by Dennis Crouch

The United States International Trade Commission (USITC or ITC) operates as an independent, quasi-judicial federal agency the mission of safeguarding US domestic industries from injury caused by foreign imports.  This is a protectionist agency. In the patent context, the ITC exercises its authority under Section 337 of the Tariff Act of 1930, which prohibits the importation of articles that infringe valid U.S. patents. Unlike district courts, the ITC cannot award monetary damages but instead provides exclusion orders that block infringing imports at the border and cease-and-desist orders that prevent domestic sales of previously imported infringing products.  These orders are then enforced by US Customs and Border Protection (CBP), a branch of Homeland Security.  The ITC is attractive to patent holders because of its relatively expeditious "target date" of 16-18 months from institution to final determination (compared to multi-year district court proceedings), its experienced Administrative Law Judges who frequently handle patent matters, the difficulty respondents face in staying ITC investigations during parallel PTAB trial proceedings, and, as mentioned above, the availability of injunctive relief (via exclusion order) despite eBay.

One measure Congress took to ensure the ensures stays on-mission is through the "domestic industry" requirement.  Before the ITC can block infringing imports, the patent holder must to show the existence of a domestic industry "relating to the articles protected by the patent." 19 U.S.C. § 1337(a)(2). This requirement has two components: the "economic prong" and the "technical prong" that we'll dig into later.

When is Transnational Activity Sufficiently Domestic: The Federal Circuit's recent decision in Lashify highlights an ongoing situation with regard to domestic industry.  Lashify, Inc. v. ITC, No. 23-1245 (Fed. Cir. Mar. 5, 2025).  Lashify designs its fake eyelash products in the U.S., but manufactures them abroad, and the question is when domestic non-manufacturing activity is enough to satisfy the domestic industry requirement.

by Dennis Crouch

In February 2021, Gesture Technology sued several companies, including Apple, LG Electronics, and Google, for infringing its U.S. Patent No. 7,933,431. The patent, which expired in July 2020, covers technology for using cameras to detect user gestures as input for controlling handheld computing devices.  Four IPR petitions followed:

• Unified Patents filed on May 14, 2021. IPR2021-
  00917;
• Apple filed on May 21, 2021. IPR2021-00920;
• LG Electronics and Google later filed "nearly identical" petitions that were joined with Apple's IPR. IPR2022-00091 and IPR2022-00359.

The PTAB instituted the IPRs and ultimately came out with a mixed result - cancelling most of the claims, but leaving a couple standing (claims 11 and 13).  On appeal, the Federal Circuit has now affirmed. Apple Inc. v. Gesture Technology Partners, LLC, No. 23-1475 (Fed. Cir. Mar. 4, 2025) (precedential); Gesture Technology Partners, LLC v. Unified Patents, LLC, No. 23-1444 (Fed. Cir. Mar. 4, 2025) (non-precedential). In the pair of opinions, both authored by Judge Prost, the court focused both on procedural IPR issues as well as substantive patent law issues. In this post, I focus mainly on the court's explanation of the obviousness standards, claim construction under §112 ¶6, IPR jurisdiction over expired patents, and IPR estoppel.  The Federal Circuit explanation here makes sense except for its analysis of estoppel, which comes at the bottom of the post.

by Dennis Crouch

After 18 years of litigation, the Federal Circuit has once again ruled in the patent infringement case Halo v. Pulse.  The February 28, 2025 opinion, authored by Judge Bryson, deals with enhanced damages, attorney fees, prejudgment interest, and the denial of a new damages trial.  On the biggest issue, punitive damages, I explain why the Federal Circuit was wrong in affirming the district court’s refusal to enhance damages.  In my view, the Federal Circuit sidestepped the practical implications of the jury's willfulness, treating the verdict as a checkbox rather than a meaningful  factual finding for enhanced damages.

Read on for my full analysis.

