Papst Licensing GMBH & Co. KG v. Samsung Electronics, No. 2018-1777
In Papst, the Federal Circuit stated that issue preclusion applies to controversies about claim construction where other cases involving the same specification reached a final judgment relying on said claim construction. This case shows the consequences of voluntarily accepting a final judgment that may have a preclusive effect on issues still being litigated in other cases.
Papst Licensing GMBH & Co. KG owned a patent directed to interface devices for communication between a data device and host computer, where an end user is not required to install additional drivers to use said interface device. The patent was part of a larger family of patents sharing a common specification, at least two of which were asserted in United States district court against several companies, including Samsung. Samsung challenged all three patents in inter partes review before the Patent Trial and Appeal Board. The PTAB found all three patents obvious over the art presented by Samsung, construing claim terms common to all three patents the same way. Papst appealed all three PTAB decisions to the Federal Circuit and fully briefed all three cases, which were scheduled to be heard before the same panel on the same day. Shortly before oral arguments, Papst voluntarily dismissed the appeals of the decisions with respect to two patents.
With respect to the remaining patent being appealed, Papst challenged the PTAB’s claim construction and the obviousness decision based on that construction. The Federal Circuit ruled that Papst’s arguments were barred by issue preclusion. By dismissing their appeals of the other two patents, Papst had made the PTAB’s decisions regarding those patents final, as well as the factual and legal determinations supporting those decisions, such as the construction of the common claim terms. The court explained that issue preclusion applies to PTAB and TTAB proceedings, and that generally when an issue of fact or law is litigated and reaches a final judgment, the determination is conclusive in subsequent action. The court found that none of the exceptions to issue preclusion (e.g., the consolidation of multiple cases into one, a lack of opportunity or incentive to litigate fully in previous cases) applied to Papst’s facts.
Key takeaway: Issue preclusion applies to PTAB decisions, so patentees must be careful to understand the consequences of allowing a judgment to become final in one patent case if they are still interested in litigating cases based on other family members sharing specifications.
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