Federal Circuit: State Law Conversion Claim Preempted Where Pleading Seeks Patent-Like Protection

On January 13, 2025, the Federal Circuit issued a notable opinion on federal preemption of state law conversion (theft) claims and correction of inventorship. In BearBox LLC v. Lancium LLC, No. 2023-1922 (Fed. Cir. Jan. 13, 2025), the court affirmed the District of Delaware’s grant of summary judgment, holding that federal patent law preempted BearBox’s Louisiana state law conversion claim. The court also affirmed that BearBox failed to prove by clear and convincing evidence that Austin Storms should be listed as an inventor of U.S. Patent No. 10,608,433.

The dispute arose from a chance encounter at a Bitcoin mining conference in May 2019. After a brief conversation at cocktail hour and dinner between BearBox’s founder Austin Storms and Lancium’s co-founder Michael McNamara, Storms sent a single follow-up email with four attachments describing BearBox’s technology. Five months later, in October 2019, Lancium filed a patent application that ultimately issued as the ‘433 patent, naming McNamara and Raymond Cline as inventors, but not Storms. (Claim 1 is listed below). The patent covered methods and systems for adjusting power consumption based on power option agreements – a concept that BearBox claimed Storms had conceived and shared with Lancium at the conference. BearBox sued, asserting both correction of inventorship under federal patent law and conversion under Louisiana state law.

State Law Preemption: The preemption issue presents an important question about the intersection of state tort law and federal patent protection. While state law conversion claims are not automatically preempted by federal patent law, the Federal Circuit found that BearBox’s particular claim as pled sought “patent-like protection” for unpatented technology and thus ran afoul of longstanding Supreme Court precedent. The court relied heavily on Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989), which held that states may not offer patent-like protection to intellectual creations that would otherwise remain unprotected under federal law. The Bonito Boats Court emphasized that “the efficient operation of the federal patent system depends upon substantially free trade in publicly known, unpatented design and utilitarian conceptions.”

The Federal Circuit’s analysis focused on how BearBox pled its conversion claim, rather than the abstract elements of Louisiana conversion law. The court noted that BearBox’s complaint was “replete with ‘patent-like’ language typically invoked when a party asserts inventorship or infringement of a patent.” This included allegations that Storms had “conceived, developed, and reduced to practice” the technology and that Lancium had engaged in “improper and unauthorized use.” The prayer for relief seeking damages based on Lancium’s use and monetization of the technology particularly troubled the court, as it effectively sought patent-like remedies.  Ultimately, the court concluded:

Here, we agree with the district court that BearBox’s conversion claim is preempted because the conversion claim, as pled, is essentially an inventorship cause of action and patent infringement cause of action, and thus seeks “patent-like protection” for ideas that are unprotected under federal law.

The court distinguished this case from situations where state law claims might validly protect against misappropriation without conflicting with federal patent policy. For instance, trade secret claims often survive preemption analysis, as the Supreme Court recognized in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974). But here, BearBox’s technology was neither patented nor kept as a trade secret – instead, it was “freely shared with others” and “otherwise in the public domain.” The Federal Circuit emphasized that federal patent law generally precludes recovery for a defendant’s use of an unpatented discovery after the plaintiff makes it publicly available.*

What particularly doomed BearBox’s conversion claim was its attempt to recover damages analogous to patent remedies. The court noted that under Louisiana conversion law, damages are typically limited to return of the converted property or its value at the time of conversion. But BearBox sought ongoing royalties and lost profits – remedies that mirror 35 U.S.C. § 284’s provision for patent infringement damages. As the court explained, allowing such recovery would effectively grant BearBox patent-like control over technology it had freely disclosed, undermining Congress’s careful balance between innovation incentives and public access to ideas.

