Digest of Soverain Software LLC v. Victoria’s Secret Direct Brand Management, LLC, et al., Nos. 2012-1649, 2012-1650 (Fed. Cir. Feb. 12, 2015) (precedential). On appeal from E.D. Tex. Before Dyk, Taranto, and Hughes.
Procedural Posture: Defendants appealed from a judgment that defendants infringed five claims of two patents and that those claims were not invalid. CAFC reversed.
- Issue Preclusion: Previously in Soverain Software LLC v. Newegg Inc., 705 F.3d 1333 (Fed. Cir. 2013), amended on reh’g, 728 F.3d 1332, 1336 (Fed. Cir. 2013), the CAFC held three of the five claims in this case invalid as obvious. Newegg, the Appellant in that appeal, had argued only that the district court erred in not granting a new trial and did not argue that the district court erred in not granting its motion for JMOL that those three claims were obvious. Nonetheless, the CAFC sua sponte found those claims invalid as obvious. In the instant appeal, the CAFC ruled that issue preclusion applied and reversed the district court, finding Soverain’s three claims invalid here as well. Soverain argued that issue preclusion should not apply because it did not have a full and fair opportunity to litigate the issue of obviousness, and asserted that it would have raised different or additional arguments if it had known the CAFC might reverse the district court in the Newegg case on invalidity rather than only granting a new trial. The CAFC rejected this argument and noted that the same basic issue of obviousness was central to both the grounds for JMOL and for a new trial. The CAFC also noted Soverain provided no case law to support its argument that a full and fair opportunity to litigate is lacking where a party might have argued differently on appeal.
- Issue Preclusion: The CAFC held that issue preclusion also applied for the two claims not at issue in the Newegg appeal. The CAFC determined the differences between those two claims and the three claims previously held invalid did not materially alter the question of validity, because the two claims only contained an additional limitation reciting the use of the Internet instead of a generic network.