The Proposed ITC Rule

The proposed rule would require each nongovernment party to a Section 337 investigation to file a disclosure statement with the Commission at the outset of its participation. The required disclosures would cover three categories: parent corporations and entities that own the party’s stock; any person or entity, besides the complainant, with the legal right to bring the investigation based on the asserted unfair acts; and any non-counsel person or entity that provides funding specifically for the investigation, excluding personal loans, bank loans or insurance, or whose approval is necessary for litigation or settlement decisions.

That third category is likely to draw attention because it addresses litigation funding and settlement control. But the proposal is broader than funding alone. It reaches ownership, legal rights in the asserted claims, and control over litigation decisions. The Commission explains that the rule is intended to help evaluate potential conflicts, provide clarity about entities whose rights are at issue, promote transparency, facilitate settlement, and bring relevant issues to the Commission’s attention.

Part of a Broader Disclosure Trend

The ITC does not frame the proposed rule as a response to recent PTO practice or any particular district court order. The notice instead makes a more general observation: Some federal courts have real-party-in-interest and litigation-funding disclosure requirements to promote transparency and evaluate conflicts, while the Commission does not currently have similar rules. The notice also invites comments on how the proposed rule compares with similar provisions in other federal, state, judicial, or administrative forums.

Even so, the patent-system connection is apparent. At the PTO, real-party-in-interest disclosure has recently returned to the center of Patent Trial and Appeal Board practice. The PTO’s real-party-in-interest requirement is not a freestanding litigation-funding disclosure rule, but it asks about a related issue: whether the named petitioner is the only party whose interests matter, or whether another entity funds, directs, controls, or benefits from the proceeding. That same focus appeared in the Director’s later decision denying institution of an inter partes review involving alleged foreign sovereign interests, where even minority government ownership raised threshold concerns when the petitioner did not show the absence of control.

Some district courts have asked similar questions through litigation-funding disclosure requirements. Chief Judge Colm Connolly’s standing order in the District of Delaware is a prominent patent-litigation example, requiring disclosure of certain nonrecourse funding arrangements, including whether the funder has approval rights over litigation or settlement decisions. There is still no uniform federal rule requiring disclosure of litigation funding in every case. But the ITC proposal shows that the same basic concerns about ownership, funding, and control are now part of the conversation in Section 337 practice.

Practical Implications

If adopted, the proposed rule would add a new diligence step to preparing and responding to Section 337 investigations. Parties would need to assess whether ownership structures, license rights, funding arrangements, or approval rights trigger a disclosure obligation. That inquiry may be especially important in investigations involving complex corporate families, exclusive licensees, trade secret owners, litigation funders, or other nonparties with a financial or control interest in the dispute. The Commission is accepting comments on the proposed rule until June 29, 2026.

The proposed rule does not prohibit third-party funding, and it does not require disclosure of counsel contingency arrangements, personal loans, bank loans, or insurance. But the Commission suggests that disclosure of certain funding and control arrangements may assist with conflicts, clarify whose rights are at issue, promote transparency, facilitate settlement, and bring relevant issues to the Commission’s attention.

The practical effect would be to make parties account for ownership, rights, funding and control interests that may sit outside the caption but still bear on the investigation. That fits the broader trend discussed above: In Section 337 practice, as in other patent forums, the named party may not tell the whole story.

Sol de Janeiro is widely known for its Brazilian Bum Bum Cream (the Cream), sold in a yellow‑and‑white rounded jar featuring an oversize lid with dark gray lettering. After Costco, a major national retailer, allegedly inquired about carrying the Cream without success, it requested that Apollo Health and Beauty Care (Apollo) develop a “dupe” product with a similar look, feel and performance. Apollo subsequently launched its Nutrius cream at Costco, where it was sold in a yellow-and-white rounded jar with a large, overhanging lid printed with the product name.

After Sol de Janeiro asserted unregistered trade dress rights in a cease‑and‑desist letter, Apollo took the fight to court, filing a declaratory judgment action in the Southern District of New York to knock out the claimed trade dress as functional. Sol de Janeiro fired back with trade dress and trademark infringement counterclaims against Apollo – and retailer Costco.

Apollo’s first bid for summary judgment on functionality failed – but discovery of new facts marked a turning point in the litigation. Apollo uncovered that Sol de Janeiro had previously sought trade dress protection for the same packaging elements for similar products, only to have the USPTO reject them as functional, prompting the court to allow renewed briefing.

On March 17, the court handed Apollo a win, granting its summary judgment motion and holding that Sol de Janeiro’s asserted trade dress was functional – and therefore unprotectable. Looking at the packaging both feature by feature and as a whole, the court concluded that the Cream design elements served practical purposes, not brand identification. It also gave “great weight” to the USPTO’s prior functionality refusals.

