Federal Circuit’s Unique Preclusion Principle

I previously wrote about Chrimar’s petition for writ of certiorari on the Federal Circuit’s unique doctrine of retroactive revocation of final judgments.  The basics are: Once affirmed on appeal, a PTAB decision cancelling patent claims will effectively reverse and vacate any prior judicial final decisions of liability and damages so long as some aspect of the prior infringement lawsuit is still pending (typically in the form of a pending appeal on other grounds).

Whether the Federal Circuit may apply a finality standard for patent cases that conflicts with the standard applied by this Court and all other circuit courts in non-patent cases.

Petition for Certiorari.

The court’s approach was originally solidified in Fresenius USA, Inc. v. Baxter International, 721 F.3d 1330 (Fed. Cir. 2013).  That decision is now one of the most cited Federal Circuit opinions of the past decade.

Now, three amicus briefs have been filed in support of the petition:

  • US Inventor: The “Court’s Fresenius line of precedent … improperly usurps a procedural issue from the regional circuits.” [Brief]
  • The Naples Roundtable: “The Federal Circuit’s self-coined “Fresenius/Simmons preclusion principle” is unique to patent law, is contrary to the preclusion principles of other circuits, and is contrary to the Restatement of Judgments. The Fresenius/Simmons preclusion principle undermines the finality of prior judicial judgments. Finality of judgments is critical to the purpose of the civil judicial system—namely, conclusively and effectively resolving disputes between parties. Finality is essential to provide closure and certainty to both litigants and society, and prevents waste of judicial resources. [Brief]
  • National Small Business Ass’n, Center for Individual Freedom, and Conservatives for Property Rights, et al.:  “When an issue is definitively resolved in a case and memorialized in a final judgment, that makes resolution of the issue final between the parties. The issue cannot not be relitigated even if another portion of the case, regarding different issues, gets reopened, as on remand after appeal. That is the law in all areas of U.S. law except for patent law in the Federal Circuit.” [Brief]

The arguments her have substantial legal merit.  Two problems (1) the Supreme Court has a history of treating preclusion differently for patent law with the idea that courts should not enforce a patent after it has been found invalid; (2) in this case the patent claims have been found invalid — and so a win here for Chimar is simply about timing of judicial process and not about rewarding merit (unless you are of the opinion that PTAB wrongly invalidated the claims).

23 thoughts on “Federal Circuit’s Unique Preclusion Principle

    1. 6.1

      The writing of that decision is atrocious.

      NOT because of the Ends obtained – but because the exact opposite Ends could be (and HAVE BEEN) obtained with the exact same types of inputs.

      The writing does NOT distinguish how these inputs necessarily arrive at these Ends and how other Ends are necessarily precluded.

      There is no ‘there’ there.

      1. 6.1.1

        …in other words, one can exactly flip the dissent and the majority, and the dissent would be just as correct as the majority — GIVEN THE GORDIAN KNOT of 101 jurisprudence.

  1. 5

    People who criticize Fresenius often overlook the problems that could be created if the rule did not exist. Without Fresenius, you’d have some thorny questions about the nature of a patent grant. For further thought, consider the following:

    In Fresenius itself, the infringement case had been remanded to the trial court for further proceedings to decide a permanent injunction and post-verdict damages. Those court proceedings were still pending when the Federal Circuit affirmed the PTO reexamination decision canceling all of the claims that were asserted in the litigation.

    At that point, what should happen? If one were to follow the logic of many who comment here, the district court case should continue and result in issuance of an injunction and award of further damages against the defendant, even though the patent claims on which those remedies are based no longer exist. So ultimately the question comes down to: should the fact that the defendant in Fresenius lost the invalidity issue at trial be sufficient to support these remedies notwithstanding that the underlying patent claims, on which they are based, are now a nullity?

    I understand fairness considerations people raise, especially when you’re dealing with a situation in which a trial victory in a still-pending case gets wiped out by an IPR filed by an unrelated third party. But the alternative is no less troubling.

    To use a real property analogy, suppose you were sued by a putative property owner for trespass to land, are found at trial to have trespassed on the plaintiff’s property, but the case is still pending. Turns out that another court, in a separate suit between the putative property owner and a third party, determines that the plaintiff who sued you actually has zero ownership in the land and is a stranger himself to it. At that point, what should happen to the suit against you? Under the logic many espouse here, the court should march forward and award damages and enter an injunction against you simply because you were found to have trespassed on the plaintiff’s land, notwithstanding that the plaintiff turns out not to have been (and never was) the owner of the land.

    1. 5.1


      Place your entire line of reasoning on any of the other areas in which expectations may flourish (i.e., contracts).

      That’s kind of the point being advanced.

    2. 5.2

      On the issue of an injunction, one would think that a PTAB cancellation should be dispositive. It is certainly settled that a permanent injunction against infringement cannot extend past the expiration of the patent. A PTAB cancellation should be the equivalent of the patent’s expiration.

      Otherwise, you are enjoining the defendant from infringing a patent that as to the rest of the world is now invalid, and the rest of the world is therefore free to infringe it.

      (Damages for past, infringement, are another matter, though. There I can see both sides. My point is that injunctive relief is future directed, while damages are past directed.)

  2. 4

    This is an good approach; the focus now must be, first getting lots of companies submitting amicus briefs showing the adverse impact such incorrect retroactive preclusion doctrine has on their respective business and second, get several leading civil pro. scholars to submit amicus briefs too. One problem I see with this cert petition is that the term”retroactive preclusion” is misleading, and the Court does not like that.

