New USPTO Leadership on the Horizon: Lutnick Confirmed as Commerce Secretary, Squires Expected as Director

Patent

by Dennis Crouch

Yesterday, the Senate voted to confirm Howard Lutnick as Secretary of Commerce. Lutnick, has been CEO of Cantor Fitzgerald and a prolific inventor named on over 400 U.S. patents. Commerce has a wide coverage, including housing the USPTO.

Meanwhile, Dani Kass at Law360 is reporting that John A. Squires, currently a partner at Dilworth Paxson and former chief IP counsel at Goldman Sachs, is expected to be nominated as the next USPTO Director.  Like Lutnick, Squires has extensive fintech experience.

The Director position requires presidential nomination and Senate confirmation under 35 U.S.C. § 3(a)(1). The statute specifically requires that the Director be a U.S. citizen with a professional background and proven ability in patent or trademark law.  I expect that Sec. Lutnick will play a key role in advancing Squires’ potential nomination through the process.

Squires brings significant private sector IP experience to the potential role. At Goldman Sachs, he founded and led the investment bank’s intellectual property practice from 2000 to 2009. This was at the same time that Lutnick at CantorFitz was deeply involved on the technical side.  Squires’ practice at Dilworth Paxson has continued to focus on emerging technologies including AI, blockchain, and fintech.  He also previously helped to create the Fortress’ IP Investment group’s $4 billion.

Although Squires has not published his list, I expect that the following will be some of his focal points as he jumps into the fray:

  1. Ensuring the patent system is both accessible and valuable to small startups.
  2. Expanding patent eligibility through legislation, especially for Software/Fintech.
  3. Expanding the use of AI tools in the examination process to create a more efficient and predictable process.
  4. Reducing the backlog and patenting delays.
  5. Considering ways to link the patent system with national security.

The USPTO had expanded a number of DEIA related initiatives under Directors Iancu and Vidal. Those have been eliminated already and so are unlikely to be a focus of Squires’ tenure.

Generic Drugs, Skinny Labels, and Liability for Off Label (Infringing) Use

Patent

by Dennis Crouch

I mentioned in a recent post that Hikma's petition for writ of certiorari was due on Valentines Day, February 14 2025.  The company has now filed its petition and it des a powerful job of presenting the problems of the Federal Circuit's "skinny label" decision.  Hikma particularly asks the Court to clarify when marketing a generic drug with a "skinny label" can trigger liability for actively inducing patent infringement under 35 U.S.C. 271(b). Petition for Certiorari - Hikma v Amarin.

The case centers on Hikma's generic version of Amarin's Vascepa (icosapent ethyl), which was originally approved to treat a form of heart disease, severe hypertriglyceridemia (SH). While that use is no longer patent-protected, Amarin later obtained patents covering Vascepa's use for the somewhat overlapping category of reducing cardiovascular (CV) risk. Following established practice under the Hatch-Waxman Act, Hikma obtained approval for and ultimately launched its generic version with a "skinny label" that carved out the still-patented CV indication. See Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399 (2012) (explaining Congress designed this system "to speed the introduction of low-cost generic drugs to market").  This situation is extremely important because the majority of new FDA approvals are for new uses of already approved drugs.

We want a system that works to both incentivize development of further uses of the known drugs -- and that allows for low cost access for uses that are no longer protected by patent rights.  I also want to recognize here that drug prices for patented uses can be prohibitively expensive for individuals, while insurers and pharmacy benefit managers are looking for ways to lower their cost and stay competitive. So, any system we have in place needs to recognize these strong incentives and the pragmatic realities driving behavior in the pharmaceutical marketplace.  In other words, the system needs to maintain the practical viability of skinny labels without unduly trampling valid patent rights. The current situation creates an unsustainable political tension around new uses for existing medicines.  In order to be politically acceptable, we're going to need a system that continues to permit wide use of the old drugs.  Otherwise we'll see mounting pressure to eliminate new use patents that many see as improper evergreening that blocks legitimate generic entry.

