On August 19, 2026, the Federal Circuit issued a precedential opinion in VDPP, LLC v. Volkswagen Group of America, Inc., No. 2024-2226 (Moore, C.J., joined by Lourie and Cunningham, JJ.). It affirmed the Southern District of Texas's dismissal of VDPP's complaint (No. 4:23-cv-02961, Judge Lee H. Rosenthal) without leave to amend, and affirmed a 35 U.S.C. 285 fee award of $207,543.60. It dismissed, for lack of appellate jurisdiction, the portion of the appeal attacking personal sanctions against counsel.

The marking problem

VDPP sued Volkswagen in 2023 for alleged infringement of U.S. Patent 9,426,452, directed to electrically controlled spectacles. Because the patent had expired, the only remaining money was back damages. Volkswagen moved to dismiss under Rule 12(b)(6). VDPP's proposed amended complaint said only that it is a non-practicing entity with no products to mark, that it had pled all statutory requirements for pre-suit damages, and that all conditions precedent were met. The district court dismissed with prejudice as futile.

The holding

A patentee who never makes or sells a patented article may recover pre-suit damages without marking its own products. Its licensees still have to comply with section 287. Arctic Cat Inc. v. Bombardier Recreational Products Inc., 950 F.3d 860, 864 (Fed. Cir. 2020). VDPP had eleven settlement agreements licensing the '452 patent. The proposed amendment alleged no facts showing licensee marking, or reasonable efforts to ensure it. One of those agreements specified that the licensee had no obligation to mark. Bare legal conclusions that statutory requirements were met do not fill that gap. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

The court rejected two attempted carve-outs. A license granted to settle litigation is still a license. TransCore, LP v. Electronic Transaction Consultants Corp., 563 F.3d 1271, 1275-76 (Fed. Cir. 2009). That the licensees did not admit infringement does not matter: notice under section 287 turns on the patentee's actions, not the accused infringer's subjective view. Lubby Holdings LLC v. Chung, 11 F.4th 1355, 1360 (Fed. Cir. 2021). VDPP continued to maintain that the licensed products infringe. On those facts, the court saw no way to amend to plead reasonable efforts. It did not foreclose that a licensor could ever make that showing without a marking obligation. This was not that case.

Fees, and the sanctions appeal that never launched

The district court found the case exceptional: seeking future damages and an injunction on an expired patent, seeking past damages without a marking allegation, failing to disclose the settlement agreements, and prolonging the case with false statements about them. A pattern of repeat '452 litigation with settlement demands far below defense costs was relevant under SFA Systems, LLC v. Newegg Inc., 793 F.3d 1344, 1350-52 (Fed. Cir. 2015). The Federal Circuit found no abuse of discretion. Counsel's personal sanctions are a different story. The notices of appeal named only VDPP. Naming the lawyer in a list of orders being appealed did not make him an appellant. FED. R. APP. P. 3(c)(1)(A). That slice of the appeal was dismissed for lack of jurisdiction.

What it means in practice

Owners who license through settlement and then sue someone else for back damages need licensee-marking facts in the complaint: a marking covenant, actual marking, or other reasonable efforts. Reciting that the plaintiff is a non-practicing entity is not enough. Putting an express no-marking term in a settlement license is a particularly hard fact to plead around.

What to watch next

Whether later panels treat the "no way to amend" language as limited to a record with eleven licenses and an express no-marking clause, and how quickly Rule 12 motions start attaching settlement licenses to force a marking plea on the papers.