The court emphasized that neither aesthetic intent nor alleged copying could transform functional packaging into protected trade dress. Apollo had introduced uncontroverted evidence that each element of the Cream jar improved the container’s quality, including that it was based on a stock jar with a rounded bottom and oversize lid that made the product easy to open, and that the yellow color merely denoted the fragrance of the body cream and product benefit.

This decision highlights several key takeaways for brands and counsel navigating the dupe economy:

• Align prosecution and litigation strategy. What’s in the USPTO record can shape the outcome in court.
• Refresh protection and enforcement strategy. Evidence of copying won’t save a trade dress claim rooted in functional design.
• Build layered protection. Combining trademarks, design patents, copyright and unfair‑competition claims can deliver broader coverage, stronger remedies and greater leverage.

The case is Apollo Healthcare Corp. d/b/a Apollo Health and Beauty Care v. Sol de Janeiro USA Inc. et al., No. 1:22-cv-7719 (S.D.N.Y. March 17, 2026). The case has been assigned to Judge George B. Daniels.

From cutting-edge athletic equipment to iconic team branding and global broadcasts of unforgettable moments, sports are powered by far more than physical talent. Behind nearly every advancement in performance, safety and commercialization lies a complex and increasingly valuable IP ecosystem.

Innovation touches nearly every aspect of the industry. There are lighter and more durable materials, data-driven performance analytics, wearable technologies, immersive fan experiences, and new methods of content distribution. Each of these developments depends on IP protection to justify the investment required to bring ideas from concept to competition. Patents protect performance-enhancing and safety-focused inventions. Design rights safeguard the distinctive look of sports apparel and equipment. Trademarks anchor team identities, athlete brands and league goodwill. And copyrights ensure that live broadcasts, highlight reels and digital sports content can be created, shared and monetized in a sustainable way.

As sports continue to intersect with artificial intelligence, advanced data analytics, immersive media and global brands, IP considerations will only grow in importance. World IP Day is a reminder that innovation does not happen in isolation; it depends on legal structures that reward creativity while enabling responsible growth.

Happy World IP Day 2026!

In theory, the answer is yes. Under 35 U.S.C. § 102 (§ 102), science fiction may qualify as prior art if it is enabling.[4] Under 35 U.S.C. § 103 (§ 103), even nonenabling science fiction may be relevant as part of an obviousness analysis when considered alongside other teachings available to a person of ordinary skill in the art.[5] In practice, however, science fiction references have rarely been seriously invoked, and there is no body of judicial precedent or PTAB authority addressing the issue. Still, science fiction presents patent practitioners with a category of references that is theoretically broad but practically uncommon.

Science fiction may qualify as prior art under § 102, but it must be sufficiently enabling.[6] A reference need not describe a physically built embodiment to be cited against a claim.[7] Examiners may rely on references without first proving enablement, and Applicants then bear the burden of showing that the disclosure is nonenabling.[8] Accordingly, much science fiction is not suitable under § 102 because it often omits operative technical detail or relies on fantastical elements that would not enable a real-world implementation.

Still, some descriptions are concrete enough to matter. For example, the patent application for the waterbed was famously rejected because it was anticipated by Robert Heinlein’s description of a “hydraulic bed” in Stranger in a Strange Land.[9] Heinlein’s hydraulic bed included a flexible cover skin, a way to fill the skin, and a way to shut off water flow.[10] These details were sufficient to anticipate one of the most distinctive design trends of the 1970s.

Science fiction is particularly interesting under the obviousness analysis because, unlike § 102, § 103 does not have an explicit enablement requirement.[11] In particular, a reference used in an obviousness rejection need not, by itself, enable the entire claimed invention, so long as the combined teachings relied upon by the Examiner would have rendered the claim obvious to a person of ordinary skill in the art.[12] Even so, the body of prior art as a whole must be enabling for a properly supported § 103 rejection.[13] In other words, an Examiner may use a science-fiction invention, combined with real enabling references, to support an obviousness rejection.

Consider the tricorder.[14] In Star Trek, a tricorder is a handheld device used to scan, analyze, and record environmental, technical, and medical data.[15] A combination of real-life inventions can already approximate a tricorder: handheld computers, wearable biometric sensors, LiDAR sensors, portable EKGs, metal detectors, learning algorithms, and pulse oximeters. An Examiner could reject an application for a real-life tricorder by combining these inventions with an episode of Star Trek. But that does not mean the science fiction itself meaningfully teaches how to arrive at the claimed invention. In many cases, the science-fiction reference may do little more than describe the desired end state, leaving the Examiner to rely on real-world references for the actual technical path.

Practitioners can respond to such rejections in different ways. First, Applicants facing science-fiction rejections can rebut a § 102 rejection by demonstrating lack of enablement.[16] Courts have repeatedly emphasized that anticipation requires an enabling disclosure, so Applicants should point out fantastical or implausible aspects. For example, Star Trek spaceships are powered by fictional “dilithium crystals.” Accordingly, a practitioner faced with a Star Trek-based rejection should investigate whether “dilithium crystals” are used to fill the technical gaps within the reference.

