Opinion ID: 675261
Heading Depth: 2
Heading Rank: 2

Heading: issues

Text: 35 Under the doctrine of issue preclusion, also called collateral estoppel, a judgment on the merits in a first suit precludes relitigation in a second suit of issues actually litigated and determined in the first suit. Lawlor v. National Screen Serv. Corp., 349 U.S. 322, 326, 75 S.Ct. 865, 867-68, 99 L.Ed. 1122 (1955). Issue preclusion, as distinguished from claim preclusion, does not include any requirement that the claim (or cause of action) in the first and second suits be the same. Rather, application of issue preclusion centers around whether an issue of law or fact has been previously litigated. International Order of Job's Daughters v. Lindeburg & Co., 727 F.2d 1087, 1091, 220 USPQ 1017, 1019 (Fed.Cir.1984). The underlying rationale of the doctrine of issue preclusion is that a party who has litigated an issue and lost should be bound by that decision and cannot demand that the issue be decided over again. Mother's Restaurant, Inc. v. Mama's Pizza, Inc., 723 F.2d 1566, 1569, 221 USPQ 394, 397 (Fed.Cir.1983). 36 Issue preclusion is appropriate only if: (1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) plaintiff had a full and fair opportunity to litigate the issue in the first action. A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700, 702, 218 USPQ 965, 967 (Fed.Cir.1983), cert. denied, 464 U.S. 1042, 104 S.Ct. 707, 79 L.Ed.2d 171 (1984). We address these conditions seriatim. 37 (1) Identical issue 38 The general principle of [issue preclusion] ... is that a right, question or fact distinctly put in issue ... cannot be disputed in a second suit. Southern Pac. R.R. v. U.S., 168 U.S. 1, 48, 18 S.Ct. 18, 27, 42 L.Ed. 355 (1897). Where an appellate court has decided a specific question, the doctrine of issue preclusion should normally prevent relitigation of that issue. In re Herr, 377 F.2d 610, 619, 153 USPQ 548, 555 (CCPA 1967) (Rich, J. concurring). 39 Difficulty sometimes arises, however, in delineating the issue on which litigation is, or is not, foreclosed. The problem involves a balancing of important interests: on the one hand a desire not to deprive a litigant of an adequate day in court; on the other hand, a desire to prevent repetitious litigation of what is essentially the same dispute. Restatement (Second) of Judgments Sec. 27 comment c (1980). 40 The district court, in its infringement analysis, explicitly interpreted the phrase at least a degree of buoyant uplift in independent claims 10 and 21. This phrase is also in reissue claim 15 at issue here. In making this determination, the district court also interpreted the phrase buoyant uplift recited in independent claims 14, 19, and 20. The district court specifically decided that buoyant uplift in the claims requires at least neutral buoyancy based on its review of the claim language, specification, prosecution history, and expert testimony. Freeman, 693 F.Supp. at 144, 9 USPQ2d at 1121. This court affirmed the trial court's interpretation. 41 During reexamination, Dr. Freeman admittedly amended the reissue claims to avoid this interpretation of the claims. The Examiner, in rejecting the claims under section 305, predicated the rejection on interpretation of the phrase buoyant uplift. Additionally, the Board, in upholding the rejection, based its decision on the district court's finding and holding with respect to the limitation 'at least a degree of buoyant uplift.'  It is eminently clear, therefore, that the identical issue, the interpretation of the phrase buoyant uplift, presented in the district court litigation is also present in the reexamination proceeding. 42 (2) Actually decided 43 The requirement that the issue have been actually decided is generally satisfied if the parties to the original action disputed the issue and the trier of fact decided it. Mother's Restaurant, 723 F.2d at 1569, 221 USPQ at 397, (quoting Continental Can Co. v. Marshall, 603 F.2d 590, 596 (7th Cir.1979)). See Restatement (Second) of Judgments Sec. 27 comment d (1980). 44 The parties to the district court action disputed the meaning of the phrase buoyant uplift. In fact, the district court commented that most of the trial involved interpreting this phrase. Freeman, 693 F.Supp. at 142, 9 USPQ2d at 1119. The district court also resolved the meaning of this claim phrase and did so, as explained above, in favor of 3M. Therefore, it is clear that the issue--the meaning of the phrase buoyant uplift--was actually decided. 45 (3) Essential to the judgment 46 In order to give preclusive effect to a particular finding in a prior case, that finding must have been necessary to the judgment rendered in the previous action. Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210 (1979); Restatement (Second) of Judgments Sec. 27 comment j (1980). The purpose of this requirement is to prevent the incidental or collateral determination of a nonessential issue from precluding reconsideration of that issue in later litigation. Mother's Restaurant, 723 F.2d at 1571, 221 USPQ at 398. 47 In the context of claim interpretation, this court has held that 48 judicial statements regarding the scope of patent claims are entitled to collateral estoppel effect in a subsequent infringement suit only to the extent that determination of scope was essential to a final judgment on the question of validity or infringement. 