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Exploring the latest in intellectual property law
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USPTO extends deadline for requesting director review of decisions instituting trial

by | Jul 16, 2026 |

The United States Patent and Trademark Office (USPTO) updated its director review process by extending the deadline for requesting director review of decisions made in Patent Trial & Appeal Board proceedings from 14 to 30 days.

Under 37 C.F.R. § 42.75(c)(1), a request for director review must be filed within the time period set forth in 37 C.F.R. § 42.71(d), unless the director grants an extension for good cause. Section 42 generally requires that a request for director review be filed within 14 days of a decision instituting trial or 30 days of a final decision or a decision denying institution.

In a precedential order in Light & Wonder, Inc. v. Evolution Malta Ltd., IPR2025-01072, Paper 30 (Director June 22, 2026), however, the director waived the 14-day deadline and extended it to 30 days. The USPTO has now incorporated that change into its published director review process.

The updated process explains that the deadline may be extended in exceptional circumstances, provided that “the trial has not progressed meaningfully.” Examples of exceptional circumstances include:

  • Dismissal of all or substantially all claims in co-pending litigation
  • Findings of fact and conclusions of law rendering all or substantially all challenged claims invalid in litigation
  • Violation of a Sotera stipulation

Parties seeking an extension based on exceptional circumstances must email Director_PTABDecision_Review@uspto.gov, copy counsel for all parties, and explain in three sentences or fewer why an extension is warranted. The remaining parties will then be given an opportunity to respond.



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Back on track: Contextual inquiry required before applying § 112(f) to software claim element

by | Jul 16, 2026 |

The US Court of Appeals for the Federal Circuit vacated and remanded a district court’s indefiniteness ruling based on an insufficient means-plus-function analysis under 35 U.S.C. § 112(f) while affirming the denial of judgment as a matter of law (JMOL) and a new trial following a jury verdict finding a related patent invalid as anticipated. TrackTime, LLC v. Amazon.com Services LLC, Audible, Inc., Case No. 24-1102 (Fed. Cir. July 2, 2026) (Prost, Taranto, JJ; Kovner, J., sitting by designation.)

TrackTime sued Amazon and Audible for patent infringement, asserting two related patents directed to time-synchronized transcript technology for audio and video files. One patent relates to methods for annotating and sharing time-synchronized transcripts on mobile devices. The other relates to “tap-to-jump” technology, which allows a user to tap a word in a transcript and jump to the corresponding point in the associated audio or video file.

The district court issued a claim construction order finding the annotation-and-sharing patent invalid for indefiniteness. The court concluded that the claim terms “executable program code configured to facilitate annotation” and “executable program code configured to synchronously play multimedia” were means-plus-function terms that recited functions without sufficient corresponding structure. Because the specification did not adequately disclose structure for performing those functions, the district court held the terms indefinite.

The tap-to-jump patent proceeded separately to a jury trial. The jury found the asserted claim invalid on multiple grounds, including anticipation by a prior art program called LiveNote, and found no infringement. The district court later denied TrackTime’s post-trial motions for JMOL and a new trial. TrackTime appealed both the indefiniteness ruling on the annotation-and-sharing patent and the denial of JMOL and a new trial on the tap-to-jump patent.

The Federal Circuit vacated and remanded the indefiniteness ruling on the annotation-and-sharing patent, finding the district court’s § 112(f) analysis insufficient considering the Federal Circuit’s intervening decision in Dyfan, LLC v. Target Corp. (2022). In Dyfan, the Court explained that determining whether a limitation should be construed under § 112(f) requires a full contextual analysis, including whether the claim language recites sufficient structure when viewed in light of the specification, the surrounding claim language, and how a person of ordinary skill in the art would understand the term.

The Federal Circuit found that the district court did not conduct the full inquiry required by Dyfan because it failed to consider extrinsic evidence regarding usage in the field and how a skilled artisan would understand the disputed “executable program code” limitations. The Court declined to decide the § 112(f) issue in the first instance, leaving it to the district court on remand to determine whether the disputed limitations, read in context, recited sufficient structure for performing the claimed annotation and synchronous-play functions on a mobile device.

The Federal Circuit reached a different result on the tap-to-jump patent. TrackTime argued that LiveNote failed to disclose three limitations, namely “performing a data lookup,” a “mobile computing device,” and a “touch-sensitive input interface.” The Court rejected each argument. It found that TrackTime [...]