Second, several obviousness defenses apply with particular force to science-fiction references. Nonanalogous art cannot support an obviousness rejection if the reference lies outside the inventor’s field of endeavor or is not reasonably pertinent to the problem addressed by the invention.[17] A reasonably pertinent reference is one that an ordinarily skilled artisan would have consulted in seeking a solution to the relevant problem.[18] Applicants may therefore argue that science fiction is nonanalogous art where its entertainment-oriented context and content make it unlikely that a person of ordinary skill in the art would have consulted it in solving the relevant technical problem.[19]

Finally, science fiction often imagines a final device without providing the needed intermediate steps to get there. This leaves science-fiction rejections vulnerable to hindsight reconstruction. Hindsight reconstruction is the impermissible practice of using the claimed invention as a template to assemble isolated pieces of prior art after the fact.[20] Thus, when a science-fiction reference merely proposes a device without workable technical detail, Applicants may argue that an Examiner is trying to establish obviousness through hindsight reconstruction.[21] These doctrines give Applicants several tools with which to respond to science-fiction rejections even though no authority squarely addresses science fiction itself.

Science fiction occupies an uneasy place in prior art. Gernsback was not entirely wrong to suggest that science-fiction works can function like patent disclosures. If enabling, science fiction may qualify as prior art under § 102, and even when nonenabling, may still inform obviousness under § 103. Yet in practice, doctrines like enablement, analogous art, and the ban on hindsight reconstruction could limit their force. Those constraints give practitioners real tools to respond to science-fiction rejections even as courts and the PTAB remain largely silent. With AI now making it easier to produce detailed, plausible, and technically rich fictional disclosures, however, the problem Gernsback anticipated could become harder to ignore.

Law Clerk Gwen Logsdon co-authored this blog post.

[1] Kiona N. Smith, Why Is It Called a Taser?, Forbes (Apr. 6, 2019), https://www.forbes.com/sites/kionasmith/2019/04/06/why-is-it-called-a-taser (last visited Mar. 13, 2026).

[2] HandelProductions, How William Shatner Changed the World – Martin Cooper, mobile phone Inventor, YouTube (Dec. 8, 2009), https://youtu.be/wN-_VA5HFwM.

[3] Camilla A. Hrdy & Daniel H. Brean, Testing the Gernsback Hypothesis: Science Fiction’s Influence on Patents and Innovation, 63 Hous. L. Rev. 359, 361 (2025), https://houstonlawreview.org/article/154446-testing-the-gernsback-hypothesis-science-fiction-s-influence-on-patents-and-innovation.

[4] In re Donohue, 766 F.2d 531, 533 (Fed. Cir. 1985) (“Accordingly, even if the claimed invention is disclosed in a printed publication, that disclosure will not suffice as prior art if it was not enabling.”).

[5] Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1578 (Fed. Cir. 1991) (“While a reference must enable someone to practice the invention in order to anticipate under § 102(b), a non-enabling reference may qualify as prior art for the purpose of determining obviousness under § 103.”).

[6] See Donohue, 766 F.2d at 534.

[7] Id.

[8] In re Antor Media Corp., 689 F.3d 1282, 1288–1289 (Fed. Cir. 2012) (“As long as an examiner makes a proper prima facie case of anticipation by giving adequate notice under § 132, the burden shifts to the applicant to submit rebuttal evidence of nonenablement.”).

[9] Daedalus Howell, Wet Dreams: Who Invented the Water Bed?, Daedalus Howell & Co. (March 27, 2013), https://dhowell.com/blog/who-invented-water-bed/#:~:text=%E2%80%9CMy%20contribution%20was%20the%20modern,Hall%20eventually%20received%20his%20reward (last visited April 1, 2026).

[10] Robert A. Heinlein, Stranger in a Strange Land 9, 14 (Ace Premium ed. 2018) (“The patient floated in the flexible skin of the hydraulic bed.”) and (“‘Here, help me lift him into the bed.’ ‘No—fill it first.’ Frame did so, cutting off the flow when the cover skin floated six inches from the top.”).

[11] 35 U.S.C. § 103.

[12] Raytheon Techs. Corp. v. Gen. Elec. Co., 993 F.3d 1374, 1380 (Fed. Cir. 2021) (“In the absence of such other supporting evidence to enable a skilled artisan to make the claimed invention, a standalone § 103 reference must enable the portions of its disclosure being relied upon.”).

[13] See Raytheon, 993 F.3d at 1379.

[14] “Spectre of the Gun,” Star Trek: The Original Series (NBC television broadcast Oct. 25, 1968).

[15] Id.

[16] See Donohue, 766 F.2d at 533–34.