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Supreme Court Patent Challenges February 2025

Patent

by Dennis Crouch

The Supreme Court's 2024-2025 patent docket has a growing number of cases awaiting consideration. I count fifteen pending cases that could reshape multiple facets of patent law. At the heart of this term lies a set of challenges to the Federal Circuit's Rule 36 summary affirmance practice, with five separate petitions (ParkerVision, Island IP, ATOS, Audio Evolution Diagnostics and Converter Manufacturing) arguing that the court's frequent use of one-word affirmances undermines transparency and violates statutory requirements for reasoned decision-making and demands supervision from the Supreme Court. This procedural theme extends beyond Rule 36 to encompass broader questions about how patent cases should be adjudicated, with three petitions (BBiTV, Island IP, and Brumfield) challenging the Federal Circuit's approach to resolving factual disputes at summary judgment, particularly in patent eligibility cases. Impact Engine and Audio Evolution Diagnostics also challenge the eligibility framework, with Audio Evolution specifically questioning whether medical diagnostic machine patents should be considered abstract ideas under Alice/Mayo.

Two cases raise what I see as core substantive patent law issues outside of eligibility:

  • Converter Manufacturing questions the court's long-standing approach to prior art enablement.
  • Celanese raises questions the the scope of the on-sale bar under the America Invents Act, particularly for secret processes.

These substantive challenges are complemented by cases addressing remedial issues, including DISH Network's questions about attorney fee liability and IPR-related costs, and Provisur's challenge to the Federal Circuit's review of jury willfulness findings.

The following list loosely categorizes the pending cases and you'll find details about each via the hyperlink.

Federal Circuit Rule 36 Challenges

Patent Eligibility Cases

Other Core Patent Law Issues

Additional Procedural & Remedial Issues

Pending/Potential Filings

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The Burden of Proving Prior Art Enablement

Patent

by Dennis Crouch

Federal Circuit recently issued a Rule 36 summary affirmance in Converter Manufacturing, LLC v. Tekni-Plex, Inc. (Fed. Cir. Sept. 9, 2024).  The case is now on petition for writ of certiorari to the US Supreme Court and raises significant questions about the burden of proving enablement of prior art references in patent cases.  The case also raises a challenge to the Federal Circuit's aggressive approach to issuing judgments without opinion. [Read the petition in 24-866]

Converter Manufacturing holds a number of patents covering thermoformed plastic food trays with rolled edges.  The dispute in the IPR centered primarily on whether the three prior art references were sufficiently enabling.  While creating rolled edges on circular plastic items (like cups) was well-known, doing so on rectangular trays presented a pretty tricky challenge because the plastic would pucker and wrinkle at the corners where the material has to travel different distances compared to the straight edges. This technical difficulty explains why industry participants considered rolled edges on rectangular trays "impossible" before CM's invention, despite the seemingly simple concept.

Science fiction is fun to read, but it typically cannot invalidate real innovations because (typically) the SciFi author does not actually teach the details of how to make the futuristic technology -- i.e., the work does not enable the invention.  Even in cases involving real prior invention, the public nature of patent law requires that the prior art evidence enable the invention. This requirement serves a crucial policy goal: ensuring that patents are only invalidated by prior art that genuinely placed the claimed technology within public possession, not by mere conceptual descriptions that fail to teach the public how to actually implement the invention. 

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When Properties Define Structure: Eligibility of Composition Claims

Patent

by Dennis Crouch

The Federal Circuit has reversed a controversial ITC decision that had invalidated composition of matter claims as abstract ideas. US Synthetic Corp. v. Int'l Trade Comm'n, No. 23-1217 (Fed. Cir. Feb. 13, 2025). This case marks an important limitation on the seemingly ever-expanding realm of patent ineligibility under Section 101. Writing for a unanimous panel, Judge Chen wrote that US Synthetic's patent claims covering polycrystalline diamond compacts (PDCs) used in drill bits are patent eligible, rejecting the ITC's determination that claims defining a composition by its material properties could be deemed abstract ideas.

As I wrote in an October 2024 post, this case raised fundamental questions about whether composition of matter claims could ever be considered abstract ideas simply because they included functional limitations or defined the composition through its properties rather than manufacturing steps. The ITC's decision had drawn criticism from PhRMA and others as an unprecedented expansion of abstract idea analysis.

At oral arguments, Judge Dyk explained that the court was taking the case seriously:

This case is breaking new territory. If we were to affirm, then this very crude tool of patentability, known as patent eligibility, start running random through composition of matter claims, just as it has through computer software and diagnostic claims.

Oral args at 15:10.

