IP UPDATE
Exploring the latest in intellectual property law
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Exploring the latest in intellectual property law
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Are You Ready for the UPC? Act Now to Prepare for its Opening on June 1

by , and | Mar 1, 2023 | ,

On February 17, 2023, Germany ratified the Agreement on the Unified Patent Court (UPC) and triggered the UPC’s entry into force on June 1, 2023. The UPC will revolutionize patent enforcement across Europe and impact companies around the world that hold European patents or conduct business in Europe.

Owners of existing European patents or pending applications can “opt out” of the UPC’s jurisdiction for an initial transitional period of at least seven years. Companies must act now if they want to opt out before the court officially opens.

Understanding the UPC

The UPC will have exclusive jurisdiction over patent infringement and invalidity actions in its member states for patents granted by the European Patent Office (EPO), including existing European patents and new European patents with unitary effect (unitary patents). There are currently 17 EU Member States participating in the UPC (Germany, France, Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Sweden and Slovenia). Additional EU Member States may join the UPC in the future.

The UPC will have local and regional divisions in its member states, with a central division in Paris and Munich and a Court of Appeal in Luxembourg.

As a streamlined patent enforcement venue, the UPC will provide several new benefits to patent owners, including faster decisions with limited discovery and lower cost, and the possibility of injunctive relief throughout the member states. At the same time, the UPC will allow revocation of a patent in a single action with effect for all member states, alongside the possibility to oppose a European patent before the EPO.

European Freedom to Operate

Because of the UPC’s structure and incentives, patent litigation will likely increase in Europe, which will heighten the intellectual property (IP) infringement risk for companies doing business in Europe. If a company has not already done so, it should promptly review its competitors’ European patent estates to assess the potential risks and develop a defense strategy to avoid a surprise attack from a competitor after June 1, 2023.

European Enforcement Actions

Although the UPC is new and untried, it has the incentive to provide strong relief for those who trust it. If a company needs to bring a patent infringement action against a competitor and would like to do so in a fast, cost-effective manner, with the possibility of significant remedies, the UPC should be considered as a potential venue. The company should review its portfolio and infringement evidence to assess its opportunities.

Deciding Whether to Opt Out

The right to opt out European patent filings from the UPC’s jurisdiction will be available for an initial transitional period of seven years, which may extend to 14 years. It will be possible to reverse an opt-out, but not if the patent has been enforced or attacked in national court.

McDermott’s UPC Resource Center explores the various advantages and disadvantages of both staying in and opting out of the UPC.



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No Blank Check: Vendor Can’t Claim Declaratory Judgment From Customer Lawsuits Alone

by | Jun 18, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s dismissal of a declaratory judgment action, explaining that declaratory judgment jurisdiction does not “arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee.” Mitek Sys., Inc. v. United Servs. Auto. Ass’n, Case No. 23-1687 (Fed. Cir. June 12, 2025) (Taranto, Schall, Chen, JJ.)

Mitek develops a mobile image capture software development kit called MiSnap. United Services Automobile Association (USAA) sent letters to and filed infringement claims against several of Mitek’s bank customers. Mitek sought a declaratory judgment that it and its customers did not infringe four USAA patents related to mobile check deposits, arguing that it had standing based on a reasonable apprehension of suit and indemnity demands from its customers. The district court dismissed the declaratory judgment action, which Mitek appealed. The Federal Circuit vacated and remanded the district court’s dismissal, finding that the decision lacked adequate explanation and support.

On remand, the district court again analyzed Mitek’s two jurisdictional bases for its declaratory judgment action: potential liability for infringement and alleged demands for indemnity made by licensees after USAA sent letters seeking to license USAA patents. The district court again dismissed the case, determining that Mitek could not establish a case or controversy between USAA and Mitek as to infringement, and determining that indemnification agreements and USAA’s letters to Mitek customers did not create a reasonable potential for Mitek’s indemnification liability. Even if it had jurisdiction, the district court stated that it would exercise its discretion to decline jurisdiction, because the best means by which Mitek could defend the MiSnap software used by the banks was to intervene in a future litigation brought by USAA against a Mitek customer regarding the asserted patents. Mitek again appealed.

