VDPP, LLC v. Volkswagen Grp. Of Am., Inc., Appeal No. 24-2226 (Fed. Cir. Aug. 19, 2026)

In our Case of the Week, the Federal Circuit considered whether a non-practicing entity is required to enforce patent marking by its licensees to obtain pre-suit damages.  The issue arose in the context of an appeal from a dismissal of a case brought by a non-practicing entity, an award of attorney fees against VDPP, and an award of sanctions against its attorney.

VDPP sued Volkswagen in 2023, accusing it of infringing U.S. Patent No. 9,426,452.  By the time the lawsuit was filed, the patent had expired.  Thus, the lawsuit was premised on damages that had accrued prior to the commencement of the action.  Pursuant to the marking statute,

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented . . . by fixing thereon the word “patent” . . . . In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

35 U.S.C. § 287(a).  Accordingly, VDPP would only have been able to obtain relief in the case if it could establish compliance with the marking statute.  VDPP is a non-practicing entity, so did not have its own products to mark.  Nonetheless, it had entered into eleven settlement agreements licensing the patent to various parties.  VDPP failed to plead that any of its licensees marked the patent on their products.  Volkswagen moved to dismiss alleging the statutory requirement was not satisfied, and the district court granted that motion and denied leave to amend.

On appeal, the Federal Circuit affirmed that portion of the district court’s decision.  It noted that the marking requirement applies to licensees even if the licenses “were entered into to settle litigation,” and even though they did not admit to infringement.  “[T]here is no difference between a license entered into under a settlement agreement and any other patent license agreement . . . Nor does the subjective view of the accused infringer matter.”  The Court held that, “[u]nder the facts of this case, we see no way for VDPP to amend its complaint to plausibly allege it made reasonable efforts to ensure its licensees complied with 35 U.S.C. § 287.”

The court also affirmed an attorney fee award against VDPP, finding there was no abuse of discretion in holding that the case was exceptional based on the litigation conduct of VDPP.

In terms of a sanction issued against VDPP’s attorney, William Peterson Ramey, III of Ramey LLP, which made him jointly and severally liable with VDPP for the attorney fee award, the Court dismissed the appeal because Mr. Ramey did not timely appeal the sanctions order on his own behalf, and VDPP lacks standing to contest the sanctions award against him.

The opinion can be found here.

By Nika Aldrich

ALSO THIS WEEK

US Inventor, Inc. et al. v. Squires, Appeal No. 2024-2378 (Fed. Cir. Aug. 21, 2026)

The Federal Circuit declined to decide an appeal involving inventor-advocacy groups’ claim that language on the cover of U.S. patents has become misleading. Every newly issued patent states that the patent “grants to the person(s) having title to this patent the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States of America or importing the invention into the United States of America…”  (Emphasis added.)  Appellants claimed the language had become misleading in the wake of the U.S. Supreme Court’s ruling in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), where the Supreme Court determined that a patent holder seeking a permanent injunction to prevent infringement must satisfy the traditional four-factor test before courts could issue a permanent injunction. Appellants sought to compel the U.S. Patent and Trademark Office to engage in rulemaking to change the quoted language to accurately reflect a patent holder’s legal entitlement following eBay decision, and to declare the current language unlawful. Neither the district court nor the Federal Circuit reached the merits of Appellants’ contention.  Instead, the district court dismissed the matter for lack of standing, and the Federal Circuit affirmed. This leaves for another day the resolution of any conflict between what U.S. patents on their face purport to provide the patent holder, and what the patent holder can legally enforce through the U.S. judicial system.

The opinion can be found here.

By Trevor Gruwell

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.