Significant Patent Law Changes in 2024 May Increase the Threat of Invalidity and Reduce the Threat of Damages

Introduction

Recent US court rulings in patent law are reshaping key aspects of patent validity, damages calculations, and litigation strategies. Decisions from the courts over the past year have simplified challenging design patents, expanded the scope of foreign damages, and increased scrutiny of patent damages models. At the same time, ongoing cases such as EcoFactor v Google may set new standards for expert testimony and royalty calculations.

Going into 2025, proposed patent legislation aims to reduce uncertainty surrounding patent eligibility, specifically the “Patent Eligibility Restoration Act” (PERA), and to reinstate injunctions as the standard remedy in patent infringement lawsuits, via “The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive Patent Rights Act of 2024” (RESTORE). If passed, these bills would dramatically improve patent owners’ ability to enforce their patents, but the government overhaul implemented by President Trump will likely mean these bills lose Congressional attention.

Death knell for design patents?

The Rosen-Durling test applied a formulaic construct for evaluation of prior art to determine if a design patent was “basically the same” as pre-existing designs, and hence invalid due to obviousness. In LKQ Corporation v GM Global Tech, the Federal Circuit dismantled the rigid test and its “basically the same” standard, replacing it with the more flexible Graham v John Deere test that has traditionally governed utility patent obviousness. This is a flexible standard that allows for an obviousness based on the appearance of the design, with only a few broad guideposts instead of the formulaic rules in Rosen.

Design patents based on prior art combinations may now be invalidated more frequently because of the ruling, which represents a fundamental change in design patent law. Under the new standard, analogous prior art is expected to be construed more broadly, and secondary prior art reference need not be “so related” to a primary prior art reference such that it creates its motivation to combine.

Key takeaways:

• Design patents will be increasingly vulnerable to obviousness challenges based on applying the utility patent obviousness standard.
• Practitioners may need to supplement design patent protection strategies with trade dress and copyright protection measures.
• The Patent Trial and Appeal Board (PTAB) is likely to see an increase in petitions challenging design patents based on this new standard.

Expanding foreign damages: Brumfield v IBG

The Federal Circuit’s decision in Brumfield v IBG held that foreign damages are equally applicable under 271(a), not just 271(f). However, the court emphasised that liability must be tied to US-based infringing acts, even if revenue is generated overseas.

Key takeaways:

• Patentees should revisit damages models to capture foreign sales where US acts of infringement serve as proximate cause.
• Damages experts must address the proximate cause of damages by specifically explaining facts as to both base and rate.
• An enhanced rate may be argued even if the base cannot be added in, so long as there is a direct tie-in to the Georgia-Pacific factors. Offers for sale, actual sales, and use of the claimed system may be easier to tie in due to the law on extraterritorial acts (eg, Transocean).
• The ruling may lead to more aggressive damages claims in international patent disputes.
• Method claims remain more challenging to enforce internationally when compared with apparatus claims.

Apportionment of value of a patent in a complex device: VLSI v Intel

Microprocessors are extremely complex devices that incorporate a myriad of patented inventions. The ongoing legal battle in VLSI v Intel has drawn significant attention due to its large damages award and the Federal Circuit’s scrutiny of the damages calculation methodologies. Central to the dispute is whether VLSI’s damages model properly apportioned the value of patented technology within Intel’s processors.

VLSI accused Intel of infringing patents related to power management in microprocessors, ultimately securing a USD2.18 billion jury award. However, Intel challenged the methodology used to calculate damages, arguing that VLSI failed to adequately apportion the value of the patented invention from the broader value of Intel’s products. The Federal Circuit subsequently found flaws in the technical evaluation used to justify the award, leading to remand for a retrial on damages.

Key takeaways:

• Large, billion-dollar damages awards are increasingly vulnerable to appellate scrutiny, especially where technical evaluations fail rigorous examination.
• Courts are reinforcing apportionment requirements to ensure that damages reflect only the incremental value of the patented technology rather than unrelated features.
• The remand for a damages retrial underscores the importance of reliable expert testimony in high-stakes patent litigation.

2025 – a tougher standard requiring more precision for patent damages? EcoFactor v Google

The Federal Circuit’s upcoming en banc ruling in EcoFactor v Google will be consequential because it addresses whether lump sum licences covering multiple patents can be disaggregated into per-patent royalty rates for damages calculations and the standards damages experts must meet.

