IP UPDATE
Exploring the Latest in Intellectual Property Law
IP UPDATE
Exploring the Latest in Intellectual Property Law
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Damages on Default Judgment Not Barred by Absence of Precise Amount in Complaint

by | May 8, 2025 |

The US Court of Appeals for the Ninth Circuit reversed and remanded a district court decision, allowing collection of actual damages in a default judgment where the complaint only sought damages “in an amount to be determined at trial.” AirDoctor, LLC v. Xiamen Qichuang Trade Co., Ltd., Case No. 24-215 (9th Cir. Apr. 11, 2025) (Friedland, J.) (Berzon, Kennelly JJ., concurring) (per curiam).

AirDoctor produces and sells air purification products, including branded filters designed specifically for its machines. In 2022, AirDoctor discovered that Xiamen Qichuang Trade had sold tens of thousands of unauthorized replacement filters that were marketed as compatible with AirDoctor products. These filters were allegedly labeled with AirDoctor’s registered trademarks, including AIRDOCTOR and ULTRAHEPA, without permission. AirDoctor asserted that these actions constituted trademark infringement, false advertising, and unfair competition under the Lanham Act and related state laws.

AirDoctor filed a complaint seeking injunctive relief and monetary damages “in an amount to be determined at trial.” Xiamen did not respond or appear in the litigation, and the court entered a default judgment against it. AirDoctor subsequently moved for approximately $2.5 million in actual damages, calculated based on the number of infringing units sold, along with $50,000 in attorneys’ fees and costs. The district court entered a default judgment in Air Doctor’s favor but declined to award damages or attorneys’ fees. The court reasoned that Fed. R. Civ. Pro 54(c) barred monetary relief in default judgments unless the complaint demanded a specific sum. Since AirDoctor’s complaint did not include a precise dollar amount, the court concluded that granting the requested monetary relief would exceed what was demanded in the pleadings and thus violate Rule 54(c). AirDoctor appealed.

The issue before the Ninth Circuit was whether the district court erred in interpreting Rule 54(c) to prohibit an award of actual damages in a default judgment where the complaint requested “damages in an amount to be determined at trial” but did not specify a fixed damages amount. Xiamen did not appear on appeal either.

The Ninth Circuit reversed, concluding that Rule 54(c) does not require a complaint to state a specific sum of damages for a court to award actual damages after a default judgment. The Court emphasized that the rule’s purpose is to prevent awards that are fundamentally different in kind or amount from those for which the defendant had been put on notice by the complaint, not to deny recovery when the type of relief was clearly identified, even if the amount was not. The Court noted that AirDoctor had clearly requested actual damages in its complaint and had indicated that the precise amount would be determined later, which was sufficient to give Xiamen fair notice of the relief sought. Relying on its 1974 decision in Henry v. Sneiders, the Court reaffirmed that actual damages may be awarded in default cases even if the complaint does not state a dollar figure, as long as the damages are of the same kind as those demanded.

The Ninth Circuit clarified that Rule [...]

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Tell Us Your Secret: Case Dismissed for Failure to Identify Trade Secrets

by | May 1, 2025 |

The US Court of Appeals for the Tenth Circuit affirmed a district court’s grant of summary judgment in favor of the defendants for the plaintiff’s failure to identify the trade secrets at issue with sufficient particularity. Double Eagle Alloys, Inc. v. Hooper, Case No. 24-5089 (10th Cir Apr. 22, 2025) (Bacharach, Seymour, Phillips, JJ.)

Double Eagle and Ace Alloys are direct competitors and distributors of specialty metals for companies in the oil and gas industry. After working for Double Eagle for decades, including five years as an inside sales manager, Michael Hooper left to join Ace. As he departed, Hooper took with him 2,660 digital files downloaded from his Double Eagle computer to an external storage device. After discovering the download, Double Eagle sued Hooper and Ace for trade secret misappropriation and civil conspiracy. The parties cross moved for summary judgment.

