In a joint appeal of two adverse decisions from the District Court, the Federal Circuit on procedural grounds rejected an appeal from the Wisconsin Alumni Research Foundation ("WARF") in Wisconsin Alumni Research Foundation v. Apple Inc. The decision was based on the Court's conclusion that WARF was precluded from asserting infringement under the doctrine of equivalents (DOE) after having failed to establish literal infringement and having withdrawn its DOE assertions in an earlier litigation, and also precluded from asserting the same patent on DOE grounds against "next-generation" Apple products similar to ones deemed non-infringing earlier.
The case arose over U.S. Patent No. 5,781,752 directed to "[a] predictor circuit [that] permits advanced execution of instructions . . . [i]n an electronic computer with a single processing unit" (alleged to be infringed by Apple's A7 and A8 processors in one of the decisions at issue and Apple's A9 and A10 processors in the other). The first decision (WARF I) on appeal (regarding earlier litigation about the A7 and A8 processors in which the District Court found infringement by Apple and the Federal Circuit reversed) is the District's Court's refusal to permit WARF to litigate infringement under DOE that had been withdrawn in the earlier litigation, on the grounds that WARF had affirmatively abandoned that theory of infringement (as explained in the opinion, this abandonment was made in a context where Apple was precluded from introducing evidence at trial of its own patent, No. 9,128,725, regarding similar technology) and that the District Court's construction of the term "particular" ("to be associated with a single load instruction") "foreclosed an equivalent where the prediction could be associated with a group of load instructions" (emphases in opinion) because WARF's DOE theory would "vitiate the claim limitation by rendering meaningless the term "particular." The District Court (in WARF II) after lifting a stay until resolution of WARF I refused to permit WARF from pursuing infringement of Apple A9 and A10 processors under DOE based on its decision in WARF I, supported by Federal Circuit precedent under Nystrom v. Trex Co., 580 F.3d 1281 (Fed. Cir. 2009), that ruled that "the plaintiff in that case was barred from revisiting a doctrine of equivalents theory of infringement based on waiver of that doctrine in past litigation over materially similar, earlier generation of the same products despite later generations being produced during and after the course of the first litigation." These appeals followed.
The Federal Circuit affirmed, in an opinion by Judge Prost joined by Judges Taranto and Chen. As explained in the opinion, WARF argued in its appeal from WARF I that it did not waive its claim of infringement under DOE "generally" with respect to Apple's A7 and A8 processors, and that issue preclusion does not apply in WARF II. Apple argued that the Kessler doctrine supported the District Court's decision in this regard, see Kessler v. Eldred, 206 U.S. 285 (1907) (the panel agreeing with this argument in its affirmance).
With regard to WARF I and the District Court's waiver determination, the Federal Circuit asserted the preeminence of Federal Circuit law for waiver questions regarding "enforcement of a patent right," citing Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1250‒51 (Fed. Cir. 2005). WARF's ultimate position on this question was that the District Court's claim construction of the term "particular" was a change of circumstances that precluded application of waiver in its DOE infringement theory under Exxon Chemical Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475 (Fed. Cir. 1998). Apple for its part argued that WARF made its own "strategic choice to abandon its [doctrine-of-equivalents] theory in order to prevent Apple from introducing evidence of Apple's own patent during the trial's liability phase," relying in large part upon the Federal Circuit's earlier decision reversing the District Court's finding of literal infringement and the absence in that decision of remand or a new claim construction.
The Federal Circuit agreed with Apple. Regarding WARF's "changed circumstances" concerning claim construction of the term "particular," the opinion asserts that "[t]he correct inquiry is whether the claim construction changed in a way that would excuse WARF's failure to raise, at the previous trial, the doctrine-of-equivalents theory that it now attempts to reassert in WARF I," concluding that it did not. The Court held that the interpretation of the term was consistent with Apple's understanding that it should be given its plain and ordinary meaning (supported by its expert's testimony). In addition, the opinion states that WARF was not prohibited from raising its DOE grounds for infringement at trial despite its assertion of its confidence regarding its literal infringement case. Nor was the panel convinced that Apple's failure to pursue the narrower construction of the term at trial provided any justification for WARF not earlier pursuing is DOE case.
