03/25/2014

Brain Life v. Elekta: CAFC Applies and Questions Kessler Doctrine during Issue and Claim Preclusion Analysis


Category: Civil Procedure  
 
 
 
 By: Jesus Hernandez, Blog Editor/Contributor
 
TitleBrain Life, LLC v. Elekta Inc., No. 2013-1239 (Fed. Cir. March 24, 2014).
Issues
[1: Claim Preclusion] First, Brain Life contends that, because the asserted claim limitations in this suit differ from the asserted claims in the MIDCO suit, claim preclusion is inapplicable.
Brain Life, LLC at *9.
[2: Claim Preclusion] Next, Brain Life contends that, because the trial court in the MIDCO Litigation dismissed the method claims without prejudice, Supreme Court precedent counsels that those claims are not subject to res judicata. Brain Life contends that, when a claim is dismissed without prejudice, a party can sue again on the same claim, against the same defendant, in the same court.
Id. at *9-10.
[3: Issue Preclusion and Kessler Doctrine] Finally, Brain Life argues that Elekta’s ERGO++ product did not exist until after the first suit reached final judgment. Because that product did not exist, Brain Life contends that it could not have been accused in the MIDCO Litigation and that neither claim nor issue preclusion could apply to that product.
Id. at *10.
Holdings
[1: Claim Preclusion] [The] principles [of claim preclusion] bar the assertion of infringement of either the method or system claims to the extent the alleged acts of infringement predate the final judgment in the MIDCO Litigation [but not to acts of infringement after the MIDCO litigation].
Id. at *11 (text added).
[2: Claim Preclusion] [T]o the extent Brain Life’s allegations of infringement are directed to products created and, most importantly, acts of alleged infringement occurring after entry of the final judgment in the MIDCO Litigation, those claims are not barred by the doctrine of claim preclusion [because under the principles of res judicata, a party could not assert claims for any conduct that has not taken place yet].
Id. at *13 (text added).
[3: Issue Preclusion and Kessler Doctrine] [Because] Elekta only acquired the ERGO++ product after the MIDCO Litigation was finalized [...], the ERGO++ has never acquired the status of a noninfringing device in connection with the ’684 patent. [Therefore] neither claim preclusion, issue preclusion, nor the Kessler Doctrine stand as a bar to Brain Life’s current allegations of infringement regarding the ERGO++.
Id. at *22 (text added).
 
 
 
Procedural HistoryBrain Life, LLC (“Brain Life”) filed suit against El- ekta, Inc. (“Elekta”) alleging infringement of the method claims of U.S. Patent No. 5,398,684 (“the ’684 patent”). The district court granted summary judgment in favor of Elekta, holding that Brain Life’s claim was barred on res judicata grounds. […] Brain Life appeals from that determination.
Brain Life, LLC at *2 (internal citations omitted).
 
 
 