Double Eagle argued that the files Hooper downloaded contained financial, technical, and business information that qualified as trade secrets. Double Eagle categorized the files as pump-shaft-quality (PSQ) specifications, pricing, and customer drawings. Ace argued that the alleged trade secrets were not protectable since Double Eagle shared the information with customers or posted the information online. The district court granted summary judgment to the defendants on all claims, holding that “Double Eagle failed to identify its alleged trade secrets with sufficient particularity and clarity to proceed to trial,” that it failed to present evidence of the information’s secrecy to support the misappropriation claim, and accordingly that there was no underlying tort on which to base the claim for civil conspiracy. Double Eagle appealed.

Double Eagle argued that the summary judgment grant was improper because there were genuine issues of material fact on the issue of whether it identified its trade secrets with sufficient particularity and whether the business information was confidential. Double Eagle also argued that the district court erred by not allowing it an opportunity to supplement the evidence in support of its claim. The Tenth Circuit disagreed and affirmed on all counts.

The Tenth Circuit agreed with the district court that Double Eagle failed to introduce evidence that its alleged trade secrets were “known only to a limited number of people, were not readily ascertainable, or were valuable because they were not widely known.” The Court noted that Double Eagle’s PSQ specifications were readily ascertainable through proper means, its pricing was shared with customers without any protection to prevent customers from sharing those prices, and the customer drawings originated from the customers and were not owned by Double Eagle.

The Tenth Circuit similarly agreed with the district court’s dismissal of the misappropriation claim, explaining that the same lack of secrecy that defeated the trade secret claim also defeated the misappropriation claim. Finally, the Court rejected Double Eagle’s argument concerning its ability to supplement the record because the district court invited the parties to submit briefing on the issues, including an opportunity to move for leave to submit more evidence, but Double Eagle chose not to do so. Having [...]

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Royal Play Penalty: No Standing in the End (Zone)

by | Apr 24, 2025 |

The US Court of Appeals for the Federal Circuit dismissed an appeal from the Trademark Trial & Appeal Board, finding that the appellant lacked standing because it failed to allege any actual and particularized injury. Michael J. Messier v. New Orleans Louisiana Saints, LLC, Case No. 24-2271 (Fed. Cir. Apr. 14, 2025) (per curiam) (Moore, C.J.; Prost, Stark, JJ.) (nonprecedential)

Michael J. Messier claimed that he is a direct descendent of the kings of France, and that he and his family own intellectual property rights to the Fleur-de-Lis mark used by the NFL’s New Orleans Saints. Messier filed a petition with the Board for cancellation of the Saints’ Fleur-de-Lis mark. Messier’s petition contained no claim that he or his family currently use any fleur-de-lis marks in commerce or any other avenues for revenue, such as licensing. The Board dismissed the petition.

The Board held that pursuant to Sections 13 and 14 of the Lanham Act, 15 U.S.C. §§ 1063 and 1064, to maintain a cancellation action, Messier had to “allege a commercial interest in the registered mark or a reasonable belief in damage from the mark’s continued registration.” Messier’s original and amended petitions failed to do so. The Board noted that Messier did not own or conduct “any business under the mark, and thus he cannot allege entitlement.” Messier appealed.

The Federal Circuit determined that Messier lacked standing to bring the appeal. The Court explained that to demonstrate Article III standing for his appeal, Messier had to demonstrate actual or imminent injury that was concrete and particularized, a causal connection between the alleged conduct and the injury, and potential redressability by a favorable decision. Messier failed to meet his burden, primarily because he failed to demonstrate injury by the Saints’ use of the Fleur-de-Lis mark that went beyond “a general grievance or abstract harm.” Messier did not allege that he used a fleur-de-lis design in commerce whatsoever and thus failed to demonstrate any injury.



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Broadcast Alert! Applying Conventional Machine Learning to New Data Isn’t Patent Eligible

by | Apr 24, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s ruling that patents applying established machine learning methods to new data are not patent eligible under 35 U.S.C. §101. Recentive Analytics, Inc. v. Fox Corp. et al., Case No. 23-2437 (Fed. Cir. Apr. 18, 2025) (Dyk, Prost, Goldberg, JJ.)

Recentive sued Fox, alleging infringement of four patents designed to tackle long-standing challenges in the entertainment industry – namely, optimizing the scheduling of live events and refining “network maps,” which determine the content aired on specific channels across various geographic markets at set times. These patents aim to streamline broadcast operations and enhance programming efficiency.

