In Phil-Insul, collateral estoppel precludes IntegraSpec from ‎relitigating claim construction in a ‎second case involving a ‎different defendant, different claims and “somewhat” ‎different accused ‎products. In Rembrandt v. Samsung, the ‎Circuit reverses and remands the district court’s ‎handling of ‎the patent marking statute regarding the effect of a ‎subsequent patent claim ‎disclaimer and as to whether the ‎statute applies on a claim-by-claim basis.‎
Thanks to my colleague Martin Garthwaite for his help with ‎this week’s report.‎
Pete

Phil-Insul dba IntegraSpec v. Airlite Plastics, Fed. Cir. ‎Case 2016-1982 (April 17, ‎‎2017)‎

The Circuit rules that collateral estoppel precludes ‎IntegraSpec from relitigating claim ‎construction previously ‎litigated in a case with another defendant even though the ‎previously-‎construed claim is not the one presently being ‎litigated. ‎

IntegraSpec’s patent is directed to insulating concrete forms ‎that are used in building ‎construction. In a prior case against ‎Reward Wall involving very similar concrete forms, ‎the ‎district court granted summary judgment of ‎noninfringement, which was affirmed by the Circuit ‎under ‎Rule 36 (without a written opinion). In the present case, ‎Airlite successfully moved for ‎summary judgment ‎of ‎noninfringement based upon collateral estoppel and the ‎narrow claim ‎construction rendered by the district court in ‎Reward Wall. ‎

The opinion first lays out the test for collateral estoppel ‎under Eighth Circuit law:‎
‎(1) the party sought to be precluded must have been a ‎party, or in privity with a party, to ‎the original lawsuit; (2) ‎the issue sought to be precluded must be the same; (3) ‎the issue ‎sought to be precluded must have been ‎actually litigated; (4) the issue sought to be ‎precluded ‎must have been determined by a valid and final ‎judgment; and (5) the ‎determination in the prior action ‎must have been essential to the prior judgment.‎

IntegraSpec argued on appeal that there was no final ‎judgment since the appeal was decided ‎under Rule 36 and ‎that the determination in the prior action was not essential to ‎the prior ‎judgment. Specifically, IntegraSpec argued that the ‎Circuit’s 2013 TecSec case created a rule that ‎a Rule 36 ‎affirmance cannot have preclusive effect because the court ‎could have affirmed based ‎on any number of grounds and ‎not only claim construction. The Circuit rejects this argument ‎and ‎rules that the TecSec holding only applies where the ‎appellate court affirmed, without ‎explanation, the judgment ‎of a trial court that determined two issues, either of which ‎could ‎independently support the result. ‎

In the Reward Wall appeal, IntegraSpec raised issues as to ‎the construction of two terms: ‎‎“adjacent” and “substantially ‎the same dimension.” The Rule 36 affirmance in Reward ‎Wall ‎necessarily meant that the Circuit found no error in ‎either of the district court’s claim ‎constructions. Therefore, ‎the case is easily distinguished from TecSec.‎

The panel also dismisses IntegraSpec’s argument that ‎claim 1 and not claim 2 was construed in ‎Reward Wall, ‎noting that the same disputed claim terms in this case—‎‎“adjacent” and ‎‎“substantially the same dimension”—were at ‎issue in both claims. It is well-established that claim ‎terms ‎are to be construed consistently throughout a patent, so the ‎fact that a different claim is ‎now being asserted is not ‎relevant, as both the district court and the Circuit ‎previously ‎considered and rejected IntegraSpec’s ‎arguments regarding the two terms. ‎

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Rembrandt Wireless Technologies v. Samsung ‎Electronics, Fed. Cir. Case 2016-1729 (April 17, ‎‎2017)‎

The Circuit agrees with Rembrandt and the district court that ‎the per-unit royalty award is ‎appropriate as to Samsung’s ‎infringing Bluetooth-compatible phone and television ‎products, but ‎is troubled by the court’s application of the ‎patent marking statute. Rembrandt did not require ‎its ‎licensee to mark products covered by one claim of the ‎patent, which Rembrandt subsequently ‎disclaimed to ‎attempt to avoid the damages limitation of 35 U.S.C. § 287. ‎The Circuit reverses ‎the ruling that such a disclaimer is an ‎effective means to avoid § 287 but remands on the issue ‎of ‎whether the patent marking requirement is on a claim-by-‎claim or entire patent basis.‎

Samsung unsuccessfully argued for a broader interpretation ‎of the claims that would include ‎prior art it asserted in ‎support of its obviousness argument. The panel also affirms ‎a determination ‎of what constitutes a reasonable royalty, ‎first agreeing that it was correct to consider the ‎difference ‎between what Samsung paid Texas Instruments for two ‎different Bluetooth chips, one ‎including Bluetooth Enhanced ‎Data Rate functionality such as claimed in the patents-in-‎suit, and ‎without. The Circuit also agrees it was appropriate ‎for the district court to consider a settlement ‎between ‎Rembrandt and BlackBerry involving the same patents. ‎

As an NPE, Rembrandt would normally not have had a ‎problem with § 287, which provides that ‎if a patentee fails to ‎mark patented products with the patent number, damages ‎are limited to ‎those incurred after an infringer receives ‎notice of the infringement (such as upon the filing of the ‎suit ‎in the present case). However, patentees must require ‎licensees to mark their products, and ‎Rembrandt failed to ‎require its licensee Zhone to do that here. Rembrandt ‎subsequently ‎disclaimed claim 40 and argued that the ‎obligation to mark the product embodying claim 40 ‎had ‎therefore vanished. The district court relied on Circuit ‎precedence holding that a disclaimed ‎patent claim is treated ‎as if it had never existed, and denied a motion by Samsung ‎that damages ‎should exclude pre-notice damages. The ‎Circuit rejects that holding, noting that while a ‎disclaimer ‎may relinquish rights of the patent holder, “we have never ‎held that the patent owner’s ‎disclaimer relinquishes the ‎rights of the public” and the provision requiring marking in ‎order to ‎collect pre-notice damages. ‎

However, the Circuit has never ruled on whether the ‎marking requirement applies on a “claim-by-‎claim” basis ‎‎(as argued by Rembrandt) or a “patent-by-patent” basis (as ‎argued by Samsung). ‎Applying Rembrandt’s claim-by-claim ‎approach would permit Rembrandt to recover pre-‎notice ‎damages for infringement of claims other than claim ‎‎40, which is the only claim that Samsung ‎alleges the ‎unmarked Zhone product embodied. The case is remanded ‎for the district court to ‎consider whether claim-by-claim or ‎patent-by-patent is the correct approach.‎

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