Troutman Sanders Federal Circuit Review – November 21, 2014

Each week, Troutman Sanders’ Federal Circuit review summarizes the Federal Circuit precedential patent opinions from the prior week.

This week:

• Collateral estoppel may preclude construction of a claim limitation in a reexamined patent if the limitation has been previously construed and presents an identical issue.

Collateral estoppel may preclude construction of a claim limitation in a reexamined patent if the limitation has been previously construed and presents an identical issue.

e.Ditigal Corp. v. Futurewei Tech., Inc., & Huawei Device USA, Inc., & Pantech Wireless, Inc., No. 2014-1019, -1242, -1243 (Fed. Cir. Nov. 19, 2014) (Moore, J.). Click Here for a copy of the opinion.

e.Digital sued defendants asserting claim 33 of the reexamined U.S. Pat. No. 5,491,774 and claims 2 & 5 of U.S. Pat. No. 5,839,108. The ‘774 patent covers a device with a microphone and flash memory recording medium capable of audio recording and playback. Prior to reexamination, the Colorado District Court construed the “sole memory” in claims 1 & 19 of the ‘774 patent to require “that the device use only flash memory, not RAM or any other memory system” even if the device uses a microprocessor. During reexamination, the USPTO allowed new claim 33, which recites the identical “sole memory” limitation and added a microprocessor limitation. The District Court for the Southern District of California adopted the Colorado Court’s construction on the ‘774 patent without separately construing the asserted claims of the ‘108 patent and entered judgment of non-infringement on both patents based on collateral estoppel.

Collateral estoppel applies if: (1) the issue necessarily decided in the previous proceeding is identical; (2) the first proceeding ended with a final judgment on the merits; and (3) the party against which collateral estoppel is asserted was a party (or was in privity with a party) at the first proceeding. The main issue on appeal was whether construction of the “sole memory” limitation was an identical issue.

The Federal Circuit affirmed the district court’s decision as to the ‘774 patent and reversed and remanded as to the ‘108 patent. The court held that new (post-reexam) claim 33 recites the same “sole memory” limitation as claims 1 and 19. Moreover, the reexam “in no way modifies, clarifies, or even informs the construction of the sole memory limitation” because the reexamination focused on a limitation that is unrelated to the “sole memory” limitation. Adding a “microprocessor” limitation to the claim did not alter the analysis in the prior litigation, because the “microprocessor” issue was expressly considered by the Colorado Court.

For the ‘108 patent, the Federal Circuit held that even though it incorporated by reference the ‘774 patent as prior art, it is not related to the ‘774 patent. The ‘108 patent “discloses a separate invention, includes a distinct prosecution history, and is supported by a different written description.” Because the two patents were unrelated, the ‘108 patent required a new claim construction inquiry.

Finally, the court affirmed the district court’s conversion of defendant’s partial judgment of non-infringement into a final judgment, in accordance with F.R.C.P. 54(b), because there was no just reason for delay.