Licensing Lessons from ALM Holding v. Zydex

Licensing Lessons from ALM Holding v. Zydex

Can you license your technology to another company and accidentally lose your right to sue copycats? According to a recent decision by the Federal Circuit Court of Appeals (CAFC), the answer depends entirely on how carefully you draft your contract.

In ALM Holding Company & Ergon Asphalt & Emulsions, Inc. v. Zydex Industries, the CAFC reversed a district court’s dismissal of a patent infringement suit, delivering a crucial reminder to businesses about the fine print of intellectual property licensing.

The Case: A Question of Standing

The plaintiffs brought a patent infringement lawsuit against Zydex, but the district court threw the case out before it could even begin. Why? The court determined that the plaintiffs lacked constitutional standing to sue.

The district court reasoned that because the plaintiffs had granted an exclusive license for the subject patents to a third party, they no longer suffered a direct “injury-in-fact” from infringement. Even though the plaintiffs had retained certain rights, the lower court believed they had signed away too much control to seek legal redress.

However, the plaintiffs had been careful to retain three specific powers in their licensing agreement:

  1. The right to sue for infringement.
  2. The right to approve all sublicenses.
  3. The right to approve any assignment of rights by the licensee.

The CAFC Decision: Keeping a “Non-Illusory” Interest

The CAFC reversed the dismissal and sent the case back to the district court.

The appellate court found that because the plaintiffs had retained the right to sue and control sublicenses, they kept a sufficient exclusionary interest in the patents. In short: they retained enough skin in the game to maintain standing for an infringement action.

The Takeaway for Businesses

A patent owner’s core power is the right to exclude others from making, using, selling, or offering to sell their invention. When entering into exclusive license agreements, licensors must be incredibly strategic. If you do not carefully retain specific enforcement and approval rights, you risk accidentally stripping your business of the legal standing required to defend your own technology.

Guard Your Innovations with Expert Counsel

Capitalizing on innovative developments is critical to your organization’s growth—but protecting those assets requires foresight.

The Law Office of Kathleen Lynch PLLC is designed to help businesses like yours stay ahead of the game and navigate complex IP landscapes. Don’t leave your licensing agreements to chance.

  • Ready to protect your IP? Your first consultation is entirely free.
  • Get in touch: Email us today at kl****@*****aw.com to schedule your strategy session.
Back to the Basics: Patents (Part 2)

Back to the Basics: Patents (Part 2)

This is the second in our series of posts breaking down the fundamentals of patents. In [Part 1], we discussed the scope of a patent and the process of obtaining one. Today, we’re focusing on the payoff: the benefits of a patent and how you can enforce your rights.

Now that you have a patent, what can it actually do for you?

Ultimately, a patent is only as valuable as your ability to enforce it. As a patent owner, you hold the exclusive right to prevent others from making, using, selling, or offering to sell your invention. But how do we determine if someone is actually stepping on your toes? It all comes down to the claims.

Defining the “Metes and Bounds”

A patented invention is strictly defined by its claims. Located at the very end of the patent document, these numbered paragraphs map out the legal “metes and bounds” of your intellectual property. Think of them as the invisible fence around your innovation.

When a dispute arises or a patent is asserted against an alleged infringer, the process follows two main steps:

  1. Interpretation: The court interprets the claims to determine the exact scope of the invention.
  2. Application: That scope is compared directly to the competitor’s product or activity to see if it falls within your protected territory.

The Power of Enforcement

Patent infringement is a serious matter handled exclusively via federal civil actions. If a competitor crosses the line, the law provides robust remedies to make things right.

As a patent owner, you can pursue:

  • Monetary Damages: Recovery of actual damages (like lost profits or reasonable royalties).
  • Treble Damages: If the infringement is proven to be willful or intentional, the court can award up to three timesthe actual damages.
  • Injunctions: Court orders to immediately halt existing and future infringing activity.
  • Fees: In exceptional cases, the recovery of court costs and attorneys’ fees.

Protect Your Innovation

Capitalizing on your innovative developments is critical to your organization’s growth, but you shouldn’t navigate the complex world of intellectual property alone. Having the right legal partner to guide your decisions is vital.

The Law Office of Kathleen Lynch PLLC is designed to help businesses like yours stay ahead of the game and safeguard what they build.

Ready to protect your competitive edge? Your first consultation is completely free.

Details, Details, Details: Why Precise Patent Drafting Matters

Details, Details, Details: Why Precise Patent Drafting Matters

This week, Actelion Pharmaceuticals (“Actelion”) failed in its effort to hold Mylan Pharmaceuticals (“Mylan”) liable for infringing its patents on a highly successful hypertension drug, Veletri®. The Federal Circuit’s decision serves as a stark reminder to businesses everywhere: in the world of intellectual property, omitting a single technical detail can cost you a monopoly.

The Dispute: A Battle Over a Generic Alternative

Actelion holds patent protection for Veletri, a life-saving drug used to treat pulmonary arterial hypertension. Seeking to enter the market with a lower-cost generic version, Mylan filed an Abbreviated New Drug Application (ANDA) with the FDA, asserting that its generic product did not infringe Actelion’s intellectual property. Actelion promptly sued Mylan in federal court, asserting infringement of two patents covering the formulation process.

