Sorting Cases: Applying Collateral Estoppel Mid-Stream

by Dennis Crouch

XY, LLC v. Trans Ova Genetics, L.C. (Fed. Cir. 2018).

The split decision here reveals an important dispute between Federal Circuit judges over the impact of AIA trials on pending litigation.  In this case, XY’s six patents in suit relate to the sorting of semen by gender (used for farm animal breeding).  My discussion below focuses on only one of the patents that was first enforced by the district court but later cancelled by a PTAB action.

Background: After their patent license deal went bust, XY sued Trans Ova for infringement and a jury found that the patents were not invalid and also willfully infringed. (The district court also decided contract and antitrust issues).  Following final judgment from the district court siding with the patentee, the Patent Trial and Appeal Board (PTAB) issued its final judgment finding two of the aforementioned infringed claims to be unpatentable. Claims 1 and 3 of U.S. Patent No. 7,195,920.  That PTAB decision was affirmed today without opinion by the same 3-judge panel of Judges Chen, Dyk, and Newman.

On appeal, one question for the court was the impact of the PTAB and Federal Circuit decision invalidating the patent.  The court found it moot — holding that the parallel Federal Circuit invalidation must be given immediate issue preclusive effect. The court writes:

Collateral Estoppel: As a threshold matter, we need not address Trans Ova’s invalidity arguments as to the Freezing Patent claims in view of our affirmance today in a separate appeal invalidating these same claims, which collaterally estops XY from asserting the patent in any further proceedings. . . .

That affirmance renders final a judgment on the invalidity of the Freezing Patent, and has an immediate issue preclusive effect on any pending or co-pending actions involving the patent. . . .

We do not find, as the Dissent states, that “in the event of conflict the administrative agency’s decision ‘moots’ the district court’s decision.” Dissent at 6. Rather, we find 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. This court has long applied the Supreme Court’s holding in Blonder-Tongue to apply collateral estoppel in mooting pending district court findings of no invalidity based on intervening final decisions of patent invalidity.

Final Decision vs Affirmance of Final Decision: Note here that the final paragraph is somewhat confusing because it appears to state two separate principles – (1) that affirmance of an invalidity finding [by the Federal Circuit] creates collateral estoppel on the issue of validity and also (2) that a final decision of patent invalidity moots pending district court findings of no invalidity.  This begs the question of what would be the proper result if this case had been decided after the IPR decision cancelling the claims but before deciding the outcome of this appeal.  When the court recognizes the potential issue – I expect that in most situations it would coordinate the appeals.

Preserving the Issue for Appeal: In this case, the defendant appealed its invalidity loss — one question is whether the that appeal was necessary to overturn the infringement verdict.  In dicta, the court suggests here that the justification for the decision is that “a defendant should not have to continue defending a suit for infringement of an adjudged invalid patent.”  (Internal quotes of excluded).  For this point, however, the court relied only upon statements from prior non-precedential Federal Circuit decisions. See U.S. Ethernet Innovations, LLC v. Tex. Instruments Inc., 645 F. App’x 1026, 1028–30 (Fed. Cir. 2016) and Translogic Tech., Inc. v. Hitachi, Ltd., 250 F. App’x 988 (Fed. Cir. 2007).

The majority opinion was written by Judge Chen and joined by Judge Dyk.

Writing in partial dissent, Judge Newman argues that collateral estoppel should not apply in this situation.  The dissent explains that collateral estoppel is not automatic, is confused by the various legal standards at play here, should be handled with caution when asserted by a non-mutual party (the defendant here was not part of the IPR), should be applied with caution when operating between an administrative agency and the courts, and certainly should not be decided sua sponte – without request from either party, briefing, or arguments on the subject. “Collateral estoppel is not subject to automatic imposition without affording any opportunity for party discussion.”

65 thoughts on “Sorting Cases: Applying Collateral Estoppel Mid-Stream

  1. 8

    This comment thread is one of the better ones on this blog in recent memory.

    I also see that there are 48 comments so far, and not one from Mooney.

    Coincidence?