The case arises from a long-running dispute over smart thermostat technology. EcoFactor alleged that Google’s Nest thermostats infringed its patents. At trial, EcoFactor’s expert presented a damages model that derived a per-unit royalty from three broad licensing agreements, which included the asserted patent. Google challenged the damages methodology, arguing that the expert’s approach lacked proper apportionment and failed to account for the value of non-asserted patents covered by the same licences.

The Federal Circuit will determine whether district courts should treat the reliability of expert testimony as a threshold issue of admissibility under Daubert or leave it to the jury to assess its weight. The Intellectual Property Owners Association (IPO), in its amicus brief, argued that the reliability of expert testimony should be treated as an issue of admissibility and not leave reliability to the weight of the testimony for the jury.

Key takeaways:

• The decision may raise the standard for expert testimony and necessitate the use of more exacting procedures when calculating royalties from similar licences.
• If the Federal Circuit strengthens the Daubert gatekeeping function, expect an increase in pretrial challenges to damages experts.
• To prevent issues in litigation later, companies involved in licensing negotiations may need to make sure that licence agreements specify patent-by-patent valuation.

With oral arguments scheduled for early 2025, EcoFactor could become one of the defining cases of patent damages in the coming years.

Problems for pharma patent disclosures: Amgen Inc. v Sanofi

In the case of Amgen Inc. v Sanofi, the Supreme Court reaffirmed the principle that broad claims necessitate equally broad disclosures. Amgen sought to protect a genus of antibodies while disclosing only a handful of examples, relying on a roadmap approach to permit skilled artisans to figure out the rest. But the Court was unpersuaded. It held that the enablement requirement demands more than just a conceptual roadmap – patentees must enable the full breadth of their claims.

The Federal Circuit wasted no time in applying this ruling to Baxalta Inc. v Genentech, Inc. There, the panel invalidated claims in another antibody patent, reasoning that the so-called roadmap approach left skilled artisans no better equipped to practise the full scope of the invention than the original inventors had been. The decision in Baxalta heightens the challenge for biotech companies seeking broad antibody claims, demanding a shift toward more precise and well-supported disclosures.

Key takeaways:

• Broad genus claims are increasingly risky without correspondingly detailed support in the disclosure.
• Patent drafters should focus on experimental data and comprehensive, detailed disclosures to better withstand enablement challenges.

Patent term adjustments and double patenting: Allergan v MSN Labs

In Allergan v MSN Labs, the Federal Circuit expressed that a first-filed, first-issued, later-expiring patent claim could not be invalidated based on a later-filed, earlier-expiring reference patent claim sharing a common priority date. In its opinion, the court stated, “the first-filed, first-issued patent in its family... is the patent that sets the maximum period of exclusivity for the claimed subject matter and any patentably indistinct variants.”

Key takeaways:

• Companies must be proactive in structuring continuation applications to avoid unintended ODP vulnerabilities.
• Practitioners must carefully manage continuation applications and terminal disclaimers to avoid ODP challenges.

Limiting software patentability: Mobile Acuity v Blippar

In Mobile Acuity Ltd. v Blippar Ltd., the Federal Circuit continued to raise the bar software patentees face in protecting their inventions with utility patents, finding that Mobile Acuity’s claims were directed to an abstract idea and lacked an inventive concept sufficient to transform them into patent-eligible subject matter.

In this case, the patent claims recited a method for storing and sharing images between users. The court found that the patent claims were framed at too high a level of abstraction. Mobile Acuity attempted to argue that its “technical solution” to image sharing should satisfy Alice Step 2, but the court rejected this argument, holding that merely stating how to apply an abstract idea using generic computing components is insufficient to be patent-eligible subject matter.

Key takeaways:

• Courts are unlikely to find claims reciting functional software processes patent eligible without a specific technical implementation.
• Disputes over patent eligibility that can be resolved at the beginning of the case on the face of the patent should be disposed of without delay.

Deliberate delay in the patenting process can leave patent worthless: Google v Sonos

In a rare invocation of the prosecution laches doctrine, the district court in Google v Sonos found that Sonos’ 13-year delay in prosecuting a continuation application amounted to an impermissible abuse of the patent system. The court reasoned that allowing such a delay to extend the patent term would undermine the policy objectives of the Patent Act, particularly in light of modern patent term calculations that base the patent term on 20 years from the earliest filing date rather than 17 years from the issue date under the old rule.