The patents at issue can be divided into two categories: network maps and machine learning training. The machine learning training patents focus on generating optimized event schedules by training machine learning models with parameters such as venue availability, ticket prices, performer fees, and other relevant factors. The network map patents describe methods for dynamically generating network maps that assign live events to television stations across different geographic regions. These methods utilize machine learning to optimize television ratings by mapping events to stations and updating the network map in real time based on changes to the schedule or underlying criteria. The patents’ specifications explain that the methods employ “any suitable machine learning technique” using generic computing machines.

Fox moved to dismiss on the grounds that the patents were subject matter ineligible under § 101. Recentive acknowledged that the concept of preparing network maps had existed for a long time. Recentive also recognized that the patents did not claim the machine learning technique. Nonetheless, Recentive argued that its patents claimed eligible subject matter because they involve using machine learning to generate custom algorithms based on training the machine learning model. Recentive characterized its patents as introducing “the application of machine learning models to the unsophisticated, and equally niche, prior art field of generating network maps for broadcasting live events and live event schedules.”

The district court disagreed and granted Fox’s motion. Applying the Alice framework, at step one, the court determined that the asserted claims were “directed to the abstract ideas of producing network maps and event schedules, respectively, using known generic mathematical techniques.” At step two, the court determined that the machine learning limitations were no more than “broad, functionally described, well-known techniques” that claimed “only generic and conventional computing devices.” The court denied Recentive’s request for leave to amend because it determined that any amendment would be futile. Recentive appealed.

For the Federal Circuit, this case presented a question of first impression: whether claims that do no more than apply established methods of machine learning to a new data environment are patent eligible.

Step One

While Recentive claimed that its machine learning approach was uniquely dynamic and capable of uncovering hidden patterns in real time, the Federal Circuit found these features to be merely standard aspects of how machine learning operates. The Court explained that iterative training and model updates are not [...]

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Transatlantic Terminology: Skilled Artisan Could Equate UK, US Word Meanings

by | Apr 24, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board unpatentability determination, finding that a skilled artisan would have found the term “sterile” in a UK publication to mean the same as the term “sterilized” in the United States. Sage Products LLC v. Stewart, Case No. 23-1603 (Fed. Cir. Apr. 15, 2025) (Reyna, Cunningham, Stark, JJ.)

Sage owns two patents related to a sterilized chlorhexidine product in a package, such as an applicator filled with an antiseptic composition for disinfecting skin. Becton, Dickinson and Company petitioned for inter partes review (IPR) of both patents. The Board relied on four key pieces of prior art, including one that was a UK publication, to find the challenged claims unpatentable. In instituting the IPR and evaluating the petition, the Board construed the term “sterilized” to mean that “the component or composition has been subjected to a suitable sterilization process such that sterility can be validated.” In the final written decision, the Board found that a skilled artisan at the time of the invention would have known, through education and experience, that the term “sterile,” as used in the UK prior art publication, is equivalent to the term “sterilized,” as used in the US and particularly in the Sage patents. Reviewing the totality of the evidence before it, including both parties’ experts’ reports and testimony, the Board determined the challenged claims were unpatentable. Sage appealed.

The Federal Circuit declined to overturn the Board’s findings, affirming the Board’s definition of a person of ordinary skill in the art and their understanding of the term “sterilized” at the time of the invention. The Court found that the Board did not ignore or disregard evidence but properly weighed the evidence before it, concluding that a skilled artisan having the education and experience required by the Board’s definition would know the differences between the US and UK regulatory standards for “sterile” and therefore would know that UK references to “sterile” items would satisfy the challenged claims’ requirement for “sterilized” items.



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Opposers Beware: Your Own Mark May Not Be Protectable

by | Apr 17, 2025 |

The US Court of Appeals for the Federal Circuit affirmed the Trademark Trial & Appeal Board’s dismissal of an opposition to the registration of the marks IVOTERS and IVOTERS.COM while also noting that the US Patent & Trademark Office (PTO) might want to reconsider whether it permits registration of those marks. Heritage Alliance v. Am. Policy Roundtable, Case No. 24-1155 (Fed. Cir. Apr. 9, 2025) (Prost, Taranto, Stark, JJ.)

