E.Digital Corporation v. Futurewei Technologies, Inc. et al.

Docket Nos. 2014-1019, -1242, -1243

November 14, 2014

Brief Summary: In a collateral estoppel analysis, “claims of unrelated patents must be construed separately”, although “a court cannot impose collateral estoppel to bar a claim construction dispute solely because the patents are related”.

Summary: e.Digital appealed SD CA judgement of non-infringement, finding it was collaterally estopped from seeking construction of a claim limitation in US Patent Nos. 5,491,774 and 5,839,108 different from a Colorado Court’s construction of that term in the ‘774 patent. The technology relates to removable, interchangeable flash memory recording medium that allows for recording and playback. The Colorado Court construed the “sole memory” limitation of the ‘774 claims to mean “‘that the device only use flash memory, not RAM or any other memory system’ to store the ‘received processed sound electrical signals” based on the specification and prosecution history (use of RAM disclaimed). Based on this construction, the parties stipulated to dismiss that case with prejudice which was finalized. The USPTO subsequently cancelled claims 1 and 19 of the ‘774 patent in an ex parte reexamination, which also resulted in the issuance of claim 33 “which recites the limitations of cancelled claims 1 and 19, including the identical sole memory limitation, and added additional limitations like a microprocessor.” E.Digital also brought suit against GoPro and others, asserting claim 33 and two claims of the ‘108 patent. The DC granted the defendant’s motion to apply collateral estoppel to the sole memory limitation of both patents since the ‘774 reexamination never addressed the sole memory limitation and the patents are “closely related”. The FC opinion explains that collateral estoppel applies if: 1) the issue necessarily decided in the previous proceeding is identical to the one which is sought to be relitigated; 2) the first proceeding ended with a final judgment on the merits; and 3) the party against which collateral estoppel is asserted was a part or in privity with a party at the first proceeding (Aspex Eyewear, FC 2013; Hydranautics, 9th Cir. 2000). The FC explained that it did “not hold that reexamination history cannot ever create a new issue that would preclude the application of collateral estoppel, such a scenario does not exist here because the reexamination history in now way modifies, clarifies, or even informs the construction of the sole memory limitation.” Thus, it held the application of collateral estoppel to claim 33 was correct. However, the ‘774 and ‘108 patents, while directed to similar subject matter, are not related and “claims of unrelated patents must be construed separately” (Texas Digital, FC 2002) (this opinion also explaining that “a court cannot impose collateral estoppel to bar a claim construction dispute solely because the patents are related” (e.g., for a continuation-in-part)). Thus, the application of collateral estoppel to the ‘108 patent based on claim construction of the ‘774 patent was reversed. The DC was also found not to have abused its discretion in converting one defendant’s partial judgment of non-infringement to a final judgment under Fed. R. Civ. P. 54(b).

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