It is not unusual for a company to have a portfolio of similar patents that build on each other, even if they are not formally in the same family of patents. In
e.Digital Corp. v. Futurewei Technologies, Inc. (
No. 2014-1019), the Federal Circuit recently confronted the issue of whether a claim construction of terms in one patent would bind the patentee with respect to another similar, but formally unrelated patent it owned. The Federal Circuit concluded that there could not be any collateral estoppel effects because the patents were not formally related. This decision should be extremely useful for companies with large patent portfolios in limiting the damage caused by an adverse or unfavorable claim construction.
The Patents at Issue
E.Digital previously litigated one of its patents (No. 5,491,774), and the court construed some of the claim terms in the patent during that litigation. The '774 patent involved technology relating to a device with a microphone and a removable flash memory for storing recordings.
E.Digital then brought suit against Futurewei, asserting that it infringed both the '774 patent and another patent (No. 5,839,108). The '774 patent and the '108 patent both involved the same type of technology. While the '108 patent disclosed an improvement to the technology claimed in the '774 patent and incorporated the '774 patent by reference, the two patents were not formally related or in the same family of patents.
The district court granted judgment of non-infringement for Futurewei based on a determination that e.Digital was collaterally estopped from challenging the claim constructions rendered during the first litigation and, because the '108 patent was similar, those same constructions would be binding with respect to the '108 patent. E.Digital appealed, and the Federal Circuit affirmed the determination with respect to the '774 patent and reversed with respect to the '108 patent.
Collateral Estoppel Does Not Apply if the Patents Are Not Formally Related
Because this decision came out of the Ninth Circuit, the Court applied that Circuit's collateral estoppel law. The Court concluded that collateral estoppel could not apply because the two patents were different. It recognized that there was a common inventor and that the '108 patent incorporated the '774 patent, but the two patents were not in the same family, disclosed different inventions, had different prosecution histories, and had different written descriptions. "These distinctions reinforce the well-understood notion that claims of unrelated patents must be construed separately."
The Court then specifically noted that the inverse is not always true. In other words, just because two patents are in the same family does not mean that collateral estoppel will always apply. It may, but it depends on the facts and circumstances involving the two patents. For example, a continuation-in-part patent might disclose new matter that is relevant to how a term should be construed.
Take-Away for Patent Holders
This decision is very helpful for patent holders with broad portfolios of similar patents. It helps to limit the ability of an accused infringer to use prior, unhelpful claim constructions against a patentee and can serve to minimize the damage to a patent portfolio from an adverse decision. As a practical matter, those prior claim constructions may be persuasive, but they will likely not be binding.