In my view, this decision is somewhat dangerous because of its potential to undermine state law cases that have protected individuals in idea-submission scenarios. Courts have long recognized claims where someone provides an idea to a company and seeks compensation when the company uses it without permission or payment These are typically tied into breach of (implied) contract or misappropriation as part of a confidential relationship. See, Desny v. Wilder, 46 Cal. 2d 715 (1956); Hoeltke v. C.M. Kemp Mfg. Co., 80 F.2d 912 (4th Cir. 1935); Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979).   In Aronson, the Court upheld a contract requiring payment for use of an invention even after a patent application was rejected, distinguishing this from state law protection that would prevent others from using publicly available information.  See also Softel, Inc. v. Dragon Med. & Sci. Communs., 118 F.3d 955 (2nd Cir. 1997); Nadel v. Play-By-Play Toys & Novelties, Inc., 208 F.3d 368 (2nd Cir. 2000).

* I want to note one procedural oddity here.  The appellate court based its decision here at least partially on the factual finding that the technology here was not kept secret but instead had been “freely shared with others” and “otherwise in the public domain.”  The district court made those conclusions following the bench trial on inventorship.  But, the those facts were still in contention at the summary judgment stage when the district court decided the preemption issue.  And, normally an appellate court reviews the summary judgment record independently, applying the same standards as the district court to determine whether summary judgment was appropriate. This issue probably deserves some additional research, but it is not clear to me that the court appropriately relied upon the publicly-available status of the submissions in its review of the summary judgment.

Inventorship Claims Fail Due to Lack of Clear and Convincing Evidence

Apart from the state law claim, BearBox also claimed inventorship rights under 35 U.S.C. § 256.  That statute provides a court with authority to order correction of inventorship when it determines an inventor has been erroneously omitted from a patent. However, patent issuance creates a presumption that the named inventors are the true and only inventors, and the late-coming inventor faces the heavy burden of proving inventorship by clear and convincing evidence.

A key challenge for BearBox was the requirement that an alleged joint inventor’s testimony must be corroborated by independent evidence. As the Federal Circuit has long held, “an alleged co-inventor must supply evidence to corroborate his testimony.” Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998). While corroborating evidence can take various forms – including contemporaneous documents, physical evidence, circumstantial evidence about the inventive process, or testimony from others – BearBox’s case rested primarily on four attachments sent in a single email: a product specification sheet, an annotated system diagram, hardware component specifications, and a data file modeling system simulation.

The district court’s analysis, which the Federal Circuit affirmed, found these materials insufficient to establish Storms’ inventorship claims. First, Storms himself admitted that the hardware component specifications had nothing to do with the subject matter of the ‘433 patent. More fundamentally, for the remaining documents, BearBox could not establish either that Storms had conceived of the claimed invention or that he had communicated any relevant information prior to Lancium’s independent conception.  This timing issue proved particularly problematic because Lancium had filed a prior patent application in February 2018 – fifteen months before Storms ever met anyone from Lancium – disclosing many key aspects of the technology.

To qualify as a joint inventor, an individual must “show that he contributed significantly to the conception—the definite and permanent idea of the invention—or reduction to practice of at least one claim.” Blue Gentian, LLC v. Tristar Prod., Inc., 70 F.4th 1351 (Fed. Cir. 2023). These contributions must arise from “some element of joint behavior, such as collaboration or working under common direction.” Kimberly-Clark Corp. v. Procter & Gamble Distrib. Co., Inc., 973 F.2d 911 (Fed. Cir. 1992). The Federal Circuit found no error in the district court’s conclusion that the limited interaction between Storms and Lancium – essentially one dinner conversation and a single email – failed to establish the required level of collaboration or significant contribution to conception.

BearBox raised several procedural challenges to the district court’s inventorship analysis, but none proved persuasive. The Federal Circuit rejected BearBox’s argument that the district court improperly excluded as hearsay Storms’ testimony about what he told McNamara at dinner. While acknowledging some merit to the argument that the testimony was offered for a non-hearsay purpose (to prove notice rather than truth), the court found that BearBox’s failure to make an offer of proof about what the testimony would have been was “fatal” to preserving the issue for appeal.

The Federal Circuit also dismissed BearBox’s criticism of the district court’s element-by-element analysis of the patent claims.  At oral arguments BearBox’s counsel argued:

All claims, or maybe most, the majority of claims, are a combination of known elements. And so, if the District Court is looking at the elements in isolation for evidence of earlier conception or conception, it will always be found.