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Construing claims to fit the brand

by | Jul 9, 2026 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s claim construction and grant of a preliminary injunction, concluding that an accused infringer’s proposed construction would have produced the “highly improbable” result of excluding the patentee’s Orange Book-listed drug from the scope of the asserted claims. Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited, Case No. 25-2016 (Fed. Cir. July 1, 2026) (Bryson, Stoll, JJ.) (Dyk, J., dissenting in part)

Otsuka sued Hetero Labs, alleging that Hetero Labs’ generic drug product would infringe Otsuka’s patent rights. Otsuka moved for a preliminary injunction to prevent Hetero Labs from entering the market. The district court granted the motion, concluding that Otsuka was likely to succeed on its infringement claim. Hetero Labs appealed, arguing that the district court erred in construing the asserted claims.

The central dispute concerned how to calculate the patent’s claimed weight ratio. The representative claim requires administering dextromethorphan in combination with quinidine, with the proviso that the “weight to weight ratio of dextromethorphan to quinidine is 1:0.5 or less.” The district court construed “dextromethorphan” and “quinidine” to include their pharmaceutically acceptable salts. Under that construction, the claimed ratio is calculated using the full weight of the compounds as administered – for example, the full weight of dextromethorphan hydrobromide rather than only the dextromethorphan active moiety. Hetero Labs, by contrast, argued that when the compounds are administered as salts, the ratio must be calculated using only the weight of the active moieties.

The Federal Circuit affirmed the district court’s construction, concluding that the intrinsic evidence supported construing “dextromethorphan” and “quinidine” to include both the free base compounds and their pharmaceutically acceptable salts. The Court found that the patent claims, specification, and prosecution history consistently used those terms to encompass the compounds in the form in which they are administered. The Court also found that extrinsic evidence supported its construction. Relying in part on its 2007 decision in Osram GmbH v. ITC, the Court explained that Hetero Labs’ proposed construction would produce the “highly improbable” result of excluding Otsuka’s Orange Book-listed Nuedexta product – the very product the patent was intended to protect – from the scope of the claims. The Court also rejected Hetero Labs’ indefiniteness argument, concluding that the claims were not rendered indefinite simply because they encompassed formulations using either free bases or pharmaceutically acceptable salts.

Judge Dyk, dissenting in part, concluded that the district court’s construction was inconsistent with both the intrinsic evidence and the purpose of the claimed invention. According to Judge Dyk, the invention depended on maintaining a specific ratio of dextromethorphan to quinidine to ensure that:

  • Dextromethorphan achieved a therapeutic effect
  • Quinidine slowed the metabolism of dextromethorphan
  • Patients were not exposed to excessive amounts of quinidine

In his view, calculating the claimed ratio using the full weight of pharmaceutically acceptable salts rather than only the active moieties distorted that relationship by incorporating the weight of carrier ions that have no therapeutic significance. Judge Dyk also disagreed with the majority’s reliance [...]

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Unintentional delay: USPTO shortens threshold for additional information requirement

by | Jul 1, 2026 |

On June 24, 2026, the United States Patent and Trademark Office (USPTO) revised its practice of requiring additional information for certain petitions based on unintentional delay and changed the conditions under which the corresponding higher petition fee applies. The new rule is effective August 13, 2026.

In March 2020, the USPTO clarified that additional information would generally be required for petitions based on unintentional delay in the following three circumstances:

  • A petition to revive an abandoned application filed more than two years after the application became abandoned.
  • A petition to accept a delayed maintenance fee payment filed more than two years after the patent expired for nonpayment.
  • A petition to accept a delayed priority or benefit claim filed more than two years after the priority or benefit claim was due.

The USPTO required petitioners to provide additional information when a petition was filed more than two years after the relevant deadline. The additional information was intended to establish the facts and circumstances surrounding the entire period of delay and demonstrate that the entire delay was “unintentional.” The USPTO reasoned that the two-year threshold would reduce uncertainty and unpredictability concerning patent rights.

Under the new rule, the USPTO has shortened the threshold for requiring additional information from two years to one year. The USPTO explained that the one-year threshold will further increase certainty and predictability concerning patent rights by requiring applicants and patentees to provide an adequate explanation establishing that the entire delay was unintentional. According to the USPTO, such an explanation “safeguards a patentee’s rights by establishing on the record that the delay was unintentional, and protects the public by prohibiting revival, reinstatement, entry of a benefit or priority claim, or excuse of delay” when a party cannot establish that the delay was unintentional. The USPTO also explained that the revised threshold will promote efficiency by encouraging applicants to monitor their patent files and promptly address errors.

