Source: https://www.b2ipreport.com/swip-report/collateral-estoppel-applied-patent-invalidity/
Timestamp: 2019-04-19 04:47:44+00:00

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How Is Collateral Estoppel Applied to Patent Invalidity?
A California court has held that a defendant is collaterally estopped from asserting patent-ineligibility under 35 USC § 101 because the defendant, in prior litigation, lost a post-trial motion in which it evidently raised other theories of patent invalidity, even if not § 101 invalidity. XpertUniverse, Inc. v. Cisco Systems, Inc., No. 17-cv-03848-RS (N.D. Cal. May 8, 2018). Notably, the court distinguished the Federal Circuit’s very recent decision in Voter Verified, Inc. v. Election Systems and Software, LLC. In Voter Verified, the Federal Circuit held that, while Alice was not a change in the law, the fact that § 101 patent-eligibility was “barely considered” in prior litigation precluded application of collateral estoppel.
Plaintiff XpertUniverse had sued defendant Cisco alleging infringement of claims of US Patent No. 7,499,903, directed to “semantic to non-semantic routing for locating an expert.” Prior versions of Cisco’s “Remote Expert” products had been found to infringe the ’903 patent claims in a 2013 jury trial in Delaware. XpertUniverse brought the present case in 2017, alleging that newer versions of Cisco’s product infringe the ’903 patent claims. Cisco brought a motion for judgment on the pleadings, alleging invalidity under Alice Corp. v. CLS Bank Corp. and § 101. XpertUniverse in turn moved for summary judgment that Cisco was collaterally estopped from raising the invalidity challenge.
(1) whether there is substantial overlap between the evidence or argument presented in the prior case and the current one, (2) whether the current case involves the application of the same rule of law as the prior case, (3) whether pretrial preparation and discovery in the prior case would reasonably have been expected to uncover evidence or arguments raised in the current case, and (4) whether there is substantial overlap between the claims of the prior case and the current case.
Moreover, Voter Verified, submitted to the court after other briefing had been completed, was distinguishable. First, Voter Verified relied on “the Eleventh Circuit’s test for issue preclusion, which unlike the Ninth Circuit’s inquiry, requires that the issue in question be actually raised and that it be necessary to support the prior judgment.” According to the court, this difference made it difficult to apply guidance from the Federal’s circuit onto “the question of whether Section 101 is distinct from the ‘general issue’ of patent validity.” And second, the court thought that the claims of the ’903 patent survived the Alice abstract idea test.
Cisco had argued that the ’903 patent claims were directed to the abstract idea “of connecting a customer with a question to an expert with an answer.” But the court accepted XpertUniverse’s argument that the claims did not simply recited the application of generic computing technology to an old problem. In support of its finding, the court cited three Federal Circuit cases having somewhat different facts: Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016) (data structure patent-eligible because improved computing efficiency); McRO, Inc. v. Bandai Namco Games Am. Inc. (Fed. Cir. 2016) (rules for improving animation patent-eligible where not simply an analog of manual processes); Visual Memory v. NVIDIA Corp. (Fed. Cir. 2017). While not disagreeing that the “claims involve the abstract idea of connecting a customer with an inquiry to a live expert,” the court found the claims to be “ultimately directed at a specific means or method of accomplishing that result.” Unlike the Federal Circuit in the foregoing cases, however, the court here did not identify a specific technological improvement rendering the claims patent-eligible.
One wonders whether this case would have been decided differently had Voter Verified been available at the outset of the briefing, rather than decided when the District Court had clearly progressed far in its deliberations on the present motions. In any case, the Federal Circuit there certainly seemed to say – even if not hold – that § 101 patent-eligibility could not be lumped with prior art or § 112 invalidity questions for collateral estoppel purposes. And that makes sense to this patent lawyer; the legal and factual analyses presented in questions of § 101 patent-eligibility are certainly different from those considered when other grounds of potential invalidity are at issue. But at a minimum, this case demonstrates that the application of collateral estoppel to patent invalidity, and § 101 patent-eligibility in particular, requires further appellate review.

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