The threshold question for declaratory judgment jurisdiction is “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

Regarding Mitek’s infringement basis, the Federal Circuit found that Mitek did not establish a reasonable potential of the suit for infringement. The Court’s consideration also included post-filing events, including settlements of related customer suits and Patent & Trial Appeal Board decisions invalidating asserted patent claims. These developments further undermined any ongoing controversy. The Court then addressed the allegations of direct infringement, induced infringement, and contributory infringement:

  • Direct Infringement. Mitek admitted that MiSnap alone did not perform all elements of any asserted claim. USAA also never accused MiSnap of satisfying every limitation of an asserted claim. Instead, MiSnap’s “unadulterated” software implemented by third-party banks failed to meet certain elements of the asserted claims. And although Mitek stated that it evaluated the complete mobile deposit system, Mitek could not have had a reasonable apprehension of suit based on testing its [...]

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Speculation of Harm Isn’t Standing: Not Every Adverse Board Decision Is Ticket to Appeal

by | Jun 12, 2025 | ,

After assessing whether a patent owner had standing to appeal the Patent Trial & Appeal Board’s final written decision, the US Court of Appeals for the Federal Circuit found no injury in fact to support Article III jurisdiction and dismissed the appeal. Dolby Labs. Licensing Corp. v. Unified Patents, LLC, Case No. 23-2110 (Fed. Cir. June 5, 2025) (Moore, Clevenger, Chen, JJ.)

Dolby owns a patent covering a prediction method involving an in-loop filter. Unified Patents, claiming to be the sole real party in interest (RPI), filed an inter partes review (IPR) challenging several patent claims as anticipated and obvious. Dolby contested the challenge, identifying nine additional entities it argued should have been named as RPIs (alleged RPIs). The Board declined to rule on Dolby’s inclusion, however, and proceeded with Unified as the sole RPI.

In its final written decision, the Board found that Unified failed to establish the unpatentability of any challenged claims. Consistent with the US Patent & Trademark Office’s practice, it also declined to address the RPI dispute, finding it immaterial – there was no evidence the alleged RPIs were estopped from filing their own IPRs later or that Unified had advantageously or strategically omitted them. Dolby appealed.

The Federal Circuit explained that when it reviews final Board decisions, its jurisdiction is constrained by Article III’s “Cases” and “Controversies” requirement. To establish standing, an appellant must demonstrate:

  • A concrete and particularized injury in fact that is actual or imminent, not speculative.
  • A causal link between the injury and the appellee’s challenged conduct.
  • A likelihood that the injury will be redressed by a favorable ruling.

Dolby asserted standing to appeal the Board’s refusal to address the RPI dispute based on three grounds:

Its statutory right to appeal as a “dissatisfied” party under 35 U.S.C. § 319.

  • The denial of its right to information under 35 U.S.C. § 312(a)(2).
  • An injury in fact arising from potential breaches of license agreements by the alleged RPIs and possible conflicts of interest involving the Board’s administrative patent judges.

The Federal Circuit rejected Dolby’s argument that it had a right to appeal based solely on dissatisfaction with the Board’s decision. The Court explained that the right to appeal a Board decision under the America Invents Act (AIA) requires Article III standing. The Court also dismissed Dolby’s argument for a statutory right to RPI information, finding that the AIA does not create an informational right. The Court explained that unlike statutes such as the Federal Advisory Committee Act or the Federal Election Campaign Act, which expressly grant public access to information, the AIA lacks a public access provision and explicitly limits judicial review of IPR-related determinations, including RPI disclosures.

As to Dolby’s right to appeal the Board decision, the Federal Circuit found Dolby’s argument too speculative to establish standing, citing four key deficiencies:

Dolby failed to assert that any alleged RPIs were party to license agreements, undermining its claim of potential breach.