While BearBox argued that the court should have considered claim elements in combination, the Federal Circuit found no error in the limitation-by-limitation approach given that BearBox needed to demonstrate Storms’ significant contribution to at least one claim. The court noted that this analysis actually mirrored how BearBox itself had presented its case in post-trial briefing.

= = =

The appellate panel also affirmed the district court’s exclusion of Dr. McClellan’s supplemental expert report, which had been filed three weeks before trial and five months after the close of expert discovery.

= = =

The Federal Circuit panel consisted of Judges Chen, Bryson, and Stoll, with Judge Stoll writing the opinion. The case was appealed from the District of Delaware where Judge Williams presided. Benjamin Horton argued the case for BearBox who was also represented by John Labbe, Chelsea Murray, and Raymond Ricordati of Marshall Gerstein. Mark Nelson argued for Lancium and was joined on the brief by other Barnes & Thornburg lawyers, including Adam Kaufmann and Chad Stover.

= = =

Claim 1. A system comprising:

a set of computing systems, wherein the set of computing systems is configured to perform computational operations using power from a power grid;

a control system configured to:

monitor a set of conditions;

receive power option data based, at least in part, on a power option agreement, wherein the power option data specify: (i) a set of minimum power thresholds, and (ii) a set of time intervals, wherein each minimum power threshold in the set of minimum power thresholds is associated with a time interval in the set of time intervals;

responsive to receiving the power option data, determine a performance strategy for the set of computing systems based on a combination of at least a portion of the power option data and at least one condition in the set of conditions, wherein the performance strategy comprises a power consumption target for the set of computing systems for each time interval in the set of time intervals, wherein each power consumption target is equal to or greater than the minimum power threshold associated with each time interval; and

provide instructions to the set of computing systems to perform one or more computational operations based on the performance strategy.

Supreme Court Asked to Expand Fee Recovery in Patent Cases: Can Courts Make Attorneys Pay and What about IPR Fees??

Dennis Crouch

In a newly filed petition for certiorari, DISH Network has asked the Supreme Court to resolve two important questions about attorney fee awards in patent cases: whether district courts can (1) make plaintiff's attorneys jointly liable for fee awards in exceptional cases and (2) award fees incurred during parallel Inter Partes Review (IPR) proceedings. DISH Network L.L.C. v. Dragon Intellectual Property, LLC, No. 24-726 (petition filed Jan. 8, 2025).


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Federal Circuit Rejects Invalidation Based on After-Arising Technology

by Dennis Crouch

In an important opinion exploring the relationship between patent validity and after-arising technology, the Federal Circuit has reversed a district court's invalidation of a pharmaceutical patent covering Novartis's blockbuster heart failure drug Entresto. Novartis Pharmaceuticals Corp. v. Torrent Pharma Inc., Nos. 2023-2218, 2023-2220, 2023-2221 (Fed. Cir. Jan. 10, 2025).


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Federal Circuit: Pink Hip Implants Are Functional, Cannot Be Protected as Trade Dress

by Dennis Crouch

The Federal Circuit has affirmed the Trademark Trial and Appeal Board (TTAB) cancellation of CeramTec's trademark registrations for the pink color of its ceramic hip implants, and also providing an important analysis of functionality doctrine and its intersection with expired utility patents. CeramTec GmbH v. CoorsTek Bioceramics LLC, No. 2023-1502 (Fed. Cir. Jan. 3, 2024).  The cautionary outcome here is unsubstantiated statements in the utility patent left the patentee unable to later claim trade dress protection for the distinctive feature.  Patent attorneys should consider a trade dress discussion with their clients prior to filing a utility application that covers potentially distinctive trade dress. I discussed the case while it was pending. See Dennis Crouch, Pink Ceramic Hip Implants: When Functionality Trumps Trade Dress, Patently-O (October 2024).


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Patent Term Adjustments Cut by Applicant Delays: A 23,000 Year Impact

by Dennis Crouch

The Patent Term Adjustment (PTA) statute was designed to ensure patent terms aren't unfairly shortened by USPTO delays during prosecution. 35 U.S.C. § 154(b). The basic framework provides day-for-day extension of patent term to account for certain examination delays, such as when the USPTO takes more than 14 months to issue a first office action or more than 4 months to respond to an applicant's reply.

