Summary: Licensee barred from bringing suit against products that attained “noninfringing” status.

Case: Brain Life, LLC v. Elekta Inc., No. 2013-1239 (Fed. Cir. Mar. 24, 2014) (precedential). On appeal from S.D. Cal. Before O’Malley, Bryson, and Wallach.

Procedural Posture: Licensee Brain Life, LLC appealed a finding that claim preclusion barred its patent infringement allegations based on a prior suit by the patent owner. The Federal Circuit affirmed-in-part, vacated-in-part, and remanded for further proceedings.

  • Claim Preclusion: The patent at issue (the ’684 patent) includes apparatus and method claims. Prior to the Brain Life lawsuit, patent owner MIDCO sued Elekta for infringement of the ’684 patent but focused only on the apparatus claims. The district court in the MIDCO suit dismissed the method claims without prejudice prior to trial, and Elekta ultimately obtained a final judgment of non-infringement on the apparatus claims. Following this judgment, MIDCO licensed the ’684 patent to Brain Life. In theBrain Life suit, the district court granted Elekta’s motion for summary judgment based on claim preclusion. On appeal, the Federal Circuit held that claim preclusion barred all allegations of infringement for activity that predated the final judgment in the MIDCO case. However, the Federal Circuit also held that claim preclusion did not bar allegations of acts of infringement occurring after entry of final judgment in the prior case.
  • Issue Preclusion: The Federal Circuit found that issue preclusion did not bar assertion of the method claims, which were not “fully, fairly, and actually litigated to finality” in the previous suit. The Federal Circuit further found that issue preclusion does not bar infringement causes of action for products not at issue in an earlier litigation.
  • Kessler Doctrine: As set forth in Kessler v. Eldred, 206 U.S. 285 (1907), theKessler doctrine bars infringement causes of action against products that have attained “status” as non-infringing products—even when claim or issue preclusion would otherwise not bar bringing such claims. Under the Kessler doctrine, a final judgment of non-infringement in a first suit entitles the accused infringer to make, use, and sell the products accused of infringement in the first suit for all patent claims that were or could have been asserted in the first suit. On this basis, the Federal Circuit found that Brain Life was barred from bringing both its apparatus and method claims against the products accused of infringement in the MIDCO suit and products “essentially the same” as those accused in the first suit. However, the Federal Circuit determined that the Kessler doctrine did not bar Brain Life from bringing infringement claims against any new Elekta products that were not part of the first suit.