The equitable doctrine of collateral estoppel protects a party from having to re-litigate an issue that has already been fully and fairly adjudicated. In Nestlé USA, Inc. v. Steuben Foods, Inc. the Federal Circuit said that application of collateral estoppel is not limited to construing only identical patent claims; but instead, it extends to terms across related patents. Case No. 2017-1193 (Fed. Cir. Mar. 13, 2018).

Nestlé and Steuben Foods were simultaneously involved in multiple litigation disputes. Two of these disputes are relevant to the court’s collateral estoppel decision: (1) an IPR proceeding and corresponding appeal regarding Patent No. 6,945,013 owned by Steuben Foods (the ’013 proceeding) (IPR2014-01235 and Fed. Cir. App. No. 16-1750) and (2) an IPR proceeding regarding related Patent No. 6,481,468, also owned by Steuben Foods (the ’468 proceeding). See IPR2015-0049. The ’013 and the ’468 patents both claim priority to the same U.S. provisional application.

In its Final Written Decision (FWD) in the ’013 proceeding, the Board determined that Nestlé had not proven unpatentability. Nestlé appealed to the Federal Circuit, arguing that the Board erred in its construction of the claim term “aseptic.” While that appeal was pending, the Board issued its FWD in the ’468 proceeding, in which the Board again assigned “aseptic” the same meaning it assigned in the ’013 proceeding. Nestlé again appealed to the Federal Circuit, arguing that the Board erred in its construction of the claim term “aseptic.”

While the parties were briefing the appeal in the ’468 proceeding, the Federal Circuit issued its opinion in the ’013 proceeding. The court agreed with Nestlé that the Board had erred, vacated the Board’s construction of “aseptic,” and remanded the case back to the Board for further proceedings consistent with the Court’s construction of “aseptic.” See Nestlé USA, Inc. v. Steuben Foods, Inc., 686 F. App’x 917, 918 (Fed. Cir. 2017).

The parties addressed the newly-issued Federal Circuit opinion in their response and reply briefs in the ’468 proceeding, and Nestlé did not raise collateral estoppel. Yet Nestlé argued that “[t]he Court should vacate the Board’s construction of ‘aseptic’ for the same reasons that it did in IPR2014-01235.” Case No. 17-1193, Doc. No. 40, p.9, Jun. 30, 2017. The Court agreed and determined collateral estoppel should apply.

Collateral Estoppel protects a party from having to litigate issues that have been fully and fairly tried in a previous action and adversely resolved against the party-opponent. Slip. Op. at 3. In determining that the “same issue” had already been litigated between the two parties, the court relied on the following facts:

  • the two patents claim priority to the same provisional application;
  • it is undisputed that the claims use the term “aseptic” (or its related variation “aseptically disinfecting”) in the same way;
  • the two patents use identical lexicography for the term “aseptic” in their specifications; and
  • neither party identified any material difference between the patents or file histories that would give rise to claim construction issues differently in this appeal versus the prior appeal.

The Federal Circuit determined therefore that Steuben Foods received a full and fair opportunity to litigate claim construction during the earlier IPR and its appeal. Collateral estoppel protects Nestlé from having to revisit the issue again: “[O]ur precedent makes clear that collateral estoppel is not limited ‘to patent claims that are identical. Rather, it is the identity of the issues that were litigated that determine whether collateral estoppel should apply.’” Slip Op. at 3. Accordingly, the Court vacated the Board’s decision in the ’468 proceeding, determined that “aseptic” should be construed as detailed in the ’013 proceeding, and remanded the case back to the Board.

The Federal Circuit’s decision reminds parties to carefully consider claim construction arguments they advocate for terms that are used across multiple patents. Depending on the circumstances of a particular case, collateral estoppel may prevent a party from challenging a claim’s construction in later proceedings.