Fed Circuit Rules that Voluntary Dismissal of Related Appeals Leads to Issue Preclusion

In Papst Licensing GMBH & Co. KG, v. Samsung Electronics America, Inc., No. 2018-1777 (Fed. Cir. May 23, 2019), the Federal Circuit affirmed the Board’s decision that certain claims were unpatentable as obvious. In its obviousness decision, the Board adopted particular claim constructions, which were also adopted in several similar proceedings. For the related proceedings, Papst voluntarily dismissed the appeals, prior to oral argument, resulting in finality of the Board’s decision. 

On appeal, the Federal Circuit upheld the Board’s decision finding the arguments presented on appeal were barred by issue preclusion. Because of overlapping claim constructions with the concluded proceedings, the Federal Circuit determined that issue preclusion prevented a different result in the instant case. Earlier Supreme Court precedent made clear that an administrative tribunal’s resolution of an issue making up only one part of an ultimate legal claim can, nonetheless, preclude the losing party from later contesting the resolution of that issue within a separate case. From that general rule of law, the Court determined that the “ruling was not just materially identical to the Board’s claim-construction ruling in this case; it also was essential to the Board’s ultimate determination.” Id. at 15. Apart from issue preclusion, the Court found substantial evidence to support the Board’s finding that the claims were obvious.