[17] See In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004) (citing In re Deminski, 796 F.2d 436, 442 (Fed. Cir. 1986)).

[18] See Airbus S.A.S. v. Firepass Corp., 941 F.3d 1374, 1382 (Fed. Cir. 2019) (citing In re GPAC Inc., 57 F.3d 1573, 1589 (Fed. Cir. 1995)).

[19] See In re Oetiker, 977 F.2d 1443, 1447 (Fed. Cir. 1992) (“It has not been shown that a person of ordinary skill, seeking to solve a problem of fastening a hose clamp, would reasonably be expected or motivated to look to fasteners for garments.”). See also In re Clay, 966 F.2d 656, 660 (Fed. Cir. 1992) (“A person having ordinary skill in the art would not reasonably have expected to solve the problem of dead volume in tanks for storing refined petroleum by considering a reference dealing with plugging underground formation anomalies.”) and In re Klein, 647 F.3d 1343, 1350–1351 (Fed. Cir. 2011) (“An inventor considering the problem of making a nectar feeder with a movable divider to prepare different ratios of sugar and water for different animals, would not have been motived to consider [references to statement-card receptacles, tool trays, cabinet drawers, and blood plasma bottles] when making this invention.”).

[20] See W.L. Gore & Assocs. v. Garlock, 721 F.2d 1540, 1553 (Fed. Cir. 1983). See also KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 405 (2007).

[21] See Leo Pharm. Prods., Ltd. v. Kappos, 726 F.3d 1346, 1357–58 (Fed. Cir. 2013) (rejecting a “hindsight-guided combination of elements” where the PTAB selected a vitamin D analog from one reference and inserted it into the claimed steroid composition). See also In re Dembiczak, 175 F.3d 994, 999–1000 (Fed. Cir. 1999) (rejecting obviousness where the PTAB used hindsight to combine ordinary trash bags with jack-o’-lantern craft references to reconstruct the claimed pumpkin trash bag) and In re Fritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992) (rejecting obviousness where the examiner used hindsight reconstruction to piece together a claimed landscape edging strip from isolated prior-art disclosures, treating the invention itself as a “template” for the combination).

A New Opportunity for Early Patent Owner Briefing

Under the new guidance, a patent owner may file a pre‑order paper addressing whether the reexamination request raises a substantial new question of patentability. The paper must be no more than 30 pages and must be filed as soon as possible, but no later than 30 days from service of the request on the patent owner. The procedure applies to reexamination requests filed on or after April 5, 2026.

The Director anticipates that the requester ordinarily will not respond, though limited exceptions may arise. If permitted, any response must be filed within 15 days. As before, a determination that no substantial new question has been raised is final and nonappealable. See 35 U.S.C. § 303(c).

How the Substantial New Question Determination Traditionally Worked

The ex parte reexamination process has long followed a familiar sequence. A requester files a request explaining the pertinency and manner of applying cited prior art to the claims. If the requester does not own the patent, the request is served on the patent owner. Within three months, the Director determines whether the request raises a substantial new question of patentability affecting any claim. That determination is placed in the patent file and is final and nonappealable. See 35 U.S.C. §§ 302 and 303.

When a substantial new question is found, the patent owner may file a statement and amend or add claims, after which the requester may reply. See 35 U.S.C. § 304. In practice, patent owners rarely use this post‑institution opportunity, choosing instead to respond to formal rejections once examination resumes.

What the New Guidance Changes and Why

Historically, the substantial new question determination was made by reviewing the reexamination request itself without input from the patent owner. Ordering reexamination required little explanation. Denying a request, however, required the Office to explain why the cited art failed to raise a substantial new question, typically by engaging directly with the requester’s arguments and doing so without any adversarial counterpoint.

The new procedure changes that dynamic. By inviting focused patent owner briefing before the threshold decision is made, the Director ensures that the Office has a developed explanation on the record for why a request may not warrant reexamination. That explanation can then be credited or relied upon in a final, nonappealable decision declining to order reexamination.

Viewed in context, the timing of the change is telling. As ex parte reexamination filings have increased, so too has the burden on the Office to process them. Allowing early patent owner input may make it easier for the Director to deny requests that do not truly raise a substantial new question, without having to develop that reasoning independently. In that sense, the new procedure functions as a gatekeeping mechanism designed to manage volume while remaining within the statutory framework.

A Procedural Shift Without Rulemaking

The guidance is notable because it conflicts with existing regulations. Under 37 C.F.R. § 1.530, patent owner submissions before the threshold determination were prohibited. Similarly, 37 C.F.R. § 1.540 limited the Director’s consideration to the papers identified in 35 U.S.C. § 304. The guidance expressly waives those provisions for timely filed pre‑order papers, reshaping long‑standing practice through Director guidance rather than formal rulemaking.

