IP Law Daily, PATENT—Fed. Cir.: Mixed appellate ruling in patent dispute between smart parking systems companies, (Jan 8, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Federal Circuit affirms non-infringement but orders new trials after finding legal errors in the district court’s exclusion of key invalidity and unfair competition evidence.

In a non-precedential disposition, the U.S. Court of Appeals for the Federal Circuit issued a mixed ruling in a patent dispute over intelligent parking technology. It affirmed the district court’s judgment that Indect USA Corp. did not infringe Park Assist, LLC’s asserted patent but vacated key portions of the lower court’s decision, remanding for a new trial on both the validity of the patent under the on-sale bar and the unfair competition claim under the Lanham Act. It also vacated a broad declaratory judgment protecting Indect’s customers from future infringement liability (Indect USA Corp. v. Park Assist, LLC, Nos. 24-1023, 24-1127 (Fed. Cir. Jan. 7, 2026)).

Background. The plaintiff/appellant, Indect USA Corp., is a provider of parking guidance systems, including the UPSOLUT system, which uses camera-based occupancy detection. The defendant/cross-appellant, Park Assist, LLC, offers competing smart parking technologies and holds a patent for image-based parking space management.

Park Assist’s U.S. Patent No. 9,594,956 (the ’956 patent) is titled “Method and system for managing a parking lot based on intelligent imaging.” It discloses a method for managing multiple parking spaces using imaging devices to detect vehicle presence, capture high-resolution images, compare parking permits, and trigger enforcement processes.

After Park Assist sued Indect’s customer, the San Diego Airport Authority, for patent infringement, Indect filed a declaratory judgment action seeking a ruling of non-infringement and invalidity, and alleged unfair competition under § 43(a) of the Lanham Act. Park Assist counterclaimed for direct and induced infringement.

The district court denied Indect’s invalidity and Lanham Act claims, held that Indect did not infringe the ’956 patent, and rejected Park Assist’s counterclaims. Both parties appealed: Indect challenged the denial of its invalidity and unfair competition claims; Park Assist contested the court’s claim constructions and declaratory relief.

Patent validity. The Federal Circuit upheld the district court’s finding that the patent was not invalid under 35 U.S.C. § 112 for indefiniteness or lack of enablement. Indect argued that the claimed method was logically impossible to perform because certain steps (e.g., determining whether a space is vacant and simultaneously extracting data from a vehicle occupying it) could not coexist. The court disagreed, applying Altiris, Inc. v. Symantec Corp., 318 F.3d 1363 (Fed. Cir. 2003), and held that the claim did not require the steps to occur simultaneously or in written order.

The court also rejected Indect’s contention that the term “high resolution image” was indefinite. Drawing on Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275 (Fed. Cir. 2017), the court found that the specification provided adequate guidance—defining such images as those from which permit identifiers, such as license plate numbers, could be extracted.

Claim construction. Further, the appellate court affirmed the district court’s constructions of key terms. It held that the preamble “a method of managing a plurality of parking spaces” was limiting, noting that the specification consistently referred to managing multiple spaces. This interpretation prevented the claims from being improperly construed to apply to a single parking space, aligning with Catalina Mktg. Int’l Inc. v. Coolsavings.com, Inc., 289 F.3d 801 (Fed. Cir. 2002).

The term “displaying a thumbnail image” was also upheld as requiring “near real-time” display. The court reasoned that the specification emphasized real-time monitoring and feedback, citing Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314 (Fed. Cir. 2011), and held that the construction was consistent with the patent’s purpose.

On-sale bar. The Federal Circuit vacated the district court’s ruling on validity and remanded for a new trial on the on-sale bar defense. Indect had sought to introduce a “Chinook” document allegedly showing that Park Assist offered for sale a product embodying the patented method more than one year before filing. The district court excluded the evidence, reasoning that it only provided a product, not a method. The Federal Circuit found this to be a legal error. Citing BASF Corp. v. SNF Holding Co., 955 F.3d 958 (Fed. Cir. 2020), and Quest Integrity USA, LLC v. Cokebusters USA Inc., 924 F.3d 1220 (Fed. Cir. 2019), the court held that a product embodying a method can invalidate a method patent under § 102(b). The exclusion constituted an abuse of discretion warranting a retrial.

Unfair competition. Additionally, the appellate court reinstated Indect’s Lanham Act unfair competition claim, finding that the district court abused its discretion in excluding evidence of Park Assist’s suit against the San Diego Airport. Indect argued that Park Assist’s suit was objectively baseless and brought in bad faith, a key requirement under Judkins v. HT Window Fashion Corp., 529 F.3d 1334 (Fed. Cir. 2008). The appellate court noted that this evidence was relevant and probative, and that its exclusion deprived Indect of a fair opportunity to prove bad faith.

Declaratory judgment. The court also vacated the district court’s declaratory judgment protecting all current and future Indect customers from infringement liability. It held that there was no specific finding that Indect’s UPSOLUT system could not be used in an infringing manner. The court noted that Kessler v. Eldred, 206 U.S. 285 (1907), does not authorize blanket non-infringement findings absent a full adjudication of each implementation. Citing In re PersonalWeb Techs. LLC, 961 F.3d 1365 (Fed. Cir. 2020), the court emphasized that Kessler rights attach only to adjudicated products and do not extend prospectively to future, unadjudicated uses.

Disposition. Finally, the Federal Circuit affirmed the non-infringement judgment, upheld the claim constructions and rejection of invalidity based on indefiniteness or enablement, but reversed the evidentiary rulings on the on-sale bar and unfair competition claim. It vacated the judgment of patent validity and the Lanham Act dismissal and remanded for new trials on both issues. The declaratory judgment of non-infringement protecting Indect’s customers was also vacated.

The Case is Nos. 24-1023, 24-1127.

Judge: Stark, L.

Attorneys: Paul V. Storm (Foley & Lardner LLP) for Indect USA Corp. Tod Mathew Melgar (Lippes Mathias LLP) for Park Assist, LLC.

Companies: Indect USA Corp.; Park Assist, LLC

Cases: Patent TechnologyInternet Trademark FedCirNews CaliforniaNews