Defensive Collateral Estoppel Applies Only if Essentially Identical Accused Product Found Non-infringing

The Federal Circuit recently issued an opinion vacating the District of Delaware’s grant of summary judgment of non-infringement based on collateral estoppel. Specifically, the Federal Circuit held that collateral estoppel did not apply because material differences existed between the accused products in the two actions. The Court remanded for further proceedings. ArcelorMittal Atlantique et Lorraine v. AK Steel Corp., No. 17-1637, 2018 (Fed Cir. Oct. 5, 2018) (Before Reyna, Wallach, and Hughes, Circuit Judges) (Opinion for the court, Reyna, Circuit Judge).

The asserted U.S. Patent No. RE44,940 (the RE940 patent) relates to boron steel sheets that become highly mechanically resistant when hot-stamped—a process in which steel blanks are rapidly heated, inserted into a stamping machine, stamped into a particular shape, and then rapidly cooled. The representative claim 17 of the RE940 patent is a product-by-process claim. The claimed “thermal treatment’” of the steel sheets results in “mechanical resistance in excess of 1500 MPa,” a quality that is highly desirable for auto part production. The RE940 patent is a reissue of US Patent No. 6,296,805 (the ‘805 patent) with nearly identical claims, and both are owned by ArcelorMittal.

In 2010, ArcelorMittal sued AK Steel Corporation (AK Steel) for infringement of the ‘805 patent. The key issue was whether steel sheets produced by AK Steel, referred to as AXN, met the “mechanical resistance of 1500MPa or greater” limitation after thermal treatment. The action resulted in a jury verdict of non-infringement, “in part based on the lack of evidence of the hot-stamped steel sheets meeting the limitation requiring a [UTS] of 1500 MPa.” In 2013, ArcelorMittal filed the present lawsuit, which AK Steel sought to dismiss on the basis of collateral estoppel, arguing that the accused ULTRALUME products were the same as the AXN products in the 2010 action. The district court granted AK Steel’s motion for summary judgment, dismissing the action, and ArcelorMittal appealed.

In its opinion, the Federal Circuit explained that defensive collateral estoppel of non-infringement applies in very limited circumstances where “a close identity exists between the relevant features of the accused device and the device previously determined to be non-infringing such that they are ‘essentially the same.’” Accused products are essentially the same where “the difference between them are merely ‘colorable’ or ‘unrelated to the limitation in the claim of the patent.’” Thus, “[i]f accused devices in a second suit remain ‘unchanged with respect to the corresponding claim limitations at issue in the first suit,’ the patentee is precluded from pursuing its infringement claims a second time.” The burden is on the proponent of claim or issue preclusion to show that the accused products are essentially the same.


AK Steel failed to carry this burden and show that the ULTRALUME products at issue in the present action were essentially the same as the AXN products at issue in 2010. Instead, evidence of material difference existed between the two products. First, while no evidence existed that the AXN products met the “in excess of 1500 MPa” UTS limitation after hot-stamping, evidence existed that the ULTRALUME products did meet this limitation. Second, while the AXN products were of “experimental grade,” thermally treated by a non-commercial hot-stamper, and never supplied to an auto manufacturer, the process used to produce the ULTRALUME products was no longer rudimentary and utilized commercial stammers, and the ULTRALUME products were commercially marketed and supplied to auto manufacturers.

Furthermore, Court found that the district court erred by focusing on pre-processed steel in determining whether a material change existed between the accused products. Process terms in product-by-process claims serve as limitations in an infringement analysis. Here, hot-stamping—the claimed thermal treatment process step—was critical to the infringement analysis. Thus, the proper analysis must focus on steel that has undergone the thermal treatment. If third-party hot-stampers produced steel sheets that met the claimed limitation, with a UTS exceeding 1500 MPa after thermal treatment, the hot-stampers directly infringed the RE940 patent.

Additionally, the Court held that because evidence of material differences in the accused products exited, the district court also erred in limiting discovery based on issues presented in the 2010 action. On remand, the district court is to allow ArcelorMittal to conduct discovery in its opposition to AK Steel’s motion for summary judgment.

Take Away

An accused infringer may use defensive collateral estoppel to dismiss an infringement action only where an essentially identical accused product was found to be non-infringing in a prior action. In considering whether two accused products are essentially identical for the purpose of finding collateral estoppel, courts may consider the sophistication and commercialization of the accused products.


Image Source: Gene Quinn.

The Author

Joseph Robinson

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Dustin Weeks is a Partner in the intellectual property practice group at Troutman Sanders. His practice spans all areas of intellectual property law, including patent prosecution, patent litigation (including Hatch-Waxman litigation), and client counseling. He represents clients ranging from start-ups and solo inventors to Fortune 500 companies. Dustin works closely with his clients to learn their business objectives so that he can tailor strategies to procure, protect, and enforce their intellectual property. Dustin specializes in post-grant proceedings (e.g. Inter Partes Reviews) before the Patent Trial and Appeal Board (PTAB) where he has extensive experience representing both patent owners and petitioners across a wide range of technologies, including wireless networking, pharmaceuticals, MEMs devices, medical devices, and electro-mechanical consumer devices. Dustin's broad experience in patent prosecution, counseling, and patent litigation uniquely positions him to navigate the blended practice of post-grant proceedings.

For more information or to contact Dustin, please visit his Firm Profile Page.

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There are currently 1 Comment comments.

  1. B December 2, 2018 12:01 pm

    The CAFC got a simple CE issue correctly. I’m SHOCKED. Maybe it’s the “material” difference language that helped.