Federal Circuit Rules Collateral Estoppel Does Not Apply to Similar but Unrelated Patent

e.Digital Corp. v. Futurewei Tech., Inc.,__F.3d__(Fed. Cir. Nov. 18, 2014)(MOORE, O'Malley, Reyna)(S.D. Cal.: Sabraw)(2 of 5 stars)

Federal Circuit affirms-in-part and reverses-in-part a collateral estoppel decision where a prior claim construction issue did not apply to an unrelated patent for a similar but different invention.

Background: e.Digital initially brought a suit in Colorado for infringement of its '774 patent. During that case, the court construed the "sole memory limitation" of claims 1 and 19 of the '774 patent. The Colorado court looked to the '774 patent's written description and prosecution history disclaimers and decided that it required "the device use only flash memory, not RAM." Slip. op. at 3. Following claim construction, the court granted the parties' motion to dismiss with prejudice.

After the case, the '774 patent issued after reexamination with claims 1 and 19 cancelled, and a new claim 33 that recited "the limitations of cancelled claims 1 and 19, including the identical sole memory limitation." Id. at 4.

e.Digital then brought the present case in California for infringement of claim 33 of the '774 patent and claims 2 and 5 of the '108 patent. The court reasoned that the patents were "closely related" and that application of collateral estoppel regarding the sole memory limitation to both patents was proper. Id.

Collateral Estoppel: On appeal, the parties dispute only whether the construction of the sole memory limitation constitutes an identical issue for the purpose of collateral estoppel. First, the Federal Circuit found that the lower court correctly applied the doctrine to the '774 patent despite the new claim. The court found that claim 33 recited the identical limitations of former claims 1 and 19 and the reexamination never addressed that limitation or the presence of RAM. The panel explained that while a reexamination may create a new issue that would preclude collateral estoppel, here it does not because it "in no way modifies, clarifies, or even informs the construction of the sole memory limitation." Id. at 5.

Next, the Federal Circuit found the application of collateral estoppel to the '108 patent improper. The court started by pointing out that the '108 patent does not relate to the '774 patent, but rather discloses a separate invention with its own prosecution history and written description. Because the two patents are not related, "the '108 patent requires a new claim construction inquiry." Id. at 6. The court further explained that simply because two unrelated patents require separate inquiries does not justify the position that two related patents do not. The question lies with whether the issue previously decided is identical to the one now before the court.