Federal Circuit Summary

Before Newman, Lourie, and Reyna. Appeal from the United States District Court for the Northern District of Florida.

Summary: Collateral estoppel does not apply to a prior decision of no invalidity under § 101, where the issue was not actually litigated.

In 2009, Voter Verified sued Election Systems for patent infringement. The district court held the asserted claims were not invalid under § 101, and that those same claims were not infringed. In 2012, the Federal Circuit affirmed on both issues. In 2016, Voter Verified again sued Election Systems, asserting infringement of the same patent. Election Systems moved to dismiss for invalidity under § 101. Voter Verified argued that issue preclusion (also known as collateral estoppel) precluded Election Systems from relitigating invalidity under § 101. The district court dismissed the case, determining that the asserted claims were directed to patent ineligible subject matter.

The Federal Circuit affirmed. First, the Court determined that issue preclusion could apply because there was no intervening change in the law. Alice did not alter the law under § 101 because the court applied the same two-step framework it created in Mayo. And Mayo was not intervening—that case was decided when the earlier litigation between Voter Verified and Election Systems was still pending. Nevertheless, the Court concluded that issue preclusion did not apply because (1) the § 101 issue was not previously litigated, and (2) the § 101 issue was not critical and necessary to the prior judgment. In the prior litigation, the district court granted summary judgment of no invalidity with no analysis of § 101, because Election Systems failed to present any arguments or evidence on the issue. Moreover, the prior finding of no invalidity was not necessary to the prior judgment because the district court also previously held that Election Systems did not infringe. On the merits, reviewing de novo, the Federal Circuit affirmed the § 101 invalidity holding.

This case is: VOTER VERIFIED, INC. v. ELECTION SYSTEMS & SOFTWARE LLC

Written by: Mark Kachner and Janet M. Olsen, Ph.D.

Edited by: Paul Stewart