The new rule extends this one-year threshold to petitions seeking to excuse an applicant’s failure to act within prescribed time limits under the Hague Agreement in connection with international design applications. The USPTO emphasized, however, that it retains discretion to require additional information whenever there is a question whether a delay was unintentional, regardless of the length of the delay.

Because the revised rule increases the evidentiary requirements and the cost of reviewing petitions filed after an extended delay, the USPTO also revised the threshold for when the higher petition fee applies. Under the new rule, the higher fee applies to petitions filed more than one year after the applicable deadline, rather than more than two years after the deadline. According to the USPTO, applying the higher fee at the one-year threshold will further encourage applicants to file petitions promptly, benefiting applicants by reducing delays in the examination process and promoting greater certainty and predictability regarding patent rights.

Practice note: Petitioners filing a petition to revive an abandoned application more than one year after the application became abandoned, a petition to [...]

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Compound errors: Written description, not typographical error analysis, controls priority claim

by | Jul 1, 2026 |

The US Court of Appeals for the Federal Circuit affirmed summary judgment that the asserted patent was invalid as anticipated because the provisional application to which it claimed priority did not provide adequate written description support for the claimed compound. The Court explained that the proper inquiry was whether the provisional demonstrated possession of the later-claimed subject matter, not whether a discrepancy in the provisional could be characterized as an obvious typographical error. Enanta Pharmaceuticals, Inc. v. Pfizer Inc., Case No. 25-1427 (Fed. Cir. June 23, 2026) (Lourie, Bryson, Chen, JJ.)

Enanta owns a patent direct to coronavirus inhibitors. The patent claimed priority to a July 20, 2020, provisional application. In April 2021, before Enanta filed a nonprovisional application correcting what it later characterized as a typographical error, Pfizer publicly disclosed the compound that ultimately became part of its COVID-19 treatment, Paxlovid®.

The dispute centered on a structural limitation defining an alkyl substituent. The provisional disclosed NHC(O)-C2-C12-alkyl while the asserted patent claimed NHC(O)-C1-C12-alkyl. According to Enanta, the “C2” designation in the provisional was an obvious drafting error that a person of ordinary skill in the art would recognize and mentally correct.

The district court granted summary judgment that the patent was anticipated because the asserted claims were not entitled to the provisional application’s filing date. Enanta appealed.
While the Federal Circuit affirmed, it clarified that the district court framed the issue incorrectly. Rather than asking whether a court could correct an alleged error in the provisional, the proper question was whether the provisional itself provided sufficient written description support for the later-claimed invention.

In clarifying the appropriate inquiry, the Federal Circuit rejected Enanta’s reliance on cases addressing correction of errors in issued patents and decisions concerning genus-species written description issues, explaining that those authorities did not govern the priority analysis presented here. Nor could the Court simply construe the provisional to correct the alleged mistake because the disclosure was subject to reasonable debate.

Applying the written description standard, the Federal Circuit concluded that “C2 is simply different from C1.” Because the provisional disclosed only the C2 structure, it did not demonstrate that the inventors possessed the later-claimed C1 embodiment as of the provisional filing date. The Court also found Enanta’s expert testimony insufficient to create a genuine issue of material fact, explaining that generalized opinions regarding carbon chain nomenclature and drafting errors elsewhere in the specification did not establish written description support for the specific claimed limitation.

Because the asserted claims were not entitled to the provisional application’s priority date, Pfizer’s intervening public disclosure constituted anticipatory prior art, rendering the patent invalid.



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Not so bulletproof: USPTO rejects discretionary denial across seven IPR petitions

by | Jun 25, 2026 |

The United States Patent and Trademark Office (USPTO) denied a patent owner’s request for discretionary denial of seven inter partes review (IPR) petitions, further providing guidance on the factors to consider when exercising discretionary review. The decision was designated informative on June 15, 2026. Tesla, Inc. v. Bulletproof Property Mgmt., LLC, IPR2026-00204; -00205; -00219; -00222; -00227; -00228; -00229 (USPTO, June 15, 2026)

The USPTO Director previously issued a short notice referring Bulletproof’s (the patent owner) requests for discretionary denial and Tesla’s oppositions to them for merits consideration. Unlike many prior discretionary denial decisions that were issued with limited or no analysis, this decision directly addressed the parties’ arguments and explained why each weighed against discretionary denial of Bulletproof’s petitions.