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Take That Conception Out of the Oven – It’s CRISPR Even If the Cook Doesn’t Know

by | May 22, 2025 | ,

Addressing the distinction between conception and reduction to practice and the requirement for written description in the unpredictable arts, the US Court of Appeals for the Federal Circuit explained that proof of conception of an invention does not require that the inventor appreciated the invention at the time of conception. Knowledge that an invention is successful is only part of the case for reduction to practice. Regents of the Univ. of Cal. et al. v. Broad Inst. et al., Case No. 22-1594 (Fed. Cir. May 12, 2025) (Reyna, Hughes, Cunningham, JJ.)

The Regents of the University of California, the University of Vienna, and Emmanuelle Charpentier (collectively, Regents) and the Broad Institute, Massachusetts Institute of Technology, and the President and Fellows of Harvard College (collectively, Broad) were each separately involved in research concerning CRISPR systems that “are immune defense systems in prokaryotic cells that naturally edit DNA.” At issue was the invention of the use of CRISPR systems to modify the DNA in eukaryotic cells. Regents and Broad filed competing patent applications resulting in an interference proceeding under pre-AIA law at the US Patent & Trademark Office Board of Patent Appeals & Interferences to determine which applicant had priority to the invention.

The main issue before the Board was a priority dispute over who first conceived of the invention and sufficiently reduced it to practice under pre-AIA patent law. Regents submitted three provisional patent applications dated May 2012, October 2012, and January 2013 and moved to be accorded the benefit of the earliest filing date, May 2012, for the purpose of determining priority. Alternatively, Reagents sought to be accorded either October 2012 or January 2013 as its priority date. The Board found that Regents’ first and second provisional applications (filed in May and October 2012, respectively) were not a constructive reduction to practice because neither satisfied the written description requirement of 35 U.S.C. § 112. The third provisional application, filed in January 2013, was the first to amount to a constructive reduction to practice of the counts in interference. The Board then ruled that Broad was the senior party for the purposes of priority in the interference proceeding because Broad reduced the invention to practice by October 5, 2012, when a scientist submitted a manuscript to a journal publisher. The Board ruled that Regents failed to prove conception of the invention prior to Broad’s actual reduction to practice. Regents appealed.

Regents argued that in assessing conception, the Board “legally erred by requiring Regents’ scientist to know that their invention would work.” The Federal Circuit agreed and vacated the Board’s decision. As the Court explained, there are three stages to the inventive process: conception, reasonable diligence, and reduction to practice. At the conception stage, “an inventor need not know that his invention will work for conception to be complete.” Rather, knowledge that the invention will work, “necessarily, can rest only on an actual reduction to practice.” The Board therefore legally erred by requiring Regents to know its invention would work to prove [...]

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Hatch-Waxman or Not, Clinical Trials Aren’t Subject to Injunction

by | May 15, 2025 |

Analyzing the permissible scope of an injunction under the Hatch-Waxman Act, the US Court of Appeals for the Federal Circuit reversed the district court’s prohibitions on an open-label extension (OLE) of a then-running clinical trial and new clinical trials and remanded for further consideration of whether prohibiting a request for an additional indication was appropriate. Jazz Pharmaceuticals, Inc. v. Avadel CNS Pharmaceuticals LLC, Case No. 24-2274 (Fed. Cir. May 6, 2025) (Lourie, Reyna, Taranto, JJ.)

This appeal is one of several disputes between Jazz and Avadel regarding their competing sodium oxybate products. Jazz markets two such products: Xyrem, approved for treating excessive daytime sleepiness and certain cataplexy, and Xywav, which, in addition to Xyrem’s indications, also may be used for treating idiopathic hypersomnia. Avadel filed a § 505(b)(2) new drug application (NDA) to market its own product, Lumryz. During the pendency of the Lumryz application, Jazz obtained a patent and asserted that Avadel infringed it under 35 U.S.C. § 271(e)(2), part of the Hatch-Waxman Act, based on its filing of the Lumryz NDA. The patent was never Orange Book listed, so Avadel did not need to submit any patent certification.