But PTA is a two-way street. The statute also penalizes applicants who fail to "engage in reasonable efforts to conclude processing or examination." 35 U.S.C. § 154(b)(2)(C). The most common applicant delay comes from taking more than three months to respond to an office action. See 37 C.F.R. § 1.704(b).


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Not Quite Teaching Away: Federal Circuit Clarifies Evidence Needed to Defeat Motivation to Combine

by Dennis Crouch

In a recent non-precedential decision, the Federal Circuit provided an interesting analysis on how to evaluate evidence both supporting and undermining motivation to combine references in obviousness challenges. Laboratory Corporation of America Holdings v. Ravgen, Inc., No. 2023-1342, 2023-1345 (Fed. Cir. Jan. 6, 2025).


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Ripe for Review: Digital Access to a Banana taped to the Wall

by Dennis Crouch

Let me peel back the layers of this slippery copyright dispute that has the art world going bananas. In Morford v. Cattelan, No. 23-12263 (11th Cir. 2024), the Eleventh Circuit confronted the question of whether an artist can claim copyright protection over the concept of taping a banana to a wall. The appellate court sided with the accused famous artist, Morford continues to pursue his copyright action in a newly filed petition for writ of certiorari to the Supreme Court.

(more…)

Patents as Product Liability Admissions: A Cert Petition Highlights Novel Use of Patent Filings in Whistleblower Case

by Dennis Crouch

A fascinating cert petition filed last week (Peterson v. Minerva Surgical) uses Minerva’s patents in an innovative way — attempting to use the company’s patent filings as evidence of prior knowledge of product safety issues. The petition, filed by former Minerva Surgical area sales director Dan Peterson, argues that the company’s patent application for an improved surgical device directly contradicted testimony it later gave in whistleblower retaliation arbitration proceedings.

According to the petition, in January 2017, Minerva filed Patent Application No. 15/418,635 seeking protection for a modified endometrial ablation device. The application disclosed that the original design had a defect that could “plug” uterine perforations, potentially leading to serious patient injuries. The USPTO ultimately granted the patent (No. 10,213,151) in February 2019, with claims explicitly discussing how the new design solved these safety issues. (more…)

Federal Circuit Internal Debate over Reversal versus Vacatur

by Dennis Crouch

Yesterday, the Federal Circuit issued a divided opinion in Honeywell International Inc. v. 3G Licensing, S.A., No. 2023-1354 (Fed. Cir. Jan. 2, 2025), highlighting key disagreements about the proper role of appellate courts in reviewing Patent Trial and Appeal Board (PTAB) decisions.  The case appears to also foreshadow an internal fight over the exclusion of expert testimony that is currently pending en banc in EcoFactor v. Google.

The case centers on the validity of a patent related to encoding data in cellular communications, specifically focusing on methods for protecting important data bits from transmission errors.  Patent No. 7,319,718.  Writing for the majority, Judge Dyk reversed the PTAB's holding that the claims were not proven obvious. Judge Stoll write in dissent, arguing the majority improperly stepped into the role of fact-finder rather than acting as an appellate tribunal.  To be clear, Judge Stoll was no fan of the PTAB's opinion, but would have vacated and remanded for further factual development on the question of obviousness rather than entirely flipping the decision via reversal.


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Supreme Court Preview: Will “Skinny Labels” Get a Weight Check?

by Dennis Crouch

The Supreme Court will soon be asked to weigh in on the the skinny-label debate -- particularly the question of how much a generic drug manufacturers can say about their products without inducing patent infringement? The case is Hikma v. Amarin.

It is very common for a drug to follow the following innovation-patent pathway:

  1. First the composition is discovered and patented along with a particular therapeutic use.
  2. Later a more effective treatment regimen is discovered and patented.

Once the first set of patents expire, generic manufactures should be permitted to begin marketing the drug -- except for uses still patented.  But, this gets tricky.  We know that there will be a very $trong incentive for insurance companies, doctors, and patients to use the cheaper generic drug for the still-patented treatment regime.  The question is whether the generic manufacture can be blamed for inducing this infringement.