    1. 8.1

      But, to conclude, no one else has yet objected to the Blog’s title. So I suggest that “Mid-Stream” is not accurate for a situation of decided IPR claim rejections already fully sustained on appeal by the same Fed. Cir. scheduled to decide an appeal from a decided D.C. decision on the same claims. How about “Collision Collateral Estoppel” instead?”

  2. 7

    What is going on here, much less in the Newman dissent and some comments?
    An IPR proceeding is IN REM, that is, not limited in impact to participants. By statute it removes the subject claims from the patent. It is NOT a mere estoppel or collateral estoppel applicable only to petitioners.
    Furthermore, as the Sup. Ct. clearly held years ago, but some readers here still refuse to understand, a claim “validity” decision is only an “invalidity not proven by that defendant decision” binding only on the losing defendant and NOT binding on others, but CONVERSELY a final claim INvalidity decision by by an Article III court [or now an IPR, PGR, CBM, interference, derivation proceeding or reexamination] IS binding on other proceedings.

    1. 7.3

      <[A] final claim INvalidity decision by by an Article III court [or now an IPR, PGR, CBM, interference, derivation proceeding or reexamination] IS binding on other proceedings.

      Well, yes and no. It is true that an invalidity determination by tribunal A is subsequently binding tribunal B if collateral estoppel is pleaded. Like all other affirmative defenses, however, one must plead it or else it is waived. That is the problem here. Collateral estoppel was never pleaded. In Blonder-Tongue the Court actually remanded to allow the defendant to amended their answer and allow the court to determine whether any exceptions to collateral estoppel applied. That is what should have happened here, rather than the sua sponte application of collateral estoppel.

      1. 7.3.1

        Greg, how could collateral estoppel have been pleaded here at the D.C. case pleading level when the third party IPR against the same claims may not have even begun by then, much less decided, appealed to and confirmed by the Fed. Cir., so that automatic IPR REMOVAL of the patent claims, which does NOT require pleading collateral estoppel, is virtually guaranteed?

        1. 7.3.1.1

          35 USC 318 “(b) Certificate- If the Patent Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal has expired OR any appeal has terminated, the Director SHALL issue and publish a certificate CANCELLING any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.” [Emphasis supplied.]

        2. 7.3.1.3

          Right, collateral estoppel could not have been pleaded, just like it could not have been pleaded in Blonder-Tongue’s case. That is why the Court there ordered a remand to allow for a new affirmative defense to be pleaded and properly briefed.

          If that was the way that the Court thought that the issue should be addressed in that case, why not the same here?

    2. 7.4

      Wait a minute. If what you say about issue estoppel is true, how come a petitioner can argue a claim construction broader than a previous court claim interpretation? Why not apply issue preclusion there too?

      1. 7.4.1

        Issue preclusion does not apply where the party being estopped did not have a full & fair chance to fight the previous contest. If a patent claim is held invalid, the patentee must have been part of the previous litigation, with a chance to defend validity, so it is necessarily possible to apply issue preclusion against that patentee.

        Where claim constructions are involved, it depends. A defendant might well be able to estop a patentee who lost a given Markman fight in a previous litigation. The patentee is unlikely, however, to be able to estop a defendant (who was not party to the previous litigation), because the new defendant has not yet had their full & fair chance in the fight.

      2. 7.4.2

        One contested claim construction may not be the same as the next.

        Different words or elements of a claim may be challenged (by different or by the same parties).

        For your point, for example, the patentee’s broader construction may turn on a different word or element (heck, may even turn on a different point of how a punctuation mark is to be read). All you need is “different.”

  3. 6

    A better way to view the issue is that the first decision divests the court of subject matter jurisdiction in the second case. Courts must independently confirm that the court has Article III jurisdiction to decide the case. This is an ongoing requirement to ensure that the matter does not become moot during the proceedings. When a patent claim is found invalid, and that decision becomes final, then there is no longer a case or controversy over that patent claim in any other proceeding. In a district court, the cause of action is mooted. On appeal, the court must vacate the district court decision with direction to dismiss.

    This is exactly what the Supreme Court did last week in Secure Access v. PNC. The case before the Supreme Court became moot because in a parallel PTAB proceeding, the same claims were found invalid, and the decision became final.
    link to patentlyo.com
    There is a nuance here that there is still an option for appeal of the PTAB decision for en banc review or a writ of certiorari.