Limits on Early Briefing

The Director’s notice draws clear boundaries around what patent owners may argue. Patent owners are instructed not to raise discretionary denial arguments under 35 U.S.C. § 325(d). Instead, the focus remains on whether the request presents a new, noncumulative technical teaching or a new light that escaped earlier review. Existing MPEP guidance remains in effect.

A Familiar Gatekeeping Structure

There is a familiar pattern here. In IPR and PGR proceedings, institution decisions are discretionary, Director‑driven, and insulated from appellate review. Ex parte reexamination historically has been different, with a more mechanical threshold inquiry and no express discretionary denial regime.

But the common thread remains the same. In all three contexts, the threshold decision is made by the Director and is final and unreviewable. By introducing adversarial briefing at the front end of ex parte reexamination, the Office is strengthening that gatekeeping role. Whether this leads to more denials remains to be seen, but the structure now looks familiar: a front‑loaded decision, informed by briefing, controlled by the Director, and shielded from appeal.

Design patents protect the new, original, and ornamental appearance of an article of manufacture under 35 U.S.C. § 171. Unlike software utility patents which have faced significant headwinds since the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank International, design patents are not subject to the abstract idea doctrine under Section 101. This distinction has become increasingly important for technology companies. Specifically, the visual and interactive elements of digital products are often among their most commercially differentiated features. Design patents have emerged as one of the most durable tools to protect them and the Guidance makes these tools even more effective.

How the Guidance impacts your business depends on your current position and what you are building. Let’s walk through several scenarios to paint a clearer picture.

You Have an Existing Portfolio of GUI and Icon Design Patents

For companies that already file design patents for their digital interfaces, the Guidance is both a compliance opportunity and a strategic prompt. On the compliance side, the Guidance retroactively applies to all pending applications. For instance, if you have design patent applications currently in prosecution that were rejected or narrowed under the old drawing requirements mandating a physical display screen or portion of a screen in solid or broken lines be depicted, these applications are probably worth revisiting. Now, if the title and claim properly identify an article of manufacture (e.g., using language such as “icon for display screen” or “GUI for display panel”), the drawings no longer need to show the screen at all. An amendment to the title and claim language may be sufficient to overcome a previously maintained rejection.

Strategically, the Guidance is an open invitation to audit your broader product portfolio for design patent filing opportunities that may have been overlooked or deprioritized under the prior framework. For instance, if your product has evolved to include new interface elements, updated icon designs, animated transitions, or interactive UI components that have not been the subject of design patent filings, it may be prudent now to assess what is worth protecting. 

You Are Building AR/VR, Spatial Computing, or Projected Interface Products

For companies developing augmented reality, virtual reality, mixed reality, or projected interface technologies, the Guidance is arguably the most consequential development in design patent law in years. Prior guidance provided little to no clear framework for protecting these designs. The USPTO now expressly recognizes computer-generated interfaces and icons exist beyond the confines of a conventional display screen. Additionally, a design’s dependence on a CPU and software for its existence is not a basis for denial. Stated differently, projected designs, holograms, and virtual and augmented reality interface designs for computer systems are now protectable as design patents provided the appearance of the interface or icon is separate from the computer system generating it, and the design is for a computer, computer display, or computer system purposefully making it more than a transient or disembodied picture or 3D image.

The Guidance illustrates this point with concrete examples complying with Section 171. For example, a “projected paper stack icon for a computer” where the icon appears to float in space separate from the device that projects it, and the “for a computer” language is in the title and claim, satisfies the article of manufacture requirement. As another example, a “virtual reality motorcycle interface for a computer” shown in three views (top-down, front, and perspective) may assist in fully disclosing the three-dimensional appearance of the design.

The take home message is clear for companies in this arena – File early. U.S. design patent rights are based on first-to-file, and the competitive filing landscape for AR/VR and projected interface designs is about to become significantly more active. Beyond the U.S., international design patent applications must be filed within one year of public disclosure to preserve U.S. novelty rights. Unlike the U.S., many foreign jurisdictions provide no such grace period (e.g., any public disclosure before filing could destroy international novelty). And for products approaching a launch, design patent filings clearly should be on the pre-launch checklist.

You Are a Software or App Company Grappling With the Post-Alice Environment

Software and application companies primarily have relied on utility patents and weathering the difficulties that Section 101 rejections create. The Guidance is a timely reminder that design patents protect a dimension of your product that utility patents often cannot reach.

A utility patent, even one that survives Section 101 scrutiny, protects the functional aspects of an invention. Meanwhile a design patent protects its ornamental appearance. These are different though certainly complementary forms of patent protection. In many cases, the ornamental, visual dimension of a software product is precisely what is most visible to users. It is probably the aspect most likely to be copied by competitors and most commercially significant in terms of brand differentiation.