The pendulum of the mind
alternates between sense and nonsense,
not between right and wrong. 
- Carl Jung (Memories, Dreams, Reflections)

By Dennis Crouch

In a significant policy shift, Acting USPTO Director Coke Stewart has rescinded the June 21, 2022, Vidal memorandum that had significantly curtailed discretionary denials of PTAB post-grant proceedings. This rescission signals a potentially dramatic return to broader PTAB discretion in denying institution of inter partes reviews (IPRs) in cases with parallel district court litigation. I believe we can expect a significant uptick in discretionary denials of IPR institution petitions. And, patent holders in district court will be looking for ways to quickly move cases forward in order to provide evidence that IPR denial is appropriate.

The tersely worded announcement from the USPTO simply directs parties to once again rely on PTAB precedent for guidance, specifically highlighting the precedential PTAB decisions of Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) and Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020). The announcement further states that any portions of PTAB or Director Review decisions relying on the now-rescinded Vidal Memorandum shall not be binding or persuasive.

Since its creation under the AIA, the PTAB has rapidly established itself as America's most active patent litigation forum -- and the only one that is effectively risk-free for patent challengers. Before the AIA created the IPR system, district courts rarely invalidated patents on obviousness grounds because of the doctrine's technical complexity that often went beyond the span of generalist federal judges and juries. PTAB judges are hired for their willingness and ability to dig deeply into complex obviousness arguments involving the combination of multiple references. Over the past decade, the PTAB has invalidated tens of thousands of patent claims as obvious. To put this in perspective, I am fairly confident the PTAB has invalidated more patent claims on obviousness grounds in its short life than all federal courts combined since the founding of our patent system in 1790.  AIA Trials have been a huge shock to the patent system -- a shock that has almost entirely favored patent challengers.  Thus, Director Stewart's new policy change is important as it is likely to redirect access to this powerful alternative forum.

by Dennis Crouch

I sometimes have difficulty following doublethink. The recent implementation of the Republican Administration's executive orders on diversity initiatives has created a nuanced and seemingly contradictory landscape in federal agencies, including the USPTO.

In January 2025, the White House issued executive orders "Ending Radical And Wasteful Government DEI Programs And Preferencing" and "Ending Illegal Discrimination and Restoring Merit-Based Opportunity." These orders were followed by a February 5, 2025 memorandum from the Office of Personnel Management providing additional guidance on implementation. At the same time, the White House has repeatedly offered statements and other executive actions that focus particularly on protecting and "defending women."

The USPTO's implementation response has been notably selective.

by Dennis Crouch

As federal agencies begin to respond to the new Republican Administration's agency reorganization directive, the USPTO finds itself in an unusual position. Unlike many federal agencies, the USPTO operates primarily on user fees rather than appropriated funds. However, this self-funding status does not exempt the agency from the new "Department of Government Efficiency" (DOGE) initiative requiring agencies to develop plans for "large-scale reductions in force" (RIFs) by March 13, 2025.  opm-omb-memo-guidance-on-agency-rif-2-26-2025.

Depending on how Commerce Secretary Howard Lutnick and Acting USPTO Director Coke Stewart interpret and implement these directives, the impact on USPTO operations could be extremely disruptive. Lutnick has indicated he is in favor of major reductions in force, although not speaking directly about the USPTO. These negotiations continue behind closed doors while patent examiners, practitioners and applicants continue to sit in limbo about potential impacts on examination quality, processing times, and the stability of the U.S. patent system.

A new February 26, 2025 memorandum from OMB and OPM directs agencies to take serious steps toward shrinking their activity, workforce, and physical footprint.  Agencies have been directed to focus on "maximum elimination of functions that are not statutorily mandated." The memo notes that agencies should narrowly interpret statutory requirements:

Agency leadership must confirm statutes have not been interpreted in a way that expands requirements beyond what the statute actually requires. Instead, statutes should be interpreted to cover only what functions they explicitly require.

An important note here is that much of the USPTO operation is guided by precedential cases that are effectively already interpreting the statutes. This would seemingly guide any interpretation offered by the agency director.  Although some of this may seem dramatic, the Agency is part of the executive branch, and thus subject to the direction of the President and his sworn duty to "take Care that the Laws be faithfully executed."  Cuts are ongoing, but major systemwide upheavals are unlikely for several more weeks. We should know more after the March 13 agency deadline.