    1. 4.1

      How are you going to be “getting lots of companies submitting amicus briefs showing the adverse impact such incorrect retroactive preclusion doctrine has on their respective business” when it only ever happens in very few actual cases, for the reason explained in 2.1 below?

  3. 3

    [T]he Supreme Court has a history of treating preclusion differently for patent law with the idea that courts should not enforce a patent after it has been found invalid…

    Yeah, this is the real problem here. As IWasThere has convincingly explained, the current state of the law on this point is not consistent with Hayburn’s Case, 2 U.S. 409 (1792). If the Court really valued its own precedent on this point, it would take cert. and reverse. Unfortunately—as Prof. Crouch notes—the Court appears to like that patent law is to be treated as a Hayburn exception. A bad rule, that, but not much to be done about it unless and until the Congress amends the Judiciary Act to remove Title 35 from the Court’s certiorari and mandamus jurisdictions.

    1. 3.2

      I have no idea why Hayburn’s Case would have any bearing on the question presented. Hayburn’s is simply about separation of powers and Congress’ power to assign non-judicial duties to Article III courts. The case has nothing to do with finality of judgments or preclusion principles.

      And to be clear, the Federal Circuit has never stated that a final court judgment can be retroactively revoked based on a PTAB finding of invalidity. Under Fresenius, if you have a fully final judgment (i.e. a judgment in an infringement action in which court proceedings have fully concluded), a PTAB finding of invalidity will not by itself impact that judgment. Period.

      Fresenius is about what defines “finality,” defining it as a proceeding that is complete at both the district court and appellate levels, as to all issues in the case. The controversial aspect of Fresenius is that the court treats preclusion on case-wide basis and not in an issue-by-issue piecemeal fashion; for example, if the Federal Circuit affirms invalidity but remands for a new trial on another issue (in Fresenius it was damages), the continuation of proceedings meant there was no “final” judgment as to any issue. It’s simply a rule about the timing of finality, in applying a series of judge-made preclusion doctrines that have always been articulated by the Supreme Court as being deliberately flexible.

      I realize a lot of folks don’t like the rule, and there are legitimate reasons for their views. But it’s frustrating to see these people continue to mischaracterize the rule in an attempt to raise some constitutional boogeyman that does not exist.

      1. 3.2.1

        [I]t’s frustrating to see these people continue to mischaracterize the rule in an attempt to raise some constitutional boogeyman that does not exist.

        To be super clear, I am definitely not contending that there is any sort of constitutional infirmity here. I am 100% on team IPRs-are-constitutionally-supportable.

    2. 3.3

      Greg is Hayburn good precedent since no judgement or opinion ever issued in the case?

      PS, the Supreme Court will neverstand to have their power over patents removed because IP is a basic Constitutional protection.

      1. 3.3.2

        [I]s Hayburn good precedent since no judgement or opinion ever issued in the case?

        It is good precedent if the SCotUS continues to cite it as good precedent, and the SCotUS does continue to cite it as good precedent. That said, Lode Runner is more right than wrong to regard Hayburn as irrelevant here. The Court treats it as irrelevant to the present question, and a precedent has exactly as much value as the highest court gives it (in this case, much in some circumstances, little in others).

        I am grousing because I would like the law to be more consistent. Hayburn’s is not the only precedent that is offended by the Fresenius approach. It also cuts against the straightforward application of the rule articulated in Blonder-Tongue Labs v. Univ. of Ill., 402 U.S. 313, 350 (1971). For better or worse, however, there is no physical necessity that the law much be consistent in its application across different “buckets” of circumstance. The SCotUS has decided that it likes the outcome that it purchases with the inconsistency here, and what the SCotUS likes, it gets (unless and until the amendment to the judiciary act that I hypothesize).


          The SCotUS has decided that it likes the outcome that it purchases with the inconsistency

          NO branch (including the Judicial Branch) is Above The Law.

          For all of the apologists out there fawning over the raiment of the bare-arsed Royal Nine, your fealty is sorely misplaced. Read again your own State Attorney Oaths – let me know if you understand what they mean.


          Thank you for the Blonder-Tongue reference. I have been raising this since my first PGR where the PTAB overruled the district court on whether a POSITA can tell if a balloon is substantially filled with water.

          PTAB advocates do not like Blonder-Tongue, because it would hold the PTAB accountable. If they do a poor job, it will not be binding on the district court.

          Blonder-Tongue says that invalidity MAY be binding in a subsequent venue with different parties. A patent that is held to be invalid in a first action, MAY be invalid in a second action PROVIDED:

          [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)

  4. 2

    The patent was so not invalid that the infringer lost all their motions for summary judgment in the lower court, presented no arguments at trial, and declined to appeal. This was years before the PTAB considered the issue.

    Yes, the PTAB is improperly invalidating patents that have merit and easily pass muster in an Article III Court under Section 282.

    1. 2.1

      Please explain how patent law suits can normally complete all invalidity issue discovery, trial and appeal “years before the PTAB considers the issue,” when there is a time bar of only one year for filing IPRs from the time the suit starts?
      [And, it should not normally even be one year. There should be little sympathy for defendants who wait out most of a year after being sued before filing an IPR, or expect someone else to do it for them later on. Especially now in WDTX? or any known patent suit “rocket docket.”]

  5. 1

    A third problem to add to the last paragraph of the blog is the previously admitted “so long as some aspect of the prior infringement lawsuit is still pending” Fed. Cir. requirement in all these cases. I.e., is the subject D.C. invalidity-unproven decision part of a truly “final” decision in any of these rare cases before any IPR claim invalidity decision or not?

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