The US Food & Drug Administration (FDA) approved Lumryz. Avadel launched the product, and Jazz amended its complaint to assert traditional § 271(a) – (c) infringement. Ultimately, Avadel and Jazz stipulated infringement, the patent was determined not invalid, and the jury awarded damages based on the post-launch infringement. After further proceedings, the district court permanently enjoined Avadel from seeking an idiopathic hypersomnia indication for Lumryz, offering an OLE phase of its then-running Lumryz idiopathic hypersomnia clinical trial, and against initiating new clinical trials. Avadel appealed, arguing that each of these restrictions was improper.

The Federal Circuit largely agreed with Avadel, reversing the first two prohibitions, and remanded the case back to the district court for further consideration of the prohibition against any new clinical trials. Turning first to the prohibition on new clinical trials, the Court held that initiating new trials for the purposes of submission to the FDA fell squarely within the Hatch-Waxman Safe Harbor for experimentation (under § 271(e)(1)) and thus could not be enjoined (per §271(e)(3)). Jazz unsuccessfully argued that Avadel had waived its Safe Harbor position, which required factual development.

Next, the Federal Circuit rejected the district court’s injunction against an OLE, concluding that the district court had not applied the Supreme Court’s four-factor eBay (2006) test for injunctions when deciding the appropriateness of such extraordinary relief. Refusing to determine whether an OLE extension qualified as safe-harbored activity in the first instance, the Court explained that only if such activity were deemed to be infringing on an appropriate record could it be enjoined.

Finally, with respect to prohibiting Avadel from seeking an idiopathic hypersomnia indication for Lumryz, the Federal Circuit concluded that the propriety of that restriction may turn on whether the infringement qualified under the Hatch-Waxman Act, reasoning that an injunction might run afoul of the § 271(e)(4) limitation on the scope of injunctive relief. [...]

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New Rx for High Drug Prices? Senate Judiciary Committee Advances Six Bills With Heavy Dose of Options

by | Apr 17, 2025 | ,

The US Senate Judiciary Committee advanced to the full Senate six bills intended to reduce pharmaceutical prices and enhance market competitiveness. The package collectively targets several aspects of the pharmaceutical landscape, including pharmaceutical benefit manager (PBM) pricing practices, next-generation drug releases, patent portfolio assertions, and use of US Food and Drug Administration (FDA) regulatory mechanisms. Many of the bills’ proposals have been proposed before, but it is significant that the six bills were moved to the full Senate with bipartisan support.

The Affordable Prescriptions for Patients Act, if passed, would limit how many patents a reference product sponsor can assert in a Biologics Price Competition and Innovation Act (BPCIA) litigation against a biosimilar applicant, although such limits could be surpassed with court approval. A biologics license holder could assert up to 20 patents in a BPCIA case. Certain patents, such as method of treatment patents, would fall outside the limitation.

Against the backdrop of the Supreme Court’s 2013 holding in FTC v. Watson that certain “pay for delay” agreements are prohibited as anticompetitive, the Preserve Access to Affordable Generics and Biosimilars Act would add precision to the boundaries of permissible settlements in the pharmaceutical industry. The Federal Trade Commission (FTC) would have specific authority to institute a civil action to recover penalties, and certain presumptions would apply. For example, any agreement providing a generic or biosimilar applicant with “anything of value, including an exclusive license,” would be presumptively anticompetitive, with certain exceptions and exclusions. Terms that would remain permissible include a pre-expiration launch date, reasonable litigation expenses, and covenants not to sue for patent infringement.

