Other Barks & Bites for Friday, October 3: CAFC Won’t Revive US Inventor Case Against USPTO for Denying Petition for Rulemaking; Value of EU Counterfeit Seizures Hits Single-Year Record; and USPTO Tells Employees 1% of Workforce Will Be Laid Off

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This week in Other Barks & Bites: USPTO Acting Commissioner for Patents Valencia Martin Wallace sends an internal email to staff indicating that 1% of the agency’s workforce will be laid off; U.S. sales of electric vehicles hit a record during the third quarter of 2025 just as federal subsidies for EV purchases ended; the Federal Circuit nixes US Inventor’s pursuit of associational standing to sue the USPTO for denying its petition for rulemaking on discretionary denial criteria for AIA trials; the Durbin-Hawley AI LEAD Act is introduced to apply products liability standards to both developers and deployers of AI systems; the EUIPO and EU customs officials report that EU authorities confiscated €3.8 billion of counterfeit items during 2024, the highest recorded value of single-year EU counterfeit seizures; and the Eleventh Circuit affirms an attorneys’ fees award entered in a trademark case filed by the 1970s funk group The Commodores against one of its former members.

Bites 

CAFC Tells US Inventor That Its Members Only Face Speculative Fear of Patent Cancellation – On Friday, October 3, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in US Inventor, Inc. v. U.S. Patent and Trademark Office affirming the U.S. District Court for the District of Columbia’s dismissal of Administrative Procedures Act claims against the USPTO challenging the agency’s denial of US Inventor’s petition for rulemaking to establish criteria for limiting the USPTO’s discretionary authority to institute America Invents Act (AIA) validity trials. Finding that US Inventor lacked either organizational standing or associational standing as required by Article III, the Federal Circuit found that the risk of patent cancellation to any member of US Inventor through an AIA trial stemming from the agency’s denial of the rulemaking petition, especially given the agency’s discretion to deny institution outside the scope of US Inventor’s petition, was too speculative to support standing.

CAFC Affirms Pre-Trial Exclusion of Expert Testimony for Failure to Apportion – On Thursday, October 2, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Rex Medical, L.P. v. Intuitive Surgical, Inc. affirming the District of Delaware’s reduction of the jury’s damages award from $10 million to nominal damages of $1 after finding that the district court did not abuse its discretion in excluding expert testimony on hypothetical negotiations based on a settlement agreement between Rex Medical and Covidien for failing to apportion the value of that license based on the patents-in-suit. The Federal Circuit also dismissed Intuitive Surgical’s cross-appeal on infringement and validity due in large part to the transitional “comprising” phrase employed by Rex Medical’s patent claim, which creates a presumption that the recited elements of an invention do not prohibit additional elements from being present.

InterDigital Reportedly Wins World’s First Anti-Interim License Injunction in Germany, UPC – On Thursday, October 2, IP Fray reported that American tech R&D and licensing company InterDigital was awarded an anti-interim-license injunction (AILI) by both German regional court in Munich as well as the Mannheim division of the Unified Patent Court (UPC) barring Amazon from seeking injunctive or declaratory relief stemming from InterDigital’s fair, reasonable and non-discriminatory (FRAND) licensing obligations at issue in patent infringement proceedings ongoing at the High Court of Justice for England & Wales. The rulings reportedly mark the first time that an AILI has been awarded in any patent legal proceedings without requiring the filing of any prior infringement action between the parties being filed in German courts or at the UPC, marking the latest decision by German courts to push back against anti-suit injunctions and other forms of “jurisdictional imperialism” decried this summer by Presiding Judge Oliver Sch?n of Munich Regional Court.

About 1% of USPTO Workforce Laid Off Under RIF Plan During Government Shutdown – On Wednesday, October 1, news reports indicated that Acting Commissioner of Patents Valencia Martin Wallace sent an email to USPTO staff indicating that about 1% of the agency’s 14,000-person workforce would be laid off as a result of a reduction-in-force (RIF) plan being implemented during the current shutdown of the U.S. federal government due to Congressional failure to solve budgetary disputes. The Agency’s recently confirmed Director John Squires also reportedly told employees “that the reduction in force ‘is intended to focus resources on core operations and is not a reflection of anyone’s service, performance or conduct.’” A message on the USPTO website regarding the shutdown indicates that “at present, the USPTO will remain open and fully operational until further notice under operating reserves from the prior year’s fee collections.”

EU Counterfeit Seizures Reach €3.8 Billion in 2024 for Highest Recorded Value in Single Year – On Wednesday, October 1, the European Union Intellectual Property Office (EUIPO) and the European Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD) jointly published figures on counterfeit product seizures by European authorities during 2024 showing that, while that total amount of counterfeits was lower than the record set in 2023, the 112 million counterfeits seized last year had a total value of €3.8 billion, the highest recorded value of counterfeits seized by EU authorities in a single year reflecting a shift towards counterfeiters selling products with higher unit prices. According to the EUIPO and DG TAXUD’s joint report, 90% of the value of infringing counterfeits were collected by authorities in six countries: Italy, Spain, France, Germany, Greece, and Netherlands.

