Nexus, Schmexus: Patent Licenses Do Not Need a Nexus to Specific Patent Claims to Be a Secondary Consideration of Nonobviousness

The U.S. Court of Appeals for the Federal Circuit has relaxed the standard and clarified the analysis for the showing of a nexus to a patented invention when patent licenses are presented as objective indicia of nonobviousness.

In its precedential decision on June 16, 2025, in Ancora Technologies, Inc. v. Roku, Inc., 2023-1674 (Fed. Cir. June 16, 2025), the Federal Circuit reversed and remanded an appeal from an inter partes review (IPR) in which the Patent Trial and Appeal Board (PTAB) determined that various claims of Ancora’s patent were obvious. The Federal Circuit first determined that the PTAB correctly construed claim terms and affirmed the PTAB’s prima facie determination of obviousness of the challenged claims based on a combination of three prior art references.

However, the Federal Circuit reversed the PTAB’s determination that Ancora failed to show a nexus between the challenged claims and patent licenses that Ancora had entered into with third parties during settlements in other proceedings. The licenses were presented by Ancora to show commercial success of the patented invention as a secondary consideration of nonobviousness. Although the PTAB found that Ancora did not establish whether the licenses resulted directly from the unique characteristics of the claimed subject matter, the court disagreed and found that the PTAB applied a more exacting nexus standard than required. The decision explains that “[u]nlike products, which may incorporate numerous features beyond those claimed or described in a patent 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” and that “[l]icenses to the challenged patent then, unlike products or other forms of objective evidence of nonobviousness, do not require a nexus with respect to the specific claims at issue, nor does our nexus law require that a particular patent be the only patent being licensed or the sole motivation for entering into a license.”

The decision was limited to the use of licenses as evidence of secondary considerations. Although the court had found the PTAB applied an incorrect heightened standard for analyzing the patent licenses, the court affirmed the PTAB’s determination regarding Ancora’s press release. Issued by Ancora and a third-party licensee after settlement of an infringement dispute, the press release praised the challenged patent only “as a whole,” rather than specific claims. The court agreed that Ancora failed to show the press release had a legally and factually sufficient connection to the challenged claims as a secondary consideration of nonobviousness.

The Federal Circuit also found that the PTAB failed to properly analyze the nexus issue. In reaching its decision, the court looked at various evidence to support a nexus finding: the specificity of what patents were and were not licensed by Ancora to the third parties; the proximity of timing of the licenses to the settlements in the other proceedings; and the large amount the license payments exceeded the cost of litigation. While the PTAB had sought a showing of damages, the court held that this confuses damages for litigation costs as the appropriate comparator for evaluating the significance of the magnitude of licensing payments. The court found that “damage figures are a function of an infringer’s usage, not a patent’s strength” and “clear evidence that substantial license fees were paid for licenses to a specific patent late in a litigation should be given the significance that their magnitude deserves.”

The case was remanded back to the PTAB to consider the nexus issue and the probative value of Ancora’s licenses as objective indicia of nonobviousness to be weighed against the prima facie obviousness determination.

This is an example of the court now applying different standards for nexus depending on the type of evidence presented. Patent owners and IPR petitioners alike should continue to evaluate whether evidence presented as secondary considerations of nonobviousness has a nexus to patent claims. Patent licenses are deemed directly tied to patented technologies and so do not require a nexus to specific claims at issue. Patent owners should ensure that licenses are specific as practicable with respect to which patents are and are not subject to the license to show a clear focus to the licensed patents. However, press releases relating to the licenses should praise the subject matter of specific patent claims, rather than the patents as a whole.