Property Office.
There is no need to prove confusion or reputation for design infringement claims; a claimant only needs to show the same overall impression on the informed user. This can mean less legal spend on obtaining “confusion” and “reputation” evidence.
You can file a registered design in the United Kingdom (and the European Union, if relevant) with a deferred publication date if the release is not immediate to protect the design as soon as possible.
Designs can protect the product’s appearance in whole or in part for unique stylistic elements, such as lines, contours, colours, shapes, texture and materials (e.g., sole patterns on footwear).
Trade Marks
When developing a product or considering protection for a product already on the market, think about what trade marks could be filed to protect the look/feel of the label or product. In particular, consider the following:
The shapes and colours of the product and label.
Filing simplistic versions of the packaging or labelling design, e.g., filing a label without the brand name if certain elements are unique enough.
Filing monochrome versions of the marks, as well as colour marks if the pattern/imagery is distinctive.
Any stylistic positioning elements that could be filed as position marks (although careful drafting is necessary to make sure the trade mark is sufficiently clear to be enforceable (see Thom Browne v Adidas)).
If the overall shape of the product could be a 3D mark.
If it is a product with reputation, think carefully about what makes the product unique and how it stands out in the market.
A word of caution on trade marks: you must have an intention to use or already use the trade marks in some way and cannot only file the trade marks as a legal weapon.
We have not touched on copyright here, but if design and trade mark claims are not available, a claim under copyright could be another avenue to explore.
Part 1 of this series on protecting unique packaging designs in the European Union can be found here.
Delaying Examination of Continuing Applications Could Sabotage USPTO Goals
Rumor has it that one of many behind-the-scenes changes being implemented at the USPTO relates to how (or when) continuing applications are taken up for examination. Typically, an examiner may give priority to a continuing application based on its U.S. priority date. That could change, with placement in the examination queue being based on the actual filing date of the continuing application itself. This effort to move continuing applications to the back of the line may be spurred by a narrative that continuation applications are a burden on the USPTO and hindrance to competition, but its implementation could sabotage important USPTO’s goals.
Loss of Examination Efficiency
One reason an examiner may choose to give priority to a continuing application is an expectation that it will be relatively easy to examine. The examiner is already familiar with the technology and the prior art, and so can immediately focus on evaluating patentability of the claims. Moving continuing applications to the end of the examination queue would lose these efficiencies. The current average time to examination is over 20 months and climbing. With a two year gap between examination of a parent application and its child, it is likely the examiner will have to spend more time getting reoriented to the subject matter of the application and its place in the state of the art.
Loss of Maintenance Fee Revenue
A more concrete impact of de-prioritizing examination of continuing applications is the consequent loss of maintenance fee revenue. The current USPTO fee schedule includes a new surcharge for continuing applications filed “late” in their 20-year term that is designed to “partially offset foregone maintenance fee revenue.” The USPTO justified the new fee by explaining that maintenance fee payments are essential to the USPTO’s fiscal health, “account for about half of all patent fee collections,” and “subsidize the cost of filing, search, and examination activities.” So, why would it implement internal changes that will leave more maintenance fees on the table?
Maintenance fees are due 3.5, 7.5 and 11.5 years after a patent grants, but a patent’s potential term is measured from its earliest non-provisional U.S. priority date. This means a patent granted more than 8 years after its priority date may expire before one or more maintenance fees must be paid (as illustrated in the USPTO’s figure below). But this also means the USPTO has incentive to expedite the examination and grant of continuing applications.
This figure assumes a continuing application will be granted 30 months from its actual filing date, but also illustrates how delays in grant can cause one or more maintenance fee deadlines to fall off the chart and not be paid.
Take a continuing application filed just after 6 years from the start of its 20-year term (between Child C and Child D in the figure) and subject to a new surcharge of $2700. If this application is granted after 30 months (2.5 years), its 20-year term will expire just as the third maintenance fee would be due (M3 in the figure), so that fee will not be paid. On the other hand, if the patent is granted within 1.5 years, it is at least possible the patent owner would want to maintain it for another year—and probable if it is protecting an approved pharmaceutical product. At current maintenance fee rates, that means the USPTO is potentially losing $8,280 per application by not striving to expedite examination and grant of continuing applications subject to the $2700 surcharge.
A continuing application filed just after 9 years from the start of its 20-year term (between Child D and Child E in the figure) and subject to a new surcharge of $4000 is never going to pay the last maintenance fee, but the sooner the patent is granted, the more likely the patent owner will want to pay the second maintenance fee (M2 in the figure), which currently is $4040. If it takes 30 months to grant, the second maintenance fee will be due one year before expiration of the 20-year term, but if it takes only 18 months to grant, there will be two years left when the second maintenance fee falls due. That means by expediting examination and grant of continuing applications subject to the $4000 surcharge the USPTO could double the incentive to pay the $4000 maintenance fee.