The Guidance has meaningfully expanded the scope of what design patents can cover in the digital context. A well-constructed IP strategy for a software product today will typically layer utility patents (for patent-eligible, algorithmic and functional innovations), design patents (for icons, GUIs, and interface elements, including projected and AR/VR designs), copyright registrations (for source code and graphical works), and trade secret protection (for aspects of the technology that are not disclosed or readily reverse-engineered). While design patents are often underutilized, the Guidance makes a compelling case for taking a second (and perhaps third) look at them.

You Are Managing a Portfolio with International Exposure

For companies with meaningful international business, U.S. design patent protection rarely is sufficient on its own. Protection abroad through direct national filings or via the Hague System for the International Registration of Industrial Designs operate under their own set of rules. The scope of protectable subject matter also varies by jurisdiction. A critical distinction worth noting is the difference in priority periods for design and utility patent applications. Specifically, the priority period for design applications is six months from the earliest filing date versus 1 year for utility applications.

In the near term, the Guidance should prompt a parallel review of international design filing strategies for products with global commercial exposure. A design patent strategy that is well-calibrated for the U.S. market may need to be tweaked for global consideration. For instance, the equivalent of the U.S. article of manufacture requirement may be interpreted differently abroad. And as a result the scope of protectable digital designs may be broader or narrower than under U.S. law.

The Article of Manufacture Requirement Has Not Gone Away

Across all these scenarios, the Guidance confirms the article of manufacture requirement under 35 U.S.C. § 171 remains alive. The Guidance’s non-compliant examples are instructive precisely since they illustrate where the line in the sand still falls. A bare “virtual reality motorcycle interface” with no reference to “for a computer” or any other article of manufacture in the title, claim, or description fails even when the drawings are detailed and 3D. Additionally a “digital motorcycle picture” described in terms suggesting a transient or disembodied image, with no article of manufacture identified anywhere in the application still fails for being a picture instead of a design for an article of manufacture.

The Guidance is a measured and meaningful update to an antiquated framework in view of existing and anticipated technologies. It offers concrete, actionable opportunities for companies at different stages of digital interface development. Whether its managing an existing portfolio, entering the AR/VR space, building a software IP strategy from the ground up, or thinking about international protection, design patent protection is now more flexible  than it has ever been. Technology companies should critically inspect whether they are moving fast enough to take advantage of the opportunities.

Return Mail Applied to Foreign Governments

The decision arose from an inter partes review (IPR) petition filed by Tianma Microelectronics Co., Ltd. challenging a patent owned by LG Display Co., Ltd. LG Display sought discretionary denial based on real‑party‑in‑interest (RPI) issues, arguing that Tianma was partially owned by entities ultimately controlled by the Chinese government and that those entities were not disclosed as RPIs.

The Director agreed and addressed an issue not previously resolved. Relying on Return Mail, Inc. v. United States Postal Service, where the Supreme Court held that the U.S. government is not a “person” eligible to file an IPR petition, the Director concluded that the same rule applies to foreign sovereigns.

The decision emphasizes symmetry. Allowing foreign governments to challenge U.S. patents through PTAB proceedings while barring the U.S. government from doing so would create an imbalance. The Director also rejected the notion that a foreign sovereign could proceed indirectly through a corporate petitioner, explaining that such an approach would undermine Return Mail itself.

Minority Ownership and the Burden of Proof

One of the more consequential aspects of the decision is the ownership level at issue. LG Display showed that an entity affiliated with Aviation Industry Corporation of China, a Chinese state‑owned enterprise, owned “10% or more” of Tianma’s stock. While the Director emphasized that ownership percentage alone is not dispositive, he concluded that this showing was sufficient to place RPI status in dispute.

Once that occurred, the burden shifted to Tianma to demonstrate that no foreign sovereign had the ability to control or direct the IPR. Tianma did not meet that burden. Rather than producing shareholder agreements, governance documents, or other evidence clarifying control rights, Tianma relied primarily on a declaration denying foreign government involvement. The Director found that insufficient.

The decision thus signals that minority foreign government ownership, particularly when combined with other indicia of state involvement, may be enough to block institution unless a petitioner can affirmatively establish the absence of control.

Discretion as an Independent Ground

The decision also rests on an independent ground. The Director made clear that even if the legal analysis under Return Mail were incorrect, he would still deny institution as a matter of discretion.

Citing recent Federal Circuit authority, the decision reiterates that institution determinations are committed to the Director’s discretion and are largely unreviewable. Considerations such as resource allocation, system integrity, and the risk of exploitation of PTAB proceedings are sufficient on their own to support denial.

Implications for PTAB Practice

This decision reflects the continued expansion of discretionary denial at the PTAB. Institution is no longer limited to assessments of prior art strength, timing, or parallel litigation. The identity of the petitioner and the interests behind the petitioner now play a central role.

For petitioners, even minority foreign government ownership may require careful attention. For patent owners, RPI challenges remain a viable threshold tool. And for PTAB practitioners more broadly, the decision underscores that discretionary considerations increasingly shape whether review will be instituted at all.

