When the Federal Circuit summarily affirms a trial court judgment, collateral estoppel can still apply to bar a patent owner from re-litigating an issue provided that the judgment of the trial court did not include a determination of more than one issue, each of which could independently support the result.
Collateral estoppel is a legal doctrine that bars a plaintiff from re-litigating an issue against a subsequent defendant when that issue was previously litigated against a prior defendant. Court rulings with respect to claim construction and non-infringement fall within the types of issues that a plaintiff can be collaterally estopped from re-litigating. In Phil-Insul Corp. v. Airlite Plastics Co., the Federal Circuit held that collateral estoppel could bar a patent owner from re-litigating such issues even when the prior decision on those issues was only summarily affirmed by the Federal Circuit without opinion.
Phil-Insul Corp. doing business as IntegraSpec ("IntegraSpec") filed two patent infringement suits against two different defendants on the same patent relating to insulating concrete forms used in the construction of buildings. In the first case against Reward Wall Systems, Inc. ("Reward Wall"), the district court construed the relevant claim of the patent to require at least two rows of alternating projections and recesses in a given concrete panel. Based on this construction, the court granted summary judgement of non-infringement with respect to Reward Wall’s products because the products had only one wall of alternating projections and recesses. IntegraSpec appealed the judgment to the Federal Circuit, challenging only the trial court’s claim construction. The Federal Circuit affirmed the trial court’s judgment via a Rule 36 summary affirmance, which allows the Federal Circuit to enter a judgment affirming a trial court ruling without issuing a written opinion on the merits. In the second suit, IntegraSpec sued Airlite for infringement of the same patent. Airlite moved for summary judgment of non-infringement, alleging that IntegraSpec’s infringement claims were barred by the prior decision in the case against Reward Wall. Specifically, Airlite argued that its accused products had the same design as Reward Wall’s products and, therefore, did not infringe for the same reasons already litigated in the prior case. The district court agreed with Airlite, and IntegraSpec appealed.
The Airlite Decision
On appeal, IntegraSpec primarily argued that a Rule 36 summary judgment cannot serve as the basis for collateral estoppel relying, in part, on a prior Federal Circuit decision. In that prior case, the plaintiff accused several defendants of infringing the same patent. The trial court granted a first defendant’s motion for summary judgment of non-infringement on two separate and independent grounds: (1) that the plaintiff failed to present sufficient evidence of infringement and (2) that the plaintiff failed to show several of the as-construed claim limitations were met. On appeal, the Federal Circuit summarily affirmed without issuing an opinion, consistent with its authority under Rule 36. When a separate defendant sought to rely on that affirmance to collaterally estop the plaintiff from re-litigating the issue of claim construction, however, the Federal Circuit ruled that collateral estoppel did not apply.
In the Airlite case, IntegraSpec argued that this prior decision stood for the general proposition that a summary affirmance under Rule 36 cannot give rise to issue preclusion under the collateral estoppel doctrine. The Federal Circuit, however, disagreed. In the cited case, two separate and independent grounds supported the trial court judgment, but in the Airlite case, only one ground formed the basis of the trial court’s judgment. As such, the court found the prior case did not support the proposition advanced by IntegraSpec that summary affirmances can never form the basis for collateral estoppel.
The court explained that the prior decision stands for the proposition that collateral estoppel does not apply in the limited situation in which the trial court determined more than one issue, each of which is sufficient to support the ultimate result.
In contrast to the cited case, in the Airlite case, the issues that were summarily affirmed on appeal in the case against Reward Wall were only issues of claim construction of the same terms currently at issue. As such, the summary affirmance could mean only one thing—that the single ground for trial court’s judgment was affirmed on appeal. Accordingly, the court held that IntegraSpec was barred from re-litigating the claim construction and non-infringement issues in the Airlite case.
Strategy and Conclusion
Collateral estoppel can bar a patent owner from re-litigating issues of claim construction and patent infringement even when the prior decision on those issues was only summarily affirmed by the Federal Circuit. This highlights the ongoing impact of an adverse final decision.
Further Information The Airlite opinion can be found here.
Originally printed in LES Insights on April 25, 2017.