One Bite at the Apple: WARF’s Second Infringement Theory Gets Precluded

by Dennis Crouch

In a significant ruling that underscores the importance of strategic litigation planning in patent cases, the Federal Circuit has affirmed a district court’s judgment barring Wisconsin Alumni Research Foundation (WARF) from pursuing  doctrine of equivalents infringement claims against Apple after the patentee’s failed bid to show literal infringement. Wisconsin Alumni Research Foundation v. Apple Inc., No. 22-1884 (Fed. Cir. Aug. 28, 2024).  The case addresses two separate but related disputes: WARF I, concerning Apple’s A7 and A8 processors, and WARF II, involving Apple’s A9 and A10 processors. The Federal Circuit’s decision hinges on three key legal principles: waiver, issue preclusion, and the Kessler doctrine. In particular, the court expanded the scope of both issue preclusion and the Kessler doctrine in favor of accused infringers.

The outcome for Apple here also appears a master class in strategic planning, with Apple’s admissions that the A9 and A10 processors lack colorable differences from the prior versions with respect to the accused LSD predictor.

• Fed. Cir. Decision

WARF sued Apple back in 2014, alleging infringement of its US5781752, which relates to a speculation circuit for predicting dependency in parallel processing computers. In WARF I, WARF initially pursued both literal infringement and DOE theories against Apple’s A7 and A8 processors.  WARF also attempted to accuse the A9 and A10 processors, but those had not yet been released and the judge limited the trial only to the existing processors.  In addition, just before trial WARF abandoned its DOE theory in exchange for Apple’s agreement not to introduce evidence of its own patent application that could have swayed the jury.  In particular, WARF had stated that it agreed to “make no doctrine of equivalents arguments whatsoever at trial.”  This decision to abandon DOE would later prove pivotal in the court’s reasoning.

A jury initially sided with WARF, finding literal infringement. However in a 2018 appeal, the Federal Circuit reversed and found that no reasonable jury could find literal infringement.  On remand, WARF then attempted to revive its DOE theory against the A7 and A8 processors, but the district court denied this request, citing WARF’s prior abandonment of the theory.

In parallel, WARF had filed WARF II, accusing Apple’s A9 and A10 processors of infringing the same patent. WARF II had been stayed awaiting the outcome of the WARF I appeal.  Once that decision was released, WARF sought to proceed with WARF II against the new products under a DOE theory. However, the district court found that WARF I precluded WARF from pursuing this claim, relying on both the trans-substantive issue preclusion doctrine as well as the patent-specific Kessler doctrine.

WAIVER: The Federal Circuit’s decision affirms the district court’s rulings on all fronts. First, regarding WARF I, the court held that WARF had indeed waived its DOE theory — highlighting WARF’s strategic decision to abandon the theory in exchange for a favorable evidentiary ruling.

One related precedent here is the Federal Circuit’s 1998 decision in Exxon Chemical Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475 (Fed. Cir. 1998).  In Exxon, the patentee had similarly abandoned its DOE claim prior to trial.  In the initial appeal in the case, the federal circuit narrowed the claim construction and remanded for a new trial.  And, in a subsequent appeal, the Federal Circuit concluded that Exxon should be permitted to add-back its DOE claim.   In WARF, the Federal Circuit distinguished Exxon for a couple of key reasons.  First, the court noted that the initial broad claim construction in Exxon meant that the patentee’s DOE claim was ‘moot’ and therefore was properly not pursued.  There was no such claim construction issue in WARF.  Second, the court noted that WARF expressly and by agreement abandoned its DOE argument, unlike the silent non-raising of the issue in Exxon.

Turning to WARF II – a separate litigation – the Federal Circuit’s analysis centered on issue preclusion and the Kessler doctrine.  These preclusion doctrines always involve at least two cases involving some or all the parties.  And, the question is whether some outcome in the prior case(s) precludes aspects of the subsequent case.

