Licenses Do Not Require Nexus to Specific Claims to Be Objective Evidence of Nonobviousness, and Substantial Licensing Fees Should Be Given the Significance That Their Magnitude Deserves

In Ancora Technologies, Inc. v. Roku, Inc., No. 2023-1674 (Fed. Cir. June 16, 2025), the Federal Circuit vacated and remanded a PTAB decision that misapplied the law on secondary considerations of nonobviousness, especially on the issue of whether there was nexus to evidence of licensing.   

Roku and Nintendo challenged claims of Ancora’s patent in two IPRs. Ancora raised secondary considerations of nonobviousness in opposition, citing industry praise and licensing. But, in finding the claims obvious, the Board found Ancora had not established a nexus between these considerations and the challenged claims.

Ancora appealed. While the Federal Circuit agreed with the Board on other issues in the case (claim construction, prima-facie obviousness, and its nexus analysis of industry praise), the Court held the Board erred in its nexus analysis for licensing.

First, the Court found the Board incorrectly required a nexus between a license and the challenged claims. The Federal Circuit reasoned “[u]nlike products, which may incorporate numerous features beyond those claimed ... and therefore may require careful parsing to establish a nexus, actual licenses to the subject patent do not demand the same, as they are, by their nature, directly tied to the patented technology.” The Court also clarified that nexus law does not require a patent be the only patent in a license agreement or the sole motivation for licensing.

Second, the Court found the Board did not give appropriate weight to licensing fees. The Court found the Board failed to give “substantial license fees” made near the end of a four-year lawsuit that “far exceeded” costs of litigation the “significance that their magnitude deserves.”  The Court also noted that the Board failed to evaluate certain other “low-value” licenses.

The Court thus vacated and remanded to reconsider nexus as it pertains to licensing.