Opinions — Friday, May 15, 2026

The Federal Circuit affirmed the Southern District of Florida's dismissal with prejudice of MCOM IP, LLC's complaint alleging that City National Bank of Florida infringed claims 2, 8, 14, and 17 of U.S. Patent No. 8,862,508, directed to a "unified electronic banking system." The court held that MCOM failed to present any meritorious challenge to the district court's invalidity ruling under 35 U.S.C. § 103, which found that the asserted claims added no patentable substance to other claims of the '508 patent that had been held unpatentable for obviousness in an inter partes review. MCOM's only arguments on appeal were that the district court had not actually invalidated claim 17 (which the Federal Circuit found plainly incorrect) and that the claims satisfied 35 U.S.C. § 101's subject matter eligibility requirements (which was irrelevant to the § 103 obviousness determination). The court separately reversed the district court's awards of attorneys' fees under both § 285 and § 1927, finding that the grounds presented were insufficient to support a conclusion that the case was exceptional or that MCOM's counsel acted in bad faith.

The decision confirms that obviousness under § 103 and patent eligibility under § 101 remain distinct inquiries, and a showing that claims satisfy § 101 does not salvage claims found obvious. The reversal of the fee awards addresses the standards for exceptional-case determinations under § 285 and bad-faith sanctions under § 1927, with the court concluding that bringing suit on claims not challenged in an IPR—even when those claims are later found invalid on similar grounds—does not automatically render a case exceptional or establish bad faith, particularly where the patentee could rely on the statutory presumption of validity. The decision illustrates the preclusive effect that can flow from district court invalidity rulings and clarifies pleading requirements when asserting claims following adverse IPR proceedings on related claims of the same patent.

The Federal Circuit affirmed dismissal with prejudice of mCom IP's infringement suit against HSBC Bank USA asserting claim 17 of U.S. Patent No. 8,862,508, which covers a unified electronic banking system with real-time marketing features. The court held that issue preclusion barred mCom's claim 17 assertion based on the companion mCom v. City National Bank appeal decided the same day, in which the Federal Circuit affirmed claim 17's invalidity. Alternatively, the court affirmed on the independent ground that mCom failed to plausibly allege infringement of the "real-time" elements (which require monitoring, content selection, transmission, user action, and financial institution reaction all within a single active session) or the "common point of control" element.

The court's application of issue preclusion is notable for its invocation of collateral estoppel based on a companion appellate invalidity ruling issued simultaneously, effectively disposing of the case on preclusion grounds before reaching the merits. On the alternative ground, the court applied Federal Circuit pleading standards under Bot M8 and Twombly/Iqbal, finding that allegations of cross-visit cookie tracking (placing cookies during one visit and using them upon a later login) failed to nudge the real-time infringement theory across the line from conceivable to plausible. The court also reviewed the district court's denial of leave to amend for abuse of discretion under Second Circuit law, affirming where mCom had already received one amendment opportunity with a warning and failed to specify how further amendment would cure the deficiencies.

In Meta Platforms, Inc. v. Eight KHZ, LLC, the Federal Circuit dismissed the appeal and cross-appeal from a Patent Trial and Appeal Board decision in IPR2023-01003 pursuant to the parties' joint stipulation under Federal Rule of Appellate Procedure 42(b). The court ordered that each side bear its own costs and denied all pending motions as moot.