Only Some of the Claims are Invalid

by Dennis Crouch

Hantz Software v. Sage Intacct (Fed. Cir. 2023) (non-precedential) 

The district court sided with the defendant Sage, dismissing the complaint for lack of eligibility.  In a short opinion, the Federal Circuit has largely affirmed, but made an important caveat -- that the district court held only that claims 1 and 31-33 are invalid.

[W]e agree that the operative complaint asserted infringement of only claims 1 and 31–33 of each asserted patent, and because Sage did not file any counterclaim of its own (instead, it simply moved to dismiss Hantz’s complaint), we conclude that the ineligibility judgment should apply to only claims 1 and 31–33 of the asserted patents. We therefore vacate the district court’s judgment insofar as it held any claim other than claims 1 and 31–33 of each asserted patent ineligible and affirm in all other respects.

Slip Op.  Despite the limit here, claim preclusion will prevent Hantz from reasserting any of the remaining claims against Sage. Non-mutual collateral estoppel should also apply here to to prevent Hantz from asserting any of the claims against a third party -- unless the claims are meaningfully distinct on eligibility grounds from those already adjudged to be invalid.  Normally, collateral estoppel only applies to issues actually litigated, but in the patent context, the Federal Circuit has ruled that it may also apply to non-litigated claims when the differences do not "materially alter the question of invalidity." Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013); MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1377-78 (Fed. Cir. 2018) (Asking “whether the remaining claims present materially different issues that alter the question of patentability”).