    1. 6.1

      The PTAB merely terminated the franchise right. That does not resolve the controversy as to the infringement during the period during which XY held the franchise right. Did Trans Ova infringe the XY franchise right? The judge and jury say they did.

      Section 282 governs the defenses to the infringement of the franchise right. The patent is presumed valid. The claims are to be construed properly (not broadly). Blonder-Tongue comes into play: 1) did the franchisee have a fair opportunity procedurally, substantively and evidentially to pursue his claim the first time; 2) did the franchisee choose to litigate in the PTAB; 3) did the PTAB apply appropriate standards for obviousness; 4) did the PTAB wholly failed to grasp the technical subject matter and issues in suit; 5) was the franchisee deprived of crucial evidence or witnesses in the first litigation; 6) did the infringer plead and prove these factors were met in the PTAB?

      The PTAB clearly did not adjudicate the controversy.

      The PTAB did not address the property right of the franchisee, and did not evaluate the merits of a Trans Ova defense under §282.

      The PTAB merely said that if we had it to do over again, we would not issue this patent.

      The PTAB did not determine the patent claims to be invalid. It determined the patent claims to be unpatentable.

      Trans Ova needs to go back to court on remand and prove that this advisory opinion should be retroactively applied to raise a defense under §282.

      1. 6.1.1

        The PTAB did not determine the patent claims to be invalid. It determined the patent claims to be unpatentable.

        Not sure how you are supporting this statement.

        1. 6.1.1.1

          The statute and the decision.

          the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner

          ORDERED that claims 1–4, 6–9, 11–13, 15, 21–28, and 31–34 of the ’425 patent are unpatentable;

          They have thoroughly confused examination with adjudication. Courts determine invalidity. The agency determines patentability.

          The public franchise doctrine helps to clarify. The agency can terminate the franchise. The property right remains to be determined under §282 in a real court. The PTAB decision is merely advisory with respect to the defense to infringement.

          Judge Newman is correct, and the Oil States court will agree with her.

          1. 6.1.1.1.1

            Judge Newman is correct, and the Oil States court will agree with her.

            I expect you are right about this.

          2. 6.1.1.1.2

            ?

            35 U.S.C. 321 Post-grant review.
            (b) SCOPE.—A petitioner in a post-grant review may request to cancel as unpatentable 1 or more claims of a patent on any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim).

            The support that I am looking for is in regard to your attempt to parse “unpatentable” from “invalid.”

            The takeaway (from the statute and to which the decision must depend from) draws “unpatentable” FROM “invalid.”

            The subject claims are deemed to be “unpatentable” because they are “invalid.”

            Under what other basis do you generate a meaning for “unpatentable?”

            1. 6.1.1.1.2.1

              Like I said, the statute and the actual decisions. There is also the historical use of the term in examination. Also the logical use of the word. A claim in a patent cannot itself be unpatentable, because it is already patented. Patentability is inherently advisory. It is not a legal status.

              If a claim in an application is unpatentable, a patent may not issue. If a claim in an issued patent is found “unpatentable”, then the Director shall issue a cancellation certificate.

              The letters patent along with any cancellation certificate are what determine the legal status. A determination of unpatentability in a Final Written Decision has no operative effect on the patent. It is just a determination.

              Eventually, the Director will issue a cancellation certificate, which terminates the franchise. Validity of the claims of the private property, was never at issue. Only patentability.

              Consider BRI. A claim can be unpatentable under BRI, but that does not mean it is invalid under Phillips.

              1. 6.1.1.1.2.1.1

                Let me try again:

                What precisely is the difference in meaning between the two words?

                You are evidently wanting to use the two words as if they have two completely separate meanings, and as I have shown you, the statute collapses the meaning of one into the other. Thus, your repeated answer (statute and courts) does not provide the distinguishing that I am asking for.

                If you insist on saying “statute and courts,” I am left to conclude that your position reduces to a nullity, and that you are merely latching onto a set of words with an incorrect understanding of what those words mean.