Targeting the concern that branded small molecule and biologics drug manufacturers release new products with patent protection and withdraw or unfairly disincentivize older products to avoid generic competition, the Drug Competition Enhancement Act would deem the alleged practice of “product hopping” unfair competition subject to enforcement actions. The bill would define a hard switch as when a branded or biologics manufacturer discontinues or withdraws an application and introduces a follow-on product within a certain period relative to generic or biosimilar approval. It would define a soft switch as when the brand manufacturer took actions that “that unfairly disadvantage the listed drug or reference product relative to [a] follow-on product.” The bill would provide specific exclusions and justifications for branded manufacturer actions that would otherwise constitute a hard or soft switch.

Seeking to curb perceived abuses of the FDA citizen petition process, the Stop Significant and Time-Wasting Abuse Limiting Legitimate Innovation of New Generics (Stop STALLING) Act would grant the FTC the authority to bring a civil action against those filing “sham petitions” with the FDA, with penalties up to $50,000 per calendar day of review or the revenue earned by the seller of the branded product, whichever is greater. A petition could be classified as a sham based on its own objective unreasonableness, an intention to delay approval of a generic or biosimilar product, or as part of a series of covered petitions.

Based on [...]

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Detour Ahead: New Approach to Assessing Prior Art Rejections Under § 102(e)

by | Apr 3, 2025 | ,

The US Court of Appeals for the Federal Circuit established a more demanding test for determining whether a published patent application claiming priority to a provisional application is considered prior art under pre-America Invents Act (AIA) 35 U.S.C. § 102(e) as of the provisional filing date, explaining that all portions of the published patent application that are relied upon by the US Patent & Trademark Office (PTO) to reject the claims must be sufficiently supported in the provisional application. In re Riggs, Case No. 22-1945 (Fed. Cir. Mar. 24, 2025) (Moore, Stoll, Cunningham, JJ.)

Several inventors who work for Odyssey Logistics filed a patent application directed to logistics systems and methods for the transportation of goods from various shippers by various carriers across different modes of transport (e.g., by rail, truck, ship, or air). PTO rejected the application under § 102(e) in view of Lettich, which claimed the benefit of a provisional application (Lettich provisional), and as obvious in view of Lettich in combination with the Rojek reference.

The inventors appealed the Lettich rejections to the Patent Trial & Appeal Board, arguing that Lettich did not qualify as prior art under § 102(e). The Board initially agreed with the inventors, but the Examiner assigned to the application requested a rehearing, asserting that the Board applied the incorrect standard for § 102(e) prior art. The Board ultimately issued its decision on the Request for Rehearing, stating that it had jurisdiction over the Examiner’s request and that the Examiner’s arguments regarding Lettich’s status as prior art under § 102(e) “[we]re well taken.” The Board amended its original decision “to determine that Lettich is proper prior art against the instant claims.” The Board then reviewed and affirmed the Examiner’s anticipation and obviousness rejections. The inventors appealed.

The Federal Circuit vacated and remanded the Board’s decision. With respect to whether Lettich qualified as § 102(e) prior art, the Court found that the Board’s analysis was incomplete. The Court concluded that the Board correctly applied the test set forth in the Federal Circuit’s 2015 decision in Dynamic Drinkware v. National Graphics by determining that the Lettich provisional supported at least one of Lettich’s as-published claims. However, the Court found that this test was insufficient because all portions of the disclosure that are relied upon by the PTO to reject the claims must also be sufficiently supported in the priority document. Although the PTO asserted that the Board had conducted this additional analysis, the Federal Circuit disagreed and vacated and remanded for the Board to determine whether the Lettich provisional supported the entirety of the Lettich disclosure that the Examiner relied on in rejecting the claims.



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Hatch-Waxman Litigation Expenses Are Deductible Under Internal Revenue Code § 162(a)

by | Apr 3, 2025 |

The US Court of Appeals for the Federal Circuit upheld a US Court of Federal Claims ruling that Hatch-Waxman Act litigation expenses are ordinary and necessary business expenses under § 162(a) of the Internal Revenue Code, entitling an abbreviated new drug application (ANDA) filer to deduct litigation expenses incurred defending against a patent infringement lawsuit. Actavis Labs. FL, Inc. v. United States, Case No. 23-1320 (Fed. Cir. Mar. 21, 2025) (Chen, Cunningham, Stark, JJ.)