49 A.B. Dick Co., 713 F.2d at 704, 218 USPQ at 968. This court has warned, however, that statements regarding the scope of patent claims made in a former adjudication should be narrowly construed. Id. Additionally, to apply issue preclusion to a claim interpretation issue decided in a prior infringement adjudication, the interpretation of the claim had to be the reason for the loss [in the prior case] on the issue of infringement. Jackson Jordan, Inc. v. Plasser American Corp., 747 F.2d 1567, 1577, 224 USPQ 1, 8 (Fed.Cir.1984). 50 As explained above, the issue, interpretation of the phrase at least a degree of buoyant uplift, was actually decided in the district court. Additionally, interpretation of that phrase to require at least neutral buoyancy of the IOL device was necessary to the holding of noninfringement. The district court held that based on its interpretation of this phrase, there was no infringement by 3M of reissue claims 10, 11, 20, and 21. In fact, the district court indicated that if this phrase was not interpreted in that manner, all models of 3M's IOLs would infringe claims 20 and 21, while all but one would infringe claims 10 and 11. Thus, as required under Jackson Jordan, the interpretation of the phrase buoyant uplift was the reason for Dr. Freeman's loss on the issue of infringement of the reissue claims in the district court. Thus, the interpretation of the phrase buoyant uplift was necessary to the district court's judgment. 51 Moreover, this is not a case where the second proceeding, the reexamination, involving the same issue was unforseen. Because the proceedings in the PTO were stayed pending the completion of the district court action, Dr. Freeman should have been aware of the possibility that the Board would accord preclusive effect to the district court findings. Mother's Restaurant, 723 F.2d at 1572, 221 USPQ at 399. 52 (4) Full and fair opportunity to litigate 53 To apply issue preclusion, the party against whom the estoppel is being asserted must have been accorded a full and fair opportunity to litigate in the prior court proceeding the very issue he now seeks to relitigate. Jackson Jordan, 747 F.2d at 1574, 224 USPQ at 7. There is no requirement that the parties be the same in both instances; preclusion may be invoked in a case involving the same plaintiff and either a party or a non-party to the first action. Blonder-Tongue Lab., Inc. v. University of Ill. Found., 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971); Jackson Jordan, 747 F.2d at 1575, 224 USPQ at 6. The Supreme Court has stated that relitigation of issues is warranted, however, if there is reason to doubt the quality, extensiveness, or fairness of procedures followed in the prior litigation. Montana, 440 U.S. at 164 & n. 11, 99 S.Ct. at 979 & n. 11 (1979). 54 Dr. Freeman does not contend that he did not have a full and fair opportunity to litigate the scope of the reissue claims in the district court proceedings. Indeed, the record before us indicates that he had and fully took advantage of his opportunity to have this issue decided. Additionally, we have no reason to doubt the quality, extensiveness, or fairness of the procedures followed in the district court. To the contrary, the fact that this court on appeal affirmed the district court's conclusions regarding claim interpretation and noninfringement strongly suggests that the district court proceedings were not deficient. 55 We accordingly conclude that all of the requirements for the application of issue preclusion have been met. We therefore turn our attention to whether the doctrine should be applied here. 56 Exceptions to application of issue preclusion 57 The doctrine of issue preclusion is premised on principles of fairness. Blonder-Tongue, 402 U.S. at 349, 91 S.Ct. at 1453. Thus, a court is not without some discretion to decide whether a particular case is appropriate for application of the doctrine. A.B. Dick, 713 F.2d at 702, 218 USPQ at 967. Accordingly, under certain circumstances, where all of the requirements of issue preclusion have been met, the doctrine will not be applied. Preclusion will not be effected when the quality or effectiveness of the procedures followed in the two suits differ. For instance, issue preclusion will not be applied if the scope of review of the first action is very narrow. Restatement (Second) of Judgments Sec. 28 comment d (1980). 58 In this vein, Dr. Freeman infers that this court may not have agreed with the district court on the merits but affirmed that its finding of noninfringement was not clearly erroneous. Dr. Freeman thus implies that review of the district court's infringement decision by this court was narrow thereby implicating the exception to estoppel set out above. However, we note that though this court found the district court's infringement determination was not clearly erroneous, the underlying issue of claim interpretation, being a question of law, was reviewed de novo. SRI Int'l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1118, 227 USPQ 577, 596 (Fed.Cir.1985) (in banc). Thus, no narrower standard was applied to the district court's determination than was applied in the instant case. The exception to issue preclusion based on such circumstances is thus not implicated. 