                1. Unpatentable means that an applicant is not entitled to receive a patent. It means it does not meet the requirements of the statute or some rule under the APA consistent with the statute. For example a claim that meets the requirements of 102 under Phillips construction, but not under BRI construction is considered to be unpatentable.

                  Invalid means a claim does not meet the requirements of the statute. The agency rules play no role. A claim that meets the requirements of 102 under Phillips construction, but not under BRI is considered to be not invalid.

                2. Your attempted distinction has no tether to the law.

                  All you are doing is saying that you want the words to be different. But I directly provided you the statute which collapses the one into the other, thus your attempted difference does not exist.

                  By statute.

                  Hey, I “get” that you want there to be a difference. I really do. But your reasoning does not hold up.

                  What may help you realize this is that courts have long used the word “unpatentable” in the sense that you are attempting to distinguish and ONLY use the word “invalid.”

                  Also, you rely too heavily on the differences in action between the forums. As can be witnessed by the recent Iancu moves, those differences are a matter of choice, and are NOT a matter of law between the two different forums. Your reliance is misplaced.

                  And please take note – it’s not as if I want you to be wrong – you are after all trying to argue on behalf of a patentee, and as anyone here can attest, I am one of the most pro-patent people here.

              2. 6.1.1.1.2.1.2

                Validity of the claims of the private property, was never at issue. Only patentability.

                This is not supported by the direct words of the statute (previously supplied to you).

                You appear to want to define “legal effect” of words with no basis for doing so.

                Further, if Congress wanted to make the actions of the non-article III forum merely advisory actions, they would have done so.

                They did not do so.

                1. Paul, the claim is not dead. It will be dead when the PTO issues a cancellation certificate. It was born when the patent issued. It died when the cancellation certificate was issued. What was it in between? Alive. The jury says so.

              3. 6.1.1.1.2.1.3

                A dead claim is dead no matter what word is used, but yes PTO proceedings may use “unpatentable” and/or “cancelled” or “disclaimed” or “surrendered”, while courts use “invalid” or “unenforceable” or yes even “unpatentable,” as in “unpatentable subject matter.”

                1. Thanks Paul – which only goes to show that even the courts will conflate words of patent law in their lack of appreciation of the words (for example, as your use presents, the proper phrase there is not “unpatentable subject matter,” but rather the proper phrase would be “ineligible subject matter.”

                  Recognizing the natural separate legal questions of patentability and eligibility being the distinguishing point that guides such proper use.

            2. 6.1.1.1.2.2

              Puzzling question, puzzling comment.

              35 U.S. Code § 318 – Decision of the Board

              (a)Final Written Decision.—If an inter partes review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner

              (b) Certificate.—If the Patent Trial and Appeal Board issues a final written decision under subsection (a) … the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.

              The word “validity” and “invalidity” are never used in the statute with respect to the IPR or PGR proceeding itself, only parallel proceedings and grounds. In your own quote, you pass over the word “unpatentable” which refers to this proceeding, in favor of the word “invalidity” that’s being used here to refer by analogy to something else that “could” be but isn’t.

              1. 6.1.1.1.2.2.1

                The word “validity” and “invalidity” are never used in the statute with respect to the IPR or PGR proceeding itself,

                Except – of course – the part of the statute that I already supplied…?

                1. Anon —

                  Read the statute and my post again. The statute:

                  35 U.S.C. 321 Post-grant review.
                  (b) SCOPE.—A petitioner in a post-grant review may request to cancel as unpatentable 1 or more claims of a patent on any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim).

                  “Validity” is only mentioned as a reference point for an analogy. I couldn’t have said it more plainly:

                  the word “invalidity” that’s being used here to refer by analogy to something else that “could” be but isn’t.

                  It’s not as the result of the IPR/PGR itself.

                  I assume you’re the same “Anon” I’ve had past conversations with. Here’s another example of the poor reading, poor thinking that I object to.

                2. If you were the agency, yours might be a permissible reading.

                  I think Greg’s, InentionRights’ and my reading is better — that the decision in an IPR/PGR is that claims are “unpatentable” and that “invalidity” only appears in the statute in a “could be” or “relating to” analogy.

