IP UPDATE

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

by Ashley K. Justice | Jun 25, 2026 | Patents

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.

Up in smoke: Eighth Circuit sends Lanham Act dispute to state court

by Lauren Hong | Jun 25, 2026 | Trademarks

The US Court of Appeals for the Eighth Circuit affirmed dismissal of a trademark dispute on forum non conveniens grounds, finding that the Lanham Act claims concerning ownership and scope of trademark rights arose out of a stock purchase agreement and therefore belonged in the state court designated by the parties’ forum selection clause. Vaughn Boyd v. Deadwood Tobacco Company, Case No. 25-1659 (8th Cir. June 8, 2026) (Smith, Kelly, Grasz, JJ.)

The dispute stemmed from the 2018 sale of Deadwood Tobacco, a South Dakota cigar business associated with the DEADWOOD family of marks. Prior to the sale, Deadwood Tobacco and Drew Estate had collaborated on a successful cigar line sold under names including Sweet Jane, Fat Bottom Betty, and Crazy Alice. The stock purchase agreement reserved trademark registrations associated with those three brands from the transaction. After acquiring the company, the new owners launched additional cigar products under other Deadwood Tobacco branding. Vaughn Boyd and Drew Estate (the sellers under the agreement) subsequently alleged that the new products infringed trademark rights they had retained under the agreement.

After the parties failed to reach a resolution, Boyd and Drew Estate filed suit under the Lanham Act in federal district court in Florida. The district court concluded that the asserted trademark claims arose out of the stock purchase agreement and therefore fell within the scope of the agreement’s South Dakota forum selection clause.

Following that dismissal, Deadwood filed a related contract suit in South Dakota state court and Boyd and Drew Estate countered with a Lanham Act claim in federal district court in South Dakota. The South Dakota district court likewise determined that the dispute arose from the agreement and that the forum selection clause was valid and mandatory. Boyd and Drew Estate appealed the district court decision.

On appeal, Boyd and Drew Estate argued that their claims arose exclusively under federal trademark law rather than contract law and therefore did not “arise out of” the agreement. They further contended that the forum selection clause was permissive rather than mandatory and could not divest federal courts of jurisdiction. Finally, they asserted that public policy favored adjudication of Lanham Act claims in federal court.

The Eighth Circuit rejected each argument. Beginning with trademark ownership, the Court emphasized that trademark rights are inseparable from the goodwill they represent. Because determining the scope of Boyd and Drew Estate’s retained trademark rights required analyzing what goodwill, if any, accompanied the reserved marks, resolution of the dispute necessarily depended on interpreting the stock purchase agreement. The Court therefore concluded that the trademark claims arose out of the agreement, notwithstanding that they were pleaded solely under the Lanham Act.

The Eighth Circuit also found that the forum selection clause was mandatory. The agreement provided that disputes arising out of the agreement “shall” be venued in Lawrence County, South Dakota, and that the Lawrence County circuit court “shall have jurisdiction.” Applying South Dakota law, the Eighth Circuit found the language unambiguously mandatory and concluded that the reference to [...]

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A costly discovery misstep: Untimely damages evidence excluded

by Nicholas J. DiRoberto | Jun 18, 2026 | Copyrights

The US Court of Appeals for the Fourth Circuit affirmed a district court’s exclusion of damages evidence under Federal Rule of Civil Procedure 37(c)(1) and the resulting grant of summary judgment against the plaintiff on all claims. Deque Sys. Inc. v. BrowserStack, Inc., Case No. 25-1534 (4th Cir. June 5, 2026) (Agee, Traxler, Floyd, JJ.)

Deque Systems develops software that helps businesses make websites accessible to users who have visual and hearing impairments. Deque sued competitor BrowserStack for copyright infringement, false advertising, breach of contract, and unjust enrichment, alleging that BrowserStack reverse-engineered Deque’s software to develop a competing product and falsely advertised it as “5x faster” than Deque’s flagship offering.

Under the district court’s scheduling order, initial disclosures were due on June 7, 2024; expert disclosures were due on August 9, 2024; and fact discovery closed on October 11, 2024. Although Deque timely served its Rule 26(a)(1) initial disclosures, it failed to provide a computation of damages as required by Rule 26(a)(1)(A)(iii). When BrowserStack later served an interrogatory seeking the categories and calculations of Deque’s claimed damages, Deque again declined to provide a damages computation, stating only that it intended to seek all available damages and that its calculations remained incomplete.

Deque also failed to serve a damages expert report by the August 2024 expert disclosure deadline. After retaining new counsel, Deque disclosed a $30 million damages calculation on October 8, 2024, just three days before the close of discovery. BrowserStack moved to exclude the damages evidence and sought summary judgment.

