IP UPDATE

Don’t get too comfy: Prosecution disclaimer also applies to design patents

by Connor M. Larson | Jul 24, 2025 | Patents

Concluding that the principles of prosecution history disclaimer apply to design patents, the US Court of Appeals for the Federal Circuit reversed a district court’s denial of judgment as a matter of law and entry of a jury verdict that found liability for design patent infringement. Top Brand, LLC v. Cozy Comfort Company, LLC, Case No. 24-2191 (Fed. Cir. July 17, 2025) (Dyk, Reyna, Stark, JJ.)

Top Brand and Cozy Comfort compete in the market for oversized hooded sweatshirts. Cozy Comfort owns a design patent directed to “the ornamental design for an enlarged over-garment with an elevated marsupial pocket.” It accused Top Brand of infringing the patent through its sale of certain hooded sweatshirts and wearable blankets. In response, Top Brand filed a declaratory judgment action seeking findings of noninfringement and invalidity. Cozy Comfort counterclaimed for design patent and trademark infringement.

During prosecution, Cozy Comfort overcame an anticipation rejection by distinguishing the prior art under the ordinary observer test, pointing to specific features such as the shape and placement of the marsupial pocket and the bottom hem line. Top Brand argued that these statements constituted a clear disclaimer of claim scope, and that the accused products fell within the surrendered subject matter.

The district court disagreed, instructing the jury to compare the accused products to the design as claimed (without considering any prosecution disclaimer). The jury found infringement, and the court entered judgment accordingly, denying Top Brand’s motion for judgment as a matter of law. Top Brand appealed.

Top Brand argued that the district court erred by failing to apply prosecution history disclaimer, asserting that the accused design was within the scope of the subject matter Cozy Comfort had disclaimed. Cozy Comfort responded that the disclaimer doctrine does not apply to design patents and, even if it did, Cozy Comfort’s prosecution statements were not sufficiently clear to constitute a disclaimer.

The Federal Circuit disagreed, concluding that prosecution history disclaimer applies to design patents. The Court reasoned that allowing patentees to recapture disclaimed subject matter in litigation would undermine the integrity of the patent system. The Court emphasized that Cozy Comfort’s statements during prosecution clearly surrendered the identified features as supporting a finding of overall similarity. Because the accused design incorporated those surrendered features, the Court concluded that no reasonable jury could find infringement.

Accordingly, the Federal Circuit reversed the district court’s denial of judgment as a matter of law and vacated the jury’s verdict.

Eleventh Circuit sides with Fourth, Fifth Circuits on bankruptcy discharge exception split

by Deanna D. Boll | Jul 24, 2025 | Uncategorized

Addressing a split among bankruptcy courts in their interpretation of whether a corporate debtor, like an individual debtor, is subject to the exceptions to discharge outlined in 11 U.S.C. § 523(a) when confirming a nonconsensual Subchapter V plan, the US Court of Appeals for the Eleventh Circuit reversed a US Bankruptcy Court for the Middle District of Florida decision. The Eleventh Circuit held that the cross-reference in 11 U.S.C. § 1192 to 11 U.S.C. § 523(a)’s exceptions to discharge applies to both corporate and individual debtors. BenShot, LLC v. 2 Monkey Trading, LLC, Lucky Shot USA, LLC, Case No. 23-12342 (11th Cir. July 9, 2025) (Branch, Lagoa, JJ.) (Luck, J., dissenting).

Prior to filing for chapter 11 protection under Bankruptcy Code Subchapter V, 2 Monkey Trading and Lucky Shot (together, the debtors) were sued by BenShot for violations of the Lanham Act in connection with the debtors’ false advertising that their competing products were produced in the United States. The jury found in favor of BenShot and awarded punitive damages, determining that the debtors acted “maliciously toward” BenShot or “in an intentional disregard” of BenShot’s rights. Following this decision, the debtors filed for bankruptcy and attempted to discharge the jury award owed to BenShot. BenShot argued that the jury award constituted an exception to discharge under § 523(a)(6) for claims involving “willful and malicious injury by the debtor to another entity.” The bankruptcy court, like many bankruptcy courts in other jurisdictions, found in favor of the debtors, holding that § 523(a)’s discharge exceptions exclude corporate debtors and therefore the debtors could discharge BenShot’s debt.