Data-Driven Decision Making
In this era of data-driven decision making, the USPTO should be able to mine its examination metrics to confirm that prompt examination of continuing applications supports an efficient examination process, and it should be even more straight-forward to mine maintenance fee payment metrics to estimate the additional maintenance fee revenue that could be generated by prioritizing examination and grant of continuing applications. When crunching the numbers, the USPTO should take into account that patent owners willing to pay the new surcharges already place a high value on these applications, and so may be more likely to pay maintenance fees that fall due toward the end of the patent’s 20-year term.
If the data indicate that putting continuing applications at the back of the line undermines USPTO examination goals and exacerbates loss of maintenance fee revenue, the USPTO should revoke its decision to de-prioritize examination of continuing applications. In the meantime, stakeholders should be aware of the USPTO’s negative view of continuing applications, and look for opportunities to rebut the narrative that continuing applications are less deserving of the USPTO’s examination resources than so-called “new” applications.
5-Year Prison Term for Counterfeiting Burberry in China
On March 13, 2025, the Shanghai Procuratorate Third Branch announced that the Shanghai Third Intermediate People’s Court upheld a 5-year prison term and 2 million RMB fine for the crime of counterfeiting registered trademarks belonging to Burberry. In 2021, the defendant, Gong XX, resumed operating an online store “XXX Overseas Shopping” and started selling counterfeit Burberry brand clothing. The cost of making a single piece of clothing involved in the case ranged from 500 to 700 RMB, but the selling price could reach 3,500 RMB per piece. From 2021 to 2023, Gong sold the clothing involved in the case in his own online store and WeChat Moments, with sales reaching more than 4 million RMB.
Counterfeit clothing involved.
In February 2023, the Jing’an Temple Police Station received a report from the public that they spent thousands of RMB to buy a brand-name windbreaker from the “XXX Overseas Shopping” online store, but found that it was a fake. Based on the evidence, the public security organs quickly launched an investigation and arrested the suspect Gong. Afterwards, the Jing’an District Procuratorate indicted Gong at the Jing’an District Court in accordance with the law on the grounds that Gong committed the crime of counterfeiting registered trademarks. In November, the court made a first-instance judgment, sentencing Gong to five years in prison for the crime of counterfeiting registered trademarks and a fine of RMB 2 million. Gong appealed to the Shanghai Third Intermediate People’s Court. In February 2024, the court ruled on the second instance of the counterfeit registered trademark case handled by the Third Branch, dismissing Gong’s appeal and upholding the original judgment.
On February 23, 2024, the Shanghai No. 3 Intermediate People’s Court held a second-instance trial of the case, and the prosecutor in charge of the Third Branch attended the court.
During the trial, Gong argued that his “Knight” graphic was different from the mark registered by Burberry. However, the prosecutor pointed out that identical trademarks include not only “completely identical” but also “basically indistinguishable.” The Burberry trademark has been widely used and promoted for a long time, and has a high market visibility and strong distinctiveness. Comparing Gong’s counterfeit logo with the registered trademark of the right holder, there is basically no difference in the overall shape and arrangement of elements, with only slight differences in individual lines, which makes it impossible for ordinary consumers to distinguish them in appearance, thus misleading the public. Therefore, the “Knight” graphic trademark used by Gong can be identified as “a trademark identical to the registered trademark”.
During the trial, Gong also argued that the “BURBERRY BLACK LABEL” text trademark has not been used in China for several years, and the series of clothing is only sold in a certain country and has been discontinued. Based on this, he believed that reference should be made to the relevant provisions in the civil field where infringers of trademarks “not used for three consecutive years without justifiable reasons” may not be liable for compensation, and thus his counterfeiting behavior should not be considered a crime in the criminal field.
The prosecuting attorney pointed out that China’s criminal law currently does not have special provisions for the above situation. According to the certification letter issued by Burberry and the series of trademark registrations, “BURBERRY BLACK LABEL” is a legally registered trademark in China and is within the validity period, approved for use on clothing products, and should be protected by law. At the same time, the products of the involved text trademark still circulate in the secondary market in China, and the “BURBERRY BLACK LABEL” text trademark still plays the core function of identifying the brand.
In addition, “BURBERRY” itself is also a registered trademark of Burberry. The arrangement of the “BURBERRY BLACK LABEL” word trademark is: “BURBERRY” and “BLACK LABEL” are arranged in separate lines, and the “BURBERRY” word is enlarged, bolded and highlighted. “BLACK LABEL” itself only means “black label”, which is a common industry term for distinguishing product categories and is not a distinctive element of the trademark. According to regulations, if only the common name of the product, model number and other elements lacking distinctive features are added to the registered trademark, and it does not affect the distinctive features of the registered trademark, it can be determined as “a trademark identical to its registered trademark.”
The original announcement is available here (Chinese only).
