Other Barks & Bites for Friday, May 2: PERA and PREVAIL Act Reintroduced in Congress; USTR Moves Mexico to Priority Watch List in Special 301 Report; and Fourth Circuit Affirms CAFC’s Exclusive Jurisdiction Over Patent Misuse Counterclaims

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This week in Other Barks & Bites: Senators Thom Tillis and Chris Coons are part of bicameral, bipartisan coalitions reintroducing both PERA and the PREVAIL Act into Congress; the Eleventh Circuit affirms a jury verdict in a trademark infringement case after finding the damages within the range allowable by statute; the Federal Circuit rules that Fintiv’s patent claims are invalid for indefiniteness after finding the asserted claims to be means-plus-function claims; the EUIPO officially begins implementation of new examination guidelines under the reformed EU Design Regulation; tariff concerns weigh heavily on Apple stock despite beating analyst expectations on earnings per share; the USTR’s recent Special 301 Report on IP rights enforcement adds eight countries to the Priority Watch List, including Mexico; and the Fourth Circuit finds that Honeywell’s appeal from a contract suit must proceed in the Federal Circuit due to patent misuse counterclaims filed by OPTO Electronics.

Bites

Senators Tillis, Coons and Others Reintroduce PERA and PREVAIL Acts in Congress – On Thursday, May 1, Senators Thom Tillis (R-NC) and Chris Coons (D-DE), along with Representatives Kevin Kiley (R-CA) and Scott Peters (D-CA), officially reintroduced the Patent Eligibility Restoration Act (PERA), which would eliminate judicial exceptions to patent eligibility under 35 U.S.C. § 101 and clarify Section 101 subject matter eligibility, into Congress. On the same day, Tillis and Coons joined Senators Dick Durbin (D-IL) and Mazie Hirono (D-HI), as well as Representatives Nathaniel Moran (R-TX) and Deborah Ross (D-NC), to reintroduce the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act, which would reform patent validity proceedings at the Patent Trial and Appeal Board (PTAB) by harmonizing claim construction and burden of proof with federal district court standards, requiring PTAB petitioners to certify they meet the requirements for using the PTAB and requiring petitioners to choose between district court and the PTAB for pursuing particular validity challenges.

UK Court of Appeal Delivers $500 Million Judgment for Optis on Apple’s 4G Devices – On Thursday, May 1, the UK’s Court of Appeal issued a judgment in Optis Cellular Technology LLC v. Apple Inc., ruling that consumer device giant Apple must pay more than $500 million to mobile telecommunications developer Optis, which could end up receiving more than $700 million after interest is applied according to several pro-Apple online content distributors that were quick to decry the ruling in Optis’ favor.

CAFC Says ‘Handler’ Does Not Provide Sufficient Structure to Save Fintiv Patent Claims – On Wednesday, April 30, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Fintiv, Inc. v. PayPal Holdings, Inc., affirming the Western District of Texas’ determination that patent claims to mobile wallet payment systems owned by Fintiv were invalid as indefinite under 35 U.S.C. 112(6). The Federal Circuit agreed with the district court that the claim limitation “payment handler,” much like the nonce term “module,” recited no specific structure, opening Fintiv’s patent claims to means-plus-function analysis under Section 112 paragraph 6 with the appellate court leaving in place Western Texas’ finding that Fintiv’s specification disclosed any algorithm or other corresponding structure to perform the recited function.

Eleventh Circuit Finds Trademark Damages Within Allowable Range of Statutory Damages – On Wednesday, April 30, the U.S. Court of Appeals for the Eleventh Circuit issued an opinion in Top Tobacco L.P. v. Star Importers & Wholesalers, Inc. affirming the Northern District of Georgia’s denial of Star’s motion for judgment as a matter of law (JMOL) following a $1.1 million jury verdict entered in a trademark case over counterfeit cigarette rolling papers. The Eleventh Circuit dismissed Star’s challenge to the verdict for being larger than the actual damages incurred by Top Tobacco and Republic because the jury’s verdict awarded damages within the range of statutory damages allowable under 15 U.S.C. § 1117(c) and because Star neither challenged the district court’s jury instructions nor pursued remittitur following the verdict.

USTR Moves Mexico to Priority Watch List in Latest Special 301 Report – On Tuesday, April 29, the U.S. Trade Representative (USTR) published this year’s edition of the Special 301 Report detailing the adequacy of the United States’ international trading partners with respect to intellectual property (IP) rights. This year’s report saw the addition to the Priority Watch List of eight countries where serious IP problems exist, including Mexico, which has delayed the implementation of several provisions of the U.S.-Mexico-Canada Agreement (USMCA) regarding enforcement against trademark counterfeiting and copyright piracy as well as protection of pharmaceutical-related IP.