On appeal, the Eleventh Circuit reversed and extended the application of § 523(a) in nonconsensual Subchapter V cases to corporate debtors. It observed that § 1191(c) of Subchapter V enables a debtor, if certain conditions are met, to confirm a nonconsensual plan without adhering to the absolute priority rule, thereby allowing a debtor to receive a discharge and retain assets even when all unsecured creditors are not paid in full. The discharge granted under a confirmed Subchapter V nonconsensual plan is governed by § 1192, which includes an exception to discharge in the form of a cross-reference to § 523(a). The question of whether the exception applies to corporate debtors arises from the text of § 523(a)’s preamble, which uses the term “individual debtor” before listing the exceptions to discharge.

In reaching its decision, the Eleventh Circuit engaged in a plain reading of the language of § 1192, which makes no distinction between individual and corporate debtors. The statute uses the word “debtor,” a term applied elsewhere in the Bankruptcy Code to both individuals and corporate entities. The Court also acknowledged that § 1192 states that the discharge is of a “debt,” which does not distinguish between an individual and a corporation. The Court noted that Congress could have used the term “consumer debt” if it wanted the discharge to apply only to individuals.

The Eleventh Circuit also interpreted the language in § 1192(2) that references [...]

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Clean bill of health: Only domestic activities count when analyzing likelihood of confusion

by Hannah Hurley | Jul 24, 2025 | Trademarks

Affirming a summary judgment decision finding no trademark infringement under the Lanham Act, the US Court of Appeals for the Ninth Circuit determined that the district court properly focused on domestic activity with regard to the allegedly infringing trademark. Doctor’s Best, Inc. v. Nature’s Way Products, LLC, Case No. 24-2719 (9th Cir. July 15, 2025) (Paez, Ikuta, Nelson, JJ.) (Ikuta, J., concurring).

Doctor’s Best (DB) manufactures nutritional supplements under the mark NATURE’S DAY at its California facility. Although the products bear English labels compliant with US regulations, they are marketed and sold exclusively in China, South Korea, and Taiwan.

Nature’s Way Products (NWP), owner of the long-standing US trademark NATURE’S WAY, opposed DB’s attempt to register NATURE’S DAY in the United States, citing potential consumer confusion. After NWP sent a cease-and-desist letter, DB preemptively sued for a declaratory judgment of noninfringement. NWP counterclaimed for trademark infringement under Sections 32 and 43(a) of the Lanham Act.

In June 2023, the Supreme Court held in Abitron Austria GmbH v. Hetronic Int’l, Inc. that the Lanham Act’s infringement provisions apply only to domestic “use in commerce.” DB moved for summary judgment, arguing that its only domestic activity – transporting products within the US – did not create a likelihood of confusion among US consumers. The district court agreed, finding that DB’s domestic transport of Nature’s Day products was insufficient to support a claim of infringement. The court concluded that no reasonable jury could find that this conduct would confuse US consumers and granted summary judgment in favor of DB. NWP appealed.

NWP argued that any domestic use in commerce, however minimal, triggered the full likelihood-of-confusion analysis, even if confusion occurred abroad. The Ninth Circuit rejected this interpretation, holding that Abitron requires courts to first identify domestic use before evaluating confusion. The Court found that DB’s manufacturing and transport activities were the only relevant domestic conduct.

Turning to likelihood of confusion, the Ninth Circuit applied the eight-factor test set forth in its 1979 decision in AMF Inc. v. Sleekcraft Boats:

Strength of the mark
Proximity or relatedness of the goods
Similarity of the marks
Evidence of actual confusion
Marketing channels used
Type of goods and the degree of care likely to be exercised by the purchaser
Defendant’s intent in selecting the mark
The likelihood of expansion of the product lines

Reviewing the Sleekcraft factors, the Ninth Circuit concluded that no genuine dispute existed as to the likelihood of confusion. DB’s products were sold exclusively overseas while NWP’s products were sold only in the US. The Court emphasized that confusion must occur among domestic consumers to be actionable under the Lanham Act, and that did not occur here.

In a concurring opinion, Judge Ikuta agreed with the outcome but clarified that DB’s transport of products constituted a domestic use in commerce. However, she found no genuine issue of material fact regarding whether that use caused domestic confusion, reiterating that Abitron excludes extraterritorial confusion from the analysis.