First, Bulletproof argued that institution should be denied because of parallel district court litigation. The USPTO Director rejected that argument, noting that a trial date had not been set and that Tesla stipulated it would not pursue any invalidity grounds that were raised or reasonably could have been raised in the IPRs. According to the USPTO, the stipulation reduced the risk of duplicative proceedings and inconsistent outcomes, making institution a more efficient use of party and agency resources.

Second, Bulletproof further argued that institution should be denied because a key prior art reference had previously been presented to the USPTO. Although the reference appeared in information disclosure statements submitted during prosecution of related child applications, it was not presented during examination of the application from which the challenged patents claimed priority. The USPTO agreed with Tesla that the examiner had effectively overlooked the reference and that Tesla had demonstrated that the USPTO erred in a manner material to patentability.

Third, Bulletproof contended that settled expectations favored denial. The USPTO disagreed, finding no meaningful settled expectations given that the challenged patents were issued less than two years earlier. The relatively brief period between issuance and filing the petitions weighed against discretionary denial.

Lastly, the USPTO found Tesla’s evidence that the accused products are manufactured in the United States persuasive. Although Bulletproof asserted that between one-quarter and one-third of the products’ components originated abroad, it provided no supporting evidence. The USPTO’s analysis is consistent with its March 11 memorandum identifying factors relevant to institution decisions, including the extent to which the challenged products are manufactured domestically.

Practice note: Over the past year, about one in four petitions for institution survive the USPTO Director’s discretionary denial review. Denying Bulletproof’s petition for review of an institution decision underscores the USPTO’s focus on efficiency, avoidance of duplicative proceedings, and domestic manufacturing considerations when evaluating requests for discretionary denial. Institution petitioners may strengthen their position by demonstrating that institution will promote efficient resolution of validity issues, offering broad litigation stipulations where appropriate, and presenting evidence of US-based manufacturing activities.



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E-I-E-I-No patents for data harvesting

by | Jun 11, 2026 |

Addressing patent eligibility and attorneys’ fees, the US Court of Appeals for the Federal Circuit affirmed a district court’s ruling that five farming data patents were directed to patent-ineligible subject matter, but vacated and remanded the district court’s unexplained determination that the case was not exceptional. AGI SureTrack LLC v. Farmers Edge Inc., Case Nos. 24-1730; -1830 (Fed. Cir. Jun. 2, 2026) (Moore, Mayer, Lourie, JJ.)

AGI SureTrack owns five patents directed to capturing farming operation data in real time using passive data collection devices attached to farming equipment while the equipment performs farming operations. The claimed systems process and share the collected data through an online farming data exchange system or server. AGI sued Farmers Edge and Farmers Edge (US) for patent infringement.

At summary judgment, the district court found the asserted patents invalid under 35 U.S.C. § 101, concluding that the claims were directed to patent-ineligible subject matter. The district court also ruled that the case was not exceptional under 35 U.S.C. § 285 for purposes of awarding attorneys’ fees. AGI appealed the invalidity ruling, and Farmers Edge cross-appealed the no-exceptionality ruling.

The Federal Circuit affirmed the § 101 ruling under the two-step Alice framework. At Alice step one, the Federal Circuit found that AGI’s claims were directed to the abstract idea of collecting, analyzing, and transmitting farming data. The Court explained that claims using conventional computer components to collect, analyze, and present data (activities that can be characterized as mental processes) are directed to an abstract idea. The Court rejected AGI’s argument that the patents claimed an unconventional hardware and software system that solved interoperability problems among distinct brands of farming equipment. The claim language did not recite such a technological solution, and the specification described the invention as a way to track, store, and profit from farming operation data.

The Federal Circuit also rejected AGI’s reliance on claims involving detection of communication protocols and the use of stored “implement profiles” to decode farming equipment information. In the Court’s view, those limitations merely combined abstract concepts and did not change the character of the claims as being directed to data collection, processing, and transmission.

At Alice step two, the Federal Circuit found no inventive concept sufficient to transform the abstract idea into patent-eligible subject matter. The claims relied on generic computer components performing conventional functions. The Court explained that although the claimed automation may have increased the speed and efficiency of collecting and analyzing farming data, improved speed from automation alone does not supply an inventive concept. Considering the claim elements individually and as an ordered combination, the Court concluded that the patents did not claim a patent-eligible application for tracking and collecting farming data.

The Federal Circuit reached a different result on attorneys’ fees. The district court had ruled that the case was not exceptional under § 285 but provided no explanation for that determination. The Federal Circuit vacated and remanded, explaining that while district courts need not always provide extensive reasoning, they must provide enough [...]