Actavis filed ANDAs with the US Food and Drug Administration (FDA) seeking approval to market and sell a generic version of a drug already offered for sale in the United States. Per the Hatch-Waxman Act, filing an ANDA is an act of patent infringement where the ANDA holder seeks FDA approval prior to the expiration of the new drug application (NDA) holder’s patent. Following Actavis’s filing, the NDA holder brought a patent infringement lawsuit against Actavis.

Actavis subsequently treated litigation expenses incurred in defending the patent infringement lawsuit as ordinary and necessary expenses. Actavis deducted those litigation expenses on its tax returns for that year. However, the Internal Revenue Service (IRS) considered these expenses to be nondeductible capital expenditures since they were incurred “in pursuit of an intangible capital asset: namely, FDA approval to lawfully market a generic drug product in this country.”

Actavis eventually paid its tax liability but then sued the IRS in the Court of Federal Claims to recover what Actavis considered an overpayment of its taxes. The claims court agreed with Actavis, holding that Hatch-Waxman litigation expenses were deductible as ordinary and necessary business expenses. The IRS appealed.

The Federal Circuit affirmed. When determining whether Hatch-Waxman litigation expenses are deductible under Code § 162(a), the Federal Circuit uses two tests to settle the issue: the “origin of the claim” test and the “most significant benefit” test. However, as the Court emphasized, regardless of which test applied, Actavis prevailed.

The Federal Circuit first explained that Actavis prevailed under either test because patent infringement (not the FDA approval process) is what triggers incurring litigation expenses. Further evidence that the “origin of the claim rests in the patentholder’s decision to sue, and not in the ANDA filer’s decision to seek drug approval from the FDA, is the fact that infringement litigation cannot provide the ANDA filer what it wants – only the FDA can,” the Court stated.

Relying on the Third Circuit’s 2023 decision in Mylan v. Comm’r of Internal Revenue, the Federal Circuit delved into the fairness aspect of allowing Hatch-Waxman litigation expenses to be deductible. Citing Mylan, the Court explained that generic manufacturers defending against patent infringement suits “obtain no rights from a successful outcome. They acquire neither the intangible asset of a patent nor an FDA approval.” The Court also noted that brand-name drug companies in Hatch-Waxman lawsuits may deduct litigation expenses incurred while enforcing their patent rights. “[I]mposing very different tax treatment on the warring sides in an ANDA dispute, as the Commissioner advocates, is at odds with the careful statutory [...]

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When “It’s Obvious” Just Isn’t Enough: Challenger’s Burden to Prove Obviousness

by | Mar 27, 2025 |

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s decision that a patent was not obvious because the petitioner failed to show sufficient support of obviousness based on prior art. AMP Plus, Inc. v. DMF, Inc., Case No. 23-1997 (Fed. Cir. Mar. 19, 2025) (Lourie, Bryson, Reyna, JJ.)

DMF owns a patent directed to a compact recessed lighting system designed for installation in a standard electrical junction box. In 2019, AMP, doing business as ELCO, petitioned for inter partes review of several claims of the patent on three grounds of unpatentability:

  • Anticipation by a prior reference
  • Obviousness based on a combination of two references
  • Further obviousness based on an additional source.

The Board found that one claim was anticipated but ruled that ELCO failed to prove unpatentability of the other claims, including the claim at issue on appeal. The claim at issue describes a system with wires connected to a driver and a first connector, coupled to a second connector that in turn is connected to the building’s electrical system. This specific connection was referred to as “Limitation M.” ELCO appealed. In that earlier appeal (2022), the Federal Circuit affirmed the Board’s ruling on all claims except the claim at issue and remanded the case back to the Board for further analysis.