The Court also held that, "for reasons unrelated to claim construction," WARF had waived its DOE infringement theory. The basis for this conclusion is that WARF's actions had satisfied the standard under United States v. Olano, 507 U.S. 725, 733 (1993), for "intentional relinquishment or abandonment of a known right" by failing to present substantive arguments before the District Court for infringement under the DOE, citing Boss Control, Inc. v. Bombardier Inc., 410 F.3d 1372, 1380 (Fed. Cir. 2005), and United States v. Hible, 700 F.3d 958, 961 (7th Cir. 2012). The panel characterized WARF's arguments against waiver as "recharacter[izations]" which the Court found to be contrary to the record. In the panel's view, WARF "agreed to 'drop doctrine of equivalen[ts] and make no doctrine of equivalents arguments whatsoever at trial'," emphasis in opinion, "in exchange for Apple's agreement not to present its own patent at trial." This constituted a "relinquishment of a known right" which resulted in the District Court ordering both parties not to present evidence about that Apple patent at trial. In addition, the Court considered it relevant that both parties retained the "ability to argue their positions on what the plain and ordinary meaning required or allowed." Under these circumstances, the panel held that while WARF could have pursued its DOE theory at trial that it now asserts, not doing so constituted an abandonment constituting waiver.
Finally, in the WARF I appeal the panel turned to (and rejected) WARF's assertion of Exxon Chemical Patents, Inc. v. Lubrizol Corp.,137 F.3d 1475 (Fed. Cir. 1998), in support of its position. The Court found WARF's assertion of this precedent, for the proposition that "when the doctrine of equivalents becomes a critical issue only after a new claim construction is adopted on appeal, a plaintiff's prior choice to not present that theory at trial does not constitute abandonment" was overbroad. In the Court's view, that case involved circumstances where the Federal Circuit held on appeal that the District Court had discretion to consider an unasserted DOE infringement theory because the Federal Circuit had not "dispose[d] of" that infringement theory. Although "[a]t a bird's eye view" the facts and circumstances in Exxon were similar to those here, the panel found sufficient distinctions to reject WARF's assertion of Exxon in this instance. In Exxon, the District Court's claim construction "rendered [Plaintiff's} doctrine-of-equivalents theory moot," which was not the case here, and in Exxon "there was no reason for the jury to consider Exxon's doctrine-of-equivalents theory under the uncontested facts." In this case, "in contrast, there were reasons for WARF to pursue its doctrine-of-equivalents theory—namely, the parties were actively disputing the scope of the plain and ordinary meaning of 'particular' before, during, and after trial," i.e., the question on the meaning of "particular" was not moot. In addition, here (and not in Exxon) the Court found an affirmative abandonment of its DOE theory of infringement. Finally, in Exxon, the Federal Circuit "did not grant a per se right to a new trial on the doctrine of equivalents" but provided the District Court with the discretion to do so.
Regarding the WARF II appeal, the Court affirmed based on issue preclusion and the Kessler doctrine. For the former, the standard applied by the Court is that "(1) the issue sought to be precluded is the same as that involved in a prior action; (2) the issue was actually litigated; (3) the determination of the issue was essential to the final judgment; and (4) the party against whom estoppel is invoked was represented in the prior action," citing Adair v. Sherman, 230 F.3d 890, 893 (7th Cir. 2000); the elements at issue here are limited to the first and second, implicating the question (according to the opinion) of "what is the issue"? WARF contends the issue in WARF I to be "whether Apple's A7 and A8 processors literally infringe the '752 patent" and in WARF II to be "whether Apple's A9 and A10 processors infringe the '752 patent under the [doctrine of equivalents]." Apple's contention is the same in both cases to be merely "whether Apple's accused products infringe the '752 patent." The task the Court appreciates is to determine whether the two pairs of processors -- A7/A8 and A9/A10 -- are "essentially the same" and whether literal and DOE infringement "are part of the same overall issue of infringement."
