IP Law Daily, PATENT—Fed. Cir.: Invalidation of licensing entity’s engine controller reprogramming patent claims affirmed on appeal, (Apr 16, 2026)

By Ravindra Kumar Singh, B.L.

Prior commercial sales of a third-party device embodying the claimed invention before the critical date triggered the § 102(b) bar, despite the lack of public disclosure of inner workings.

The U.S. Court of Appeals for the Federal Circuit has affirmed a district court in Utah’s grant of summary judgment invalidating a licensing entity’s engine control software reprogramming patent, holding that undisputed evidence established that a third-party product embodying the invention had been commercially sold before the critical date, thereby triggering the pre-AIA on-sale bar under 35 U.S.C. § 102(b). The appellate court was not persuaded by the patentee's evidentiary challenges, finding that key testimony and source code evidence were admissible or sufficiently supported by personal knowledge. It further held that public disclosure of the invention’s internal functionality was not required for the on-sale bar to apply (Definitive Holdings v. Powerteq, No. 24-1761 (Fed. Cir. Apr. 14, 2026)).

Background. Definitive Holdings, LLC, a patent owner asserting rights in automotive software technology, brought suit against Powerteq LLC, a developer and seller of engine tuning and reprogramming devices. The litigation centered on U.S. Patent No. 8,458,689 (the ’689 patent), which claimed methods and apparatuses for upgrading software in an engine controller.

Definitive filed the infringement action in the district court in Utah, alleging that Powerteq infringed several claims of the ’689 patent. Powerteq moved for summary judgment on multiple grounds, including invalidity under §§ 101, 102(b), and 112, as well as noninfringement. The district court granted summary judgment solely on invalidity under § 102(b), finding that a non-party, Hypertech Inc., had commercially sold a device known as the “Power Programmer III” (PP3) as early as the mid-1990s—well before the patent’s March 30, 2000, critical date. The court concluded that the PP3 embodied all limitations of the asserted claims. Definitive appealed, challenging both the evidentiary basis of the ruling and the legal application of the on-sale bar.

Evidentiary admissibility of corporate testimony. The Federal Circuit first addressed whether the district court improperly relied on deposition testimony from Hypertech’s corporate representative under Federal Rule of Civil Procedure 30(b)(6). Definitive argued that the testimony lacked personal knowledge and would be inadmissible under Federal Rule of Evidence 602.

The appellate court declined to adopt a broad rule excluding such testimony at summary judgment. Instead, it found that the relevant portions of the testimony were grounded in personal knowledge sufficient to authenticate sales records and establish the timing and nature of the PP3’s commercial sales. Citing United States v. Duran, 941 F.3d 435 (10th Cir. 2019), the court reiterated that the threshold for personal knowledge is not onerous and may be satisfied through testimony reflecting familiarity with business records and practices.

The court further relied on Bryant v. Farmers Insurance Exchange, 432 F.3d 1114 (10th Cir. 2005), holding that a witness who personally reviews business records may testify as to their contents. Accordingly, it concluded that the district court did not abuse its discretion in considering the testimony for summary judgment purposes.

Admissibility of source code evidence. The court next addressed whether the PP3 source code constituted inadmissible hearsay. Definitive contended that the code and related expert testimony could not be considered. Rejecting this argument, the Federal Circuit held that source code commands are not hearsay because they are not “statements” offered for the truth of the matter asserted. Drawing from United States v. Shepherd, 739 F.2d 510 (10th Cir. 1984), and United States v. Rutland, 705 F.3d 1238 (10th Cir. 2013), the court reasoned that commands or instructions lack truth value and therefore fall outside the hearsay rule.

The court distinguished its earlier decision in Wi-Lan Inc. v. Sharp Electronics Corp., 992 F.3d 1366 (Fed. Cir. 2021), noting that Wi-Lan addressed reliability concerns relating to unauthenticated source code printouts, not whether source code itself constitutes hearsay. Because the evidence here involved authenticated code and expert analysis, the district court properly considered it.

Sufficiency of evidence. Definitive further argued that the district court failed to apply the heightened clear-and-convincing evidence standard required to invalidate a patent. The Federal Circuit court disagreed, finding that the evidentiary record, including sales records, installation guides, and corroborating testimony, was sufficient to meet this burden. The court emphasized that both direct and circumstantial evidence may establish prior art under § 102(b), citing Ingenico Inc. v. IOENGINE, LLC, 136 F.4th 1354 (Fed. Cir. 2025). It concluded that no reasonable jury could find that the PP3 was not on sale before the critical date or that it failed to embody the claimed invention.

Scope of the on-sale bar and third-party sales. Finally, the Federal Circuit court addressed Definitive’s principal legal argument—that the on-sale bar should not apply unless the prior sale disclosed the invention’s internal workings to the public. The court squarely rejected this position. Relying on Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 586 U.S. 123 (2019), it reaffirmed that the on-sale bar does not require public disclosure of the invention’s details. Instead, the inquiry focuses on whether the product sold embodies the claimed invention.

The court also invoked J.A. LaPorte, Inc. v. Norfolk Dredging Co., 787 F.2d 1577 (Fed. Cir. 1986), distinguishing between sales of products embodying an invention and sales of products made using undisclosed processes. Here, the PP3 directly enabled users to perform the claimed method, bringing the case within the core scope of the on-sale bar. Further citing BASF Corp. v. SNF Holding Co., 955 F.3d 958 (Fed. Cir. 2020), the court held that the sale of a product embodying essential features of a claimed invention constitutes a sale of the invention itself. Because Hypertech sold the PP3 to the public before the critical date, the claimed invention had already entered the public domain.

Finally, the Federal Circuit concluded that the undisputed record established that the PP3 was commercially sold prior to the critical date and embodied every limitation of the asserted claims. Thus, it affirmed the district court’s judgment invalidating the ’689 patent under § 102(b).

The Case is No. 24-1761.

Judge: Cunningham, T.

Attorneys: Charles L. Roberts (Wasatch-IP) for Definitive Holdings. Nolan M. Goldberg (Proskauer Rose LLP) for Powerteq.

Companies: Definitive Holdings; Powerteq

Cases: Patent TechnologyInternet FedCirNews