IP Law Daily, PATENT—D. Del.: Dismissal of patent infringement suit did not have preclusive effect on claims asserted under later patents in same family, (Mar 29, 2021)

By Randall Holbrook, J.D.

Automaker defendants could not rely on claim or issue preclusion based on previous litigation involving similar, but not identical, patents.

Dismissal of a previous case involving the same parties and similar, but not identical, patents did not have any preclusive effect on a new patent infringement suit, the federal district court in Wilmington, Delaware, has held. Although the new patents were continuations of the old patents, they were narrower, so the suit to enforce them was a new cause of action and not a continuation of the original cause of action(Stragent LLC v. BMW of North America LLC, March 25, 2021, Stark, L.).

Stragent, LLC (Stragent) was the owner of U.S. Patents Nos. 8,209,705 and 8,556,843 (the Texas patents) which were directed to an information system that stored information on an electronic bulletin board and shared that information in real time between users. Stragent brought suit in the Eastern District of Texas, alleging that BMW, Mercedes Benz, Daimler Trucks, and Volvo each infringed the Texas patents through use of the AUTOSTAR system in their vehicles. BMW and Mercedes filed inter partes review petitions, and the PTAB invalidated all claims of the Texas patents for obviousness. After the PTAB decision, Stragent requested that the Texas court dismiss its case with prejudice.

Stragent then brought a new suit against the same defendants in the District of Delaware, asserting that the AUTOSTAR system infringed four new patents issued during the previous litigation, U.S. Patents Nos. 9,705,765, 10,002,036, 10,031,790, and 10,248,477 (the Delaware patents). The Delaware patents shared the same titles and specifications as the Texas patents. Each defendant then moved to dismiss the Delaware case on the grounds of claim preclusion and issue preclusion.

Claim preclusion. There was no dispute that all parties in the present case and the Texas case were either the same or in privity. The disputed issues were whether the Texas case had resulted in a final judgment on the merits and whether the causes of action were the same. The court determined that the dismissal in the Texas case was a final judgment on the merits because it was with prejudice. Although Stragent argued that it was not a final judgment because the dismissal was made on the basis of a lack of subject matter jurisdiction, the court held that the nature of the dismissal, not the reason for it, was the important factor in determining whether a final judgment on the merits existed. However, claim preclusion was not appropriate because the cases concerned different causes of action based on different patents. Although the patents were similar, with identical specifications, they did contain different limitations which could affect the validity of the patents. At the motion to dismiss stage, and without the benefit of claim construction, the court could not determine whether the differences were material to the question of patentability, so the court denied the motions to dismiss on claim preclusion grounds.

Issue preclusion. The defendants argued that the PTAB’s decisions finding that the Texas patents were invalid should preclude litigation of the validity of the Delaware patents, as the patents were essentially the same. The court, applying similar reasoning as it did on the issue of claim preclusion, was not able to say that the Texas and Delaware patents were essentially the same at the motion to dismiss stage, and indicated that expert testimony and claim construction would be needed to answer that question. The motions to dismiss on issue preclusion grounds were denied.

This case is No. 1:20-cv-00510-LPS.

Attorneys: George Pazuniak (O'Kelly & Ernst, LLC) for Stragent, LLC. Karen Elizabeth Keller (Shaw Keller LLP) for BMW of North America, LLC and BMW Manufacturing Co., LLC.

Companies: Stragent, LLC; BMW of North America, LLC; BMW Manufacturing Co., LLC

Cases: Patent DelawareNews