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Federal Circuit Tightens Expert Testimony Standards in Trudell, Previewing Potential Approach to EcoFactor

Patent

The Federal Circuit's recent decision in Trudell Med. Int'l Inc. v. D R Burton Healthcare, LLC, 23-1777 (Fed. Cir. Feb. 7, 2025), follows a framework for excluding expert testimony that either (1) violates discovery obligations or (2) contradicts claim construction. The appellate court rejected a jury verdict of non-infringement after finding the district court abused its discretion by admitting expert testimony that both failed to comply with Fed. R. Civ. P. 26's expert disclosure requirements and violated Federal Rule of Evidence 702's reliability standards.  The case also notably resulted in judicial reassignment after the Federal Circuit found the district judge's conduct and statements demonstrated an improper emphasis on rapid case disposition over careful consideration of the issues.

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Docket This: Working with Clients to Manage the USPTO Continuation Surcharges

Patent

by Dennis Crouch

The USPTO's new fee structure, which took effect on January 19, 2025, introduces significant changes that will reshape patent prosecution strategy in the coming years. While the update includes generally higher fees across the board, one notable development is a substantial surcharge targeting continuation applications filed long after their earliest benefit date (EBD). Under this new structure, applicants now face a $2,700 surcharge for continuations filed six years after the EBD, with the fee jumping to $4,000 for applications filed nine or more years out. Small and micro entities receive their typical discounts. This change forces patent practitioners to reconsider long-established prosecution timing strategies, particularly the common practice of sequential continuation filings. The impact will be especially significant for foreign applicants and companies maintaining large continuation portfolios, requiring some immediate attention to docketing practices and client communication schedules.

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Patent Applications After Final Rejection: A One-Year Follow-Up Study

Patent

by Dennis Crouch

I have been looking at after final practice, and potential changes going forward in how applicant's respond to this important decision point.

The chart above looks at fate of patent applications that received final rejections in January 2024 -- and shows an optimistic picture one-year out. Among the 15,813 applications tracked, nearly half (48%) have issued as patents or at least received a notice of allowance, suggesting that a final rejection, while a significant hurdle, is far from the end of the road for many applications. And, that an allowance may well be on the horizon. A substantial percentage of these cases used the now defunct After Final Consideration Pilot (AFCP 2.0) to transform the rejection into allowance.  Moving forward, applicants will likely instead need to file a Request for Continued Examination (RCE) or appeal.

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From Sculptors to Headnotes: Chiseling Out Copyright Protection for Westlaw Content

Patent

by Dennis Crouch

In a surprising decision today, Judge Stephanos Bibas ruled that ROSS Intelligence's use of Westlaw content to train its legal AI system constituted copyright infringement. Thomson Reuters Enter. Ctr. GmbH v. Ross Intel. Inc., No. 1:20-cv-613-SB (D. Del. Feb. 11, 2025).  I have been following a number of AI intellectual property challenges. Most of these have favored the makers and users of AI over the owners of the IP (typically copyright holders).

In 2023, Judge Bibas largely denied Thomson Reuters' motions for summary judgment on copyright infringement and fair use. Thomson Reuters Enter. Ctr. GmbH v. Ross Intel. Inc., 694 F. Supp. 3d 467 (D. Del. 2023). However, while preparing for the scheduled August 2024 trial, the judge reconsidered his earlier ruling.  The new opinion granted Thomson Reuters summary judgment on direct copyright infringement for 2,243 specific headnotes (detailed in a sealed appendix), including a finding of no fair use.  It looks like the only remaining factual issue for trial regarding these headnotes is whether some of their copyrights have expired.  There are also another set of headnotes that the judge concluded were not original enough to be clearly copyrightable -- those would go to a jury for consideration. [Read the Decision: 1739288038966]

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Different Burdens of Proof Prevent IPR Estoppel from Extending to Non-Challenged Claims

Patent

The Federal Circuit has significantly limited the reach of inter partes review estoppel in Kroy IP Holdings, LLC v. Groupon, Inc., No. 2023-1359 (Fed. Cir. Feb. 10, 2025). The court held that a PTAB unpatentability finding cannot create collateral estoppel (issue preclusion) against asserting other claims from the same patent in district court - even if those other claims are materially identical for invalidity purposes. The decision, authored by Judge Reyna, emphasizes the critical distinction between IPR's preponderance standard and district court litigation's clear and convincing evidence requirement.  This case builds upon ParkerVision, Inc. v. Qualcomm Inc., 116 F.4th 1345 (Fed. Cir. 2024).