Issue preclusion, also known as collateral estoppel, prevents relitigation of an issue that has been decided in a previous case.  As its name suggests, issue preclusion considers whether particular issue of fact or law that has been decided in the prior case precludes relitigation of the same issue in the subsequent lawsuit.  Typically, the two issues must be identical, and is often the most contentious in patent cases because we are dealing with different products or infringement theories. It is also key that issue preclusion only applies in situations where the issue was actually litigated and determined in the initial case. Here, recall that the appellate panel actually decided no-literal infringement, but the DOE issue was waived – i.e., not actually litigated or decided.

The basic setup here is as follows:

• WARF I: Determined that Apple’s A7/A8 processors do not literally infringe.
• WARF II: Alleges that Apple’s A9/A10 processors infringe under the doctrine of equivalents.

In the appeal here, the Federal Circuit thus was faced with two key questions:

1. Different Product: whether the A7/A8 and A9/A10 processors were “essentially the same” for issue preclusion purposes;
2. Different Claims: whether literal infringement and DOE constitute the same “issue” for issue preclusion purposes

On the first point, the court found no clear error in the district court’s determination that the processors were essentially the same. The court noted that WARF had repeatedly acknowledged the similarity between the processors in post-trial briefings and had agreed to include A9 in the damages calculation for WARF I. The court dismissed WARF’s belated attempts to dispute this similarity, finding them inconsistent with its prior statements and actions.

Regarding the second point, the Federal Circuit explained:

we are convinced that literal infringement and the doctrine of equivalents are the same issue for issue-preclusion purposes.

The court arrived at this conclusion after considering the relevant statute, historical context, and the Restatement (Second) of Judgments. It noted that both literal infringement and DOE arise from the same statutory provision and share substantial evidentiary overlap.

The court also emphasized the policy implications of its decision:

To conclude otherwise would allow a patentee to proceed through the entirety of litigation only on a theory of literal infringement and, after losing its case, allow that same party to accuse the same entity of infringing the same patent, accusing the same or essentially the same products, as long as those products were sold after judgment of the first suit.

Here, the court seems to acknowledge that it is expanding the scope of issue preclusion based upon what it sees as important policy grounds.  Of course, as discussed below, this behavior is also barred by the Kessler doctrine. Thus, there was no policy reason to ratchet-up issue preclusion

Kessler Doctrine: This patent-specific preclusion doctrine, was initially established in Kessler v. Eldred, 206 U.S. 285 (1907) and later substantially expanded by the Federal Circuit, allows an adjudged non-infringer to avoid subsequent lawsuits  based upon the same patent against products that are only colorably different.

In prior cases, the Federal Circuit held claim preclusion does not bar infringement actions against accused products made subsequent to a first lawsuit.  Kessler steps in to bar that sort of action — that the court identifies as gaps in traditional preclusion doctrines.

Here, WARF argued that Kessler is designed to prevent  future harassment — and so should only apply to products made or sold after the judgment of non-infringement in the earlier case.   Here, the court once again expanded the Kessler doctrine to also cover claims against essentially the same products made or sold before the first judgment. This interpretation further strengthens the doctrine’s role in preventing a patentee from pursuing multiple lawsuits against what is effectively the same product.

The Federal Circuit’s decision in WARF v. Apple represents a significant expansion of both issue preclusion and the Kessler doctrine, tipping the scales further in favor of accused infringers — albeit only after the patentee has lost in an initial action.

= = =

From oral arguments: 

Judge Taranto: Can I ask you just to get one fact straight? Do you now agree or accept that with respect to the claim limitations that are relevant for infringement, the A9, A10 processor is materially the same as the A7, A8?

Morgan Chu for WARF: We do not. . . . We had no written discovery, interrogatories, other document productions of any kind. We did not take any fact depositions. There were no expert reports. There were no expert depositions.

. . .

Bill Lee for Apple: If you take the collection of this court’s jurisprudence on claim preclusion, issue preclusion, and Kesler, there are different statements made at different points in time on the temporal application of each of the documents. They’re not all consistent.

= = =