e.Digital Corp. v. Futurewei Technologies, Inc.

Addressing the issue of collateral estoppel as it relates to an earlier claim construction, the U.S. Court of Appeals for the Federal Circuit affirmed-in-part and reversed-in-part a district court’s finding that a party was collaterally estopped from seeking a construction of a claim limitation that was different from another court’s construction of that same term in a previous case.  e.Digital Corp. v. Futurewei Technologies, Inc., Case No. 14-1019 (Fed. Cir., Nov. 19, 2014) (Moore, J.).

Prior to the present case, e.Digital brought suit against Pentax in the U.S District Court for the District of Colorado, asserting infringement of its patent.  The asserted claims recited a “flash memory module which operates as sole memory of the received processed sound electrical signals.”  The Colorado court construed the “sole memory” limitation to require “that the device use only flash memory, not RAM or any other memory system” to store the “received processed sound electrical signals.”  Based on this construction, the parties stipulated to dismiss the case with prejudice, which the Colorado court granted.  In an ex parte reexamination, the U.S. Patent and Trademark Office (PTO) subsequently reexamined another claim of the patent that included the identical “sole memory” limitation.

e.Digital later brought suit against GoPro, Pantech, Huawei and Apple in the U.S. District Court for the Southern District of California, asserting infringement of the reexamined patent and an unrelated patent (in the sense that they were not members of the same patent family).  Based on the Colorado court’s previous construction, the defendants moved to apply collateral estoppel to the construction of the “sole memory” limitation in both of the asserted patents.  The district court granted the motions to adopt the Colorado court’s construction reasoning that the two patents were closely related, at least in the sense that the reexamined patent incorporated the other patent by reference.  After the California court rendered a final judgment of non-infringement, e.Digital appealed.

The Federal Circuit concluded that the district court correctly applied collateral estoppel to the reexamined patent because the “sole memory” limitation in the reexamined claim was identical to the term in the claims construed by the Colorado court and further, because the reexamination focused on limitations unrelated to the “sole memory” limitation.  However, the Federal Circuit concluded that the district court erred in applying collateral estoppel to the unrelated patent because the “claims of unrelated patents must be construed separately.”  While the reexamined patent incorporated the other patent by reference, the Federal Circuit noted that it disclosed a separate invention, it had a distinct prosecution history and different written description.  The Federal Circuit explained that “a court cannot impose collateral estoppel to bar a claim construction dispute solely because the patents are [subject matter] related.”  Rather, “[e]ach case requires a determination that each of the requirements for collateral estoppel are met, including that the issue previously decided is identical to the one sought to be litigated.”