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Patent Grants for 2024

by Dennis Crouch

For decades the USPTO has issued patents each and every Tuesday -- with data being released typically at 12:01 a.m. Eastern time.  Today's release wraps up 2024 and almost breaks a record with 7,499 utility patents issued -- the second most ever in any given week.  (The #1 spot is held by 7669 utility patents issued on October 3, 2023).  The total UTL patents issued has been rising for the past several years but are still below the 2019 high point at over 350,000.

As you look at the chart above, the 2024 patent count numbers are a bit skewed upward because of a calendaring quirk. While most years have 52 Tuesdays, 2024 has 53 Tuesdays. This extra Tuesday means the USPTO has one additional patent issue day compared to a typical year, which represents roughly a 2% increase in opportunities for patent grants over the calendar year.


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Federal Circuit Affirms Invalidity of Purdue’s OxyContin Patents

by Dennis Crouch

The Federal Circuit recently affirmed the invalidity of several Purdue Pharma patents related to abuse-deterrent and low-impurity formulations of OxyContin. Purdue Pharma L.P. v. Accord Healthcare, Inc., No. 2023-1953 (Fed. Cir. Dec. 30, 2024).  Although non-precedential, the appeal addresses three significant legal questions in obviousness jurisprudence: (1) The consideration given to discovering the source of a previously known problem under Eibel Process Co. v. Minnesota & Ontario Paper Co. (1923); and (2) how inherent properties of prior art compositions factor into obviousness analysis when combining multiple references similar to the Cytiva decision from earlier in 2024.


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Voluntary Dismissals and Attorney Fees

by Dennis Crouch

The Copyright Act and the Patent Act each include an attorney fee provision — permitting the district court to award “a reasonable attorney’s fee to the prevailing party.”  Because of similarities in the provisions, they tend to be interpreted together — at least with regard to what qualifies as a “prevailing party” under the statute.  (Unlike in copyright law, the patent law limits fees to “exceptional case[s]”).

On the Copyright side, there is a growing circuit split on the issue of whether defendants can recover attorney’s fees after a plaintiff voluntarily dismisses under Rule 41(a)(1).   That rule permits for voluntary dismissal and does not require a court order.  Affordable Aerial Photography, Inc. v. Property Matters USA, LLC, 108 F.4th 1358 (11th Cir. 2024), the 11th Circuit held that “some judicial action rejecting or rebuffing a plaintiff’s claim is necessary to endow a defendant with prevailing party status.”  In a parallel decision, the 11th Circuit clarified that a plainttif’s voluntary dismissal does not create a prevailing party status even if made “with prejudice.” Affordable Aerial Photography, Inc. v. Reyes, No. 23-12051, 2024 WL 4024619 (11th Cir. Sep. 3, 2024).

The Federal Circuit has developed a body of law holding that voluntary dismissals with prejudice can support prevailing party status and fee awards in patent cases. See O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC, 955 F.3d 990 (Fed. Cir. 2020). However, the Federal Circuit generally denies prevailing party status after Rule 41(a)(1) dismissals without prejudice.  The Ninth Circuit approach looks to the general question of preclusion – asking whether the plaintiff is “judicially precluded from refiling the claim.”  If so, then the defendant qualifies as the prevailing party. Cadkin v. Loose, 569 F.3d 1142 (9th Cir. 2009). So, we have something of a split here between the various circuits. (more…)

Trade Secret Protection in the Digital Age: When Does Web Scraping Cross the Line?

by Dennis Crouch

I'm following a new cert petition that asks the Supreme Court to examine when web scraping becomes an improper means of obtaining trade secret information under the the DTSA. I regularly use web scraping for academic research, and so this case caught my attention for more than just the intellectual property curiosity.

The specific question presented to the Supreme Court is "whether an action that is not unlawful under the federal Defend Trade Secrets Act ('DTSA') when performed manually by a human (or humans) is unlawful when performed by a computer robot." This framing presents a parallel to the seminal 1970 aerial photography case of E. I. duPont deNemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970).