On remand, the Board concluded that ELCO failed to demonstrate the unpatentability of the claim at issue because ELCO’s petition lacked a substantive analysis of Limitation M. The Board found ELCO’s argument that a prior art marine lighting system could be adapted for the claimed building use unsupported by evidence and ruled that the claim at issue was not obvious. Again, ELCO appealed.

ELCO raised two main arguments. First, it argued that the Board erred in not determining that the claim at issue was anticipated by a prior reference, as the Board had previously found another claim to be anticipated by the same reference. The Federal Circuit rejected this argument because ELCO had only challenged the claim at issue on the basis of obviousness in its original petition, not anticipation. Since the issue of anticipation was not raised in the petition, the Court determined that ELCO could not introduce this new ground of unpatentability on appeal.

Second, ELCO argued that its petition had sufficiently demonstrated the obviousness of Limitation M based on the prior references. The Federal Circuit disagreed, finding that ELCO’s petition did not adequately address the specific requirement for coupling the system to a building’s electrical infrastructure. The petition failed to discuss how the recessed lighting system would be installed in a building, and the references cited did not provide adequate support for the argument of obviousness for this particular limitation.

The Federal Circuit emphasized that it was not the Board’s responsibility to supplement the petitioner’s arguments or search for evidence to support an inadequately supported claim challenge. The Court reiterated that an obviousness analysis does not require the Board to fill gaps in the petitioner’s original [...]

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Rules Are Rules, Especially in Trademark Proceedings

by | Feb 6, 2025 |

The Commissioner for Trademarks recently issued a precedential decision terminating a reexamination proceeding for the registrant’s failure to respond within a statutory time period, where there was insufficient justification to waive the response requirement. In re Trigroup USA LLC, Reg. No. 7094794 (Jan. 24, 2025) (Gooder, Comm’r for Trademarks)

The Trademark Modernization Act of 2020 (TMA) created two new trademark proceedings: expungement and reexamination. The US Patent & Trademark Office (PTO) began accepting petitions for these proceedings in 2021. The reexamination proceeding must be filed within the first five years after the registration of a trademark and can only be filed against applications filed on the basis of use (§ 1(a)) or intent to use (§ 1(b)). The proceeding questions whether the mark was in use by a certain date:

  • In the case of a use-based application, the mark must have been in use on all the goods or services identified in the application by the filing date of the application.
  • In the case of an intent-to-use application, the mark must have been in use on all the goods or services identified in the application by either the date the Allegation of Use was filed or the deadline for filing the Statement of Use.

A party filing for reexamination must submit evidence that the mark was not in use by those relevant dates.

When the PTO institutes a reexamination proceeding, it issues an Office Action providing the registrant with the opportunity to rebut the claims of non-use. The rules require a response within three months of the Office Action issue date, and failure to respond results in the cancellation of the registration.

Here, the registrant did not respond to the Office Action, and the PTO cancelled the registration. The registrant then filed a Petition to the Director requesting reinstatement of the registration. Such a petition is required to include a response to the original Office Action. However, in this case, the registrant did not provide such a response, and on that basis the Commissioner found that the Petition should not be granted.

The Commissioner further found that even if the petition had included a complete response, it did not set forth sufficient facts to justify a late response. Trademark Rule 2.146(a)(5) permits the Director to waive any requirement of the rules that is not mandated by statute only “in an extraordinary situation, when justice requires, and no other party is injured.” 37 C.F.R. § 2.146(a)(5).

The registrant explained that it had an ongoing matter in China and the failure to respond was due to inadvertent error because it was dealing with the Chinese matter. The Commissioner found that this was not an extraordinary circumstance. The registrant also explained that cancellation of the registration would hinder its ongoing efforts in China and prevent it from manufacturing its products there. The Commissioner found that justice did not require the waiver of the PTO rules just because there would be harm to the registrant: “a party cannot be excused from the [...]

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