The memo from OPM creates a framework for analyzing which USPTO functions might be vulnerable to cuts -- some aspects of this are discussed in below.  The rest of this post talks through various USPTO functions -- considering ones that are statutorily mandated versus those that are discretionary as one approach to seeing where cuts might occur.

by Dennis Crouch

Since late 2022, the extraordinary demand for glucagon-like peptide-1 receptor agonists (GLP-1s) like Eli Lilly's tirzepatide (marketed as Mounjaro for diabetes and Zepbound for weight loss) has created a persistent nationwide shortage. This shortage opened a temporary but lucrative opportunity for compounding pharmacies, which the Federal Food, Drug, and Cosmetic Act permits to produce copycat versions of branded drugs during officially declared shortages. In December 2024, the FDA abruptly determined that the tirzepatide shortage had resolved and removed these products from its shortage list, effectively terminating compounders' legal authority to produce these drugs. With the recent transition to the Trump administration—whose leader has repeatedly criticized pharmaceutical companies for "getting away with murder" on pricing and specifically targeted the cost of weight loss medications—I have wondered whether the FDA might reverse course under new leadership and side with compounders offering lower-priced alternatives.  The FDA's new court filing indicates that the agency is standing firmly with patent holders and the drug approval system that grants market exclusivity.  [FDA Brief ZepBound]

The compounding pharmacies have been providing much cheaper versions of the drugs and apparently different dosing regimens.

A number of plaintiffs sued the FDA in 2024, seeking a preliminary injunction to permit ongoing compounding. Outsourcing Facilities Ass'n v. U.S. Food & Drug Admin., No. 4:24-cv-00953-P (N.D. Tex. filed 2024).   In its brief opposing the preliminary injunction, the FDA defends its data-driven conclusion that "Lilly's supply is currently exceeding demand and will meet or exceed projected demand across all strengths of Mounjaro and Zepbound." The FDA's determination relied heavily on confidential data provided by Lilly. I expect that this brief will effectively end the case for the plaintiffs, although they will likely continue to fight for some time.

by Dennis Crouch

A new petition for certiorari in Atturo Tire Corp. v. Toyo Tire Corp. highlights an interesting procedural quirk in Illinois law that may require Supreme Court intervention to resolve an important state law question about the scope of litigation privilege. The case started as a patent importation dispute that Toyo filed with the ITC against various tire manufacturers, but not against Atturo. Toyo settled those cases with provisions requiring the settling parties to stop selling Atturo's tires. After Atturo won a $10 million jury verdict under Illinois law for tortious interference and related claims, the Federal Circuit reversed based on Illinois' absolute litigation privilege.  Atturo believes the scope of litigation privilege should be referred to the Illionois Supreme Court.  But, the Supreme Court's rules only allows certification from the US Supreme Court or Seventh Circuit -- that meant that the Federal Circuit could not certify the case.

Atturo has asked the Supreme Court to exercise its unique certification authority to get definitive guidance from the Illinois Supreme Court. See Ill. Sup. Ct. R. 20(a).

Read my post about the Federal Circuit's original decision here: Dennis Crouch, Treading Carefully: Federal Circuit Expands “Absolute Litigation Privilege” and Affirms Trade Dress Invalidity in Toyo Tire v. Atturo Tire, Patently-O (October 6, 2024).

The rest of this post talks through both the scope of litigation privilege and the certification process.

by Dennis Crouch

Statutes of limitations occupy a peculiar position in our legal system - both shield and sword. While they play a vital role in promoting social stability by preventing stale claims and encouraging prompt resolution of disputes, their rigid application can sometimes feel like permitting theft by other means. When an otherwise valid claim is barred simply because time has passed, the law effectively transforms a wrongful act into a permitted one.  The Supreme Court recognized this tension nearly 150 years ago in Wood v. Carpenter, acknowledging that statutes of limitations were both "bane and antidote," necessary for societal order yet potentially harsh in their operation. 101 U.S. 135 (1879). This fundamental tension is particularly acute in copyright cases where the limitations period is quite short - only three years and where creative works can be exploited for years before their owners discover the infringement.