The case arose after Kroy sued Groupon for infringing U.S. Patent 6,061,660, which relates to incentive programs over computer networks. After Groupon successfully challenged some claims in IPR proceedings, Kroy amended its complaint to assert different claims that had not been challenged in the IPRs. The district court dismissed the case, finding that collateral estoppel barred assertion of the new claims since they were not materially different from the claims found unpatentable by the PTAB.

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Million-Dollar Mysteries: Recent Complex Patent Cases Lost to Rule 36

Patent

by Dennis Crouch

In a recent batch of Rule 36 summary affirmances, the Federal Circuit disposed of several complex patent cases without written opinions. This continues to raise serious questions in my mind about the court’s ongoing reliance on this practice. While some judges defend Rule 36 affirmances as appropriate for easy to see “losers,” an examination of these recent cases reveals sophisticated legal issues involving millions of dollars in dispute. For instance, in Lu v. Hyper Bicycles, the court declined to address important questions the quantum of evidence needed to survive summary judgment in design patent cases, while Wilson v. Corning presented novel issues regarding jury trial rights for hybrid legal-equitable claims under the Seventh Amendment.

I have previously argued that 35 U.S.C. § 144’s “shall issue” language requires the court to issue an opinion in appeals from USPTO proceedings.  But, the court has continued the practice.  In In re Google, the court summarily affirmed the PTAB’s rejection of claims related a system for hot-news detection. This is a case where Google retaining top appellate counsel to challenge the Board’s obviousness analysis. Similarly, in Maxell v. Amperex, the court passed on an opportunity to provide needed on analogous art determinations, a key confusing aspect of obviousness decisions.

While I don’t think these cases are generally clear losers, I have found that they are more likely to involve detailed factual records, particularly in IPR appeals where technical minutiae abound.  So, I can understand why the court may be reticent to delve into the difficult cases — except that is the role of the judges.  And, the court should not permit the PTAB to avoid review via complexity. The Federal Circuit’s handling of Shell v. Scientific Design exemplifies this concern – rather than grappling with important questions about the Board’s ability to fill gaps in petitioner’s obviousness arguments, the court opted for summary affirmance without any opinion. This approach not only deprives the patent community of valuable precedent but also raises questions about whether the court is fully engaging with the challenging factual determinations underlying many patent appeals. For me, the very process of writing often reveals analytical gaps or inconsistencies that were not apparent during my initial consideration of an issue.  Judges need to explicitly connect their reasoning from premise to conclusion, and that can be evaded via summary affirmances. (more…)

USPTO After Final Practice: More Rejections, Fewer Appeals, and the Future of RCEs

Patent

by Dennis Crouch

Over the past decade, the rate at which applicants file a Notice of Appeal (NOA) following a Final Office Action has steadily declined. This chart presents a quarterly snapshot of appeal activity by dividing the count of NOAs filed by the number of final rejections issued in that same period. Unlike a cohort analysis that tracks the fate of individual applications, this approach provides a broad view of how frequently applicants are choosing to challenge examiners' decisions via the Patent Trial and Appeal Board (PTAB).  To control for distortions, this dataset is limited to published applications, ensuring that the numbers are not skewed by the fact that non-published applications are generally only accessible when a patent issues.  During this time, the USPTO has issued lots more final office actions 50% more at the end of calendar year 2024 as compared with 2021-2022.  But, although rejections have risen, NOA filings have not.

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Federal Circuit Upholds ITC Import Ban: Key Rulings on Storage Defense and Domestic Industry Requirements

Patent

by Dennis Crouch

The Federal Circuit has affirmed a US International Trade Commission (ITC) determination that Wuhan Healthgen violated Section 337 through importation of clinical-grade recombinant human serum albumin (rHSA) products that infringe Ventria Bioscience’s U.S. Patent No. 10,618,951. Wuhan Healthgen Biotechnology Corp. v. International Trade Commission, No. 2023-1389 (Fed. Cir. Feb. 7, 2025).

The patentee in the case – Ventria / ExpressTec – is a small biotech company  operating out of Junction City Kansas.  Their asserted patent is directed to a cell culture media containing rHSA produced via plants genetically modified to include the human genes. The albumin is basically a protein food for growing human cells in artificial laboratory environments.  Traditionally, the albumin came from animal sources, such as blood serum, but the plant process has some easy to identify benefits.  A key feature of the patented invention is monomer purity. Ideally, the albumin will be in monomer form as opposed to forming dimers or other aggregated groups, and Ventria’s patent particularly requires “less than 2% aggregated albumin.”

