Patent Case Summaries July 7, 2023

Patent Case Summaries | Week Ending July 7, 2023

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

Inguran, LLC v. ABS Global, et al., No. 2022-1385 (Fed. Cir. (W.D. Wis.) July 5, 2023). Opinion by Reyna, joined by Lourie and Bryson.

Inguran (doing business as STGenetics) owns a patent directed to a method for sorting bull sperm cells according to a specific DNA characteristic in order to preselect the gender of a domestic animal’s offspring. ST’s competitor, ABS, sells semen drawn from its own bulls that is packaged in “straws” for use in artificial insemination.

ABS and ST had three litigations between them, each involving ST’s patent. In the first lawsuit (ABS I), ST alleged that ABS directly infringed the patent. The second lawsuit (ABS II) incorporated remand proceedings from ABS I and introduced additional facts. The third lawsuit (ABS III) added claims of induced infringement based on ABS’s selling or licensing accused machines to third parties.

In ABS III, the district court dismissed the induced infringement claims on the ground that they were precluded by the court’s judgment issued in ABS I. In so ruling, the district court clarified the scope of the ABS I judgment, stating that “the judgment is reasonably interpreted to cover straws produced by third parties using [accused] technology as licensed by ABS.” ST appealed.

On appeal, ST challenged both the district court’s determination of claim preclusion and the district court’s interpretation of the scope of the judgment in ABS I. The Federal Circuit agreed with ST as to both issues and thus reversed.

Regarding claim preclusion, the parties disputed only whether ABS I and ABS III involved the “same cause of action.” The Federal Circuit explained that this question “hinges on whether the same ‘cause of action’ or set of ‘transactional facts’ are at issue.” ST argued that the patent infringement claims in ABS I (involving direct infringement) and ABS III (involving induced infringement) are separate and distinct causes of action involving different infringing acts. ABS, in contrast, argued that the cases involved the same conduct and the same transactional facts.

The Federal Circuit agreed with ST because ST had not asserted an induced infringement claim in ABS I and could not have raised such a claim based on the transactional facts available at the time. The Federal Circuit thus held that “the induced infringement claim brought in ABS III is not precluded by the direct infringement claim brought in ABS I because the claims are not based on the same transactional facts.” ST needed “additional facts to plausibly allege an induced infringement claim—facts that largely came to light during discovery in ABS II.” Thus, the district court erred in applying claim preclusion.

Regarding the district court’s interpretation of the judgment in ABS I, the Federal Circuit held that the district court abused its discretion. The plain language of the operative order in ABS I was limited to straws and “cannot reasonably be expanded to cover actions of third-party licensees” for purposes of an induced infringement claim. The Federal Circuit thus reversed the district court’s interpretation of its prior order because the court had “improperly broadened the scope of the ABS I judgment to address induced infringement activity.”

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