A federal district court in the Northern District of California granted plaintiff XpertUniverse’s (XU) motion for partial summary judgment on collateral estoppel and precluded defendant Cisco Systems from raising new invalidity grounds. The court also denied Cisco’s motion for judgment on the pleadings under 35 U.S.C. § 101.
In a previous lawsuit between the parties (the “First Action”), Cisco’s Remote Expert product was found to infringe XU’s U.S. Patent No. 7,499,903 (the “‘903 Patent”) and the jury and the court found that claim 12 of the ‘903 Patent was not invalid. In this case, XU alleges continued infringement of the ‘903 Patent by Cisco based on later versions of the Remote Expert product..
Cisco moved for judgment on the pleadings, arguing that the ‘903 Patent is directed to patent-ineligible subject matter under 35 U.S.C. § 101, an invalidity defense that was not raised in the First Action. In response, XU moved for partial summary judgment that Cisco is estopped from pursuing any invalidity arguments against the ‘903 Patent, including under Section 101, after unsuccessfully challenging the validity of the ‘903 Patent in the First Action.
Cisco’s ability to bring its Section 101 defense hinged on whether patent validity is a single issue or whether each ground for asserting an invalidity defense (e.g., obviousness, anticipation) is a separate issue. The court ruled that patent validity – including Section 101 challenges – is a single issue. The court reasoned that Cisco’s proposed invalidity contentions were nothing more than particular arguments directed to the issue of patent validity, which had already been decided in the First Action. In reaching its decision, the court relied on a number of district courts that viewed patent validity as a single issue, because the Federal Circuit has not addressed whether multiple theories of invalidity constitute “different” issues for collateral estoppel purposes. The district court acknowledged that its decision might conflict with the Federal Circuit’s recent decision in Voter Verified, Inc. v. Election Sys. & Software LLC, 887 F.3d 1376 (Fed. Cir. 2018), where the Federal Circuit held that issue preclusion did not apply to a defendant’s Section 101 defense when no evidence or argument relating to that defense was presented in a prior litigation and because patent validity was not necessary to the prior judgment. Id. at 1383–84. But the district court differentiated the instant case from Voter Verified based on underlying circuit law. In Voter Verified, the Federal Circuit applied the 11th Circuit’s test for issue preclusion in reaching its decision, which, unlike the applicable 9th Circuit’s inquiry, requires that the issue in question be actually raised and that the issue be necessary to support the prior judgment. Therefore, according to the court, Voter Verified does not apply.