Sterne Kessler’s U.S. IP Update is a newsletter delivering the latest developments in U.S. intellectual property law, tailored for companies and legal counsel in Korea. Stay informed on key court decisions, policy changes, and trends impacting patents, trademarks, and other IP rights in the United States.
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In This Issue:
Federal Circuit’s First Alice-Analysis for Machine Learning Patents
Sasha Rao and Todd Hopfinger
Last month, the Federal Circuit addressed an issue of first impression regarding the validity of certain machine-learning patents under Section 101 in Recentive Analytics, Inc., v. Fox Corp., 134 F.4th 1205 (Fed. Cir. 2025). The Court held that patents that do no more than claim the application of generic machine learning to new data environments, without disclosing improvements to the machine learning models to be applied, claim patent ineligible subject matter under Section 101. The Federal Circuit rejected the patentee’s arguments that the claimed methods’ application of machine learning to a new field of use or the greater speed and efficiency achieved by machine learning could confer patent eligibility.
The Court applied the two-step Alice framework familiar in software patent cases. For Alice Step 1, the Court quickly determined that the disputed claims were directed to ineligible, abstract subject matter, observing that the challenged patents “rely on the use of generic machine learning technology in carrying out the claimed methods,” and the claimed machine learning technology was “conventional.” For Alice Step 2, the Federal Circuit found nothing in the claims, individually or in their ordered combination, that would transform the patents into something significantly more than the abstract idea itself. The Federal Circuit’s application of Alice differed little from its applications in the more traditional software contexts. Notably, the Court stated that its cases holding that “the application of existing technology to a novel database does not create patent eligibility” are appropriate to the machine learning context. Practitioners may want to consider these decisions in composing their Section 101 arguments.
Global Battlegrounds: An Examination of Standard Essential Patents at the UPC vs. the US ITC
Ryan C. Richardson, Christopher R. O’Brien, Jean Selep
In its short existence, the Unified Patent Court (UPC) has proven to be a competent and efficient forum, attracting patent holders from a wide range of technology sectors. These attributes, along with the UPC’s broad jurisdiction and relatively low costs, have also attracted an increasing number of lawsuits brought by standard essential patent (SEP) holders. However, as a relatively new venue, the UPC has a limited track record, particularly when it comes to SEP disputes. To-date, the UPC has issued only three SEP decisions. But, those decisions indicate that the UPC is willing to issue injunctions and is willing to consider FRAND defenses. For a longer tenured venue, the US International Trade Commission (ITC) offers an established platform, with an extended history of handling SEP-related investigations, which can provide greater clarity on how such cases are likely to be adjudicated.
When facing an SEP dispute, SEP holders and implementers should consider both the UPC and the ITC, and the impact that bringing an SEP dispute to each forum could have on negotiations. For SEP holders, the UPC is a fast and more cost-effective option with its broad jurisdiction over a population similar to the United States and its willingness to issue multi-country injunctions. SEP holders should, however, remain mindful that the venue is still evolving after only a few cases. The ITC, on the other hand, offers broad discovery and the possibility of powerful exclusion orders, with a favorable track record for SEP holders regarding FRAND issues.
SEP holders should therefore consider the possibility of filing in both forums, and remain open to including both SEPs and non-SEPs in their actions. For SEP implementers, taking proactive steps is crucial. Whether at the UPC or ITC, implementers should consider raising all FRAND defenses early. At the ITC, implementers should also consider framing their FRAND arguments around the established public interest factors and retaining public interest experts with specific experience in standard setting organization practices and policies. In sum, SEP holders and implementers now have the benefit of two jurisdictional avenues to assert their patent rights, and they must be mindful of the treatment of SEPs in both forums.
Recent ITC Decision Underscores Need for Caution with Purchase Orders and IP Licenses
Robert E. Niemeier and Davin Guinn
A recent decision by the U.S. International Trade Commission (ITC) in Certain Power Converter Modules and Computing Systems Containing the Same (Inv. No. 337-TA-1370) shows the importance for sellers to be mindful when selling patented articles to avoid loss of IP rights through the creation of a contract with unintended terms. In the decision, the Commission held that the Complainant, a seller of patented power converter modules, had accepted a valid offer for one of the Respondents to buy those modules by evidence of Complainants’ employee’s email communications and that the boilerplate terms of the buyer Respondents’ purchase order form were effective and granted a license to the asserted patents. As a result, the Commission found no violation as to the purchaser Respondent because of the license.
This decision is a reminder to legal departments that drafting a form sales agreement and model sales policy for business teams is not sufficient. Legal teams must institute policies and monitoring to ensure no other contracts or terms are formed by the actual practices or by the injection of external contractual documents. Here, despite the existence of protective terms in the seller’s own standard sales documents, emails from the seller’s sales staff were found to have created a contract that excluded those terms and adopted the buyer’s licensing terms. Policies should be put in place that prevent agreements or transactions from forming outside approved processes and terms. Legal teams should also provide training and procedures for business teams to obtain review of incoming purchase orders and other documents to assess the potential impact of included terms prior to proceeding with any sale or agreement.
Sterne Kessler Presents Patent Assist AI
Anna G. Phillips
Sterne Kessler has developed Patent Assist AI, a new technology that streamlines patent specification drafting. Developed by Sterne Kessler Labs, the firm’s internal innovation team of patent professionals (who are also engineers and scientists), Patent Assist AI uses a proprietary multi-step approach to generate the detailed description section of a patent. This new tool creates efficiencies in the patent drafting process while also prioritizing the security and confidentiality of client information. Clients opting to use Patent Assist AI can be comforted knowing that their data is not used to train other AI models and will not be mixed with other client data. For more information on Patent Assist AI and how Sterne Kessler is leveraging AI technology to advance IP law, visit https://sternekessler.ai/