The entire case ultimately hinged on a single chemical metric: pH measurement.

The Flaw: The Missing Temperature Parameter

Actelion’s patent claims focused heavily on a specific requirement: the drug must be formulated from a bulk solution having a “pH of 13 or higher.” The issue at trial was how that pH should be measured. In chemistry, a solution’s pH fluctuates based on environment—specifically, temperature. However, Actelion’s patent specification failed to provide any explicit instructions on the temperature conditions required for taking the measurement.

Because the patent was silent, the court turned to standard industry practices. Generally, unless a scientist indicates otherwise, pH is measured at standard room temperature. When Mylan’s product is measured at room temperature, its pH is well below 13, meaning it does not literally infringe the patent.

Actelion attempted to argue that because Mylan refrigerates the solution during actual manufacturing, the pH should be measured at that colder operating temperature—where the chemical properties shift and the pH does indeed rise above 13.  The district court rejected this argument, holding that because Actelion failed to specify any special conditions in its paperwork, standard room temperature must apply.

The Federal Circuit Weighs In

The Federal Circuit Court of Appeals upheld the district court’s finding of non-infringement. In its opinion, the court stated:

“The district court here properly relied on just that sort of extrinsic evidence to find that those skilled in making pharmaceutical compositions, when referring to pH, mean a measurement at standard temperature unless they indicate otherwise, and we discern no clear error in how the district court evaluated the record.”

The Takeaway

Details are everything. Had Actelion explicitly stated in its patent specification that the pH threshold was meant to be measured at the cold manufacturing temperature, Mylan’s product would have clearly infringed. Instead, because Actelion left out that vital context, Mylan was able to successfully design around the patent and keep its generic product on the path to market.

Capitalizing on innovative developments is critical to your organization’s growth, but protecting those developments requires meticulous execution. Having the right legal partner to help you navigate and stress-test your intellectual property strategy is essential to staying ahead of the game.

The Law Office of Kathleen Lynch PLLC is designed to help businesses secure their innovations and avoid costly drafting traps. Your first consultation is free. Contact us today at kl****@*****aw.com to protect what you build.

U.S. Patent Office Waives Fee For AI Search Automated Pilot Program

U.S. Patent Office Waives Fee For AI Search Automated Pilot Program

A patentability search and assessment is always recommended when evaluating whether your invention would be entitled to meaningful patent protection. The search also helps to inform the inventor and patent attorney where there may be areas of more narrow protection and draft accordingly.

The United States Patent Office recently launched the AI Search Automated Pilot Program. The program is designed to evaluate the examination process by including an automated pre-examination search, and whether the inclusion will improve quality and efficiency of examinations.

The program (ASAP!) will conduct an automated search for original, noncontinuing, nonprovisional applications. The automated search results will be sent to the applicant and will provide an earlier communication regarding potential prior art issues. Under the pilot program, applicants will not be required to respond to the search results.

However, the search results may provide an opportunity to the applicant to file a preliminary amendment in an effort to place the application in a stronger position for allowance. Alternatively, the applicant may wish to file an express abandonment and obtain a fee refund in view of search results that indicate a lack of patentability.

Recently, the U.S. Patent Office has announced that it is waiving the fee requirement for any petition to participate under 37 C.F.R. 1.182 filed after March 23, 2026. This should enable self filing entrepreneurs and inventors to take advantage of this new program for free!

Capitalizing on innovative developments is critical to any organization.  Having the right person to help you make those decisions is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first consultation is free.  Email us at kl****@*****aw.com.

Photo by Szorstki on FreeImages

Patent Office Webinar Series-Starts Today

Patent Office Webinar Series-Starts Today

The U.S. Patent and Trademark Office (USPTO) and the Minority Business Development Agency (MBDA) are co-hosting a three part webinar series to help business owners understand the intellectual property process.   The series starts today at noon.

This webinar series will teach attendees how to electronically file a copyright, patent, and trademark applications. The series will provide information, resources, and tools to protect and promote intellectual property. USPTO and Copyright Office employees will conduct the lectures.

Today’s webinar topics is about copyright filings.  At noon ET, this webinar will teach you how to register your original literary, dramatic, musical expressions and artistic works electronically using the Copyright Office’s website to get a lower filing fee and quicker processing time.

Other remaining webinars are as follow:

Filing a Trademark Application Electronically – August 13 – 1 p.m. ET

This webinar will teach you how to use the Trademark Electronic Filing System (TEAS) to submit a trademark application directly through the USPTO website.  Please note that the webinar will not be directed to screening marks or determining whether a mark is available for use with a particular good or service.

Filing a Patent Application Electronically – August 14 – 1 p.m. ET

This webinar is directed to teaching you how to file patent applications electronically via the USPTO’s EFS-Web (electronic filing system).  The webinar will not cover patentability searches and assessments relating to whether or not your invention is patentable.

For more information visit the US Patent and Trademark Office website.  Even if you have an intellectual property attorney.  This may be a helpful webinar series so you can understand the application processes for some intellectual property.  

Having the right intellectual property attorney to help you make decision regarding filings and the  protection of your intellectual property is critical.  The Law Office of Kathleen Lynch is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at kl****@*****aw.com.