Victory lap: Extraterritorial injunction permitted for breach of settlement agreement

by Kavya Rallabhandi | Jul 24, 2025 | Trademarks

The US Court of Appeals for the Fourth Circuit upheld a permanent injunction, concluding that the district court properly determined that a party’s violation of a settlement agreement would lead to irreparable harm. Wudi Industrial (Shanghai) Co., Ltd. v. Wong, Case No. 24-1186 (4th Cir. July 11, 2025) (King, Gregory, Rushing, JJ.)

The dispute originated in 2017 when Wudi registered the trademark GTRACING with the US Patent & Trademark Office. Wai L. Wong, asserting prior use of the similar mark GT OMEGA RACING, initiated cancellation proceedings before the Trademark Trial & Appeal Board. In 2020, the Board ruled in Wong’s favor. Wudi sought review in the Eastern District of Virginia under 15 U.S.C. § 1071(b), and Wong counterclaimed for trademark infringement.

In May 2021, the parties entered into a confidential global concurrent-use settlement agreement resolving their litigation. Under the agreement, Wudi was permitted to use GTRACING globally, except in designated regions including multiple European countries. Critically, paragraph 6(b) of the agreement prohibited Wudi from using the phrases “GTRACING” or “GT RACING” in online advertising or social media within the European carve-out. The district court subsequently granted a stay of the dispute pending compliance by the parties.

Following the compliance period, Wong alleged that Wudi violated the agreement by using prohibited terms in online marketing within the restricted regions. The district court granted Wong’s motion to enforce the agreement, ordering Wudi to remove specific content and cease future violations. The district court warned that continued noncompliance could result in contempt proceedings.

Wudi appealed, and the Fourth Circuit initially remanded the case, instructing the district court to apply the four-factor eBay test for injunctive relief. The district court found that Wudi had breached the agreement and that Wong had suffered irreparable harm to the goodwill of its marks. The court concluded that monetary damages were inadequate, the balance of hardships favored Wong, and enforcing the agreement served the public interest. The district court issued a permanent injunction. Wudi appealed again.

Wudi challenged the injunction on multiple grounds, including claims of extraterritorial overreach, improper application of the eBay factors, erroneous breach findings, exclusion of parol evidence, failure to apply the unclean hands doctrine, and improper award of attorneys’ fees.

The Fourth Circuit rejected Wudi’s arguments and affirmed the district court’s ruling. The Court held that the injunction merely enforced contractual obligations voluntarily undertaken by Wudi and that the district court properly applied the eBay test. The Court also found no abuse of discretion in the district court’s exclusion of parol evidence and its rejection of the unclean hands defense, finding that the district court properly concluded that reputational harm can demonstrate that irreparable injury will flow from the breach of a trademark-related settlement agreement.

Valve turned: Prosecution history estoppel applies to closely related claims

by Anisa Noorassa | Jul 24, 2025 | Patents

The US Court of Appeals for the Federal Circuit reversed a jury’s infringement finding, concluding it was precluded by prosecution history estoppel. Colibri Heart Valve LLC v. Medtronic CoreValve LLC, Case No. 23-2153 (Fed. Cir. July 18, 2025) (Taranto, Hughes, Stoll, JJ.)

Colibri Heart Valve sued Medtronic CoreValve for infringing a patent covering a method of implanting an artificial heart valve. At trial, the district court denied Medtronic’s motion for judgment as a matter of law, allowing the jury to consider Colibri’s infringement theory under the doctrine of equivalents. The jury found in Colibri’s favor. Medtronic appealed.

The Federal Circuit reversed, finding that Colibri was estopped from asserting its equivalents theory. During prosecution, Colibri had canceled a claim that explicitly recited “retracting the movable sheath.” The asserted claim, while using different language, involved a similar concept: “pressing against the pusher member with a force that moves the pusher member outward from the moveable sheath.” The Court concluded that a skilled artisan would recognize these limitations as equivalent in light of basic physics.

Citing the Supreme Court’s 2002 Festo v. Shoketsu decision, the Federal Circuit emphasized that prosecution history estoppel can arise not only from formal amendments but also from the cancellation of closely related claims. Here, the cancellation of one claim effectively narrowed the scope of the remaining claims, triggering estoppel.

Accordingly, the Federal Circuit reversed the district court’s denial of judgment of noninfringement.