Judge Connolly (D. Del.) Overturns $96 Million Molecular Diagnostics Jury Verdict, Finds Patents Invalid Under § 112
Synopsis:
In a case with implications for the litigious molecular diagnostics space and written description law, Chief Judge Connolly of the District of Delaware reversed a $96 million jury verdict in favor of Natera, Inc. (Natera) against its competitor CareDx, Inc. (CareDx).1 In January 2024, a jury found that two of CareDx’s cell-free DNA (cfDNA) blood tests (AlluSure and AlloSeq) infringed two of Natera’s patents and awarded Natera damages of approximately $96 million.2 CareDx filed a motion for judgment as a matter of law, asking Chief Judge Connolly to find the asserted patents invalid for lack of written description under 35 U.S.C. § 112. On February 24, 2025, Judge Connolly granted CareDx’s motion and found the asserted claims of Natera’s patents invalid for lack of written description.3
1. Patent Dispute Between CareDx and Natera: Background and Claims
CareDx sells AlloSure and AlloSeq—blood tests that are used to assess whether a transplanted kidney is being rejected by the recipient’s body. Specifically, AlloSure and AlloSeq are used to detect cfDNA, which “is fragmented DNA in the bloodstream that originates from cells undergoing cell injury and death.”4 When a transplanted kidney is being rejected, “donor-derived cell-free DNA (dd-cfDNA) increases in the blood” of the transplant recipient.5 AlloSure and AlloSeq allow for the detection of dd-cfDNA in a transplant recipient’s blood.
Natera asserted two patents, U.S. Patent Nos. 10,655,180 (the ’180 patent) and 11,111,544 (the ’544 patent) (collectively, the “asserted patents”), related to methods for preparing, amplifying and detecting cfDNA.6 Relying on the insight that dd-cfDNA will be present in different fractions depending on whether the transplanted kidney is being accepted or rejected by the recipient, Natera’s patent claims were directed to extracting and amplifying cfDNA from a patient at given locations on the genome:
A method for preparing a preparation of amplified DNA derived from a biological sample of a second individual useful for determining genetic data for DNA from a first individual in the biological sample, the method comprising:
Extracting cell-free DNA from the biological sample;
Preparing a preparation of amplified DNA by amplifying a plurality of target loci on the cell-free DNA extracted from the biological sample to generate amplified DNA;
Analyzing the preparation of amplified DNA by sequencing the amplified DNA using sequencing-by-synthesis to obtain genetic data of the plurality of target loci, and determining the most likely genetic data for DNA from the first individual based on allele frequencies in the genetic data at the plurality of target loci.
Asserted claim 14 of the ’180 patent recites a similar method, directed to identifying SNPs (Single Nucleotide Polymorphisms), as a way of assessing the relative amount of DNA in each sample:
A method for measuring an amount of DNA in a biological sample, the method comprising:
Performing a targeted PCR amplification for more than 100 SNP loci on one or more chromosomes expected to be disomic in a single reaction mixture using more than 100 PCR primer pairs, wherein the reaction mixture comprises cell-free DNA extracted from a biological sample of a subject comprising DNA of mixed origin, wherein the DNA of mixed origin comprises DNA from the subject and DNA from a genetically distinct individual, wherein neither the subject nor the genetically distinct individual is a fetus, wherein the DNA of mixed origin comprises DNA from a transplant, and wherein the amplified SNP loci comprise SNP loci on at least chromosome 1, 2, or 3;
Measuring a quantity of each allele at a plurality of amplified SNP loci that comprise an allele present in the genetically distinct individual but not the subject, wherein the quantity of each allele at a plurality of amplified SNP loci are measured by high-throughput sequencing;
Measuring an amount of the DNA from the genetically distinct individual in the biological sample using the quantity of each allele at the SNP loci and an expected quantity of each allele at the SNP loci for different DNA fractions,
Wherein the method is performed without prior knowledge of genotypes of the genetically distinct individual.
At trial, CareDx argued, among other things, that the asserted claims were invalid for lack of written description under 35 U.S.C. § 112. The jury disagreed and found that the asserted patents were not invalid.
CareDx filed a motion for judgment as a matter of law under FRCP 50(b), arguing that no reasonable jury could find that the specifications of the asserted patents satisfy the written description requirement in view of the evidence presented at trial.
2. Judge Connolly’s Opinion
Beginning with the ’544 patent, Judge Connolly explained that claim 21 recites “a method by which (1) cell-free DNA is extracted from a biological sample of one individual (i.e., the ‘second individual’); (2) target loci on the extracted cell-free DNA is ‘amplified’ and ‘sequenc[ed by] synthesis to obtain genetic data’; and (3) ‘the most likely genetic data’ for DNA from another individual (i.e., the ‘first individual’) in the obtained genetic data is ‘determin[ed]’ from that data ‘based on allele frequencies.’”7 Thus, to satisfy the written description requirement, the specification must show that the inventors possessed the full scope of this claim, including the individual claim elements and all three claim elements “as an integrated whole.”8
Judge Connolly first focused on whether the specification “adequately describes the combination of the claimed steps as an integrated whole.”9 CareDx’s expert, Dr. Brian Van Ness, testified that the specification does not describe all three of the claimed steps being performed in combination. Dr. Van Ness’s testimony was largely unrebutted—Natera cited only two passages from the specification, admitted that the specification lacked working examples, and otherwise relied on the testimony of its expert, Dr. John Quackenbush.