The district court excluded Deque’s damages evidence under Rule 37(c)(1), finding that Deque failed to comply with Rule 26’s disclosure requirements. Because Deque could no longer prove damages and failed to establish entitlement to injunctive relief, the district court granted summary judgment in BrowserStack’s favor on all claims. Deque appealed.

The Fourth Circuit affirmed. The Court explained that Rule 37(c)(1) “gives teeth” to Rule 26’s disclosure requirements by prohibiting a party from using information that was not properly disclosed during discovery. The Court found that Deque had “indisputably failed to comply” with Rule 26(a)’s damages disclosure requirements by failing to provide a damages computation in its initial disclosures, expert disclosures, or interrogatory responses. The Court rejected Deque’s argument that its disclosure of damages in a rebuttal expert report three days before the close of discovery constituted a timely disclosure.

Turning to the propriety of the sanction, the Fourth Circuit applied the five-factor test set forth in its 2003 Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co. decision:

Surprise to the opposing party
Ability to cure the surprise
Disruption of trial
Importance of the evidence
Explanation for the nondisclosure

The Fourth Circuit concluded that all five factors favored exclusion. BrowserStack was plainly surprised by Deque’s $30 million damages claim, which was disclosed only days before discovery closed. Curing that surprise would have required reopening discovery and significantly delaying the proceedings. Although the damages evidence was important, Deque failed to offer any meaningful justification for its repeated failure [...]

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Tick tock: Related trade secrets have single accrual date under DTSA statute of limitations

by Tori Lazerson | Jun 11, 2026 | Trade Secrets

The US Court of Appeals for the Federal Circuit reversed a judgment awarding damages and a permanent injunction, finding that the plaintiff’s trade secret misappropriation claims were barred by the statute of limitations under the Defend Trade Secrets Act (DTSA). Insulet Corp. v. EOFlow, Co. Ltd., Case No. 25-1807 (Fed. Cir. May 28, 2026) (Dyk, Reyna, JJ.) (Prost, J., dissenting).

Insulet manufactures the Omnipod, an adhesive wearable insulin patch pump currently sold in 25 countries. EOFlow developed a competing product, the EOPatch 2, marketed in Europe and South Korea. On August 3, 2023, Insulet filed suit against EOFlow alleging trade secret misappropriation under the DTSA and patent infringement.

The misappropriation allegedly occurred when EOFlow hired several former Insulet employees to develop the EOPatch 2. The employees included Steve DiIanni, former director of mechanical engineering at Insulet, who possessed “detailed technical information” about the Omnipod. Between March and May 2018, DiIanni provided EOFlow with computer-aided design (CAD) files and information regarding the Omnipod’s soft cannula and occlusion-detection algorithm.

The district court bifurcated the DTSA and patent claims. At trial on the DTSA claims, the jury found misappropriation of four trade secrets, including the Omnipod CAD files, and concluded that none of Insulet’s claims were barred by the statute of limitations. The jury initially awarded $170 million in compensatory damages and more than $280 million in exemplary damages. These amounts were reduced to $26 million and $34 million, respectively, with the district court’s grant of a permanent injunction. Insulet’s patent claims were dismissed without prejudice.

On appeal, Insulet moved to transfer to the Court of Appeals for the First Circuit. The Federal Circuit denied the motion, concluding that it retained jurisdiction because the dismissal of the patent claims functioned, at least in part, as a dismissal with prejudice, since the statute of limitations expired with respect to certain alleged acts of patent infringement. The Court then addressed two issues under the DTSA statute of limitations: when the statute of limitations begins to run and whether related trade secrets are subject to a single accrual date.

On the first issue, the parties disputed the applicable standard. EOFlow argued that the statute of limitations began to run under an inquiry-notice standard while Insulet contended that the Supreme Court’s 2010 decision in Merck & Co. v. Reynolds required application of a discovery standard under which the limitations period begins when the plaintiff discovers or reasonably should have discovered the facts underlying its claim. The Federal Circuit declined to decide which standard governed, concluding that Insulet’s claims were time-barred even under the more demanding Merck standard. Applying an access-plus-similarity framework, the Court found that, before the critical date, Insulet knew or should have known that EOFlow had access to its trade secrets through a former Insulet employee, and possessed sufficient information regarding similarities between the EOPatch 2 and Insulet’s trade secret technology to plead a misappropriation claim.

On the second issue, for which there was no controlling First Circuit authority, the Federal Circuit determined that the [...]

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

by Ashley K. Justice | Jun 11, 2026 | Patents

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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