April 2014
Where Neither Claim Preclusion nor Issue Preclusion Bar Assertion of Claims, the Kessler Doctrine Bars Assertion of New Claims of the Same Patent Previously Held Noninfringing in an Earlier Action
| Judges: O’Malley (author), Bryson, Wallach |
| [Appealed from S.D. Cal., Judge Bencivengo] |
In Brain Life, LLC v. Elekta Inc., No. 13-1239 (Fed. Cir. Mar. 24, 2014), the Federal Circuit affirmed the district court’s SJ barring infringement claims on claim and issue preclusion grounds, and vacated the judgment because the Court found that the Kessler Doctrine precluded a majority of the claims.
Plaintiff Brain Life, LLC (“Brain Life”) sued Defendant Elekta, Inc. (“Elekta”) for infringement of the method claims of U.S. Patent No. 5,398,684 (“the ’684 patent”). The ’684 patent is directed to both a method and apparatus for generating a video image from a variety of separate scanner imaging sources.
Prior to this suit, the owner of the ’684 patent, Medical Instrumentation Diagnostics Corporation (“MIDCO”), sued Elekta, alleging that Elekta’s GammaKnife, GammaPlan, and SurgiPlan products infringed the ’684 patent (“the MIDCO Litigation”). In the MIDCO Litigation, Elekta requested dismissal of the method claims prior to trial, which MIDCO did not oppose, and the method claims were dismissed without prejudice. After a jury trial, Elekta’s products were found to infringe apparatus claim 1 of the ’684 patent. On appeal, the infringement finding was reversed and the case was remanded for entry of judgment of noninfringement in Elekta’s favor. On remand, MIDCO attempted to revive the ’684 patent’s previously dismissed method claims, but the trial court refused to reopen the case and entered final judgment that Elekta’s GammaKnife, GammaPlan, and SurgiPlan products did not infringe the ’684 patent. The district court’s refusal to reopen the case was subsequently affirmed on appeal.
In the present suit, which Brain Life, a licensee of the ’684 patent, filed against several defendants, including Elekta, Brain Life alleged that Elekta’s GammaKnife, GammaPlan, and SurgiPlan products, as well as Elekta’s ERGO++ treatment systems, infringed the method claims of the ’684 patent. The district court granted SJ in favor of Elekta, holding that Brain Life’s claims against Elekta were barred, because there was no material difference between the accused products in this suit and the previously adjudicated noninfringing products with respect to the apparatus claims. The district court also barred Brain Life from asserting the method claims of the ’684 patent against Elekta because MIDCO could have pursued the method claims in the MIDCO Litigation but chose not to, and once final judgment was entered in favor of Elekta, Elekta developed and sold its products with an understanding that they did not infringe the ’684 patent. Brain Life appealed.
On appeal, the Court first held that the doctrine of claim preclusion barred Brain Life’s assertion of either the method or system claims of the ’684 patent to the extent the alleged acts of infringement predated the final judgment in the MIDCO Litigation. To the extent Brain Life’s acts of infringement postdated the final judgment of the MIDCO Litigation, regardless of whether the same transactional facts were present in both suits, the Court then held that claim preclusion did not bar Brain Life’s second suit. The Court explained: “Quite simply, Brain Life could not have asserted infringement claims against the products in question for acts of alleged infringement that postdate the final judgment in the MIDCO Litigation in the current litigation.” Slip op. at 13.
“Simply, by virtue of gaining a final judgment of noninfringement in the first suit—where all of the claims were or could have been asserted against Elekta—the accused devices acquired a status as noninfringing devices, and Brain Life is barred from asserting that they infringe the same patent claims a second time.” Slip op. at 20.
Second, the Court held that issue preclusion did not bar Brain Life from asserting the method claims of the ’684 patent against Elekta, especially for the ERGO++ product. The Court held that the method claims were never litigated to finality in the MIDCO Litigation, as neither party to that suit had requested claim construction for the method claims, and the method claims were dismissed without prejudice. Further, the Court noted that the method claims were also not litigated in subsequent appeal or on remand. The Court also noted that the ERGO++ product was never at issue in the MIDCO Litigation. Even though the ERGO++ product shared some similarities with other Elekta products that were litigated in the MIDCO Litigation, the Court explained that the system claims were not barred by precedent applying issue preclusion to previously challenged products that were not materially altered. Further, the Court held that issue preclusion did not bar the assertion of the method claims of the ’684 patent based on use or sales of the ERGO++ product.
Third, the Court held that even if neither claim preclusion nor issue preclusion barred Brain Life from asserting the method claims of the ’684 patent against Elekta’s sale of the GammaKnife, GammaPlan, and SurgiPlan products that postdate the final judgment of the MIDCO Litigation, the Kessler Doctrine nonetheless barred Brain Life from asserting the method claims against the sale of those products. The Court explained that this doctrine is based on the principle that when an accused infringer demonstrates noninfringement in an earlier suit, the specific allegedly infringing devices acquire the status of the noninfringing devices vis-à-vis the asserted patent claims. The Court further explained that “when the devices in the first and second suits are ‘essentially the same,’ the ‘new’ product(s) also acquires the status of a noninfringing device vis-à-vis the same accusing party or its privies.” Id. at 18-19 (quoting Foster v. Hallco Mfg. Co., 947 F.2d 469, 479-80 (Fed. Cir. 1991)). Here, the Court held that because all of the claims were or could have been asserted against Elekta in the earlier MIDCO Litigation, the products have acquired a noninfringing status, and Elekta was free to continue selling those products after entry of final judgment in that suit. The Court also held that since there was no dispute that the GammaKnife, GammaPlan, and SurgiPlan products in the present suit are essentially the same as the products previously litigated in the MIDCO Litigation, the Kessler Doctrine barred Brain Life from asserting the method claims of the ’684 patent against the sale of those products. The Court, however, held that since neither Brain Life nor MIDCO had ever accused Elekta’s ERGO++ product of infringing any of the ’684 patent claims, the ERGO++ product never acquired the status of a noninfringing device in connection with the ’684 patent. Therefore, Brain Life’s present infringement allegations were not barred under claim preclusion, issue preclusion, or the Kessler Doctrine.
Accordingly, the Court affirmed the district court’s SJ of noninfringement of Elekta’s GammaKnife, GammaPlan, and SurgiPlan products, but vacated the district court’s SJ of noninfringement of Elekta’s ERGO++ product and remanded for further proceedings.
