In Acumed LLC v. Stryker Corp, the Federal Circuit dishes up a tasty decision on claim preclusion that certainly shouldn't ruin a patent holder's appetite for further litigation. Acumed makes clear that a patent holder's claims against an infringer for multiple versions of a product do not need to be brought in a single serving unless the allegedly infringing devices are "essentially the same"-even if the allegations against additional infringing devices "could be raised" at the same time. While not allowing anyone two bites at the same apple, Acumed may offer patent holders an increasingly rare opportunity to both have, and eat, a slice of patent law cake.
Acumed involved a patent for a medical nail used to fix fractures in human bones. In a first round of litigation, the patent holder claimed that defendant's nail-known as the T2 PHN-infringed its patent. Discovery revealed detailed information that the defendant was also developing a longer version of the T2. However, marketing and sales of the longer nail did not begin until after the close of discovery in the first case.
Patentee Acumed brought a motion to compel production of commercial information regarding the longer screw. It argued that, if the nail was "substantially similar" to the original T2, infringement claims against it could reasonably be swept into the pending litigation. The district granted the motion and then offered Acumed the opportunity to amend its complaint to include allegations against the long version-but cautioned that doing so would postpone the already scheduled trial. Acumed declined to amend, proceeded to trial solely against the original T2 and obtained a verdict of willful infringement which the Federal Circuit affirmed.
Only then did Acumed file a second complaint against the longer version of the T2. The defendant argued that these new claims were precluded by the judgment in the first action because they could have been raised there. The district court agreed and dismissed Acumed's second action. Acumed then appealed.
Reversing the district court, the Federal Circuit reviewed the standards for claim preclusion---the preferred term for the collective concepts of collateral estoppel and res judicata. It ruled that the standard for patent law is whether the device currently before the court is "essentially the same" as the accused device in the prior action. Devices are "essentially the same" where the differences are unrelated to the limitations in the claims of the patent. Despite precedential language which seemed to indicate otherwise, the mere fact that allegations against the additional device "could have been raised" in the prior action does not, by itself, create claim preclusion. Because even the defendant agreed (and in fact argued) that since the longer version of T2 was NOT essentially the same, claim preclusion did not apply.
Patent holders-especially in industries where there are multiple or continually changing models-should keep Acumed on their staples shelf because of the control it seems to impart. It appears that patent holders can control what multiple iterations they challenge and when they do so. This strategic flexibility may also allow patent holders to counter the impact of recent changes in the laws of willfulness by allowing them to reserve willfulness allegations for subsequent actions until infringement is established in the opening rounds of litigation.
Potential defendants aren't just left with the scraps. Declaratory judgment actions and equitable principles of estoppel may blunt the threat of repeated litigation from products not expressly covered by the lawsuit sur la table. And both sides will have to be very careful as to how they draft their allegations and how issues are framed to avoid unintended consequences regarding the scope of any trial which leads to a final judgment. Acumed also reaffirms the importance of securing total freedom from the patent in licensing and settlement and not just of the accused product.
Our view? There's enough meat on Acumed's bones for everyone at the patent law table to have something to chew on. Bon Appetit!
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