You Go Your Way and I’ll Go Mine: Federal Circuit Rejects PTAB Rigid Nexus Requirement

In Ancora Technologies, Inc. v. Roku, Inc., the Federal Circuit clarified how to evaluate licensing evidence offered as objective indicia of nonobviousness. The court’s holding marks a decisive shift away from the Patent Trial and Appeal Board’s (Board) increasingly inflexible approach to nexus analysis, particularly where patent licenses are involved.

In inter partes reviews (IPRs) brought by Roku, Ancora’s U.S. Patent No. 6,411,941 was held unpatentable as obvious over a combination of prior art references. Ancora appealed the Board’s refusal to credit substantial licensing agreements as evidence of nonobviousness. Although the licenses identified the ’941 patent by number and were executed after prolonged litigation, the Board concluded that Ancora had not adequately demonstrated a “nexus” between the challenged claims and the licensed subject matter. The Board held that objective indicia like licenses must be shown to relate specifically to the claimed invention, not merely the patent as a whole.

On appeal, the Federal Circuit rejected this approach and reversed the Board. The Federal Circuit began by reaffirming the basic rule that the patentee bears the burden of showing a sufficient connection or nexus between the objective indicia of nonobviousness, i.e., the secondary considerations including copying, long felt need or commercial success including licensing, and the claimed invention. However, the court emphasized that the level of specificity required to establish that nexus depends on the nature of the evidence.

Unlike 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.

The court considered this distinction critical. The court acknowledged that licensing revenue from a multi-function product might require a detailed analysis to isolate value attributable to the patented feature, a license to a single patent, especially where identified by number and executed in litigation, carries an inherent nexus to that patent’s claims. The court explained:

Licenses 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 Federal Circuit disagreed with the Board when it overly scrutinized Ancora’s licensing activity. The Board dismissed Ancora’s first license because large portions of the agreement were redacted. But the court disagreed, noting that the license explicitly identified the ’941 patent and that the agreement was entered into near trial, after years of litigation. In addition, the court emphasized that it was legally inappropriate to infer that a license lacked probative value simply because it did not attribute royalties to specific claims. To the contrary, the court reasoned, since the patent was specifically licensed by sophisticated parties near the eve of trial with royalty payments far exceeding the cost of litigation, the licenses weighed heavily in favor of finding a nexus to support a finding of nonobviousness.

The court rejected the Board’s suggestion that a license might have been a strategic decision to avoid risk, rather than an acknowledgment of the patent’s strength. The court reasoned that business decisions made in the shadow of patent litigation, particularly when they result in substantial royalties to avoid potential damages, are themselves compelling evidence that the patent was not obvious.

Strategic Takeaways for Patent Owners and Applicants

1. Document licensing value early and often. Ensure that license agreements identify specific patents by number and preferably describe specific value. Even in the presence of redactions or additional licensed assets or patents, that specificity strengthens the nexus presumption.

2. Preserve the litigation context. When licenses are executed after lengthy litigation, capture that fact in your record, correspondence with opposing counsel and/or in the specific settlement or license agreements. Timing and context matter. They convey coercive leverage and market respect for patent validity/strength.

3. Push back against claim-by-claim attribution requirements. The Federal Circuit has made it clear: such parsing claim-by-claim is not required when the evidence is a license to a patent, not a product. Raise this point proactively before the Patent Office Examiner and/or the Board.

4. Draft claims to facilitate correspondence to licensing models or objectives. When drafting new applications, consider how the claims align with potential licensing models or objectives. Strong correlation between claim scope and commercially viable embodiments or licensing programs makes future licensing evidence more persuasive.

5. Use licensing to rebut obviousness with economic logic. Economic behavior, particularly when it involves real money, is often the best rebuttal to hindsight-based obviousness arguments.

Strategic Takeaways for Litigators

1. License specificity matters. If the patent owner has a license identifying the patent by number, that should be enough. The Board’s insistence on claim-level attribution was improper, and litigants should resist such parsing.

2. Context of licensing counts. Licenses entered into after years of litigation or on the eve of trial are powerful evidence of patent strength. Courts are willing to infer commercial significance from that timing.

3. Settlement is not a disqualifier. The Federal Circuit explicitly rejected the idea that settlements motivated by business risk undermine the probative value of a license. On the contrary, risk aversion supports nonobviousness because it is an acknowledgement of the strength of the patent.

Overall Lessons from Ancora v. Roku

The Federal Circuit’s decision in Ancora underscores the need to re-ground secondary consideration analysis in commercial reality. For too long, the Patent Trial and Appeal Board has applied a product-focused, feature-dissection approach to all objective indicia of nonobviousness, including licenses. The Ancora court pushes back, reinforcing the idea that licensing a patent is not the same as selling a product that happens to practice a claim. One is a legal and economic transaction focused squarely on the patent; the other is often a blend of design, engineering, and market response. However, the other secondary considerations should also be explored from the perspective of making use of them more feasible when attempting to show nonobviousness.

The opinion reaffirms an often overlooked or discounted point: substantial license fees paid by sophisticated parties for the right to practice a patent, especially after years of litigation, are highly probative evidence that the claimed invention was not obvious at the time it was made. And that probative value should not be diluted by attempting to identify the intent or granular attribution of value to individual claims.

By recognizing that licenses reflect real-world valuation of patented innovation, the Federal Circuit has given patent owners a renewed opportunity to translate business outcomes into patent strength. It is now up to litigants and practitioners to seize that opportunity, and exercise that licensing’s evidentiary power.

The Board and the Federal Circuit may have gone their “separate ways” on the nexus question. But for patent owners and litigators, Ancora makes clear which approach now controls -- the Federal Circuit had the last word.

is a partner in Manatt, Phelps and Phillip’s Intellectual Property Protection and Enforcement business unit and is the author of Patent Prosecution: Law, Practice, and Procedure, 2025 Edition, and Constructing and Deconstructing Patents (2d Edition).

Ancora Technologies, Inc. v. Roku, Inc., 140 F.4th 1351, 2025 USP.2d 864, 2025 WL 1679967 (Fed. Cir. 2025) (per curiam).

Id., 140 F.4 at 1362.

Id., 140 F.4 at 1362.