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AIA reviews: An alternative to litigation, not a second chance

by | May 28, 2026 | ,

Addressing the scope of discretionary institution under the America Invents Act (AIA), the United States Patent and Trademark Office (USPTO) denied institution of inter partes review (IPR), concluding that the petitioner was attempting to use the Patent Trial & Appeal Board as a “second bite at the apple” after unsuccessfully litigating substantially similar invalidity issues in district court, contrary to the AIA’s purpose of providing a streamlined alternative to litigation. Magnolia Medical Technologies, Inc. v. Kurin, Inc., IPR2026-00097, Paper 17 (Director May 14, 2026).

Magnolia challenged the validity of Kurin’s patent directed to a blood-testing device in district court. After the district court excluded Magnolia’s invalidity expert based on disclosure deficiencies related to claim construction and a jury subsequently found the patent not invalid, Magnolia filed an IPR petition asserting substantially similar anticipation and obviousness grounds. The Director denied institution, concluding that Magnolia had already had a full and fair opportunity to litigate those issues in district court and was improperly attempting to relitigate them before the Board.

The Director explained that Congress created IPRs and post-grant reviews (PGRs) under the AIA to provide streamlined and cost-effective alternatives to district court litigation, not to facilitate repetitive validity challenges or expand parallel litigation. The decision noted that, in practice, many petitioners pursue AIA review alongside district court litigation, sometimes asserting overlapping invalidity theories or taking inconsistent positions across forums, thereby increasing costs and burdening both patent owners and the USPTO.

The Director further emphasized that AIA proceedings serve broader public-interest objectives beyond resolving private disputes, including promoting efficiency, fairness, predictability, and the integrity of the patent system. In exercising discretionary institution authority, the USPTO considers factors such as examiner error, inconsistent positions across forums, settled expectations, and whether institution would represent an appropriate use of USPTO resources.

Applying those principles, the Director concluded that Magnolia’s petition fell outside the intended purpose of AIA review because Magnolia was not using the Board as an alternative forum for resolving validity disputes, but instead to relitigate substantially similar invalidity theories after an unfavorable outcome in district court. The Director emphasized that Magnolia had already contested validity in district court using anticipation and obviousness grounds similar to those asserted in the petition and that the parties had expended substantial resources litigating those issues.

The Director rejected Magnolia’s argument that institution was warranted because no tribunal had adjudicated the merits of its anticipation and obviousness theories after the district court excluded its expert testimony. According to the Director, Magnolia had a full and fair opportunity to litigate those issues, and the exclusion of its expert resulted from deficiencies within Magnolia’s control. Permitting institution under those circumstances, the Director explained, would improperly allow Magnolia to obtain a “second bite at the apple” before the USPTO.

In discussing the public-interest considerations that inform discretionary institution decisions, the Director highlighted several precedential and informative decisions addressing issues such as substantial examiner error, inconsistent positions across forums, foreign sovereign petitioners, and settled expectations. The Director explained that these decisions reflect [...]

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Patentee that retains exclusionary rights has constitutional standing notwithstanding broad license grant

by | May 28, 2026 |

The US Court of Appeals for the Federal Circuit reversed a district court decision dismissing a patent infringement suit for lack of constitutional standing, concluding that patentees that retain exclusionary rights, even after granting a broad license, maintain Article III standing. A.L.M Holding Company v. Zydex Industries Private Ltd., Case No. 25-1317 (Fed. Cir. May 19, 2026) (Chen, Cunningham, Stark, JJ.)

A.L.M. and Ergon co-own six patents directed to warm-mix asphalt technology. Prior to filing suit, the patentees entered into a licensing agreement with Ingevity Corporation, granting Ingevity an exclusive, worldwide, royalty-bearing license to manufacture, import, use, and sell products covered by the patents. The agreement also provided for shared control of infringement actions and an equal split of any resulting recoveries and costs. Despite the breadth of the license, the patentees retained certain rights, including the ability to make, import, and use the licensed products.

A.L.M. filed suit against Zydex. The district court dismissed the action, concluding that the patentees lacked constitutional standing because the license transferred away sufficient exclusionary rights, leaving A.L.M. without a cognizable injury under Article III.

Reviewing the issue de novo, the Federal Circuit reversed. The Court framed the proper inquiry for constitutional standing as whether the plaintiff retains an exclusionary interest in the asserted patents. The Court explained that, absent a transfer of all exclusionary rights, a patentee generally maintains the concrete injury necessary to satisfy Article III.

