Collateral estoppel is a legal rule that protects a party from having to litigate issues that have already been fully and fairly tried in a previous action and adversely resolved against a party-opponent. This rule can work against the patent owner or the defendant during litigation.
Collateral estoppel works against the patent owner
In general but not always, collateral estoppel works against the patent owner and helps the alleged infringer. For example, if a term in a patent claim being asserted by the patent owner has already been construed by a court in prior litigation, then the patent owner cannot contest the correctness of the claim construction of the patent claim in a subsequent patent litigation against the same defendant. This was the case in Nestle USA, Inc. v. Steuben Foods, Inc. (Fed. Cir. March 13, 2018). It is also true for a different defendant which was not a party to the original litigation.
The patent owner must accept the claim construction that was previously determined by the court.
This is not the case for the defendant who was not involved in the original litigation. The defendant does not need to accept the claim construction previously decided by the court. The defendant can argue that the claim construction was too broad or too narrow. This defendant did not have the full and fair opportunity to litigate the issue unlike the patent owner. Hence, the defendant can take the position that the claim term should be interpreted much more broadly so that the patent claim would be invalid for being anticipated or obvious by the prior art. Conversely, the defendant can take the position that the claim term should be interpreted much more narrowly so that the patent claim would be sufficiently narrow so that the defendant’s products or actions would avoid infringement of the patent claim. This would be the defendant’s prerogative but not the patent owner’s.
Collateral estoppel works against the alleged infringer
Collateral estoppel can work against the alleged infringer in the case where there is multiple litigation on one or more related patents and a court in prior litigation ruled against the alleged infringer. For example, if the alleged infringer advocated for a certain meaning of a claim term but lost, then in subsequent litigation against the patent owner, the alleged infringer cannot advocate for a different meaning for the claim term for a related patent.
Nestle USA, Inc. v. Steuben Foods, Inc.
In Nestle USA, Nestle filed an Inter Partes Review proceeding with the Patent Trial and Appeal Board (PTAB) in an attempt to invalidate Steuben’s patent. Presumably, Stueben (Patent owner) alleged that Nestle (Alleged infringer) infringed on Stueben’s patent. Steuben owns multiple related patents directed to systems for aseptic packaging of food products.
In a prior litigation, Nestle (Alleged infringer) appealed and won on the claim construction issue for the claim term “aseptic” on a different but related patent. In that prior litigation, the court construed the term “aseptic” to mean “FDA level of aseptic.” Nestle now argues that a term similar to “aseptic” in the current litigation should have the same meaning as in the prior litigation. That is the extra wrinkle or issue in the case. The issue is whether collateral estoppel applies to claim language not identical but similar to the prior case. In the prior litigation, the court construed the term “aseptic” to mean “FDA level of aseptic.” In the current litigation, Nestle wanted the court to adopt the same definition for the claim phrase “aseptically disinfecting.”
The Federal Circuit explained that it was clear that identical claim terms are subject to collateral estoppel. The Federal Circuit went further to say that since collateral estoppel applies to the identity of the issues and similar claim terms or variants thereof are also subject to collateral estoppel.
The Federal Circuit vacated the Board’s construction of “aseptically disinfecting” and construed it to mean “FDA level of aseptic.”
Ramifications of collateral estoppel on patent prosecution
The complexity of collateral estoppel increases because collateral estoppel transcends the current patent when the patent is a part of a portfolio of patents. For example, if a patent portfolio is being developed for a particular technology through the filing of one or more continuation, divisional and continuation-in-part patent applications, then the identical claim terms across the related patents that are subject to collateral estoppel. If the patent owner litigated one patent against a defendant, then the arguments and words used to define the terms of the patent claim in that patent will be applied to the identical claim terms across the related patents in the family.
The ramification of the Nestle opinion is that the patent litigator needs to be cognizant of the ramifications of the arguments being presented and how it affects the patents in the portfolio for similar claim terms.
Moreover, if the patent family still has a pending patent application that is being prosecuted, then patent prosecutor needs to be aware of the litigation arguments. One because the patent prosecutor needs to advise the examiner when arguments in litigation might be inconsistent with arguments presented during patent prosecution. Secondly, because merely using different but similar claim terms will not avoid the negative effects of collateral estoppel against future patents acquired later on. The patent prosecutor may have to find a solution to use terms that can be described not as similar but significantly different to mitigate the effects of collateral estoppel.
Because of the application of collateral estoppel across the entire patent portfolio, patent prosecution of subsequent patent applications may benefit from a consideration of how to craft different claim terms to mitigate the negative effects of collateral estoppel that may arise if litigation ensues.
I invite you to contact me with your patent questions at (949) 433-0900. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.