Read alongside the Director’s recent decisions addressing parallel proceedings, manufacturing activity, and real‑party‑in‑interest disclosure, this decision confirms that discretionary denial has become a central feature of PTAB institution practice rather than a narrow exception.

What the Director Will Now Consider at Institution

On March 11, 2026, USPTO Director John Squires issued a memorandum titled “Additional Discretionary Institution Considerations, U.S. Manufacturing and Small Business Use of AIA Proceedings.” The memorandum directs the Office, when deciding whether to institute IPRs and PGRs, to consider three non-merits factors:

• Whether products accused of infringement are manufactured in the U.S. or tied to investments in U.S. manufacturing;
• Whether products made, sold, or licensed by the patent owner that compete with the accused products are manufactured in the U.S.; and
• Whether the petitioner is a small business that has been sued for patent infringement.

These considerations move institution analysis well beyond novelty and obviousness and squarely into questions about products, markets, and economic impact.

A Domestic Industry-Like Concept, Without the Label

For patent owners, the manufacturing focus will feel familiar. At a high level, it resembles the domestic industry requirement applied by the International Trade Commission (ITC), which requires a patentee to show a domestic industry relating to articles protected by the asserted patent, typically through significant U.S. investment in plant and equipment, labor, or exploitation of the patent through engineering or research and development.

The USPTO is not importing the ITC framework wholesale, and the memorandum does not create a formal domestic industry requirement for PTAB proceedings. But the resemblance is difficult to ignore. The Director is expressly interested in where relevant products are made and where investments occur, and that information may now influence whether a petition is instituted at all.

Read this way, the memorandum introduces a potentially patent owner friendly basis for discretionary denial. A patent owner that manufactures competing products in the U.S., or has made meaningful domestic investments tied to the asserted patent, may be better positioned to argue against institution, particularly where the accused products are manufactured abroad.

The Accused Product: Open Questions

The memorandum also emphasizes the manufacturing footprint of the accused product itself, asking whether the product is made in the U.S. or tied to U.S. manufacturing investments. What the memorandum does not clearly say is how that fact will cut in practice.

Domestic manufacturing by an accused infringer could support institution on the theory that America Invents Act proceedings protect U.S. businesses from weak patents. Or it could simply serve as another data point in a broader policy balance that has yet to be fully articulated. For now, the Director appears to be signaling that this information matters, while reserving flexibility on how it will be weighed in close cases.

A Clear Signal for Small Businesses

The third factor is more direct. The Director expressly invites petitioners who are small businesses sued for infringement to identify themselves, using Small Business Administration size standards and the USPTO’s small entity fee rules as reference points. That invitation strongly suggests that small business status may weigh in favor of institution when IPR or PGR is used as a defensive tool.

From Prior Art to Products

The larger point is conceptual. Post grant proceedings have traditionally focused almost exclusively on whether a claimed invention is new or nonobvious. This memorandum underscores that institution decisions are now also about the products patents protect, the products they allegedly cover, and the economic behavior the patent system is encouraging.

This memorandum fits squarely within a year-long pattern. Under Director Squires, discretionary denial is no longer peripheral; it is central. Parties on both sides should expect institution decisions to turn not only on prior art, but also increasingly on manufacturing footprints, business realities, and broader policy considerations. Manufacturing evidence now belongs in institution briefing.

The first intervention came in Radian v. Samsung. There, an NPE sought a preliminary injunction, which is a form of relief that NPEs have historically struggled to obtain. In its Statement of Interest, the USPTO and Antitrust Division urged the court to reject the assumption that licensing entities necessarily suffer only compensable, monetary harm. Instead, the government argued that infringement can irreparably harm an NPE by undermining its ability to control licensing terms, market positioning, and strategic relationships, particularly where valuation is uncertain and speculative.

That case, however, never produced a ruling. The motion for a preliminary injunction was ultimately withdrawn, leaving unresolved whether the government’s views would have moved the needle.

Now the government is back, once again in a case brought by an NPE.

In Collision v. Samsung, the procedural posture is markedly different. The case has already gone to trial. A jury has found infringement and awarded substantial damages. The dispute now centers on whether to grant a permanent injunction, which is a remedy that has been especially difficult for NPEs to secure in the wake of the Supreme Court’s decision in eBay v. MercExchange.

As in Radian, the USPTO and Antitrust Division’s Statement of Interest emphasizes that patents are property rights that confer the right to exclude, and that irreparable harm is not limited to injuries that can be easily reduced to dollars and cents. But in Collision, those arguments are presented in a post‑verdict context, where infringement is no longer hypothetical and damages in the form of a running royalty have already been awarded.