                  Most importantly, Greg’s way is the way the PTO interprets the statute, and they get Chevron deference for that interpretation.

                  If we were all writing on a clean slate, your reading of the statute would be within the bounds of reason. But we’re not.

                  The places where you’re dead wrong are where you state of others, that the statute uses “unpatentability” “is not supported by the direct words of the statute” That’s bizarrely false.

                  Likewise, your statement “courts have long used the word ‘unpatentable’ in the sense that you are attempting to distinguish and ONLY use the word ‘invalid.’” Likewise, that’s just not true — in the context of IPR’s and PGR’s, they’ve consistently used “unpatentable.”

                3. Try again – you are over (and under) reading what I have stated.

                  I “get” that you are trying to back peddle a bit – but you have a bit more to go.

    2. 6.2

      Indeed, but just re your last line nuance, neither Fed. Cir. en banc review or Sup. Ct. cert is an “option for appeal.” They do not provided any right to appeal any further, merely something that one can merely petition for, that is very rarely granted. The Fed. Cir. decision remains a final decision unless and until any such petition.

    3. 6.3

      Yes but re the nuance, “en banc review or a writ of certiorari” is not “an option [or right] for appeal.” They can only be petitioned for, and are very rarely granted.

  4. 5

    This seems like an “ideal” case to bring a takings clause claim against the US government. As discussed based on Oil States, even though Congress can establish the PTAB and laws, there is personal property in the patents under the takings claims. Here, district court found (under its standards) that the patents were valid. The PTAB found (under its lower standards) that the patents were invalid. The dissent expressly notes the reason the PTAB decision was affirmed was due to the different standards. So … but for Congresses change of law and the PTAB’s actions consistent with this changed law, the patents would have been valid in US court (which was tried and determined). There is a damage award (over $1M) seems to have been taken from the patent owner by the PTAB’s decision (government action that took the vested patent right from the patent owner). Hence, a position under the takings clause that the government owes the patent owner the damage amount (that would have been received and due but for the government taking a vested property right from a patent owner for a public purpose important to the government – as detailed in Oil States).

    Thoughts ?

    1. 5.1

      Even as I may appreciate where you want to go with this, one must not confuse an end result of action in one forum (patent claims invalid in non-Article III forum) with the end result of action in another forum (patent claims held not invalid in Article III forum) – on “direct” basis.

      The nuance here is actually an indirect step that the end result of action (invalidity) is – or becomes – the driver for a reflected actions elsewhere.

      As others point out, the propriety of this “reflection” can (and should) be challenged, but the nuance does exist that it is a reflection, and not a direct causality, that is at point.

      The takings argument must be applied with a bit more precision. One needs to recognize what it taken at what point. The “that, detective, is the right question” moment is not yet evident in your post. Your attempt at equating the damage award as the item being “taken” does not survive the “Franchise” side that such a damage never “truly” existed, because the patent (claim) should be considered void ab initio.

      Instead, may I suggest that you consider the full weight of all the sticks in the bundle of property rights (no matter if you are attempting to change the TYPE of property of that bundle) in two conditions:
      i) after grant, and the property leaving the domain of the Executive branch
      ii) immediately after an initiation decision.

      And make no mistake that the Office deigning to change how they have decided to apply claim construction in post grant proceedings is NOT a change that can be undone at the same discretion of the executive branch administrative agency, and hence remains one of the sticks that is lighter in the above consideration (and by no means is the only lightening or taking from the bundle).

      1. 5.1.1

        Correct Anon. Brian, find another legal career, if you are young enough. Patent law is dead unless your client is well connected on K Street and you can convince Ross your industry is a strategic interest. The ramification of the holding, read “revelation,” that an issued US patent falls under the ‘public rights’ doctrine obviates any claim to a taking. The ‘takings’ talk in Oil States is dicta, a bone tossed out that the court of federal claims might still have jurisdiction over patents asserted against the sovereign, since the holding of Oil States obviates the entire basis why a cause of action in the court of federal claims lies in the first instance. Take it to the bank.