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TikTok – A First Look at the Briefs

Briefs are trickling in for the Supreme Court’s fast-paced battle over the upcoming TikTok ban.   The outcome of TikTok v. Garland will likely be a watershed moment for free speech in the digital age — especially with respect to non-US media.  This post walks through the six amicus briefs all filed early.  Three support TikTok and its content creator co-petitioners; and three agree with the appellate court and U.S. government that the ban is appropriate.

As background: TikTok has over 170 million U.S. users but is ultimately owned by Chinese company ByteDance, which under Chinese law must share data and comply with Chinese Communist Party directives. After years of bipartisan concern about TikTok’s data collection practices and potential for content manipulation, Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACAA) in April 2024 with strong support from both parties, and President Biden signed it into law. The Act effectively requires ByteDance to sell TikTok to non-Chinese owners by January 19, 2025, or face a ban on U.S. operations. TikTok and several content creators immediately challenged the law as violating the First Amendment, but the D.C. Circuit upheld the ban in December 2024, finding that even if strict scrutiny applied, the government’s national security interests justified the restriction. With the divestiture deadline looming, the Supreme Court took the extraordinary step of granting immediate review and scheduling arguments for January 10, 2025, just nine days before the law would take effect. The case presents novel questions about how traditional First Amendment doctrines apply to social media platforms controlled by potentially hostile foreign powers and tests the limits of Congress’s authority to restrict foreign ownership of communications infrastructure. (more…)

Some numbers from this week

by Dennis Crouch:

  • On December 24, 2026 2024, the USPTO issued 6,920 utility patents and 800 design patents. The vast majority of utility patents are published prior to issuance - this week the numbers were 94%.
  • The utility allowance rate was 86% for the week - calculated as the number patented divided by the number disposed of (patented / (patented + abandoned)). 90% of abandoned cases were - as you might expect - for failure to respond to an office action. A distant #2 was failure to pay the issue fee.
  • For the week, patent applications in semiconductor and display technologies (AU groups 2620, 2820) show extremely high allowance rates of 97-98%. In contrast, business methods, GUI, and AI-modeling patent applications (AU groups 3680, 2140, 2120) face much lower allowance rates around 59-62%, reflecting stricter scrutiny in these software and "abstract-idea" focused domains.

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Non-Patent IP Cases at the Supreme Court: December 2024 Update

by Dennis Crouch

I recently posted about pending patent cases before the Supreme Court, this post goes into the non-patent intellectual property cases:

On December 11, 2024, the Court heard arguments in Dewberry Group, Inc. v. Dewberry Engineers Inc., No. 23-900, addressing profit calculations for trademark misappropriation under Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a). This is the only IP case that has been granted certiorari this term. The dispute stems from a $43 million disgorgement award based on profits earned by companies affiliated with, but legally distinct from, the defendant. The central question is whether courts can consider affiliate revenues without first “piercing the corporate veil.”

During oral argument, the Justices focused heavily on corporate law fundamentals. Several appeared skeptical of the respondent’s argument that courts can treat affiliate profits as evidence of a defendant’s “true financial gain” without disregarding corporate separateness. The Court’s ultimate resolution could significantly impact how companies structure their IP holdings and licensing arrangements between related entities.

Two interrelated petitions examine internet service provider liability for copyright infringement. In Cox Communications, Inc. v. Sony Music Entertainment, No. 24-171, and Sony Music Entertainment v. Cox Communications, Inc., No. 24-181, the Court confronts important questions about secondary liability following a $1 billion jury verdict. The Cox petition challenges the Fourth Circuit’s holding that an ISP “materially contributes” to infringement merely by continuing service to known infringing subscribers. This arguably conflicts with decisions requiring either active promotion of infringement (Second and Tenth Circuits) or at least failure to implement simple preventive measures (Ninth Circuit).

Sony’s cross-petition addresses when ISP infringement qualifies as “willful” under 17 U.S.C. § 504(c). The Fourth Circuit held that knowledge of subscriber infringement suffices, while the Eighth Circuit requires evidence the ISP knew its own conduct was unlawful. This distinction has enormous practical impact—under the Fourth Circuit’s approach, the statutory damages ceiling automatically increases from $30,000 to $150,000 per work for contributory infringers. The Court has invited the Solicitor General to weigh in on both petitions — this will likely be submitted by the Trump Administration after January 20, 2025.

