By Phillip Shelton and Carl Kukkonen –
In Think Prod., Inc. v. ACCO Brands Corp., No. 18-CV-07506, 2019 WL 6609427, at *1 (N.D. Ill. Dec. 5, 2019), the District Court addressed whether the plaintiff patent ower was collaterally estopped from arguing validity in view of PTAB rulings, affirmed by the Federal Circuit, that invalidated two of the plaintiff’s similar patents.
The Defendants (ACCO Brands Corporation and ACCO Brands USA, LLC) manufacture a series of laptop locks that include a cable for attaching a portable electronic device to substantially immoveable objects. Think Products (“Think Prod.”) sued Defendants for patent infringement of two of Think Prod.’s patents: U.S. Patent Nos. 9,562,375 (the “ ‘375 patent”) and 10,125,523 (the “ ‘523 patent”), which disclose security locking devices for securing portable electronic devices to substantially immoveable objects. In prior IPRs between the same parties before the PTAB (and affirmed by the Federal Circuit), two of Think Prod.’s patents (U.S. Patent Nos. 8,717,758 (the “ ‘758 patent”) and 8,837,144 (the “ ‘144 patent”)) were invalidated based on obviousness under 35 U.S.C. §103(a). Defendants moved for summary judgment based on collateral estoppel, arguing that the prior judgement of invalidity for the ‘758 and ‘144 patents, barred re-litigation of the obviousness issue for the ‘375 and ‘523 patents.
Collateral estoppel applies when (1) the issue litigated is the same as one involved in a prior action; (2) that issue was actually litigated and determined in the first action; (3) the determination of the issue was essential to the judgment in the first action; and (4) the party against whom collateral estoppel is invoked had a full and fair opportunity to litigate the issue in the first action. Here, Think Prod. contested two elements of collateral estoppel, and also invoked judicial estoppel based on an alleged inconsistent position taken by Defendants in the earlier action.
First, Think Prod. argued that the obviousness issue presented in the prior action was not the same issue as the present case. In addressing this first point, the Court analyzed the claim language between the patents, and determined the language used in the subject patents closely paralleled language in the invalidated patents. This was important because that language had resulted in the PTAB invalidating the ‘758 and ‘144 patents for obviousness. Despite the ‘375 and ‘523 patents having slightly different language from the ‘758 and ‘144 patents, the Court found that the asserted patents disclose claims that are identical or broader than the ‘758 and ‘144 patents, and are not materially different. The Court further noted that broader claims are invalid where the PTAB has found narrower claims to be obvious. See Ormco Corp. v. Align Tech., Inc., 498 F.3d 1307, 1319 (Fed. Cir. 2007).
Second, Think Prod. argued that the obviousness issue was not essential to the judgment in the prior action because some of the claims were deemed anticipated by the PTAB. In response, the Court held that obviousness was the primary basis for the finding of invalidity in the PTAB ruling. Furthermore, although the PTAB found additional reasons to invalidate the ‘758 and ‘144 patents, it did not mean that obviousness was not essential to its ruling. Finally, the Court rejected Think Products assertion that Defendants were judicially estopped from a claim construction for the term “captive security rod” because the Court disagreed with Think Prod.’s characterization of the Defendant’s arguments.
In sum, the Court concluded that Think Prod. was collaterally estopped from arguing that the claims of the ‘374 and ‘523 patents are valid.