Collateral Estoppel May Be Applied Sua Sponte to Co-Pending Actions

In XY, LLC v. Trans Ova Genetics, L.C., the Federal Circuit applied collateral estoppel sua sponte following a related decision upholding the invalidity of one of XY’s asserted patents.

XY filed suit against Trans Ova for patent infringement, among other things, asserting six patents.  Trans Ova counterclaimed alleging invalidity. The district court found that the asserted patent claims were valid, that Trans Ova willfully infringed the asserted claims, and that XY was entitled to damages in the form of an ongoing royalty.

In a separate case decided the same day, the Federal Circuit affirmed a decision by the Patent Trial and Appeal Board invalidating one of XY’s patents asserted against Trans Ova. The Court held that “an affirmance of an invalidity finding, whether from a district court or the Board, has a collateral estoppel effect on all pending or co-pending actions.”  Thus, the Court determined that the issues on appeal related to this patent were mooted.  For the remaining patents, the Court found that that the district court focused too heavily upon pre-verdict factors in determining the royalty rate and remanded to recalculate.

Judge Newman dissented stating that collateral estoppel should not be applied without opportunity to respond. 

Want to learn more? Click here for additional commentary about this case from Finnegan’s “Last Month at the Federal Circuit” podcast series.