        1. 5.1.1.1

          Does the fact that the court/gov’t direct coordination of the cases (deciding one specifically before the other) have any affect on the due process or takings argument? (I personally have my doubts in THIS case since the parties of the district court case and the IPR are different….but in a case where both are the same (or in privity), I can see this argument coming up…)

          Because had the CAFC panel decided the district case first…(as might be natural absent the intervention of the panel (i.e. gov’t) to coordinate the cases) the IPR decision would have been the moot one (rather than the district judgment) if the parties were the same (under current CAFC precedence that the CAFC appeal decision designates ‘finality’ to end the IPR case).

          In the above case…..it seem the apparently ARBITRARY decision by the court itself as to which case to ‘decide’ first is the relevant factor….leading to argument that the gov’t is somehow violating due process and deliberately chosing the winner.

          I ask because this exact situation is developing in the Virnetx-Apple series of cases…..where the district court has ruled that Apple violated Virnetx’s patents in FOUR CONSECUTIVE trials…..(with the patents ruled not invalid by the CAFC once)….yet the PTAB has proceeded to IPR and reexam the patents to the point at which the CAFC is now going to coordinate the ultimate decision in the cases using the same panel.

          1. 5.1.1.1.1

            No – there is no mootness in the scenario you describe, because (in chief part), an Article III forum finding of “not found invalid” is NOT the same thing as a final decision of “valid.”

            Whether or not the same or different parties may be involved does not matter (presuming of course that even a slightly different argument is being advanced in the secondary, non-Article III forum).

      2. 5.1.2

        Anon and I Was There,

        Thank you for the comments. I’ve honestly been trying to wrap my brain around the takings dicta in Oil States and trying to find how it can be tested. In other words, I’ve been asking myself “what is the fact pattern” in which the supposed “Right” under the takings clause for patents can be tested with regard to an IPR.

        I have not found a single existing or even possible fact pattern that permits this alleged right to be tested in Court. I find this troubling.

        You both bring up good points. Under the logic that seems prevalent right now – if the “patent franchise” is canceled, it never really existed – so there really was no vested right. No vested right – no taking. This is true irrespective of whether the purported patent right was canceled using a standard different from that historically used to analyze patent validity.

        Taking this logic further, is there a point where altering the standard of a validity determination could be a taking ? If hypothetically the PTAB determined that claims are to be interpreted based on the Broadest Possible Definition then there still wouldn’t be a takings case. Correct ? In theory, the PTAB could rig their rules right up to the VERY limits of being arbitrary and capricious in every manner to maximize the ability to efficiently deal with bad patents – yet no takings. Do I have that logic right ?

        1. 5.1.2.1

          I have not found a single existing or even possible fact pattern that permits this alleged right to be tested in Court. I find this troubling.

          Fact patterns are not what you should be “searching for.”

          Instead, as I indicate (with fair attribution to the movie I, Robot), one must act the right question. THAT is the path to which one must “Tak[e] this logic further

          Elsewise – the purported “mere scare tactic” of ANY AND ALL personal property could in essence have some corollary “public right” attached to it by an act of Congress, then that Franchise style right could be attacked in a non-Article III forum, and the mirror of personal property could be stated as “never properly existing” – circumventing ALL takings law.

          This very concept was the topic of some extensive back and forth with the late Ned Heller.

    2. 5.2

      Even assuming that invalidating patent claims could be considered a “Taking”, the “Just Compensation” would be $0 because an invalid patent claim has no value.
      The takings issue is a red herring.

      1. 5.2.1

        Absolutely not – and not if you truly understand Takings law (and as well, understand what “personal property” means in regards to Takings law).

    3. 5.3

      The fact pattern is good so far. If the parties do not settle there will be a new damages trial without the freezing patent. The takings will be the difference between the original damages award and the new damages award.

      It will put the USPTO/DOJ solicitors in a tight spot as to who is responsible for the takings. Will they continue to argue that the USPTO has the power to annihilate an issued patent? In that case it is clear that the executive branch conducted the takings and must cut a check to XY.

      Or will the USPTO/DOJ solicitors back down finally and say the PTAB decision is not retroactive. I think if the government backs down (which they should), the Federal Circuit would have to take up the Trans Ova appeal of the jury verdict on the merits which would force Trans Ova to pay the damages instead of the government.

