In the June 16, 2025 decision of Ancora Technologies, Inc. v. Roku, Inc., the Federal Circuit vacated and remanded two inter partes review (IPR) decisions by the Patent Trial and Appeal Board (PTAB) that had found claims of U.S. Patent No. 6,411,941—owned by Ancora Technologies, Inc.—to be unpatentable as obvious. While the Federal Circuit affirmed the Board’s construction of the key term “agent” and upheld its prima facie case of obviousness based on prior art, it held that the PTAB legally erred in dismissing Ancora’s license evidence as lacking a sufficient nexus to the claimed invention. This case offers important guidance on the evidentiary treatment of licenses as objective indicia of nonobviousness.
The Patent at Issue: Software Licensing and BIOS Security
Ancora’s ’941 patent addresses software license enforcement mechanisms by embedding license verification structures in the erasable, non-volatile memory of a computer’s BIOS. This technique is intended to secure software against unauthorized use without relying on more volatile or easily altered memory. The method described in claim 1 includes:
- Selecting a program in volatile memory (e.g., RAM),
- Using an “agent” to set up a verification structure (including at least one license record) in the erasable, non-volatile BIOS memory (e.g., EEPROM),
- Verifying the program using the verification structure, and
- Acting on the program based on the verification result.
Claims 1–3, 6–14, and 16 were challenged and ultimately invalidated in IPRs filed by Nintendo, Roku, and VIZIO.
The PTAB’s Decision: Obviousness Based on Hellman and Chou
The PTAB found that the challenged claims were obvious over a combination of two prior art references:
- Hellman (U.S. Patent No. 4,658,093): Discloses a system using hash functions and non-volatile memory to control software use based on allowed instances.
- Chou (U.S. Patent No. 5,892,906): Describes BIOS-based security methods for verifying passwords and controlling hardware access.
The Board determined that Hellman provided the base mechanism for license enforcement and that Chou taught the use of BIOS memory for secure storage. Ancora argued that this combination was inoperable and lacked a motivation to combine, but the Board found otherwise and rejected Ancora’s claims as obvious.
The Board construed the term “agent” in the claims as “a software program or routine,” declining Ancora’s argument that the term should be limited to software running at the OS level. Relying on intrinsic evidence and dictionaries, the Board found no disavowal or redefinition requiring a narrower construction.
Charles Gideon Korrell notes that the Federal Circuit gave deference to the Board’s reliance on extrinsic evidence, including industry definitions and expert declarations, and determined that “agent” was not limited to software-only or OS-level implementations. The court found substantial evidence supported the Board’s construction.
Secondary Considerations: Licensing and the Nexus Requirement
The Federal Circuit’s principal disagreement with the Board lay in its treatment of Ancora’s license agreements as objective indicia of nonobviousness.
Ancora had presented multiple licenses entered into after extended litigation, many just before trial and with substantial royalty payments. The PTAB found that Ancora failed to show a nexus between these licenses and the specific claims of the ’941 patent, concluding that they could reflect business decisions to avoid litigation rather than recognition of the patent’s strength.
The Federal Circuit sharply criticized this reasoning:
“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…”
Citing LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012) and Institut Pasteur v. Focarino, 738 F.3d 1337 (Fed. Cir. 2013), the court emphasized that actual licenses to the patented technology are highly probative of nonobviousness and should not be subject to the same parsing applied to commercial product evidence.
In the court’s view, according to Charles Gideon Korrell, the Board erred by demanding a higher evidentiary burden than the law requires. Even if the licenses also referenced related patents or included redacted sections, that did not undermine the fact that they expressly covered the ’941 patent. The Board’s approach “too finely parsed” the record and ignored the licensing context: settlements reached after years of litigation and near trial dates, with substantial consideration paid.
Charles Gideon Korrell explains that the Federal Circuit’s holding here confirms that the economic behavior of parties—especially sophisticated technology companies licensing patents to avoid trial—is relevant and weighty evidence of the patent’s nonobviousness, even where the license bundles multiple rights.
Remedy and Remand
Although the Federal Circuit affirmed the PTAB’s claim construction and the Board’s finding of a prima facie case of obviousness, it vacated the Board’s decision due to legal error in the analysis of secondary considerations. On remand, the PTAB must:
- Re-evaluate the nexus between the challenged claims and Ancora’s licenses under the proper legal standard,
- Weigh this licensing evidence, including both high- and low-value settlements, as part of its overall nonobviousness analysis.
This remand could potentially alter the outcome if the Board concludes that the licenses provide significant objective evidence supporting the validity of the challenged claims.
Conclusion
The Federal Circuit’s decision in Ancora Technologies, Inc. v. Roku, Inc. underscores the importance of properly evaluating licensing evidence in an obviousness analysis. While upholding a broad construction of “agent” and affirming the prima facie obviousness of the claims, the court found fault with the PTAB’s overly narrow view of what constitutes a nexus between a patent and license agreements. The decision reinforces that real-world licensing behavior—especially in litigation contexts—can and should play a meaningful role in the nonobviousness inquiry.
Charles Gideon Korrell believes this decision will have broad implications for how PTAB and district courts assess secondary considerations in IPR and invalidity proceedings. In particular, it may offer patent holders new avenues to bolster the validity of their claims with well-supported licensing histories.