Sunday, March 08, 2009

Invalid to one, invalid to all. Collateral estoppel in patent cases.

The decision in O2Micro v. Taiwan Sumida is short, and rather basic. The punchline is:

This court held in Mendenhall v. Barber-Greene Co., 26 F.3d 1573, 1577 (Fed.
Cir. 1994) that “once the claims of a patent are held invalid in a suit involving one
alleged infringer, an unrelated party who is sued for infringement of those claims may
reap the benefit of the invalidity decision under principles of collateral estoppel.”
Blonder-Tongue Labs., Inc. v. University of Ill. Found., 402 U.S. 313, 350 (1971)). O2
Micro, in a letter to this court, has conceded that the judgment in the instant case cannot
be upheld, as per Mendenhall, if this court affirms the invalidity judgment in the MPS
case. Because today’s judgment of invalidity of the asserted claims of the ’722 patent in
the MPS case collaterally estops O2 Micro from pursuing infringement claims against
Taiwan Sumida based on the same claims of the ’722 patent, this court vacates the
judgment of the District Court for the Eastern District of Texas.

***The parallel case had some interesting evidentiary issues.

The patentee seemed to be asleep at the switch on some points-->

Thus, the record stands unrebutted with evidence showing that [prior art] Henry included a flow-through switch.
O2 Micro’s attorney arguments on appeal cannot create an evidentiary gap. See
Johnston v. IVAC Corp., 885 F.2d 1574, 1581 (Fed. Cir. 1989) (noting that “Attorneys’
argument is no substitute for evidence.”).

Dr. Horenstein’s testimony provides substantial evidence for the jury to have
found the “second state” limitation in the prior art. Indeed, Dr. Horenstein
acknowledged and seems to have embraced Dr. Rhyne’s characterization of Henry’s
sawtooth generator as consistent with the claimed second state

KSR came up-->

Section 103 of Title 35 requires this court to inquire “whether the improvement is
more than the predictable use of prior-art elements according to their established
functions.” KSR Int’l Co. v. Teleflex Inc., 127 S. Ct. 1727, 1740 (2007). Applying the
law to the facts in the record, this court answers the inquiry in the negative and
concludes that the asserted claims of the ’722 patent are obvious as a matter of law.

The case has much commentary on Rule 706 -->

The predicaments inherent in court appointment of an independent expert and
revelations to the jury about the expert’s neutral status trouble this court to some extent.
Courts and commentators alike have remarked that Rule 706 should be invoked only in
rare and compelling circumstances. In re Joint E. & S. Dists. Asbestos Litig., 830 F.
Supp. 686, 693 (E.D.N.Y. 1993) (noting that “use of Rule 706 should be reserved for
exceptional cases in which the ordinary adversary process does not suffice”); Wright,
supra, § 6302 (“Rule 706 powers are properly invoked where the issues are complex
and the parties’ experts have presented conflicting testimony that is difficult to reconcile
or have otherwise failed to provide a sufficient basis for deciding the issues.”).
However, under Ninth Circuit law, district courts enjoy wide latitude to make these
appointments. This court perceives no abuse of discretion in this case where the district
court was confronted by what it viewed as an unusually complex case and what
appeared to be starkly conflicting expert testimony. See, e.g., Walker, 180 F.3d at 1071
(finding no abuse of discretion in Rule 706 appointment where the scientific evidence
was “confusing and conflicting” and the appointment “assist[ed] the court in evaluating
contradictory evidence about an elusive disease of unknown cause”).

The topic of "technology tutorial" came up:

The record shows that the trial court gave Dr. Santi only thirty-five days to review
all relevant materials and prepare a report. The strictures of this time frame, however,
do not amount to an abuse of discretion. Dr. Santi testified repeatedly that he had
enough time to complete his analysis. See, e.g., Trial Tr. 345, May 1, 2007. Dr. Santi
spent over 75 hours on his analysis, in addition to the time he spent writing a 27-page
report including several detailed claim charts. Id. at 245. Further, he made himself
available for depositions and met with counsel for both sides before trial to prepare a
technology tutorial for the court.

[Note that there is a technology tutorial in the Goodenough/lithium ion battery case.]


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