      If this is done correctly, PTAB decision become advisory decisions, which would the separation of powers problems and still support the alleged intent of the law. The district court would rely on the PTAB for expertise as needed, claims would be properly construed, and if the PTAB is competent the decision will support summary judgment of invalidity in the district court when appropriate.

      But it would no longer achieve the real intent of the law – killing valuable patents by influence peddling.

      1. 5.3.1

        If the parties do not settle there will be a new damages trial without the freezing patent. The takings will be the difference between the original damages award and the new damages award.

        Er, but the damages award will likely be increased on remand. What is the “takings” when the patentee comes out richer on remand than they were before the appeal?

    4. 5.4

      There is a damage award (over $1M) seems to have been taken from the patent owner…

      Er, not quite in this case. One could imagine a small change to the facts here in which your claim would have been correct, but in this case the patentee sued on four patents. One of those four was pronounced unpatentable in the PTAB. The other three remain valid and infringed, so the CAFC did not vacate the damages award. In fact, the CAFC was concerned that the district court may have set the royalty rate too low, so they remanded for reconsideration with the likelihood that the damages will actually be increased on remand.

    5. 5.5

      Note that part of your argument will become moot for IPRs as soon as the new PTO rule is adopted replacing BRI claim construction with litigation [In re Phillips] claim construction.

        1. 5.5.2.1

          Anon, this is not a flaw, but a basis for a takings claim. Every patent cancelled as a result of incorrect claim construction leaves a wide open door to a takings claim.

          1. 5.5.2.1.1

            Where is this notion of “incorrect” coming from?

            You are trying too hard to get to your desired end. The fact that there is more than one forum (and each forum has its own set of rules), does not impinge on the takings question.

            There is a takings question here – you just have not gotten to it (correctly).

            1. 5.5.2.1.1.1

              Anon, I definitely appreciate your answers and your keeping check on “that guy” of this blog. Did I miss the one time you actually stated what the “takings question” is?? You reference it often but never seem to clarify what it is.

              Again. Thank you.

              1. 5.5.2.1.1.1.1

                The takings occurs at the separate legal event of the institution decision.

                What is being taken – well before any final decision on the merits has to do with all of the sticks in the bundle that makes up the property right (phrased this way so that even Greg’s attempt to make light of the type of property change in Oil States STILL shows impact); and more precisely, “weighing” all of those sticks immediately after grant and comparing that weight to what one has immediately after the initiation decision point.

                Then, once that difference is noted, noting that THAT difference has substantial value, and that other aspects of Takings Law (think eminent domain) are NOT present in how Congress write the AIA.

                Finally, it is important to remember that even as Congress is the correct Branch to write patent law under the Constitution (as contrasted with the judicial branch), even Congress may not write a law that violates other protections afforded under the Constitution (as witness the recent IP case of Tam, albeit a different form of IP, and under a different section of the Constitution, nonetheless shows that Congress can overstep its bounds).

  5. 4

    Apparently only some of replies pass the Dennis legal test. Well, what can I say? You can keep your spin blog Dennis. FO.

    1. 4.1

      You only now are realizing that there is a certain “desired narrative” going on here…?

      The editing and the “application” of rules has long been pointed out as being (at best) inconsistent and (objectively) slanted.

      What’s additionally ironic is that this lack of a neutral and objective editorial position actually shines brightest when we see the occasional call for a “better ecosystem.” I’ve been pointing this out for at least the last five years (and the site’s single largest blight, the one single person MOST “excused” from complying with any meaning of “better ecosystem rules” has consistently been a blight for 13 years now.

      One must simply play the game provided in order to counter act the (sanctioned) spin.

  6. 3

    Two thoughts:

    1) It is better to have a clear answer than no clear answer as to the question of the effect of an adverse PTAB judgment on a still-pending court judgment of infringement. I am glad, therefore, that the court addressed this question squarely in a precedential decision.

    2) That said, before today, I was certain that the law was as Judge Newman has it, rather than as the majority has it. I was certain that iwasthere was just exaggerating when he read Oil States as contravening Hayburn. Now it looks like iwasthere was more correct than I had realized.