59 In addition to not applying the doctrine of issue preclusion as outlined above, issue preclusion may be inappropriate in subsequent litigation with others when:(2) The forum in the second action affords the party against whom preclusion is asserted procedural opportunities in the presentation and determination of the issues that were not available in the first action and could likely result in the issue being differently determined. 60 . . . . . 61 (8) Other compelling circumstances make it appropriate that the party be permitted to relitigate the issue. 62 Restatement (Second) of Judgments Sec. 29 (1980). 63 Dr. Freeman argues that the PTO offers procedural opportunities during reexamination that were unavailable to him in the prior litigation, namely, the opportunity to amend his claims in response to a decision adverse to the patentability of a claim of a patent. under 35 U.S.C. Sec. 305. Thus, according to Dr. Freeman, the availability of amending the reissue claims during reexamination could likely result in the issue sought to be precluded being decided differently. That is, by amending the claims, Dr. Freeman's claims could be interpreted differently to include less than neutral buoyancy IOLs. 64 Dr. Freeman is quite correct that the amended reexamination claims could be interpreted differently than the reissue claims. That is the point. However, contrary to Dr. Freeman's assertion, his ability to amend the claims during reexamination was not unfettered and according to the statute could not broaden the scope of the claims. 65 The reexamination statute provides that anyone at any time may request reexamination of any claim of a patent based upon prior art patents and printed publications. 35 U.S.C. Sec. 301, 302. See also House Report No. 96-1307, 96th Cong., 2d Sess. (1980), U.S.Code Cong. & Admin.News. The function of reexamination is to increase the reliability of patents thought to be of doubtful validity. In re Etter, 756 F.2d 852, 225 USPQ 1 (Fed.Cir.) (in banc), cert. denied, 474 U.S. 828, 106 S.Ct. 88, 88 L.Ed.2d 72 (1985). That function is reflected in 35 U.S.C. Sec. 303 which requires the Commissioner to determine that there is a substantial new question of patentability before a reexamination proceeding can be started. Etter, 756 F.2d at 857, 225 USPQ at 5. Thus, the substantial new question of patentability is the focal point of every reexamination. 66 In Etter, this court noted that the patentee may amend the claims during reexamination and that such opportunity distinguishes litigation from reexamination. Etter, 756 F.2d at 857, 225 USPQ at 5. See also In re Yamamoto, 740 F.2d 1569, 222 USPQ 934 (Fed.Cir.1984). However, the ability of a patentee to amend claims during reexamination must be seen in light of the fundamental purpose of reexamination--the determination of validity in light of a substantial new question of patentability. Thus, amendment of claims during reexamination is limited to amendment in light of prior art raising a substantial new question of patentability. In re Yamamoto, 740 F.2d at 1572, 222 USPQ at 936. 5 67 Dr. Freeman has never argued that the amendments to the last clause of each of the independent reissue claims were made to distinguish those claims from any prior art. Rather, during reexamination, Dr. Freeman candidly stated that the claims have been amended in this proceeding consistent with [his] amendments and purpose in filing the reissue application but now with the benefit and knowledge as to how a reader could misconstrue [his] intent. It is clear that the amendments to the last clause of each of the independent reissue claims had nothing to do with a substantial new question of patentability. 68 Therefore, although we must agree with Dr. Freeman that he had the ability to amend his claims during reexamination which was not available to him in district court, this difference does not rise to the level of a procedural difference precluding application of issue preclusion. The reason is that Dr. Freeman never had the option of amending his claims during reexamination so that they would be consistent with [his] amendments and purpose in filing the reissue application. We therefore hold that application of the doctrine of issue preclusion is not precluded on the basis of any procedural opportunity available in the PTO and not available in the district court. 69 Dr. Freeman also argues that other compelling circumstances make it appropriate that he be permitted to relitigate the issue of the scope of the reissue claims during reexamination. Specifically, Dr. Freeman argues that because the district court's interpretation of the scope of the claims was patently incorrect, application of issue preclusion here would be inappropriate. See Restatement (Second) of Judgments Sec. 29 comment j (1980) and Blonder-Tongue, 402 U.S. at 333-34, 91 S.Ct. at 1445. We are not convinced that the district court's decision was patently incorrect. Indeed, a unanimous panel of this court expressly held that the district court's claim interpretation was not erroneous. Moreover, the Board's disagreement with the district court's determination does not render the district court's determination incorrect.