Legal Reasoning (O’Malley, Bryson, Wallach)
Background
Prior MIDCO Litigation between Defendant and third party (MIDCO)“In December 1997, Medical Instrumentation Diagnostics Corporation (“MIDCO”) sued Elekta alleging that Elekta’s GammaKnife, GammaPlan, and SurgiPlan products infringed the ’684 patent (“MIDCO Litigation”).” Brain Life, LLC at *2. “As the MIDCO Litigation proceeded through discovery, MIDCO focused its efforts on claim 1 of the ’684 patent and neglected the method claims. […]” Id. at *4 (internal citations omitted). “Elekta requested that the district court dismiss the method claims prior to trial. [...] MIDCO did not oppose Elekta’s motion, and the district court dismissed the method claims without prejudice. […] [T]he jury found that Elekta’s products infringed [apparatus] claim 1 of the ’684 patent.” Id. at *5 (text added, internal citations omitted). “On remand, MIDCO attempted to revive the ’684 patent method claims that had been dismissed prior to trial […] The district court refused to reopen the case […]” Id. at *5-6.
Licensing of '684 patentIn September 2009, MIDCO licensed the ’684 patent to a company, which, in turn, licensed the patent to Brain Life.[…] Brain Life then filed suit against several defendants, including Elekta, in July 2010. Brain Life alleged that Elekta’s GammaKnife, GammaPlan, SurgiPlan, and ERGO++ treatment systems infringed the method claims of the ’684 patent[, ERGO++ being a new product Elekta purchased after the MIDCO Litigation].
Id. at *6 (text added, internal citations omitted).
[1] Claim Preclusion for activities prior to past MIDCO litigation
Legal Standard: Claim Preclusion in Patent Cases“In the simplest construct, [claim preclusion bars] the relitigation of a claim, or cause of action, or any possible defense to the cause of action which is ended by a judgment of the court.” [...] For claim preclusion to apply in a patent case, the alleged infringer must demonstrate that the accused product or process is “essentially the same” as the accused product or process in the first litigation. […] As we have previously stated, “[a]n essential fact of a patent infringement claim is the structure of the device or devices in issue.” […] An “‘infringement claim,’ for purposes of claim preclusion [does not] embrace[ ] more than the specific devices before the court in the first suit. Adjudication of liability for infringement is a determination that a thing is made, used or sold without authority under the claim(s) of a valid enforceable patent.” […]
Brain Life, LLC at *10-11 (internal citations omitted).
Claim Preclusion as to acts prior to MIDCO litigation[The] principles [of claim preclusion] bar the assertion of infringement of either the method or system claims to the extent the alleged acts of infringement predate the final judgment in the MIDCO Litigation. While the dismissal without prejudice allowed for the possibility that acts of infringement of the method claims could be subject to a future cause of action, that possibility was cut-off for all such acts predating the final MIDCO judgment once that judgment was entered. The trial court’s refusal to reopen its judgment, moreover, does not affect the application of claim preclusion. […]
Id. at *11 (internal citations omitted, text added).
[2] Claim Preclusion for activities after past MIDCO litigation
Legal Standard for Activities after previous litigationClaim preclusion does not bar Brain Life from asserting either the apparatus or method claims against Elekta because “the claim that gives rise to preclusion . . . encompass[es] only the particular infringing acts . . . that are accused in the first action or could have been made subject to that action.” […] That rule is based on the principle that res judicata requires a party to assert all claims that the party could have asserted in the earlier lawsuit; it follows that if the party could not have asserted particular claims—because the tortious conduct in question had not occurred at that time—those claims could not have been asserted and therefore are not barred by res judicata.
Brain Life, LLC at *12-13 (internal citations omitted).
Activities after MIDCO litigation not subject to claim preclusion[T]o the extent Brain Life’s allegations of infringement are directed to products created and, most importantly, acts of alleged infringement occurring after entry of the final judgment in the MIDCO Litigation, those claims are not barred by the doctrine of claim preclusion. 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.
Id. at *13.
[3] Issue Preclusion and Kessler Doctrine
Issue Preclusion
Legal StandardIssue preclusion bars subsequent litigation on an issue of law or fact that was actually litigated. […] If an issue of fact or law is actually litigated and determined by a final judgment, and the determination is essential to the judgment, that determination is conclusive in any later action between the parties on the same or a different claim. See id. Importantly, where the parties consent to a judgment on an issue prior to trial, it cannot be said that the issue was actually litigated to finality. […]
Brain Life, LLC at *14 (internal citations omitted).
Method Claims not fully, fairly, and actually litigatedWhile MIDCO asserted the method claims against Elekta in the MIDCO Litigation, it is evident that those claims were not fully, fairly, and actually litigated to finality. Neither party requested that any terms of the method claims from the ’684 patent be construed, nor did either party move for a determination of summary judgment regarding infringement, validity, or enforceability of the method claims. Indeed, the trial court only construed terms from apparatus claims 1, 3, 14, and 15 of the ’684 patent. [...] The ’684 patent method claims languished during the MIDCO Litigation until Elekta requested, via a motion in limine, that they be dismissed prior to trial for want of prosecution. […] Accordingly, because the ’684 patent method claims were not fully, fairly, and actually litigated to finality between these parties, issue preclusion does not stand as a bar to a second suit on those claims.
Id. at *15 (internal citations omitted).
Kessler Doctrine
Defining the Kessler DoctrineThe principle that, when an alleged infringer prevails in demonstrating noninfringement, the specific accused device(s) acquires the “status” of a noninfringing device vis-à-vis the asserted patent claims is “[a]n essential fact of a patent infringement claim.” […] “[T]he status of an infringer is derived from the status imposed on the thing that is embraced by the asserted patent claims.” [...] And, when the devices in the first and second suits are “essentially the same,” the “new” product(s) also acquires the status of a noninfring- ing device vis-à-vis the same accusing party or its privies. […]
Id. at *18-19 (internal citations omitted).
Dicta Questioning KesslerThe Supreme Court, therefore, may have created the Kessler Doctrine as an exception to the strict mutuality requirement that existed at that time, rather than to espouse a specific doctrine of substantive patent law. Since that time, state and federal courts have created exceptions to the mutuality requirement, primarily when estoppel is pleaded defensively. […] [T]he continuing force of the Kessler Doctrine in the face of the development of defensively applied issue preclusion may be questionable on the precise set of facts presented in the case at bar.
Id. at *19.
Applying KesslerThe Kessler Doctrine, therefore, is directly applicable to the case at bar. Brain Life’s predecessor-in-interest asserted all of the ’684 patent claims against Elekta in the MIDCO Litigation. […] While MIDCO ultimately abandoned the method claims prior to trial, it could have continued to assert those claims. Thus, once the accused devices in the MIDCO Litigation were adjudged to be noninfringing with respect to the asserted claims and judgment was entered as to all claims, Elekta was free to continue engaging in the accused commercial activity as a non-infringer. […] Consequently, some of the accused devices in this suit have acquired a noninfringing status vis-à-vis the ’684 patent by virtue of the first case, and Elekta is entitled to continue manufacturing, using, and selling those products without molestation from MIDCO or Brain Life.
Id. at *19-20.
Kessler and Issue Preclusion not Applicable to ERGO++Brain Life, and its predecessor MIDCO, have never accused Elekta’s ERGO++ product of infringing any of the ’684 patent claims. Indeed, Elekta only acquired the ERGO++ product after the MIDCO Litigation was finalized. Accordingly, the ERGO++ has never acquired the status of a noninfringing device in connection with the ’684 patent.
Id. at *22.
Conclusion
Based on the foregoing, Brain Life’s assertions of post-judgment infringement of the ’684 method claims are not barred by claim or issue preclusion. The Kessler Doctrine precludes Brain Life from asserting any claims of the ’684 patent against Elekta’s GammaKnife, GammaPlan, and SurgiPlan products, however, because they are essentially the same as the iterations litigated in the first suit. Brain Life’s allegations of infringement against Elekta’s ERGO++ product, however, are not barred and may continue on remand.
Brain Life, LLC at *22.
 
 
 
 
 
 
© 2000-2019, Journal of the Patent & Trademark Office Society
Disclaimer & Privacy Policy