American Policy Roundtable (APR), a publisher of campaign and political information since June 2010, filed applications to register the marks IVOTERS and IVOTERS.COM for “providing a web site of information on current public policy issues, political campaigns and citizen concerns related to political information” after the PTO approved the marks for publication. Heritage filed an opposition.

Since the 2008 US presidential election season, Heritage has published online voter guides under the names “iVoterGuide” and “iVoterGuide.com” (the iVoters marks). Without a valid registration but having priority of use, Heritage filed an opposition asserting its common law rights in the iVoters marks.

The Board considered Heritage’s opposition but ultimately found that Heritage’s mark was not distinctive. The Board first considered whether the iVoters marks were inherently distinctive and determined they were not just descriptive but “highly descriptive.” The Board next considered whether the iVoters marks had acquired distinctiveness through secondary meaning but found that the record evidence Heritage submitted was inadequate to support a finding that the iVoters marks had any source-identifying significance. Heritage appealed.

On appeal, Heritage argued that the Board had erred by finding the iVoters marks to have neither inherent nor acquired distinctiveness and that the Board violated the anti-dissection principle by evaluating the individual components of the marks instead of the marks as a whole. The Federal Circuit disagreed. The Court found the Board’s determination that the iVoters marks were highly descriptive to be supported by substantial evidence because the prefix “i” generally refers to something internet based. Heritage chose not to challenge the Board’s finding that “VoterGuide” and “.com” were not distinctive, a ruling the Court characterized as “facially reasonable.”

The Federal Circuit also disagreed with Heritage’s argument that the Board improperly evaluated the marks’ individual components. The Court found the Board properly considered the marks as a whole through its determination that the iVoters marks “on their face refer to online voter guides” and because no evidence demonstrated that the combination of the individual components conveyed “any distinctive source identifying impression contrary to the descriptiveness of the individual parts.”

Heritage argued that the Board had erred in its determination that notwithstanding over five years of use, the iVoters marks did not have statutory acquired distinctiveness. Under Section 2(f) of the Lanham Act, registration applicants may submit evidence that a mark has acquired distinctiveness because as a consequence of extensive use and promotion of the mark, consumers now directly associate the mark with the applicant as the source of those goods. Heritage argued that the Board should have accepted its five-plus years of continuous use as prima facie [...]

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High Burden Dooms Intra-District Transfer Request

by | Apr 17, 2025 |

The US Court of Appeals for the Federal Circuit denied a mandamus petition requesting transfer from the Marshall division to the Sherman division within the US District Court for the Eastern District of Texas, finding that there was lack of clear error and no abuse of discretion in the district court’s decision to deny transfer. In re SAP America, Inc., Case No. 25-118 (Fed. Cir. Apr. 10, 2025) (Dyk, Prost, Chen, JJ.) (per curiam).

Valtrus Innovations and Key Patent Innovations (collectively, Valtrus) filed a patent infringement lawsuit against SAP. SAP moved for an intra-district transfer from the Marshall division, where the case was originally filed, to the Sherman division. In support of the motion, SAP cited the presence of SAP offices, relevant witness residences, and two SAP employees, all located in Sherman. Valtrus opposed the transfer, pointing out that co-pending litigation in Marshall involved the same asserted patents.

The district court denied SAP’s motion, even though the co-pending case had been closed. The district court also pointed out that most of SAP’s witnesses were out of state or international, making either Texas division equally inconvenient for those witnesses. SAP appealed.

The Federal Circuit reviewed the district court’s ruling under the stringent standards for mandamus relief, which are as follows:

  • There is no other adequate means to attain the desired relief.
  • There is a clear and indisputable right to relief.
  • The writ is appropriate under the circumstances.

Under the Federal Circuit’s 2022 decision in In re Volkswagen, there must be “clear abuses of discretion that produce patently erroneous results.”

Under Volkswagen, a court must consider both private and public factors when deciding whether to transfer venue. The private factors are:

  • The relative ease of access to sources of proof.
  • The availability of a compulsory process to secure the attendance of witnesses.
  • The cost of attendance for willing witnesses.
  • All other practical issues that make trial of a case easy, expeditious, and inexpensive.