Judge Connolly found Dr. Quackenbush’s testimony “conclusory” and “‘far too general’” to support the jury’s decision.10 Specifically, Dr. Quackenbush “never pointed to any text in the patent’s written description that would lead an artisan of ordinary skill to know that the inventor had invented a combination of those different pieces.”11 And Judge Connolly explained that the Federal Circuit has held that “pointing to an ‘amalgam of disclosures’ from which an artisan could have created the claimed invention does not satisfy” the written description requirement.12
Judge Connolly also explained that after CareDx introduced evidence that supports its written description position, it was Natera’s burden to produce evidence to rebut that position. But Natera did not produce any evidence beyond Dr. Quackenbush’s conclusory testimony. Because there was “no substantial evidence to support the jury’s finding of adequate written description,” Judge Connolly held that “judgment of invalidity of the asserted claims of the ’544 patent as a matter of law is warranted.”13
Likewise, Judge Connolly held that “[t]he ’180 patent’s written description… is inadequate as a matter of law for the same reason the ’544 patent’s written description is inadequate—i.e., Natera did not adduce at trial substantial evidence that the patent’s text shows that the inventor possessed the combination of the elements of the claimed methods.”14
3. Conclusion and Takeaways
In the competitive and litigious field of molecular genomics, where new applications (e.g., new computational approaches) for the underlying technology of high-throughput screening are being developed and patented, Judge Connolly’s decision suggests that placing all elements into a specification in piecing them together later may be insufficient. Instead, Judge Connolly’s decision underscores the importance of tying the individual components of an invention together in a patent specification, and that providing working examples of the inventions may be critical.
For patent litigators, Judge Connolly’s decision highlights several important points to be mindful of at trial. Judge Connolly held, consistent with Federal Circuit precedent, that if a patent broadly claims several components of an invention, the specification must disclose those elements “as an integrated whole” to satisfy the written description requirement. Pointing to disparate portions of the specification will not suffice if nothing is tying those elements together.
Judge Connolly’s opinion also underscores the importance of lawyers minding their burdens and ensuring that they have supported their arguments (including their expert’s testimony) with reliable evidence. This is especially true, and can be easy to overlook, where burdens shift from one party to the other, as was the case here.
Finally, this case shows that even after an adverse jury decision, it is still possible to prevail—but understanding how to proceed, and what issues to focus on, are critical. Here, CareDx chose to focus on a select number of issues in its motion rather than attempting to relitigate the full spectrum of issues the jury considered. In doing so, CareDx successfully invalidated the patents and avoided the $96 million in damages for which it was otherwise liable.
[1] Natera, Inc. v. CareDx, Inc., No. 20-38-CFC-CJB (D. Del.).
[2] Id., D.I. 460.
[3] Id., D.I. 558.
[4] https://labproducts.caredx.com/products/alloseq-cfdna
[5] Id.
[6] Natera asserted three claims of the ’544 patent (claims 21, 26, and 27) and two claims of the ’180 patent (claims 14 and 15) against CareDx.
[7] D.I. 558 at 8-9.
[8] Id. at 9.
[9] Id. at 10.
[10] Id. at 11 (quoting Juno Therapeutics, Inc. v. Kite Pharma, Inc., 10 F.4th 1330, 1336-37 (Fed. Cir. 2021)).
[11] Id.
[12] Id. (quoting Flash-Control, 2021 WL 2944592, at *3).
[13] Id. at 13.
[14] Id. at 14.
Chinese Court Again Rules AI-Generated Images Are Eligible for Copyright Protection
On March 7, 2025, the Changshu People’s Court announced that it had ruled that images generated with Artificial Intelligence (AI) are eligible for copyright protection. This is believed to be the second case regarding AI-generated images with the Beijing Internet Court ruled similarly in late 2023. In the instant case, Lin XX generated an image of a half heart in a city waterfront using Midjourney and further used Photoshop to edit the image. An unnamed Changsha real estate company then used the image in a WeChat posting and further built a three-dimensional installation based on the image at one of its developments.
The Court explained that it first reviewed the user agreement of the AI software involved in the case, and clarified that the assets and rights of the pictures produced by using the software service in the Midjourney software user agreement belong to the user, and logged into the creation platform in court to review the login process, user information, and the picture iteration process such as the modification of the prompts. The court held that Lin’s modification of the prompts and the modification of the picture through the image processing software reflected his unique selection and arrangement, and the image generated by this was original and belonged to the works protected by the Copyright Law. The two defendants violated the copyright by disseminating the picture on the Internet without the permission of the copyright owner. At the same time, it was determined that the copyright enjoyed by Lin should be limited to the picture, and the manufacturing of the three-dimensional installation was only based on the image. The real estate company’s design and construction of the corresponding installation did not constitute an infringement of Lin’s copyright. The court then ruled: 1. The infringing party publicly apologized to the plaintiff Lin on its Xiaohongshu [Red Note] account for three consecutive days; 2. The infringing party compensated the plaintiff Lin for economic losses and reasonable expenses totaling 10,000 RMB; 3. The plaintiff Lin’s other claims were rejected. After the first-instance judgment, neither the plaintiff nor the defendant appealed, and the judgment has taken legal effect.