Wuhan Healthgen has been competing in the market by supplying its own version of the product exported from its Chinese production facilities and Ventria took action – in the ITC seeking a trade exclusion order of the infringing product.  The ITC largely sided with the patentee.  In this post, I focus on the domestic industry requirement and particularly how it applies to small innovative US companies. (more…)

Vaishali Udupa Resigns as Commissioner of Patents

Patent

by Dennis Crouch

USPTO Commissioner of Patents Vaishali Udupa has resigned after just over two years in office. Under 35 U.S.C 2, the Commissioner is appointed by Secretary of Commerce for a term of 5-years.  For much of US history, the Commissioner of Patents was the top dog at the patent office. However, in the 1990s Congress created an additional layer of the Director and Deputy Director - both having undersecretary roles within Commerce.  The Commissioner can be removed prior to the 5-year mark by the Secretary of Commerce, but the statute suggests that there must be cause: "for misconduct or nonsatisfactory performance under the performance agreement."  In this case, I suspect Udupa received substantial encouragement to leave because of her support and close ties to the prior director Kathi Vidal as well as support for a variety of diversity and equity initiatives. In addition, the backlog of pending patents has risen significantly over the past two years and is a key stated focus of the new Secretary of Commerce. (Howard Lutnick is not yet the Secretary, but will be very soon).

Her resignation comes amidst a strong push by President Trump to encourage all federal workers to resign -- with each worker receiving an email encouraging them to leave their "lower productivity jobs" working for the government and move into the private sector. Udupa met the deadline for the offered "buyout" package of no-responsibility pay through September 2025, although it is unclear whether she is seeking payments under that package.

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Preemption Lost: The Federal Circuit’s Abandonment of Supreme Court Patent Eligibility Doctrine

Patent

by Dennis Crouch

One of the most perplexing aspects of patent eligibility doctrine involves the role of preemption - the concern that patents might lock up basic tools of scientific and technological work in ways that limit individual liberty and or that may unduly block fundamental progress.  The Supreme Court has repeatedly emphasized that these  preemption concerns "undergird" and "drive" the judicially created exceptions to patent eligibility under 35 U.S.C. § 101. Yet in practice, the Federal Circuit has consistently regarded evidence of preemption (or the lack thereof) as basically irrelevant when determining whether or not a particular claimed invention is patent-eligible.  Even the complete absence of preemption "does not demonstrate patent eligibility." Roche Molecular Systems, Inc. v. Cepheid, 905 F.3d 1363 (Fed. Cir. 2018).  There is a clear disconnect here between the doctrine's theoretical framework as designed by the Supreme Court and the Federal Circuit's practical application.

This disconnect between theory and practice creates two significant concerns. Most directly, the Federal Circuit's dismissal of preemption appears to be a failure to faithfully apply the Supreme Court's precedent. At the same time though, the disconnect also raises a more fundamental question: if preemption analysis can be so readily discarded in practice, perhaps the Court's theoretical focus on preemption fails to capture the true policy concerns driving patent eligibility doctrine.

The recently filed petition in Impact Engine, Inc. v. Google LLC asks the Supreme Court to resolve this tension -- particularly suggesting that the court restore preemption analysis to its central role in patent eligibility determinations. The case also raises what I see as a particularly compelling argument involving means-plus-function claims, where Congress has already struck a balance between functional claiming and specific structural limitations through 35 U.S.C. § 112(f).  ImpactEnginePetitionforCertiorari.

Means-Plus-Function Claims in Patent Eligibility and Infringement Analyses

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Federal Circuit Affirms PTAB’s Obviousness Decision Despite Claim Construction Error

Patent

by Dennis Crouch

The Federal Circuit has affirmed the PTAB finding of obviousness in an inter partes review (IPR) challenge to an integrated circuit manufacturing patent, even while disagreeing with the Board's claim construction. HD Silicon Solutions LLC v. Microchip Technology Inc., No. 2023-1397 (Fed. Cir. Feb. 6, 2025). The decision is fairly narrow - offering a situation where the lower tribunal's errors can be harmless when alternative grounds support the ultimate conclusion.

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Most Patent Examiners Protected from USPTO Return-to-Office Mandate (for now) Through Union Agreement

Patent

by Dennis Crouch

USPTO Commissioner for Patents Vaishali Udupa released guidance yesterday regarding the agency’s implementation of President Trump’s return-to-in-person work executive order.  The guidance explains that – in general – all remote workers will be ordered to return to office in coming days. But, the memo has a major exception it does not apply to employees whose telework arrangements are protected by collective bargaining agreements.