    I will not be surprised if this issue is taken en banc. Judge Newman has given XY the template to follow in a petition for reconsideration or even cert.

  7. 2

    Oil States Anomaly #4 – An Art III court may have original jurisdiction under the Constitutional requirement of a “case or controversy” to obtain original jurisdiction, but subsequent external events such as PTAB invalidating the claims creates collateral estoppel under Blonder-Tung. Interesting. So under that subsequent moot reasoning – Roe v. Wade would never reach SCOTUS. Just saying.

  8. 1

    Blonder-Tongue does not stand for an immediate preclusive effect. Instead, there are a host of conditions that must be evaluated. When that evaluation is done, it will become quite evident that PTAB opinions do not even come close to meeting the requirements for collateral estoppel in parallel district court proceedings.

    [1] the requirement of determining whether the party against whom an estoppel is asserted had a full and fair opportunity to litigate is a most significant safeguard.

    [2] we should keep firmly in mind that we are considering the situation where the patentee was plaintiff in the prior suit and chose to litigate at that time and place.

    [3] the patentee-plaintiff must be permitted to demonstrate, if he can, that he did not have a fair opportunity procedurally, substantively and evidentially to pursue his claim the first time.

    [4] certain other factors immediately emerge. For example, if the issue is nonobviousness, appropriate inquiries would be whether the first validity determination purported to employ the standards announced in Graham v. John Deere Co.

    [5] whether…the prior case was one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit

    [6] whether without fault of his own the patentee was deprived of crucial evidence or witnesses in the first litigation.

    [7] as so often is the case, no one set of facts, no one collection of words or phrases, will provide an automatic formula for proper rulings on estoppel pleas. In the end, decision will necessarily rest on the trial courts sense of justice and equity.

    [8] Res judicata and collateral estoppel are affirmative defenses that must be pleaded. Fed.Rules Civ.Proc. 8(c)

    1. 1.1

      You are, of course, correct. It’s a sad day. Yet another intellectually dishonest ‘thru the looking glass day’ – under the Thomas “Oil States”holding. There is a ton of patent law that will now be caught up in the “anomaly” created by Oil States. Next chapter? Other parts of Administrative law, not limited to patent law getting sucked into the Oil States vortex. So disappointing.

    2. 1.2

      Res judicata and collateral estoppel are affirmative defenses that must be pleaded. Fed.Rules Civ.Proc. 8(c)

      To my mind, this is the most important point. Blonder-Tongue Labs v. Univ. of Ill., 402 U.S. 313, 350 (1971) explicitly says that “collateral estoppel [is an] affirmative defense[] that must be pleaded.” To the extent that the majority here based their holding on Blonder-Tongue, it seems to me that they have badly misread that case.

      As usual when Judge Newman writes separately, she has the better of the argument here.

      1. 1.2.1

        We have a sad rack of judges on CAFC, and SCOTUS. Judge Newman is that last one that remembers her oath. Public choice theory writ large – right before your very eyes. Patent law is officially the red headed step child of the Constitution. Mark my words. You will see the new King’s Privy Court ‘exception’ reverberate thru all the regulatory agencies. Will we have a Judges Hayberns Case ‘revolt’? Doubtful, the ‘twin societies’ (a 50’s book for the uninformed) has come to fruition. Worst SCOTUS ever. Basically the Google Cloward-Pivens strategy has won on the patent front.

        1. 1.2.1.1

          …as I have been pointing out for the last several years, there will (necessarily) be repercussions of the foundational change to the type of property that patents are – written into law now by the judicial branch.

          (I expect to see more of Greg’s “gee, maybe I was not so right” statements as these ripples wash upon the shore)

      2. 1.2.2

        Are there any analogous cases but with a second court finding invalidity instead of the USPTO? What happens when there are two parallel court cases, and one court finds invalidity and the other finds no invalidity. At the pleading stage, there is yet no collateral estoppel since there is no final decision. The case finding invalidity reaches the Fed. Circuit first and is affirmed. The opportunity to raise collateral estoppel does not arise until this point.

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