This is the opposite of the decision reached by the U.S. Copyright Office in Zarya of the Dawn (Registration # VAu001480196) that did not recognize copyright in AI-generated images.
The original announcement can be found here (Chinese only).
USPTO’s Rescission of its Discretionary Denial Memorandum – Much Ado About Nothing?
In May 2020, the Patent Trial and Appeal Board (“PTAB”) panel in Apple Inc. v. Fintiv, Inc. (IPR2020-00019) denied institution of Apple’s petition in view of the advanced state of a parallel district court litigation and in doing so set forth six non-exclusive factors to be considered when a patent owner requested that the PTAB deny institution based on a parallel litigation. Those six factors would become known as the Fintiv factors and are:
whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;
proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision;
investment in the parallel proceeding by the court and the parties;
overlap between issues raised in the petition and in the parallel proceeding;
whether the petitioner and the defendant in the parallel proceeding are the same party; and
other circumstances that impact the Board’s exercise of discretion, including the merits.
After the Fintiv decision, discretionary denials in view of parallel district court proceedings spiked considerably.
In June 2022, then-USPTO Director Kathi Vidal issued a memorandum titled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation” (the “Interim Guidelines”) in response to this spike in discretionary denials. The Interim Guidelines stated that a petition would not be denied:
based on a parallel U.S. International Trade Commission (ITC) proceeding;
when a petitioner stipulates not to pursue in the parallel litigation the same grounds of invalidity as raised in the petition or any ground that could reasonably have been raised in the petition (referred to as a “Sotera stipulation” based on a PTAB decision by that same name); or
when a petition presents “compelling evidence” of unpatentability.
The Interim Guidelines also recognized that a court’s scheduled trial date, a key factor in Fintiv discretionary denials, is not always a good indicator of when trial will actually occur. Accordingly, the Interim Guidelines allowed parties to present evidence of the median time-to-trial statistics for civil actions in the district court where the parallel litigation was pending so that the panels could better gauge the likelihood of trial proceeding on the scheduled date.
Instances of discretionary denials notably declined following the issuance of the Interim Guidelines.
On February 28, 2025, the USPTO issued an unsigned notice stating that the Interim Guidelines had been rescinded and instructed parties and practitioners to again refer to the Fintiv and Sotera decisions when determining whether to deny institution based on a parallel proceeding.
The USPTO’s decision to rescind the Interim Guidelines was expected to increase the number of discretionary denials by removing petitioner’s safe harbors previously available under the Interim Guidelines. The first post-rescission decisions are now being published and shed some early light on what impact, if any, the rescission of the Interim Guidelines have on PTAB practice.
In short, rescission of the Interim Guidelines has had no impact, yet. Since February 28th, not even a single petition has been denied based on a parallel proceeding. A brief summary of some of the post-rescission PTAB institution decisions follows.
The first PTAB institution decision addressing the USPTO’s rescission of the Interim Guidelines was Savant Technologies LLC v. Feit Electric Company, Inc. (IPR2024-01357), published March 5, 2025. In this case, patent owner requested that the PTAB deny institution based on two related litigations in different districts—the Eastern District of Kentucky and the Northern District of Texas.
In considering the Kentucky litigation, where no trial date had been set, the board considered the parties’ proffered median time-to-trial statistics and found that the trial would likely occur “well after” a final written decision would issue.
In considering the Texas litigation, which was scheduled for trial on January 20, 2026, the panel noted that “[w]hen the parties filed their papers, the USPTO was following now-rescinded guidance” that allowed parties to present median time-to-trial statistics. The panel went on to state that the time-to-trial evidence was not relevant because “the time-to-trial statistics are congruent with the scheduled trial date.” In particular, the average time to trial statistics in the Northern District of Texas suggested an earlier trial date than was scheduled. After considering the other Fintiv factors, including the merits of Petitioner’s arguments, the panel instituted the IPR.
Another decision published on March 5, 2025, Mobileye Global, Inc. v. Facet Technology Corp. (IPR2024-01110), also addressed patent owner’s request for discretionary denial. In that decision, the panel applied the Fintiv factors without any mention of the Interim Guidelines, which is notable because each party filed two post-preliminary response replies addressing the Interim Guidelines. After considering the Fintiv factors, the panel instituted IPR in this matter.
On March 7, the PTAB published its decision in Adobe Inc. v. Jaffe (IPR2024-01352). The panel did not reference the Interim Guidelines, but did consider median time-to-trial statistics while noting that the District Court had not set any trial date. Upon review of the Fintiv factors, the panel instituted IPR.
Most recently, on March 11, the PTAB issued its decision in Toyota Motor Corp. v. Emerging Automotive LLC (IPR2024-00785) denying petitioner’s request for rehearing of the panel’s prior decision denying institution. In this decision, the PTAB first agreed with petitioner that it overlooked certain aspects of a prior art reference that supported petitioner’s invalidity grounds but proceeded to deny institution for another reason—the advanced state of a parallel litigation.