The opinion notes that "[a]ccused devices are essentially the same where the differences between them are merely colorable or unrelated to the limitations in the claim of the patent," citing ArcelorMittal Atlantique et Lorraine v. AK Steel Corp., 908 F.3d 1267, 1274 (Fed. Cir. 2018). Here, the District Court held that the pairs of accused infringing processors satisfied this standard, and the Federal Circuit found no clear error in this determination. The panel dismissed WARF's contentions that there was an issue based on failure of Apple to provide discovery regarding the A9/A10 processors and that there was a "'potential' significant [design] change" in the later-developed A9/A10 processors compared with the A7/A8 processors. This decision was based on the Court's consideration of further proceedings below wherein both parties made assertions that the two pairs of processors were the same ("not more than colorably different" in Apple's language). And the only additional discovery WARF wanted was "damaged-related discovery" according to the panel, not technical discovery relevant to the question of substantial sameness at issue here.
The Court next considered the second prong of the test for issue preclusion, "whether the issue is infringement or the separate theories of infringement" and whether the issue litigated in the first action is identical to the one WARF wishes to pursue in the second action under B & B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. 138, 154 (2015). Importantly, the panel interpreted the B&B Hardware holding to be that the legal standards applied in both actions were the same, not that the "factors or tests must be identical for issues to be identical." The Court purports to apply the same analytical approach taken by the B&B Hardware Court, looking at "the statutes, the history, and the Restatement (Second) of Judgments" (i.e., the common law) to make its determination of issue identity. Here, the statute is the same (35 U.S.C. § 271), as was the historical context for the DOE (Winans v. Denmead, 56 U.S. 330, 344 (1853); see also Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950), which treated literal and DOE infringement "as a single issue"). Finally, the panel's assessment of the teachings of the Restatement (Second) of Judgments sets forth "several factors" for situations where "there is a lack of total identity between the particular matter presented in the second action and that presented in the first." These include "substantial overlap in evidence or argument"; whether "new evidence or argument involve application of the same rule of law as that involved in the prior proceeding"; "[c]ould pretrial preparation and discovery relating to the matter presented in the first action reasonably be expected to have embraced the matter sought to be presented in the second?"; and "[h]ow closely related are the claims involved in the two proceedings?" These rubrics as applied by the Court supported the District Court's determination that issue preclusion should apply to WARF's renewed assertion of infringement under the DOE. This treatment is also consistent with precedent, according to the opinion, citing Nystrom v. Trex Co., 580 F.3d 1281 (Fed. Cir. 2009) (relied upon by the District Court), and Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335, 1343 (Fed. Cir. 2012). The opinion also asserts a policy basis for their decision:
For the foregoing reasons, we are convinced that literal infringement and the doctrine of equivalents are the same issue for issue-preclusion purposes. To conclude otherwise would allow a patentee to proceed through the entirety of litigation only on a theory of literal infringement and, after losing its case, allow that same party to accuse the same entity of infringing the same patent, accusing the same or essentially the same products, as long as those products were sold after judgment of the first suit.
Finally, the opinion turns to the proper application of the Kessler doctrine in support of the District Court's decision. The doctrine is specific for patent law, according to the Court, wherein it "fills the gap between [claim and issue] preclusion doctrines . . . allowing an adjudged non-infringer to avoid repeated harassment for continuing its business as usual post-final judgment," citing Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1056 (Fed. Cir. 2014). As applied the right (to sell a non-infringing article after having been absolved of infringement of the claimed invention) "attaches to its product—to a particular thing—as an article of lawful commerce," the panel citing Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co., 232 U.S. 413, 418 (1914). Closer to the circumstances in this case (and cited by the Court in support of the District Court's judgment) is SpeedTrack Inc. v. Off. Depot, Inc., 791 F.3d 1317, 1329 (Fed. Cir. 2015), where a plaintiff only asserting literal infringement was precluded under the Kessler doctrine from asserting DOE infringement in a second lawsuit arising after having failed to prevail against the same defendant for accused literal infringement. As stated in the opinion, "WARF II presents exactly this type of litigation harassment, applied to a second suit against the very same defendant."
These proceedings appear to exonerate Apple from infringement that an earlier jury had decided was worth $506 million (after prejudgment interest).
Wisconsin Alumni Research Foundation v. Apple Inc. (Fed. Cir. 2024)
Panel: Circuit Judges Prost, Taranto, and Chen
Opinion by Circuit Judge Prost
[View source.]