Multiple amici briefs have been filed, some suggesting that prosecution laches require “extraordinary and deliberate delay” rather than mere permissible continuation application activity.

However, this decision signals renewed judicial willingness to police continuation application practices and curb excessive delays.

Key takeaways:

• Practitioners must ensure that continuation applications are filed and prosecuted diligently to avoid laches challenges.
• This ruling may encourage more aggressive challenges to patents with long prosecution histories.

Challenging enhanced damages – exceptional case determinations: Realtime Adaptive Streaming v Sling TV

In Realtime Adaptive Streaming v Sling TV, the Federal Circuit reversed a district court’s decision that designated the case as “exceptional” under 35 U.S.C. § 285 and awarded attorneys’ fees to Sling TV. The decision underscores the challenge courts face in determining when a patent case is exceptional and reinforces that fee awards require strong evidentiary support.

The dispute stemmed from claims that Sling TV had infringed patents related to adaptive video streaming. The district court ruled that Realtime’s litigation tactics – including pursuing claims after adverse rulings in related cases – rendered the case exceptional. However, the Federal Circuit found that several of the district court’s identified “red flags” were either improperly justified or lacked sufficient explanation to warrant the exceptional case designation.

Key takeaways:

• Courts must justify why a case meets the “exceptional” standard before awarding fees.
• Aggressive litigation strategies, such as defence counsel’s notice letter, do not always constitute a significant concern.
• A “red flag” is inapplicable unless it is directly related to infringement or invalidity.
• Defendants should ensure their fee requests are backed by compelling evidence of bad faith or objectively unreasonable litigation conduct.

Anti-suit injunctions: Ericsson v Lenovo

In Ericsson v Lenovo, the Federal Circuit provided clarity on when US courts can issue anti-suit injunctions in SEP disputes. The decision underscores that US courts may enjoin litigants from enforcing foreign injunctions if the domestic case is dispositive of the core licensing dispute.

The court applied a three-part test from the 9th Circuit to determine when an anti-suit injunction is appropriate:

• First, the parties and issues must be the same as between the domestic and foreign suits, and that domestic suit must be dispositive of the foreign action to be enjoined.
• Second, the court must consider whether one of the anti-suit-injunction factors applies.
• Third, the court must consider whether the anti-suit injunction’s impact on comity is tolerable (ie, enjoin the litigant, not the litigation).

In this case, the test applied was whether the domestic case would resolve the availability of injunctive relief, with a nod to comity. The court found that the SEP issue in the US case would preclude injunctive relief in any other country due to the duty to license.

Key takeaways:

• US courts remain a critical forum for resolving global SEP disputes due to their willingness to issue anti-suit injunctions.
• The application of this three-part test will serve as a guide for future SEP litigation where multinational enforcement strategies are at play.
• This decision reinforces the necessity for SEP holders to carefully navigate FRAND licensing commitments in different jurisdictions.
• Comity is afforded to the foreign court because its proceedings are not enjoined, but rather, the litigant is enjoined from enforcing the remedy.

The interplay between standard-essential patents (SEPs) and fair, reasonable, and non-discriminatory (FRAND) licensing obligations has long been contentious. In Ericsson v Lenovo, the Federal Circuit provided clarity on when US courts can issue anti-suit injunctions in SEP disputes. The decision underscores that US courts may enjoin litigants from enforcing foreign injunctions if the domestic case is dispositive of the core licensing dispute.

This ruling has broad implications for multinational patent enforcement strategies, particularly for SEP holders navigating FRAND obligations across jurisdictions.

Conclusion

These decisions described above affect key aspects of the patent landscape. Accordingly, these rulings demand strategic adaptation by patentees, implementers and practitioners.

Looking ahead, EcoFactor v Google promises further shifts in how courts evaluate methodologies for computing damages. Whether advocating for patentees or defending against infringement claims, practitioners must be prepared to navigate this evolving landscape.

Finally, the changes patent owners had hoped to see become law in PERA and RESTORE will not likely make the top of Congressional priorities this year, leaving the courts to stay the course for patent law in 2025.