The government argues that even under these circumstances, ongoing infringement can still inflict irreparable harm, including for NPEs. Patents, it contends, are unique assets, and setting a forward‑looking royalty for continued infringement requires courts to speculate about future markets, technologies, competitors, and economic conditions. According to the government, that uncertainty supports a finding that legal remedies may be inadequate, notwithstanding a substantial damages award for past infringement.

By intervening again in a case involving an NPE, the USPTO and Antitrust Division are challenging the long‑standing assumption that injunctions are effectively off‑limits to NPEs. And by doing so in the context of a permanent injunction, they have squarely presented the question that Radian never reached: whether courts should rethink how irreparable harm is assessed when an NPE has proven infringement and damages have already fallen short of stopping it.

Unlike Radian, Collision is unlikely to end quietly. Whatever Judge Gilstrap decides will come on a fully developed factual record, with the government’s views clearly before the court. This time, we may finally see whether the administration’s push to reopen the injunction door for NPEs has any traction.

Most of the revisions conform the previous version of the local rules to what is often considered standard operating procedure in the district. Even so, it is important for all litigants and counsel with cases in the District of Delaware to be aware of the revisions. BakerHostetler’s Delaware attorneys are available to provide any additional boots-on-the-ground advice and assistance relating to same. A summary of the key proposed revisions follows.

• Rule 3.2, “Patent Cases” – The proposed revisions include requirements for patent cases, including (1) attaching not only copies of the patents at issue but also “any re-examination certificates or certificates of correction” when filing an action, and (2) expressly requiring submission of the District of Delaware’s Supplemental Information for Patent Cases Involving an Abbreviated New Drug Application (ANDA) form along with any complaint or subsequent amended complaint in a Hatch-Waxman Act case.
• Rule 3.3, “Proceedings to Confirm, Vacate or Modify an Arbitration Award” – This is an entirely new rule addressing proceedings to confirm, vacate or modify arbitration awards, including how to e-file such an action and the required documents for such filings.
• Rule 5.1.1, “General Format of Papers Presented for Filing” – The revisions address a point of some frequent contention wherein filed papers are not “double-spaced” as the rule expressly requires but rather “exactly 24 point” or other similar format that is sometimes acceptable or even standard in other courts.
• Rule 5.2, “Service” – The rule clarifies that publicly filed documents do not require a certificate of service but documents filed under seal still do. The revisions also clarify that for documents that are served but not filed, once a party has counsel that is a participant in the CM/ECF system, the party is deemed to have consented to e-mail service.
• Rule 7.1.2, “Motions” – The revision and other revisions throughout, see, e.g., Rule 7.1.3(a) and (b), clarify that only a brief is allowed in support of a motion; there is no longer the option for filing a memorandum of points and authorities in lieu of a brief.
• Rule 7.1.2, “Motions” – There is a new subsection addressing the scope of the submission of citations of subsequent authority, clarifying that additional factual developments or legal precedent relevant to a pending motion submitted after briefing has concluded can only be filed with a “non-argumentative cover letter containing citations to the pending motion that is impacted.”
• Rule 7.1.5, “Reargument” – The revisions clarify that a reply brief in support of a motion for reargument may not be filed unless specifically granted by the court.
• Rule 15.1, “Form of a Motion to Amend and Its Supporting Documentation” – There is a new subsection concerning consent motions for amending pleadings, expressly requiring a blackline of the original pleading against the proposed amended pleading.
• Rule 16.1, “Fed. R. Civ. P. 16(b) Scheduling Conference” – The revisions streamline the topics to be addressed at the Rule 16 conference.
• Rule 16.4, “Requests for Extensions of Deadlines” – The revisions remove the requirement that a request for an extension of the deadlines for completion of discovery or postponement of the trial include either “a supporting affidavit by the requesting counsel’s client or a certification that counsel has sent a copy of the request to the client.”
• Rule 54.1, “Taxation of Costs” – The revisions extend the time to file a bill of costs, require the parties to meet and confer in attempt to reach agreement on the specific costs the prevailing party seeks to recover as taxable, and clarify the items – e.g., transcript fees, depositions – taxable as costs.
• Rule 83.5, “Bar Admission” – A new subsection specifies that an attorney admitted to practice by the Supreme Court of the State of Delaware who does not maintain an office in the District of Delaware must associate with Delaware counsel unless acting as an attorney on behalf of the United States or upon application to the court.
• Rule 83.7, “Substitution and Withdrawal of Attorney” – The revision specifies that when filing a motion to withdraw, the attorney seeking withdrawal must also file proof that the motion was served on the client pursuant to the remainder of the rule, i.e., at least 14 days prior to the motion being made and sent either via registered or certified mail to the client’s last known address.
• Form for Motion for Admission Pro Hac Vice. The form, appended to the end of the local rules, updates the pro hac vice fee, which is currently $50.

The proposed revisions are not final. Comments and suggestions can be sent to the clerk’s office up to and including April 25.