In its decision, the panel noted that “we no longer apply the guidance set forth in [the Interim Guidelines]” but, as in the other cases, still at least facially considered the median time-to-trial statistics provided by the parties. Nevertheless, in light of the scheduled trial date preceding the anticipated final written decision by eight months and the merits “not [] particularly strong,” the panel denied institution.
In short, nearing two weeks after the Interim Guidelines were rescinded, it appears to be “business as usual” for discretionary denials at the PTAB.
The only discernible practice pointer from this small sample of decisions is that the PTAB continues to consider median time-to-trial statistics in the absence of a trial date but is likely to disregard such evidence when a trial date is set. Accordingly, we suggest that parties continue to address median time-to-trial statistics when no trial date has been set in the parallel proceeding but should be prepared for the PTAB to disregard such evidence if or when a trial date is set.
Federal Circuit Clarifies Anticipation Analysis for Product-By-Process Claims
In Restem, LLC v. Jadi Cell, LLC, No. 2023-2054 (Fed. Cir. Mar. 13, 2025), the Federal Circuit upheld the Patent Trial and Appeal Board’s decision holding that U.S. Patent No. 9,803,176 (“the ’176 patent”) was not inherently anticipated by a prior art process, because the prior art process did not inevitably result in the claimed cell marker expression profile.
Background
The ’176 patent is directed to stem cells with specific cell markers obtained from the subepithelial layer of mammalian umbilical cord tissue. The independent claim at issue was drafted as a product-by-process claim that prepares an “isolated cell” with two steps: (1) placing the SL in direct contact with a tissue culture growth substrate and (2) culturing the SL. The claim also requires that the isolated cell express certain cell markers and not express other cell markers (“non-expression limitations”).
Restem challenged the claims as inherently anticipated by a prior art reference, Majore, but the Board disagreed, finding that Restem did not prove that Majore inherently met the non-expression limitations.
On appeal, Restem challenged the finding that Majore did not inherently anticipate the ’176 patent arguing that because Majore disclosed the process steps of the claim at issue, it inherently disclosed any product made by that process. Restem also challenged the claim constructions of the “placing” step and “isolated cell” arguing that the Board implicitly construed the terms beyond its stated constructions.
Issues
Whether the PTAB errored in holding the claims were not inherently anticipated; and
Whether the Board’s construction of the “placing” step and the term “isolated cell” was proper.
Holdings
The Federal Circuit upheld the Board’s decision that Majore did not inherently anticipate the ’176 patent because Restem did not prove that Majore’s process would inevitably result in cells with the claimed cell marker expression.
The Federal Circuit held that the Board construed the “placing” step properly and that the Board did not implicitly construe the claims beyond the stated construction; rather, the Board made factual findings that supported its anticipation analysis.
The Federal Circuit held that the Board construed “isolated cell” properly, although contrary to an express definition in the specification, because the applicant narrowed the claims’ scope during prosecution.
Reasoning
Although Majore disclosed the ’176 patent’s process steps, the Court held the claims were not inherently anticipated because Restem did not provide evidence showing the cells produced by Majore’s process would inevitably have the claimed marker profile. Restem argued that inherency is automatic for product-by-process claims once the process steps are met, but the Court stated this conflates anticipation and infringement analyses. In determining the validity of product-by-process claims, “the focus is on the product and not on the process of making it.” By contrast, in determining infringement, “the focus is on the process of making the product as much as it is on the product itself.” Because substantial evidence supported the Board’s finding that cells produced by Majore’s process would not necessarily have the claimed cell marker expression, the Court upheld the Board’s decision.
The Court also upheld the Board’s construction of the “placing” step to mean “to intentionally place umbilical cord tissue comprising the subepithelial layer so that it touches a growth substrate to permit cell culture.” Although the Board declined to import additional limitations from the specification, the Board stated “Majore’s process differs from at least the interior-down embodiment disclosed in the ’176 patent.” While Restem argued the Board implicitly added this limitation to its construction, the Court held that the Board did not do so but instead made a factual finding to support its inherency analysis that Majore’s process steps do not necessarily produce cells with the claimed cell marker expression.
While an express definition for “isolated cell” existed in the specification (“[a]s used herein, the term ‘isolated cell’ refers to a cell that has been isolated from the subepithelial layer of a mammalian umbilical cord”), the Court agreed that the Board implicitly construed “isolated cell” as “cell population.” Although this implicit construction was contrary to express lexicography, the Court held the Board did not err because both parties’ experts agreed cell marker analysis was performed at a cell population level at the time of the invention and that throughout prosecution, it was clear that the examiner allowed the patentee to claim only a cell population.
Conclusion
For product-by-process claims, prior art does not inherently anticipate claims when the claimed process is taught in the prior art; the patent challenger must additionally prove that the process in the prior art inevitably results in the claimed product. Also, a court can cite to limitations in the specification to show that a prior art process does not necessarily result in the claimed product even without construing the claims to contain those limitations. Lastly, an express definition of a claim term does not always govern construction, for example, statements in the prosecution history may govern if they show that the applicant narrowed the claims relative to the definition.
Artists Protest AI Copyright Proposal in the U.K.