This exception is significant because the vast majority of USPTO’s patent examiners – both primary examiners and assistant examiners – are represented by the Patent Office Professional Association (POPA) under a collective bargaining agreement that expressly protects telework rights. In practice, this means the return-to-office mandate primarily affects supervisory patent examiners (SPEs), Patent Trial and Appeal Board judges, and other management positions not covered by the union agreement.

I should also be clear that the email does not state that examiners will continue to work remotely – only that employees protected by a relevant CBA “are not covered by this message.”  The White House has stated that these CBAs in general are not enforceable. So, the examiners may simply be waiting for the other shoe to drop.

(more…)

Blurring the Line Between Law and Fact in Patent Eligibility

Patent

by Dennis Crouch

The well-worn advice to trial lawyers, famously captured by Carl Sandburg, has long been: "If the law is against you, pound on the facts. If the facts are against you, pound on the law. If both are against you, pound on the table."

This traditional dichotomy between law and fact reflects a fundamental principle of American jurisprudence - that certain questions are reserved for judges (law) while others are reserved for juries (fact).  And, even in cases where the judge serves both roles, the law provides for a strict separation of role. See FRCP 52(a).  But patent law doctrine often defies this clean separation. Take patent eligibility as an example: while courts characterize the atextual eligibility doctrine as ultimately a question of law, the analysis may require underlying factual determinations about what was conventional in the relevant field at the time of invention. And, even the "legal" aspects of eligibility analysis - like whether claims are "directed to" an abstract idea - require their own form of proof and evidence. The difference is that because courts have labeled these as questions of law, they bypass traditional evidentiary standards. This creates a peculiar framework where some elements of proof are subject to strict evidentiary requirements while closely related elements are left to judicial reasoning without similar constraints.  The problem has been further complicated in the eligibility area because the Federal Circuit has not generally required district courts to carefully separate their analysis between law and fact -- even at the pretrial stage where judicial factual conclusions are usually avoided.  These issues are raised to some extent in BBiTV's newly filed petition for certiorari, which challenges how courts handle disputed factual issues when deciding patent eligibility on summary judgment.

For me, BBiTV's argument raises deeper questions about how courts have arrived at this procedural framework for handling patent eligibility determinations. In my view, several historical developments in patent law have contributed to the current state of affairs, where judges increasingly make what appear to be factual determinations under the guise of eligibility legal analysis. These developments, combined with institutional pressures and uncertainties about the role of the Seventh Amendment in patent eligibility determinations, have somewhat blurred the distinction between law and fact. After reviewing the BBiTV case in particular, I move on to examine these contributing factors and their implications for how courts handle disputed facts in patent eligibility cases.

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Attorney Fees in Copyright Cases, Part II

Patent

by Dennis Crouch

WC Realty recently filed a petition for certiorari that builds upon and expands the issues presented in the Property Matters case that I wrote about recently.  Both cases focus on whether a voluntary dismissal of a copyright infringement action under Rule 41(a)(1) bars "prevailing party" status under §505 of the Copyright Act.  Under Section 505, "the court may also award a reasonable attorney’s fee to the prevailing party."   This is almost identical to the Patent Act's fee shifting provision except that patent law limits discretion to "exceptional cases."  35 U.S.C. 285.

The petition presents two distinct but related questions about how voluntary dismissals should be handled under §505 of the Copyright Act. The first question addresses the fundamental threshold issue: whether a defendant can even qualify as a "prevailing party" after a plaintiff voluntarily dismisses under Rule 41(a)(1). The Eleventh Circuit has created a categorical bar, holding that defendants cannot be prevailing parties without court-ordered dismissal, even when the dismissal is "with prejudice" and precludes refiling. The second question examines how voluntary dismissals should be weighed when courts exercise their discretion to award fees under §505.

Voluntary Dismissals and Attorney Fees

The case arose when Affordable Aerial Photography (AAP) sued WC Realty for copyright infringement over real estate photographs. After WC Realty incurred substantial defense costs, AAP voluntarily dismissed its claims "with prejudice" under Rule 41(a)(1). The district court denied WC Realty's request for attorney's fees, and the Eleventh Circuit affirmed, holding that WC Realty could not be a "prevailing party" because there was no "judicial action rejecting or rebuffing" AAP's claims.

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