Product May Acquire Non-Infringing Status, Even as to Adjudicated Method Claims, After a Prior Finding of Non-Infringement of Apparatus Claims

by McDermott Will & Emery
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Brain Life, LLC v. Elekta Inc.

Addressing the Kessler Doctrine, the U.S. Court of Appeals for the Federal Circuit affirmed-in-part, vacated-in-part and remanded a district court’s summary judgment barring assertion of method claims of a previously asserted patent, finding that although neither claim or issue preclusion barred the claims, the Kessler Doctrine precluded the majority of the asserted claims.  Brain Life, LLC v. Elekta Inc., Case No. 13-1239 (Fed. Cir., Mar. 24, 2014) (O’Malley, J.).

MIDCO, a predecessor in interest to Brain Life, asserted the patent-in-suit against Elekta, alleging that Elekta’s products infringed both the method and system claims of the patent (MIDCO litigation).  Before trial, Elekta filed an unopposed motion to dismiss the method claims.  The district court subsequently dismissed the method claims without prejudice.  At trial, a jury found that Elekta infringed the asserted patent.  Elekta appealed the finding of infringement, and the Federal Circuit reversed and remanded the case.  On remand, MIDCO attempted to revive the method claims, but the district court refused to reopen the case and entered final judgment in favor of Elekta.  MIDCO appealed, and the Federal Circuit affirmed the district court’s refusal to reopen the case.

After the MIDCO litigation, MIDCO exclusively licensed the patent to another company, which subsequently exclusively licensed the patent to Brain Life.   Several years after the MIDCO litigation, Brain Life asserted the patent against Elekta, alleging Elekta’s products (three of which were at issue in the MIDCO litigation and one new one that was not) infringe the method claims of the patent.  Elekta moved to dismiss for failure to state a claim on res judicata grounds.  The district court granted Elekta’s summary judgment motion and held that the present case was barred by claim preclusion.  Brain Life appealed.

The Federal Circuit reviewed the district court’s dismissal de novo.  The Court divided its analysis into claim preclusion, issue preclusion and the Kessler Doctrine.  Regarding claim preclusion, the Court found that, “[w]ithout a doubt,” claim preclusion barred the assertion of either the method or system claims to the extent the acts of infringement predated the final judgment in the MIDCO litigation.  However, the Court held that claim preclusion did not entirely bar the present action, because the new product, ERGO++, could not have been included in the prior action as it postdates the final judgment.

Regarding whether Brain Life’s claims were barred under issue preclusion, the Federal Circuit found that the method claims were not “fully, fairly and actually litigated to finality between these parties,” so issue preclusion does not bar the present action.

However, invoking the Kessler Doctrine, the Federal Circuit found that after the method claims were initially abandoned, MIDCO could have reasserted those claims.  However, once the Elekta systems were adjudged to be non-infringing, Elekta was free to continue engaging in the accused commercial activity as a non-infringer.  As a result, Elekta’s accused devices acquired a status of non-infringing devices, and Brain Life was barred from asserting the same patent claims a second time.  Regarding the new product, ERGO++, the Court found the product never acquired the status of a non-infringing device in connection with the patent-in-suit.  Therefore, the Court held neither claim preclusion, issue preclusion nor the Kessler Doctrine barred Brain Life’s assertion of infringement against that device.  The Court therefore remanded the case to the district court for the further proceedings on the ERGO++ device.

Practice Note:  The Kessler Doctrine is based on a 1907 U.S. Supreme Court case (Kessler v. Eldred) and addressed what was perceived to be a “gap” between issue preclusion and claim preclusion.  The doctrine is designed to preclude repeated harassment of an adjudicated non-infringer from continuing its business as usual after a final judgment in its favor.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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