The Federal Circuit emphasized that the constitutional standing inquiry is distinct from the question of statutory standing under 35 U.S.C. § 281. While statutory standing concerns whether a party is entitled to bring suit under the Patent Act and may be cured by joinder of necessary parties, constitutional standing requires a threshold showing of injury in fact and cannot be remedied after the fact.

Applying that framework, the Federal Circuit found that the plaintiffs retained sufficient exclusionary interests. In particular, the patentees preserved rights to royalties and maintained a degree of control over sublicensing, including a veto right. These retained interests demonstrated that the patentees had not transferred all substantial rights in the patents and therefore continued to suffer a legally cognizable injury from alleged infringement.

Accordingly, the Federal Circuit concluded that the plaintiffs satisfied Article III standing requirements and reversed the district court’s dismissal.

Practice note: On the same day that the Federal Circuit issued its decision in A.L.M. Holdings, the same panel also issued a nonprecedential decision in Recor Medical, Inc. v. Medtronic Ireland Manufacturing Unlimited Co., in which it stated, “[i]n a precedential opinion we issued today in a different appeal addressing constitutional standing, A.L.M. Holding Co. v. Zydex Industries Private Ltd., No. 25-1317 (Fed. Cir. May 18, 2026), we held that the patent owner in that case had constitutional standing because it retained a right to sue for patent infringement that was not rendered illusory by the rights it granted to its licensee. Because Medtronic Ireland’s retained rights are materially the same as the patent owner’s in A.L.M., we hold that Medtronic [...]

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Invalidity alone does not render a case exceptional

by | May 28, 2026 |

Addressing fee shifting under 35 U.S.C. § 285 and sanctions under 28 U.S.C. § 1927, the US Court of Appeals for the Federal Circuit affirmed in part and reversed in part a judgment dismissing a patent infringement complaint and awarding attorneys’ fees and costs, finding that the weakness of the plaintiff’s position, without more, did not justify a finding of exceptionality, and that counsel’s lack of diligence did not rise to the bad-faith conduct required for sanctions. mCom IP, LLC v. City National Bank of Florida, Case No. 24-2089 (Fed. Cir. May 15, 2026) (Dyk, Mayer, Taranto, JJ.)

mCom IP sued City National Bank of Florida in September 2023, asserting a patent directed to systems and methods for integrating financial institutions’ “e-banking touch points,” such as ATMs and online banking portals. Earlier that year, an inter partes review (IPR) initiated by Unified Patents resulted in all but four claims being found unpatentable as obvious under 35 U.S.C. § 103. mCom’s district court complaint asserted those four surviving claims.

The district court struck mCom’s initial complaint as a “shotgun pleading” and dismissed the amended complaint with prejudice for failure to state a claim. It also concluded that the asserted claims were invalid on the same obviousness grounds addressed in the IPR and awarded attorneys’ fees under § 285, finding the case exceptional, and imposed sanctions under § 1927 based on counsel’s litigation conduct. mCom appealed.

The Federal Circuit affirmed the dismissal but reversed the fee award and sanctions. The Court addressed two issues: whether the case was “exceptional” under § 285 and whether counsel had unreasonably and vexatiously multiplied the proceedings under § 1927.

Under § 285, a case is exceptional if it “stands out” based on the substantive strength of a party’s position or the unreasonable manner of litigation. The Federal Circuit rejected each basis relied on by the district court.

First, although the asserted claims were ultimately found invalid, the Federal Circuit emphasized that invalidity alone does not render a case exceptional. Rather, awarding fees requires a showing that the claims were “unusually or extraordinarily weak.” That standard was not met here where the asserted claims survived IPR and carried a presumption of validity, and where the burden of proof for invalidity in district court remains higher than in IPR.

Second, the Federal Circuit found that pleading deficiencies did not support exceptionality. The initial complaint’s defects were “purely formal,” and the amended complaint’s failure to state a claim, without more, did not render the overall litigation conduct unreasonable.

Third, the Federal Circuit rejected reliance on City National’s purported license defense, noting that no license had been established on the record.

Finally, the Federal Circuit found insufficient support for the contention that mCom pursued nuisance-value settlements, explaining that City National failed to provide evidence regarding settlement amounts or to tie prior litigation to the patent at issue.

The Federal Circuit also reversed the sanctions imposed under § 1927. Applying Eleventh Circuit law, the Federal Circuit explained that sanctions require conduct [...]

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