Summary Affirmance Does Not Preclude Party from Re-litigating Claim Construction Issues: Federal Circuit | Practical Law

Summary Affirmance Does Not Preclude Party from Re-litigating Claim Construction Issues: Federal Circuit | Practical Law

On October 2, 2013, the US Court of Appeals for the Federal Circuit reversed-in-part and remanded a district court's judgment of no infringement, finding that the patent owner could raise claim construction arguments that were presented, but not necessarily decided, in an earlier appeal in which the court summarily affirmed a judgment of no infringement under Federal Circuit Rule 36.

Summary Affirmance Does Not Preclude Party from Re-litigating Claim Construction Issues: Federal Circuit

by Practical Law Intellectual Property & Technology
On October 2, 2013, the US Court of Appeals for the Federal Circuit reversed-in-part and remanded a district court's judgment of no infringement, finding that the patent owner could raise claim construction arguments that were presented, but not necessarily decided, in an earlier appeal in which the court summarily affirmed a judgment of no infringement under Federal Circuit Rule 36.
In an October 2, 2013 opinion in TecSec, Inc. v. Int’l Business Machines, the US Court of Appeals for the Federal Circuit reversed-in-part and remanded the US District Court for the Eastern District of Virginia’s judgment that the appellees did not infringe the asserted claims of TecSec’s patents. The Federal Circuit found that TecSec could challenge the district court's claim constructions, even though it had unsuccessfully challenged the same constructions in an earlier appeal involving another defendant. In the earlier appeal, the Federal Circuit summarily affirmed a finding of no infringement. In the present appeal, a divided panel of the Federal Circuit found that TecSec could raise claim construction arguments from the earlier appeal because they were not necessarily decided by the summary affirmance.
In the earlier case, the district court severed TecSec's claims against International Business Machines (IBM) and stayed the claims against the other defendants. In an order dated March 3, 2011, the district court construed several patent terms and entered summary judgment of no infringement in favor of IBM on three separate grounds:
  • There was no evidence that IBM's software products met every limitation of the asserted claims (which required hardware and software).
  • There was no evidence that IBM induced infringement of any claims.
  • IBM's accused products did not infringe several claim limitations based on the court's constructions.
TecSec appealed that judgment to the Federal Circuit and challenged the lower court's claim constructions and its finding of no direct and indirect infringement. On January 28, 2012, the Federal Circuit affirmed the district court's judgment and issued a summary affirmance under Federal Circuit Rule 36, which permits the court to affirm judgments without issuing an opinion if, as relevant here, two conditions are met:
  • An opinion would lack precedential value.
  • The record supports summary judgment.
After the summary affirmance by the Federal Circuit, the case returned to the district court to resolve the claims against the remaining defendants. Based on the district court's earlier claim constructions, TecSec stipulated that it could not prove infringement by the remaining defendants. As a result, the district court entered judgment of non-infringement in favor of the remaining defendants, and TecSec appealed to the Federal Circuit.
In the second appeal, TecSec raised the same claim construction arguments that it presented in the earlier appeal involving IBM. In response, the appellees argued that TecSec was precluded from re-litigating claim construction for at least two reasons:
  • The Federal Circuit's mandate rule prevents reconsideration of issues that were implicitly or explicitly decided on appeal.
  • Collateral estoppel applies because claim construction was actually determined in the earlier appeal and was a necessary part of the decision.
The Federal Circuit rejected these arguments and held that TecSec was not precluded from challenging claim construction in the second appeal. The court noted the district court's judgment in the earlier appeal was based on multiple grounds, at least two of which did not implicate claim construction because they involved failures of proof. The Federal Circuit therefore found that the earlier summary affirmance did not necessarily implicate any claim construction issues. The court also noted that its holding is consistent with the Supreme Court's summary disposition procedure.
Once the Federal Circuit concluded that it could consider claim construction issues in the second appeal, it affirmed and reversed several of the district court's constructions, and therefore remanded for further proceedings consistent with its opinion.
Circuit Judge Reyna wrote a dissent, arguing that entertaining claim construction gives TecSec a second bite at the apple and undermines the utility of Rule 36. Judge Reyna found that the earlier summary affirmance under Rule 36 necessarily involved claim construction because it is the first step of an infringement analysis. Judge Reyna also expressed concern that the majority's decision will erode confidence in the Federal Circuit's use of summary affirmances.
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