Prior Litigation Bars Suit Against Products Found Noninfringing in a Prior Litigation Even As to Previously Non-Asserted Claims

Authored by D. Brian Kacedon, John C. Paul, and Kevin D. Rodkey

Abstract

In Brain Life, LLC v. Elekta Inc., the Federal Circuit held that the Kessler doctrine, which arose in the Supreme Court’s decision in Kessler v. Eldred, precludes a patent owner or its licensee from bringing an infringement action against an accused product previously found not to infringe the patent even as to previously non-asserted claims. In this way, the doctrine is distinguishable from traditional doctrines of claim preclusion and issue preclusion, which would permit a patent owner to later litigate the same patent if the accused acts occurred after final judgment or the patent claims were not fully adjudicated.

It is well understood that when a patent owner litigates an infringement lawsuit to conclusion, the final judgment resulting from that litigation may have some preclusive effect on later suits brought by the patent owner. In particular, the related, but distinct, doctrines of claim preclusion and issue preclusion will act to bar the patent owner from relitigating certain claims or issues. Specifically, claim preclusion prevents a patent owner from relitigating an infringement claim that was, or could have been, brought in the prior litigation. Issue preclusion prevents a patent owner from relitigating any issue of fact or law actually litigated in the prior litigation and resulting in a final judgment.

These two doctrines, however, potentially leave open certain avenues for reassertion of particular claims or issues. For example, alleged acts of infringement that occur after entry of final judgment (even by products at issue in the prior litigation) are not generally barred by the doctrine of claim preclusion because, by definition, accused acts that postdate final judgment could not have been litigated previously. Similarly, issue-preclusion does not typically apply where a patent owners asserts claims of a patent not previously litigated to a final judgment, even if they are asserted against the same previously accused infringer and the same previously accused device.

A doctrine known as the "Kessler doctrine" after the Supreme Court's decision in Kessler v. Eldred, however, helps fill the gaps left by these two doctrines by preventing a patent owner or its licensee from accusing a product of infringement of a patent if that product was previously found not to infringe that patent even as to post-judgment sales of that product and even as to non-asserted claims of the patent. In Brain Life, LLC v. Elekta Inc.,¹ the Federal Circuit held that though the licensee's patent-infringement claims were not barred by claim preclusion or issue preclusion, they were largely barred by the Kessler doctrine.

Background

In the late 1990s, Medical Instrumentation Diagnostics Corporation (MIDCO) sued Elekta Inc. for patent infringement, accusing Elekta's GammaKnife, GammaPlan, and SurgiPlan products. MIDCO initially asserted a number of system and method claims. After MIDCO focused its discovery on only one system claim, Elekta filed a motion to dismiss the method claims, which MIDCO did not oppose. The district court then dismissed the method claims without prejudice. Although a jury found that Elekta infringed the system claim and awarded $16 million in damages, the Federal Circuit reversed the infringement finding and vacated the damages award.

More than a decade after the MIDCO-Elekta litigation, MIDCO licensed the patent to another company, which, in turn, licensed it to Brain Life, LLC. Brain Life then sued Elekta for infringement of the very same patent, accusing three of the four products that MIDCO had previously accused but asserted the previously abandoned method claims. In addition to Elekta's GammaKnife, GammaPlan, and SurgiPlan products, Brain Life also accused Elekta's ERGO++ product. Elekta filed a motion to dismiss the litigation, which the district court granted, finding that MIDCO could have pursued the method claims in the earlier litigation but chose not to, barring Brain Life's right to later pursue them. Brain Life appealed the district court's determination.

The Decision

On appeal, the Federal Circuit agreed with the district court that Brain Life's infringement suit for the method claims was barred against Elekta's previously accused products, but determined that the Kessler doctrine—not issue or claim preclusion—created the bar. Regarding Elekta's fourth product, ERGO++, which MEDCO never accused previously, the Federal Circuit held that Brain Life's infringement suit was not barred.

The Federal Circuit first considered whether the doctrine of claim preclusion bars Brain Life's patent-infringement claims. Claim preclusion is a doctrine that bars relitigation of a legal claim, cause of action, or defense to a cause of action that resulted in a court judgment. Claim preclusion applies both to claims that a litigant actually brought and to those it could have brought. In the context of patent infringement, the Federal Circuit explained that the claim-preclusion doctrine absolutely bars claims against any acts of alleged infringement by Elekta that predate entry of the final judgment in the MIDCO-Elekta litigation. The claim-preclusion doctrine, however, does not bar Brain Life's infringement claims against Elekta for alleged acts of infringement that postdate entry of the final judgment in the MIDCO-Elekta litigation.

Next, the Federal Circuit considered whether the doctrine of issue preclusion bars Brain Life's patent-infringement suit. Issue preclusion bars later litigation on an issue of law or fact actually litigated and determined by a final judgment. Because the patent's method claims were not actually litigated in the MIDCOElekta litigation, and because Brain Life asserted only the method claims against Elekta in the later litigation, the Federal Circuit found that issue preclusion also does not bar Brain Life's patent-infringement suit.

Finally, the Federal Circuit considered whether the Kessler doctrine bars Brain Life's patent-infringement suit. The Kessler doctrine came from the Supreme Court's decision in Kessler v. Eldred, which held that when an accused product is found to be noninfringing in a patent-infringement litigation, the prevailing accused infringer has the right to manufacture, use, and sell the noninfringing product. In other words, once a court finds that an accused product does not infringe a patent, that accused product obtains a noninfringing status as to the asserted patent, which bars the patent owner and its privies from later accusing the same product of infringement of the same patent, even if different claims are being asserted. Because the MIDCO-Elekta litigation resulted in a judgment of noninfringement of the patent's system claims as to Elekta's GammaKnife, GammaPlan, and SurgiPlan products, Brain Life's patent-infringement suit of the method claims against those products was also barred, even though claim preclusion and issue preclusion did not apply. Brain Life's patent- infringement claim against Elekta's ERGO++ product could proceed, however, because the MEDCO-Elekta litigation did not implicate that particular product and thus it had not acquired a noninfringing status.

Strategy and Conclusion

This case bars a patent owner or licensee from alleging patent infringement of a previously litigated patent against a product previously found not to infringe the patent, even if the patent owner or licensee wants to assert different patent claims from those previously litigated. As a result, when bringing a patent infringement claim, it may be useful to consider this case in deciding whether to focus the litigation on a relatively small number of claims or to expand the number of claims that would otherwise be asserted.

Endnotes

¹ The Brain Life, LLC v. Elekta Inc. decision can be found at http://www.finnegan.com/files/upload/LES_Insights_Column/2014/Brain_Life_v_Elekta.pdf.

Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.