The public interest factors are:

  • The administrative difficulties flowing from court congestion.
  • The local interest in having localized issues decided at home.
  • The forum’s familiarity with the law that will govern the case.
  • The avoidance of unnecessary conflict of laws issues or in the application of foreign law.

The Federal Circuit found that the district court erred in assigning weight to the co-pending litigation in Marshall, which had been closed and had all defendants dismissed by the time the motion to transfer was resolved. The Court added that the district court improperly weighed the court congestion factor against transfer based solely on the case’s smooth progression to trial.

Despite these errors, the Federal Circuit concluded that SAP failed to demonstrate that the denial of transfer was erroneous. The district court had plausibly found the convenience of the two divisions comparable for most potential witnesses who resided outside of Texas, and that SAP had not sufficiently shown that its Sherman-based employees had relevant knowledge or would be trial witnesses. The Court therefore denied [...]

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Ill-Gotten Gains: Unjust Enrichment Remedy Not Barred by Limitation of Liability Provision

by | Apr 17, 2025 |

Examining the issue of trade secret misappropriation when parties have contractually limited their liability from breach, the US Court of Appeals for the Eleventh Circuit reversed the district court’s dismissal of the case, finding that a plaintiff could still recover damages under a theory of unjust enrichment. Pemco Aircraft Engineering Services Inc. v. The Boeing Company, Case No. 22-13776 (11th Cir. Apr. 4, 2025) (Pryor, Branch, Carnes, JJ.)

Pemco and Boeing, who are usually competitors, entered into an agreement to jointly bid for a government contract. The parties’ contract had three separately executed parts that functioned as one agreement. When the contractual relationship fell apart, Pemco sued Boeing for breach of contract and trade secret misappropriation. Based on Boeing’s contractual breach, a jury awarded Pemco more than $2 million of out-of-pocket damages. The district court dismissed the trade secret misappropriation claim, however, as time-barred under Alabama law. After Pemco appealed, the Eleventh Circuit reviewed and determined that the trade secret misappropriation claim arose under Missouri law, not Alabama law, and that under Missouri law, Pemco’s trade secret claims were not time-barred. On remand, Pemco brought amended trade secret misappropriation claims under Missouri law, which the district court dismissed based on the parties’ contract, which limited liability. Pemco appealed.

The issue on appeal was whether the parties’ contractual limitation of liability provision precluded any damages, even for misappropriation. The contractual provision lists the categories of damages that the parties disclaimed, namely, incidental, punitive, and exemplary, or consequential damages. The Eleventh Circuit explained that two sophisticated parties negotiating at arm’s length are permitted by Missouri public policy considerations to contractually limit future recovery for even intentional torts. By including punitive and exemplary damages, which are available only for tort claims and not contractual ones, the parties clearly intended to include torts related to the contract within its scope. Thus, even though trade secret misappropriation is a tort and not a contractual claim, the Court found that the claim was restricted by this provision and Pemco was therefore limited in its potential recovery.

The Eleventh Circuit next looked to whether the jury award had sufficiently compensated Pemco. The district court found that a Missouri trade secrets claim was barred in this context because of a full recovery under the related contract claim. The Court, however, distinguished the two causes of action. So long as the trade secrets claim provides a separate, non-duplicative remedy, it can stand on its own despite other recoveries under the contract. The Missouri Trade Secrets Act explicitly provides for an unjust enrichment remedy not available for contractual breach and the parties chose not to limit recovery for unjust enrichment. Thus, the Court concluded that this remedy was available as a trade secret claim that was not, and could not have been, available to Pemco under the contract.

Boeing advanced two arguments against the availability of an unjust enrichment remedy. Boing argued that any further award would be duplicative of the previous jury award and that unjust enrichment constitutes a [...]

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Not Secret and Not Used: Misappropriation Claim Dismissed

by | Apr 17, 2025 |

The US Court of Appeals for the Fifth Circuit upheld a district court’s grant of summary judgment in favor of the defendants, finding that the plaintiff failed to identify a trade secret and presented no evidence of its use or disclosure. DeWolff, Boberg & Associates, Inc. v. Justin Pethick and The Randall Powers Co., Case No. 24-10375 (5th Cir. Apr. 3, 2025) (Smith, Clement, Duncan, JJ.)