British Prime Minister Keir Starmer wants to turn the U.K. into an artificial intelligence (AI) superpower to help grow the British economy by using policies that he describes as “pro-innovation.” One of these policies proposed relaxing copyright protections. Under the proposal, initially unveiled in December 2024, AI companies could freely use copyrighted material to train their models unless the owner of the copyrighted material opted out.
Although some Parliament members called the proposal an effective compromise between copyright holders and AI companies, over a thousand musicians released a “silent album” to protest the proposed changes to U.K. copyright laws. The album, currently streaming on Spotify, includes 12 tracks of only ambient sound. According to the musicians, the silent tracks illustrate empty recording studios and represent the impact they “expect the government’s proposals would have on musicians’ livelihoods.” To further convey their unhappiness with the proposed changes, the title of these twelve songs, when combined, reads, “The British government must not legalize music theft to benefit AI companies.”
High-profile artists like Elton John, Paul McCartney, Dua Lipa, and Ed Sheeran have also signed a letter urging the British government to avoid implementing these proposed changes. According to the artists, implementing the new rule would effectively give artists’ rights away to big tech companies.
The British government launched a consultation that sought comments on the potential changes to the copyright laws. The U.K. Intellectual Property Office received over 13,000 responses before the consultation closed at the end of February 2025, which the government will now review as it seeks to implement a final policy.
Validity Analysis for Product-by-Process Claim Focuses on Product
The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board patentability finding, explaining that an anticipation analysis for a product-by-process claim focuses on the product and not the process. Restem, LLC v. Jadi Cell, LLC, Case No. 23-2054 (Fed. Cir. Mar. 4, 2025) (Moore, Schall, Taranto, JJ.)
Jadi Cell owns a patent directed to stem cells that have specific cell markers expressed. These stem cells are obtained from the subepithelial layer of mammalian umbilical cord tissue by first placing the layer in contact with a tissue culture growth substrate and then culturing the layer. The claims of the patent are product-by-process claims. Restem challenged certain claims of the patent in an inter partes review (IPR) petition as being anticipated by the Majore reference or obvious in view of Majore in combination with other references. The Board found that none of the challenged claims were shown to be unpatentable. Restem appealed.
The Board construed the claim term “placing a subepithelial layer of a mammalian umbilical cord tissue in direct contact with a growth substrate” to mean “to intentionally place umbilical cord tissue comprising the subepithelial layer so that it touches a growth substrate to permit cell culture.” The Board found that while the prior art references disclosed the two-step process in the claims, the references failed to disclose the claimed cells because the references did not necessarily produce cells with the claimed cell marker expression profile. Restem argued that the Board erred by construing the claims to require steps beyond the claimed two-step process. The Federal Circuit rejected that argument, finding that the Board had made underlying factual findings that supported its anticipation analysis in construing the “placing” step and therefore did not err.
In the underlying proceeding, the Board declined to construe “isolated cell” but construed “expresses/does not express” to mean that “the marker is confirmed present/absent relative to a control sample,” consistent with its interpretation of isolated cell to indicate a cell population. In construing this claim, the Board relied on extrinsic evidence to assess how a person of ordinary skill in the art would determine whether the cell markers were expressed. The Board found that both parties’ experts agreed that cell marker analysis was done at the cell population level at the time of invention. Restem argued that the Board erred in implicitly construing “isolated cell” contrary to the express definition in the challenged patent. However, the Federal Circuit upheld that implicit construction as supported by the intrinsic evidence because the specification consistently described the claimed invention as a cell population and the prosecution history indicated that the examiner only allowed the patentee to claim a cell population.
As for the Board’s finding that the Majore reference did not inherently or expressly anticipate the challenged claims, the Federal Circuit affirmed. The Board found that the cell marker expression profile distinguished the claimed cells from other stem cells and was therefore limiting, and that Majore did not expressly disclose the nonexpression limitations included in the patent claims. Restem argued that inherency is automatic for product-by-process claims and that the Board erred in finding Majore did not inherently anticipate patent claims. The Court disagreed, explaining that in determining validity of a product-by-process claim, “the focus is on the product and not on the process of making it,” because “an old product is not patentable even if it is made by a new process.” The Court noted that when determining infringement (as opposed to validity), “the focus is on the process of making the product as much as it is on the product itself.” The Court explained that Restem’s invalidity argument conflated the anticipation and infringement analyses for product-by-process claims by improperly shifting the analysis from whether the prior art discloses the claimed product to whether the prior art discloses the claimed process.
An Odyssey of Timeliness: Appointments Clause Arguments Must Be Preserved
Citing forfeiture, the US Court of Appeals for the Federal Circuit upheld the dismissal of a complaint against the US Patent & Trademark Office (PTO). The complaint sought director review of a 2018 Patent Trial & Appeal Board decision that affirmed a rejection of claims in the subject patent application. In the initial appeal, no “appointments clause” argument was raised. Odyssey Logistics & Technology Corp. v. Stewart, Case No. 2023-2077 (Fed. Cir. Mar. 6, 2025) (Dyk, Reyna, Stoll, JJ.)
