On November 19, 2014, the United States Court of Appeals for the Federal Circuit issued a decision in e.Digital Corporation v. Futurewei Technologies, Inc. e.Digital appealed from a judgment of non-infringement made by the U.S. Federal District Court for the Southern District of California. The district court based its determination of non-infringement on the fact that e.Digital was collaterally estopped from seeking a construction of a claim limitation in e.Digital’s U.S. Patent Nos. 5,491,774 and 5,839,108 different from another court’s previous construction of the same limitation in the ’774 patent.
The Federal Circuit, with Judge Moore writing and joined by Judges O’Malley and Reyna, held that the district court correctly applied collateral estoppel to the ’774 patent, but improperly applied the doctrine to the unrelated ’108 patent.
To understand the ruling in this case one must first look at the prior case that construed the critical claim. Previously, in a litigation in the United States Federal District Court for the District of Colorado, e.Digital asserted claims 1 and 19 of the ’774 patent. The ’774 patent discloses a device with a microphone and a removable, interchangeable flash memory recording medium that allows for audio recording and playback. Asserted claims 1 and 19 recited “a flash memory module which operates as sole memory of the received processed sound electrical signals.” The district court construed the sole memory limitation to require “that the device use only flash memory, not RAM or any other memory system” to store the “received processed sound electrical signals.” The district court based its construction on the written description of the ’774 patent and its determination that the use of RAM had been disclaimed during prosecution. With this claim construction decided, the parties stipulated to a dismissal of the case with prejudice.
After the conclusion of the aforementioned litigation in Colorado, the United States Patent and Trademark office canceled both claims 1 and 19 of the ‘774 patent at the conclusion of an ex parte reexamination. e.Digital did obtain new claim 33, which recites the limitations of cancelled claims 1 and 19, including the identical sole memory limitation. Other limitations, such as a microprocessor, were included in new claim 33.
e.Digital brought this lawsuit against Futurewei and others in the Southern District of California, this time asserting claim 33 that had been obtained as the result of reexamination of the ‘774 patent. Also asserted were claims 2 and 5 of the ‘108 patent. The ‘108 patent did not share a common specification, but rather was an improvement upon the invention disclosed in the ‘774 patent.
The district court in Southern California granted motions to adopt the previous claim construction from Colorado and then ruled that e.Digital was barred from arguing infringement as a result of collateral estoppel.
The Federal Circuit held that the district court correctly applied collateral estoppel to the ’774 patent because reexamined claim 33 contains the same memory limitation previously found in claims 1 and 19, and because the ’774 patent reexamination never addressed that limitation or the presence of RAM. Instead, the reexamination focused exclusively on a limitation in claim 33 that is completely unrelated to the sole memory limitation, which made claim 33 identical to claims 1 and 19, which had already been construed, at least insofar as the presence of RAM was concerned. The Federal Circuit did, however, point out that this ruling should not be construed to stand for the proposition that a reexamination prosecution history could not create a new issue that would preclude the application of collateral estoppel. Thus, the ruling was limited to this situation where the resulting claim did not create an issue different from the issues previously litigated in the Colorado case.
The Federal Circuit did not agree with the district court in Southern California with respect to the ‘108 patent, which the Federal Circuit said presented a separate claim construction issue. The ‘108 patent was not related to the ‘774 patent, but rather disclosed an improvement to the ‘774 patent. Thus, the ‘108 patent discloses a separate and distinct invention, has a separate and distinct prosecution history, and has a different disclosure that does specifically and clearly disclose the presence of RAM. The Federal Circuit went on the lightly admonish the district court saying: “These distinctions reinforce the well-understood notion that claims of unrelated patents must be construed separately.”
As a result, the ruling of the district court was affirmed in part, reversed in part and the case was remanded for further proceedings consistent with this opinion.