In 2018, Justin Pethick was a DeWolff, Boberg & Associates (DBA) employee. That year, DBA’s competitor, The Randall Powers Company (Powers), hired Pethick as regional vice president of sales. After Pethick began working at Powers, some prospective DBA clients hired Powers for consulting services. DBA sued Powers for trade secret misappropriation, asserting that Pethick stole its trade secrets and used them to poach clients. The district court granted summary judgment in favor of Powers and Pethick. DBA appealed.

The Fifth Circuit affirmed but on alternative grounds. To prevail on a misappropriation claim under Texas law (where the initial suit was brought), “a plaintiff must show that (1) a trade secret existed, (2) the trade secret was acquired through a breach of a confidential relationship or discovered by improper means, and (3) the defendant used the trade secret without authorization from the plaintiff.”

On appeal, Powers first argued that the information DBA claimed was trade secrets, such as contact information, meeting notes, and “confidential information related to business opportunities,” did not qualify as protectable trade secrets. DBA pointed to “large swathes of database information” without distinguishing what exactly was supposedly a trade secret. The Fifth Circuit found it was unclear as to what materials were trade secrets, noting that it had “no obligation to sift through the record in search of evidence to support a party’s opposition to summary judgment.” The Court held that summary judgment was justified on this basis.

The Fifth Circuit further held that, even assuming the information qualified as trade secrets, summary judgment was still warranted because there was no evidence that Powers and Pethick used the information. Although Pethick had requested a copy of a document that DBA claimed contained trade secrets prior to joining Powers, there was no evidence that he ever possessed it while at Powers. To the contrary, the forensic expert retained by DBA to remove its data from Pethick’s computer did not find the document. The Court concluded that DBA failed to demonstrate any use of an alleged trade secret.



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Prosecution Disclaimer Alive and Well, Especially in Closed Claim

by | Apr 17, 2025 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s noninfringement determination, finding that the presence of a disclaimed compound in the accused product precluded infringement. Azurity Pharm., Inc. v. Alkem Lab’ys Ltd., Case No. 23-1977 (Fed. Cir. Apr. 8, 2025) (Moore, Chen, Murphy, JJ.)

Azurity owns a patent directed to a nonsterile, stable liquid formulation of vancomycin hydrochloride, specifically designed for oral administration to treat Clostridium difficile infections. Following Alkem’s submission of an Abbreviated New Drug Application (ANDA), Azurity brought a Hatch-Waxman Act claim against Alkem for infringement of certain claims of the patent. The district court found that Azurity had disclaimed the presence of propylene glycol in the claimed formulation during the prosecution. Since Alkem’s ANDA product contained propylene glycol, the district court held that it did not infringe. Azurity appealed.

The Federal Circuit affirmed, focusing on the patent’s prosecution history and noting that Azurity used the lack of propylene glycol to distinguish its claimed invention from the prior art. The Court noted that this distinction was made during prosecution multiple times in response to the examiner’s rejections, and that Azurity had added negative claim limitations that specifically omitted propylene glycol from the scope of the claims.

The Federal Circuit also noted that Azurity used a “consisting of” transitional phrase to narrow the claims and relied on the closed transition to overcome the prior art. The Court explained that “consisting of” is a closed transition that limits the claim scope to only the recited components. By using this transition and not including propylene glycol as one of the claim components, Azurity effectively disclaimed propylene glycol from the invention. Therefore, the Court found that omission of propylene glycol during patent prosecution was “clean, unambiguous, and complete.”

Azurity argued that a pretrial stipulation between the parties, which stated that “[s]uitable flavoring agents for use in the asserted claims include flavoring agents with or without propylene glycol,” should preclude the application of the disclaimer. The Federal Circuit did not find this argument persuasive, concluding that the stipulation did not alter the clear and unambiguous disclaimer made during prosecution, nor did it affect the noninfringement finding. Since Alkem’s ANDA product contained propylene glycol and Azurity disclaimed inclusion of propylene glycol, there was no infringement.



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