Background
In 2020, the Federal Circuit upheld a 2018 Board decision rejecting claims in a patent application owned by Odyssey Logistics. At that time, Odyssey did not raise an Appointments Clause challenge. However, following the Supreme Court’s 2021 ruling in United States v. Arthrex, Odyssey filed a request for PTO Director review of the 2018 Board decision, arguing that the decision was invalid under Arthrex. After its request was denied, Odyssey filed a district court complaint seeking to compel director review.
Arthrex addressed the Appointments Clause of the US Constitution, which provides that “Officers of the United States” must be appointed by the President with the advice and consent of the Senate, while Congress may permit the appointment of “inferior Officers” by the President, courts, or department heads. In that case, the plaintiff argued that the Board’s administrative judges were principal officers (rather than inferior) and should have been appointed by the President and confirmed by the Senate.
In 2019, the Federal Circuit ruled that there had been an appointments clause violation in Arthrex (coincidentally, this was during the time of Odyssey’s initial appeal to the Federal Circuit). In 2020, the Supreme Court agreed with the Federal Circuit’s ruling but provided a different remedy, holding that the Director “may review final PTAB decisions and, upon review, may issue decisions himself on behalf of the Board.”
Appeal
After Odyssey sought review of the 2018 decision, the PTO responded that it does not accept requests for Director review of ex parte appeal decisions. Odyssey then filed a district court complaint that was dismissed for lack of subject matter jurisdiction. The district court explained that judicial review of a decision committed to agency discretion was improper. Odyssey appealed.
The Federal Circuit affirmed the district court, not on the grounds of lack of jurisdiction but for failure to state a claim. The Federal Circuit ruled that the PTO did not abuse its discretion in denying review. Under Federal Rule of Civil Procedure 60(b), a district court can relieve a party from a final judgment even after an appeal mandate, as long as the relief sought does not fall within the scope of that mandate. The principles underlying this rule provide guidance for agencies regarding reconsideration of prior agency decisions.
Odyssey did not raise its Appointments Clause argument in its appeal of the 2018 Board decision. The Federal Circuit has consistently held that “a party’s failure to raise an Appointments Clause challenge in its opening brief constitutes forfeiture even when the argument was raised before the termination of direct appeal and immediately after our decision in Arthrex.” In this case, Odyssey did not raise the Appointments Clause issue in its appeal at the Board, even after Arthrex.
Inventor’s Motivation to Combine Does Not Control Obviousness
The US Court of Appeals for the Federal Circuit affirmed a district court decision rejecting claims of a patent application directed to a dosing regimen for a cancer treatment, finding the claims to be obvious where the motivation to use the claimed dosing was not the same as the inventor’s motivation. ImmunoGen, Inc. v. Coke Morgan Stewart, Case No. 23-1763 (Fed. Cir. Mar. 6, 2025) (Lourie, Dyk, Prost, JJ)
The claims at issue involved a dosing regimen for administering IMGN853, an already-patented antibody drug conjugate used for treating certain cancers, at a claimed dose of six milligrams (mg) per kilogram (kg) of adjusted ideal body weight (AIBW) of the patient.
ImmunoGen argued that it was undisputed that, at the time of the invention, a person of ordinary skill in the art would not have known that IMGN853 caused ocular toxicity in humans and that without a motivation to address the problem of ocular toxicity, the claimed dosing limitation could not have been obvious. Therefore, according to ImmunoGen, the district court erred in its motivation-to-combine analysis. The Federal Circuit disagreed, stating, “that the specific problem the inventors . . . purported to solve via the claimed dosing regimen was unknown does not necessarily mean that the dosing regimen itself was not obvious.” The Court also noted that because ocular toxicity was a well-known adverse event in the administration of drugs containing a payload included in IMGN853, “a person of ordinary skill in the art, despite not knowing of IMGN853’s ocular toxicity, would have nonetheless been motivated to monitor for those side effects when administering the drug to a human.”
ImmunoGen also argued that the district court erred in finding that a person of ordinary skill in the art would have been motivated to use AIBW dosing to eliminate ocular toxicity. The Federal Circuit again disagreed, reasoning that although AIBW dosing has not been used for drugs such as IMGN853, it would still have been within the range of knowledge of a person of ordinary skill in the art when addressing dosing-induced ocular toxicity. The Court explained that AIBW was well known, had been used for drugs both smaller and larger than IMGN853, and had proven effective in reducing ocular toxicity.
The Federal Circuit concluded that the district court did not clearly err in determining that a person of ordinary skill in the art would have been motivated to select the claimed dose of six mg/kg AIBW with a reasonable expectation of success. The claimed dose had already been described in the literature for patients at their ideal body weight, regardless of whether a doctor was aware of AIBW dosing specifically. The Court also noted that the district court was not required to find that a person of ordinary skill in the art would have had a reasonable expectation of eliminating ocular toxicity using the claimed dose, as “the obviousness inquiry is generally agnostic to the particular motivation of the inventor” and the claims made no reference to ocular toxicity.
Practice Note: The motivation to combine analysis is not limited by the problem or need recognized by the inventors. Instead, any problem known at the time of the invention can provide a reason for combining elements as claimed.