Fourth Circuit Finds Patent Misuse Counterclaims Gives CAFC Jurisdiction Over Appeal – On Tuesday, April 29, the U.S. Court of Appeals for the Fourth Circuit published an opinion in Honeywell International Inc. v. OPTO Electronics Co, Ltd. dismissing an appeal filed by Honeywell in a breach of contract case after Honeywell filed a second notice of appeal to the Federal Circuit and moved to dismiss the appeal to the Fourth Circuit. The appellate court rejected OPTO’s attempt to keep the appeal within the Fourth Circuit, finding that the Federal Circuit had exclusive jurisdiction over the appeal because OPTO had filed counterclaims, including a declaratory judgment asserting that Honeywell’s revenue audits regarding OPTO’s 2D barcode products amounted to patent misuse, which the Fourth Circuit found were compulsory counterclaims arising under U.S. patent laws, thus giving exclusive jurisdiction of the appeal to the Federal Circuit. 

Barks

USPTO to Collect Patent External Quality Survey Responses Through June – On Thursday, May 1, the U.S. Patent and Trademark Office published a notice of information collection in the Federal Register announcing that the agency would be collecting responses to its Patent External Quality Survey, which gauges customer satisfaction with patent examination quality, through June 30.

EUIPO Officially Implements Changes to Design Examinations – On Thursday, May 1, the European Union Intellectual Property Office (EUIPO) officially began implementing changes to examination practices for design applications required by recent reforms under the European Union Design Regulation (EUDR), which includes streamlined filings for design applications at the EUIPO instead of national offices, new terminology and removal of the unity of class requirement.

Ninth Circuit Reverses Dismissal of Copyright Claims Over Sam Smith’s “Dancing with a Stranger” – On Tuesday, April 29, the U.S. Court of Appeals for the Ninth Circuit issued an unpublished opinion in Sound and Color, LLC v. Smith reversing the Central District of California’s dismissal of copyright infringement claims filed over Sam Smith’s 2020 single “Dancing with a Stranger,” finding that a reasonable jury could have found that Jordan Vincent’s 2018 single “Dancing with Strangers,” which is owned by Sound and Color, shared the same combination of unprotectable elements in substantial amounts under Sound and Color’s selection-and-arrangement theory.

EPO Finds 18-Fold Increase in Plastic Waste Management Patenting Over Last 35 Years – On Tuesday, April 29, the European Patent Office (EPO) published the results of a technology insight report on recent trends in the plastic waste management sector, finding that patenting activity within the field has increased by 18-fold between 1990 and 2023, with patent application filing growth rapidly intensifying from 2015 onward.

Crumbl Sued by Warner Music Group Over Copyright Infringing Social Media Posts – On Tuesday, April 29, proof of summons delivery was returned to the District of Utah in a copyright infringement case recently filed by Warner Music Group and several of its subsidiaries against Utah-based cookie company Crumbl for unauthorized uses of copyrighted music over the course of years in many of the company’s Instagram and TikTok posts.

Judge Pregerson Dismisses Copyright Case Over Showtime’s Yellowjackets – On Friday, April 25, U.S. District Judge Dean Pregerson of the Central District of California dismissed a copyright infringement lawsuit filed by Eden Film Productions against Showtime Networks and Lionsgate over the television show Yellowjackets, which allegedly contained substantial similarities to Eden’s own survival TV series about a soccer team trying to survive in the wilderness after a plane crash.

This Week on Wall Street

Apple Stock Falls After Tariff Concerns Weigh on Earnings Call – On Thursday, May 1, consumer device giant Apple reported earnings for the second quarter of 2025, beating analyst expectations on earnings per share but watching its stock price slip by 4% in aftermarket trading on Thursday and another 3% in premarket trading Friday following CEO Tim Cook’s comments in the company’s earnings report call to investors indicating that he didn’t want to “predict the future” regarding the impact of President Trump’s tariffs on Apple’s product sales.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2024 are announcing quarterly earnings next week (2023 rank in parentheses):

• Monday: Ford Motor Co. (33rd); ON Semiconductor Corp. (t-229th)
• Tuesday: Advanced Micro Devices, Inc. (79th); Continental AG (t-169th); Fresenius Medical Care AG (202nd); Koninklijke Philips N.V. (53rd); Toyota Motor Corp. (10th)
• Wednesday: Bayerische Motoren Werke AG (137th); Emerson Electric Co. (t-238th); Johnson Controls International (118th); Rockwell Automation, Inc. (t-244th); Schaeffler Technologies AG (120th); Skyworks Solutions, Inc. (180th); Winbond Electronics Corp. (t-247th)
• Thursday: Daikin Industries, Inc. (136th); Fujifilm Holdings Corp. (25th); Infineon Technologies AG (65th); Kawasaki Heavy Industries Ltd. (t-215th); LG Corp. (2nd); Nikon Corp. (t-268th); Nippon Telegraph & Telephone Corp. (24th); Omron Corp. (t-146th); Siemens Energy AG (149th); Softbank Group Corp. (141st)
• Friday: Kubota Corp. (225th); Mitsubishi Heavy Industries, Ltd. (123rd); Nippon Steel Corp. (138th); Panasonic Corp. (19th)