May 29, 2025
Authored and Edited by Hani Salameh; Sarah E. Slone, Ph.D.; Olivia J. Santiago; Michelle G. Rice; Erik R. Puknys
The following arguments will be available live to the public, both in-person and through online audio streaming. Access information will be available by 9 AM ET each day of argument at: https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/.
Coda sued Goodyear alleging trade secret misappropriation relating to self-inflating tires. After a two-week trial, the jury returned a special verdict finding that Goodyear maliciously misappropriated five of Coda’s asserted trade secrets. Even though the district court refused to instruct the jury on reasonable-royalty damages, the jury, based on Coda’s actual-loss damages theory, awarded Coda $2.8 million in compensatory damages and $61.2 million in punitive damages. Goodyear filed a post-trial motion for judgment as a matter of law challenging the jury verdict. The district court granted the motion and set aside the jury verdict. The court found that four of the five trade secrets at issue were indefinite as a matter of law and that all five lacked secrecy. Coda appealed.
On appeal, among other requests, Coda asks the Federal Circuit to reinstate the jury’s verdict on liability and remand for a new damages trial to allow Coda to seek damages based on the reasonable-royalty theory. Regarding the jury verdict, Coda argues that the district court erred by determining definiteness as a matter of law because the existence of trade secrets, including the definiteness requirement, presents a question of fact that the jury had decided. Goodyear responds that the district court properly ruled on the definiteness issue because Coda’s asserted trade secrets were so vaguely defined and should not have gone to the jury. Goodyear further contends that the district court correctly found all five asserted trade secrets lacked secrecy and were not misappropriated.
Regarding damages, Coda argues that the district court should have instructed the jury on reasonable-royalty damages, to allow the jury to consider a damages award based on both the reasonable-royalty and actual-loss theories. In support, Coda points to the difference between the jury award for compensatory damages and punitive damages to argue that the jury determined that an actual-loss award was insufficient. Goodyear counters that Coda’s expert presented a damages theory based only on actual loss, so Coda is not entitled to argue a reasonable-royalty damages theory. Coda additionally requests the case be reassigned on remand based on the presiding judge’s errors (in this and in a prior appeal in which the same judge was reversed) and previous comments expressing dim views about Coda, a request Goodyear contends to be “not well-taken.”
This case arises from multiple proceedings before the Patent Office involving U.S. Patent No. 7,168,089, owned by International Game Technology (“IGT”). The ’089 patent generally relates to slot machines and software transfer between gaming platforms. Previously, the Patent Office declared an interference between IGT’s ’089 patent and a patent application filed by Zynga. During the interference, Zynga filed a motion arguing that IGT’s ’089 patent claims were obvious. But the Patent Office found Zynga’s patent application claims lacked written description and dismissed the interference on standing grounds without reaching Zynga’s obviousness challenge.
Subsequently, Zynga petitioned for an inter partes review (“IPR”) challenging certain claims of the ’089 patent as obvious (based on different prior art). In instituting the IPR, the Patent Trial and Appeal Board rejected IGT’s argument that Zynga was estopped from challenging the ’089 patent based on the earlier interference proceeding. According to the Board, because the interference was terminated based on the threshold determination that Zynga’s claims-at-issue lacked written description, the interference did not preclude Zynga from later petitioning for IPR. The Board added that even if estoppel (under 37 C.F.R. § 41.127(a)(1)) applied, it would waive that requirement in this case. Then PTO Director Vidal sua sponte granted Director Review and affirmed the Board’s institution decision, agreeing that interference estoppel did not apply. The Board ultimately issued a Final Written Decision finding the challenged claims of IGT’s ’089 patent to be invalid.
IGT appealed. On appeal, among other challenges, IGT contends that the Board erred in failing to apply interference estoppel to bar Zynga from raising the prior art challenges it raised in the IPR. According to IGT, Zynga could have but failed to raise those prior art challenges during the prior interference. So in IGT’s view, after losing the interference, Zynga should have been precluded from raising those challenges in the IPR. In response, Zynga argues that the Board’s institution decision is unappealable and unreviewable. On the merits, Zynga contends that the Director properly interpreted the Patent Office rules in concluding that interference estoppel did not apply to bar later IPRs, and that the Board acted within its discretion to waive interference estoppel even if it had applied.
Acorda and Alkermes partnered to develop, manufacture, and market Ampyra® (dalfampridine), a drug to treat multiple sclerosis. Alkermes owns the now-expired U.S. Patent No. 5,540,938, which covers the sustained release of dalfampridine. Under two agreements (a License Agreement and a Supply Agreement), for a combined 18% royalty, Acorda obtained a license to the ’938 patent along with access to Alkermes’ manufacturing and supply of the drug. After the ’938 patent expired in 2018, Acorda continued paying royalties under the agreements. In 2020, Acorda challenged the legality of those payments under the Supreme Court’s decision in Brulotte v. Thys Co., 379 U.S. 29 (1964), which held that a contract demanding post-expiration royalties was unlawful. After Alkermes refused to renegotiate the agreements, Acorda initiated arbitration.
The arbitration panel ruled that the post-expiration royalty charges for the ’938 patent violated Brulotte. The panel, however, limited Acorda’s recovery to royalties it paid under the License Agreement, and only to those made after Acorda formally protested. In doing so, the panel applied New York’s Voluntary Payment Doctrine (“NYVPD”), which bars refunds for payments made voluntarily with full knowledge of the facts. The panel did not award recovery under the Supply Agreement because it found that Acorda did not protest payments under that agreement.
After unsuccessfully petitioning a district court to modify the arbitration award, Acorda appealed to the Federal Circuit. On appeal, Acorda contends that: (1) the arbitration panel manifestly disregarded patent law in denying full restitution; (2) the NYVPD is preempted by federal law and should not apply; and (3) the district court erred in finding that it could not modify the arbitration award under the “manifest disregard” doctrine. On jurisdiction, Alkermes contends that the Second Circuit, not the Federal Circuit, should hear this appeal because this case involves a petition for review under the Federal Arbitration Act and did not arise under federal patent laws. Alkermes also argues that Acorda forfeited its preemption argument because it did not properly present it below. On the merits, Alkermes contends that Acorda’s modification claim lacks a statutory basis, and that Acorda failed to show “manifest disregard” because the arbitration panel had a “colorable justification” for limiting Acorda’s recovery.
The Federal Circuit must now decide whether it has jurisdiction over the appeal, and if it does, whether the partial denial of restitution conflicts with federal patent laws. The decision may impact how parties structure licensing royalties and how arbitration awards interact with state contract law doctrines and federal patent laws.
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