In King for Congress v. Griner, No. 24-321, the Court is presented with a circuit split regarding Rule 68 offers of judgment in copyright cases. The dispute involves the viral “Success Kid” meme, where a congressional campaign was found to be an innocent infringer (i.e., non-willful) yet sought to recover post-offer attorney’s fees under Rule 68. The Eighth Circuit joined the First, Seventh and Ninth Circuits in holding that copyright defendants cannot recover Rule 68 attorney’s fees because the Copyright Act limits fee awards to “prevailing parties.” Griner arguably won, but the total award was just $750.

Canadian Standards Association v. P.S. Knight Co., No. 24-537 asks whether privately-developed technical standards lose copyright protection when incorporated by reference into law. The Fifth Circuit, applying its prior decision in Veeck v. Southern Building Code Congress Int’l, Inc., 293 F.3d 791 (5th Cir. 2002), held that both the government edicts doctrine and merger doctrine strip such standards of protection, regardless of their private authorship. The petitioner argues this conflicts with Georgia v. Public.Resource.Org, Inc., 140 S. Ct. 1498 (2020), which emphasized that copyrightability turns on the identity of the author rather than whether content carries legal force. The case has significant implications for U.S. treaty obligations under the Berne Convention and the sustainability of private standards development, as many technical codes relied upon by federal agencies are created by organizations seeking copyright licensing revenue.

The dispute in BMC Software v. IBM, No. 24-569 arose when IBM used its IT outsourcing position to help customer AT&T replace BMC’s licensed mainframe software with IBM’s competing products—violating a license provision prohibiting IBM from using its access to “displace” BMC’s software. The Fifth Circuit reversed a $1.6 billion damages award, holding the license restriction was likely unenforceable as a restraint on trade because it could limit AT&T’s software choices. BMC argues this creates a circuit split with four courts of appeals that recognize software owners have a “presumptively valid business justification” for license restrictions. The case raises fundamental questions about the intersection of copyright and antitrust law, particularly regarding restrictions designed to prevent competitors from leveraging privileged access to unfairly compete.

Rutstein v. Compulife Software, No. 24-634 raises a novel trade secret issue: whether automated web scraping should be treated differently than manual data collection under the Defend Trade Secrets Act (DTSA). The Eleventh Circuit held that using automated tools to collect insurance premium quotes from Compulife’s public website constituted misappropriation by “improper means,” even though manually collecting the same data would be legal. Critics argue this creates an arbitrary distinction based on collection efficiency rather than the nature of information access. The case could provide crucial guidance on how trade secret law should adapt to automated data collection technologies that power much of the modern internet.

Finally, T-Mobile v. Simply Wireless, No. 24-637, presents a circuit split over maintaining common law trademark rights. The Fourth Circuit held that once rights are established through “extensive use,” they persist until abandoned under Section 45 of the Lanham Act, 15 U.S.C. § 1127—even during extended periods of non-use. This allowed Simply Wireless to pursue infringement claims against T-Mobile despite having made no use of its mark during multiple multi-year periods. This approach conflicts with other circuits requiring continuous use until alleged infringement begins. The case could resolve whether the continuous use requirement applies only to establishing common law rights or extends to maintaining them, with significant implications for dormant mark enforcement.

The Federal Circuit’s Divided Path on Divided Infringement

by Dennis Crouch

The Federal Circuit recently issued an important decision refining how courts should analyze infringement of system claims when multiple parties are involved in operating different components of the claimed system. This post looks at the court’s  new decision in CloudofChange, LLC v. NCR Corp., No. 23-1111 (Fed. Cir. Dec. 18, 2024) and contrasts it Centillion Data Systems, LLC v. Qwest Communications International, Inc., 631 F.3d 1279 (Fed. Cir. 2011).

These cases highlight a recurring challenge in patent law – how to analyze infringement when a claim requires components controlled by different actors. The issue is particularly salient for modern technology systems that often involve both vendor-operated backend servers and customer-operated frontend devices. (more…)