CAFC Vacates IP Infringement Findings in Hookless Shower Curtain Case – On Tuesday, September 30, the Federal Circuit issued a precedential decision in Focus Products Group International, LLC v. Kartri Sales Co., Inc. vacating trade dress, trademark and patent infringement findings entered by the Southern District of New York in a case involving hookless shower curtains with embedded rights. The CAFC found that the district court did not properly narrow claim construction of the “ring” claim limitation based on prosecution history, which showed that Focus disclaimed a “flat upper edge,” that the lower court analyzed the similarity of products instead of the similarity of their use of the trademark “HOOKLESS” in the purchasing context, and that the district court did not sufficiently explain whether expired patent claims to hookless shower curtains owned by Focus were essential to the claimed trade dress as required by the U.S. Supreme Court’s 2001 ruling in TrafFix Devices v. Marketing Displays. The Federal Circuit did, however, affirm the district court’s finding that the defendants took too long to challenge venue following the Supreme Court’s 2017 ruling in TC Heartland v. Kraft Food Brands Group, and the denial of defendant Marquis’ unclean hands defense, which was raised on the eve of trial and included no allegations of specific intent.

Eleventh Circuit Affirms Attorneys’ Fee Award Against Former Commodores Member – On Monday, September 29, the U.S. Court of Appeals for the Eleventh Circuit issued a ruling in Commodores Entertainment Corporation v. McClary, affirming the Middle District of Florida’s award of attorneys’ fees in the fifth appeal brought to the appellate court by Thomas McClary, a former member of the American funk group The Commodores sued for trademark infringement over performances given under The Commodores’ name in Europe. The Eleventh Circuit found that McClary’s “vexatious” strategy and behavior flouting court orders by domestic uses of The Commodores’ trademark rights through McClary’s New York-based booking agent supported the district court’s finding that this case was exceptional under 15 U.S.C. § 1117(a).

Durbin-Hawley AI LEAD Act Would Apply Product Liability Standards to AI Systems – On Monday, September 29, U.S. Senators Dick Durbin (D-IL), Democratic Whip and Ranking Member of the Senate Committee on the Judiciary, and Josh Hawley (R-MO) introduced the Aligning Incentives for Leadership, Excellence, and Advancement in Development (AI LEAD) Act, which if enacted would apply products liability law to artificial intelligence (AI) systems and provide a cause of action to state Attorneys General and private actors to sue based on harms caused by AI systems for defective design, failure to warn or unreasonably dangerous products. Liability under the AI LEAD Act would extend to developers of AI systems as well as AI systems deployers if those deployers substantially modify those AI systems or intentionally misuse those systems contrary to their intended use.

Barks

CAFC to Sustain Operations Under Fee Authority During Government Shutdown – On Wednesday, October 1, the Federal Circuit issued an order noting that the appellate court will continue normal operations as they can be sustained during the federal government’s shutdown through the CAFC’s fee authority and no-year appropriations, with operations to be reduced as required by the Anti-Deficiency Act when such funds are no longer available.

USPTO to Close Rocky Mountain Office Amid Increased Outreach Efforts – On Wednesday, October 1, the U.S. Patent and Trademark Office (USPTO) announced that the agency plans to permanently close its Denver, CO-based Rocky Mountain Regional Outreach Office following the USPTO’s report to Congress last December indicating that regional physical office space was less necessary due to the planned establishment of community outreach offices and the popularity of agency outreach efforts.

EPO Formally Lifts Barrier Preventing Legal Practitioners From Joining Associations – On Wednesday, October 1, the European Patent Office (EPO) announced that, effective immediately, the agency had removed the legal barrier preventing legal practitioners, lawyers in European Patent Convention (EPC) contracting states authorized to practice patent matters in their own country, from joining professional associations that are available to professional representatives that have passed the European qualifying examination.

USPTO to Amend Goods Listings to Incorporate Nice Classification Changes in 2026 – On Wednesday, October 1, the USPTO issued a final rule in the Federal Register to incorporate trademark classification changes under the Nice Agreement, particularly the addition and deletion of goods from eight trademark classes, that will become effective as of January 1, 2026.

Chief Judge Kendall Bars Chinese X-Ray Tube Makers From Doing Business in U.S. – On Monday, September 29, U.S. District Judge Virginia Kendall, Chief Judge of the Northern District of Illinois, issued a memorandum opinion and order  granting motions for contempt and sanctions in a trade secret case brought by Philips Medical System, barring a pair of Chinese medical equipment manufacturers and their non-party CEOs from engaging in any business within the United States until they comply with previous contempt orders stemming from their violation of a permanent injunction preventing them from using Philips’ trade secrets and selling X-ray tubes developed through misappropriation of those trade secrets.

This Week on Wall Street

U.S. EV Sales Hit 1 Million Sales in First 9 Months of 2025 as Federal Subsidies End – On Friday, October 3, automotive sales data published by Motor Intelligence showed that U.S. sales of electric vehicles exceeded 1 million units during the first nine months of 2025, hitting a quarterly record of 438,000 during 2025’s third quarter, as a federal program offering subsidies of up to $7,500 per EV purchase was ended in September.

OpenAI’s Lower-than-Expected Share Sale Seen as Internal Vote of Confidence – On Thursday, September 2, news reports indicated that generative artificial intelligence (AI) developer OpenAI finalized a secondary share sale totalling $6.6 billion, less than the $10.3 billion authorized by the company for repurchasing stock from former and current employees in a move seen as an internal vote of confidence for the generative AI company that recently reached a $500 billion valuation.