In this patent infringement action, the Defendant moved for dismissal based on collateral estoppel and Alice contending that a prior district court had found the patents invalid for lack of patentable subject matter. Before applying the two-step Alice test, the district court took "judicial notice of the fact that Patent '046 was found invalid in Joao Control & Monitoring Systems, LLC v. Telular Corp., -- F. Supp. 3d --, 2016 WL 1161287 (N.D. Ill. Mar. 23, 2016).
In analyzing the collateral estoppel issue, the district court noted that "the Supreme Court has held that a defense of issue preclusion applies where a party is 'facing a charge of infringement of a patent that has once been declared invalid,' even though the party asserting the defense was not a party to the action where the patent was invalidated." Soverain Software LLC v. Victoria's Secret Direct Brand Mgmt., LLC, 778 F.3d 1311, 1315 (Fed. Cir. 2015) (quoting Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 349-50 (1971)).
Collateral estoppel "applies when: `(1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the party had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid and final judgment on the merits.'" Marvel Characters, Inc. v. Simon, 310 F.3d 280, 288-89 (2d Cir. 2002) (quoting Boguslaysky v. Kaplan, 159 F.3d 715, 720 (2d Cir. 1998)).
Here, the district court concluded that "[a]ll four criteria are clearly met here. In Telular, Judge Pallmeyer dismissed Plaintiff's claim that the defendant in that case infringed Patent '046, finding that Patent '046 was invalid under Section 101 of the Patent Act. 2016 WL 1161287, at *10. Applying the Alice test, the court found that Patent '046 was "directed to the abstract idea of monitoring and controlling property and communicating this information through generic computer functions," and that it did 'not contain any additional elements sufficient to transform this abstract idea into a patent-eligible invention.' Id."
In addition, the district court concluded that collateral estoppel should also apply to an additional patent that was largely duplicative of the '406 Patent. "While the Patents each span approximately 100 pages, both Patents in substance claim invention of a system for monitoring a vehicle or premises using two computers located remotely from the vehicle or premises: one computer that records audio or video from the vehicle or premises, and a second computer that receives audio or video information transmitted by the first computer via the Internet. (Compare Doc. No. 4-5 at 2 (Patent '010) (describing a '[m]onitoring apparatus and method including a processor, associated with a web site and capable of providing audio and video, which receives audio information recorded or obtained at a vehicle or premises" and then transmitted "over the Internet and/or World Wide Web'), with Doc. No. 4¬1 at 2 (Patent '046) (describing a 'monitoring apparatus and method including a processing device for receiving video information recorded by a video recording device or a camera, wherein the video recording device or a camera is located at a vehicle or a premises and the processing device is located at a location remote from the vehicle or premises' and '[Ole video information is transmitted to the communication device on or over at least one of the Internet and the World Wide Web').) Both Patents claim to 'overcome[e] the disadvantages and drawbacks . . . associated with' prior vehicle and premises security monitoring. (See Doc. No. 4-5 at 2 (Patent '010); Doc. No. 4-1 at 26 (Patent '046).) And as set forth above, the fact that the Patents may use 'slightly different language to describe substantially the same invention' does not defeat the application of collateral estoppel. Soverain Software, 778 F.3d at 1319."
As a result, the district court found that because the Patents are substantially the same, the Plaintiff was collaterally estopped from bringing infringement claims as to both Patents.
JOAO Control & Monitoring Systems, LLC v. Digital Playground, Inc., Case No. 12-ev-7734 (RJS) (S.D.N.Y. Sept. 30, 2016)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.