On March 12, 2018, the Court of Appeals for the Federal Circuit delivered a ruling that will stymie Google’s efforts to shake off a pesky serial patent litigator deemed a “patent troll” by the tech press. That case is SimpleAir, Inc. v. Google LLC.[1] This is the fourth litigated iteration filed by SimpleAir against Google, which also involved ample use of terminal disclaimers filed during prosecution, and creative arguments of res judicata and a little-known patent doctrine to shut down the litigations.
The facts are as follows.
SimpleAir filed its first patent infringement suit against Google over Google’s Cloud Messaging and Cloud-to-Device Messaging Services (“GCM”). There are a family of patents, owned by SimpleAir, which were at-issue. The parent is U.S. Patent No. 6,021,433 (“‘433”), and spawned several children – continuation applications: U.S. Patent Nos. 7,035,914 (“‘914”), 8,572,279 (“’279”), 8,601,154 (“’154”), 8,639,838 (“’838”), and 8,656,048 (“’048”). The Examiner required SimpleAir to file terminal disclaimers under 35 U.S.C. §253(b)[2] during prosecution of the child applications. Terminal disclaimers, typical in prosecution, require the child patent to expire on the same day as the earlier-filed, or parent, patent.[3] The first litigation, involving the ‘914 patent, ended with a finding of noninfringement,[4] the second and third consolidated litigations, involving the ‘154 and ‘279 patents, ended with the ‘154 patent judgment dismissed with prejudice, and the ‘279 patent returning a finding of noninfringement.[5] The current case involved the ‘838 and ‘048 patents.
The district court dismissed SimpleAir’s complaint under Rule 12(b)(6), citing that the child patents and the ‘433 patent both shared the same claimed invention, and coupled with the terminal disclaimers filed in the ‘838 and ‘048 prosecutions, therefore, claim preclusion (i.e., res judicata) applied. However, the district court never conducted claim construction of either the ‘838 nor the ‘048 patents during trial.
The Fed Circuit panel, composed of Judges Lourie, Reyna, and Chen, disagreed. The panel agreed with SimpleAir’s contention that just because there was one common specification and multiple terminal disclaimers throughout the different prosecution histories does not give rise to a presumption of “same invention.” When determining “same invention,” the Fed Circuit defined claim preclusion as:
a judgment ‘on the merits’ in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action.[6] Claim preclusion forecloses successive litigation of the same cause of action whether or not relitigation of the cause of action involves the same issues as the earlier suit.[7]
The panel noted that because the invention is determined by its claims, the district court never analyzed the claims of either ‘838 or ‘048 patent to determine that claim preclusion applied to the case.
Google tried to argue a Fed Circuit precedence, Senju Pharm. Co., Ltd. v. Apotex Inc.[8] However, in Senju, the Fed Circuit allowed claim preclusion of claims from a reexamination application. Here, there were a different type of application involved – continuations. Because claims cannot be broadened in reexaminations,[9] the child invention could not possibly be greater than that of the parent. However, there is no such prohibition on broader claims in a continuation. As such, there is the possibility that the claims of the children patents could be greater than that of the parent ‘433 patent. If the claims were broader, than the invention would be not be the “same invention.”
Google further argued that the terminal disclaimers created a presumption that the claims were patentably indistinct, thereby making the children patents the “same.” The panel disagreed, citing a long line of precedence finding terminal disclaimers raising no such admissions or presumption:
A terminal disclaimer is simply not an admission that a later-filed invention is obvious,[10] nor is it an admission of obviousness-type double patenting.[11] [Also,] the filing of a terminal disclaimer simply serves the statutory function of removing the rejection of double patenting, and raises neither presumption nor estoppel on the merits of the rejection.[12]
However, given that the district court never conducted claim construction in the ‘838 and ‘048 patents, the panel noted language in claims of each which raised a possibility of being the “same:”
‘838: . . . whether the selected remote computing devices are online or offline to the information providers of the received data.
‘048: . . . whether the computing devices are online or offline from a data channel associated with each device.
As a result, the panel remanded back to the district court with instructions to resolve whether the two patents were patentably indistinct from the previously litigated parent ‘433 patent.
Google’s third argument was that the Kessler doctrine barred the ‘838 and ’048 litigation. The Kessler doctrine precludes patent assertion against any post-judgment activity if an earlier judgment held that “essentially the same” accused activity did not infringe the asserting patent.[13] The policy consideration behind this little-known patent doctrine is to encourage free trade and commerce. If the accusing activity is not patent infringement, then the now-innocent infringer should be free to practice his trade without continued harassment from the accusing patent holder.[14] The panel deemed the Kessler doctrine inappropriate in this case, since it would apply only where there were “essentially the same” claims involved; here, there was a question as whether the claims were the “same,” and additionally, there were questions that the child claims were even broader than the parent, and the Fed Circuit never has allowed the Kessler doctrine to bar a broader set of rights than those barred by claim preclusion.
However, not all is lost for Google. The panel noted that upon remand:
If, on remand, the district court determines that the claims of the ‘838 and ‘048 patents are patentably indistinct from those previously adjudicated, and are therefore claim-precluded with respect to pre-judgment GCM services, then the Kessler doctrine would also bar SimpleAir’s assertions that those patents against Google’s provision of essentially the same GCM services post-judgment.[15]
We will have to see what Judge Gilstrap in the Eastern District of Texas determines at a later date.
[1] ___F.3d___ (Fed. Cir. 2018), vacating and remanding SimpleAir, Inc. v. Google Inc., 204 F. Supp. 908, 915 (E.D. Tex. 2016) (SimpleAir IV).
[2] See also 37 C.F.R. §1.321(c): “A terminal disclaimer, when filed to obviate judicially created double patenting in a patent application or in a reexamination proceeding . . . . “
[3] See also MPEP 804: “The doctrine of double patenting seeks to prevent the unjustified extension of patent exclusivity beyond the term of a patent . . . . Double patenting results when the right to exclude granted by a first patent is unjustly extended by the grant of a later issued patent or patents.”
[4] See SimpleAir, Inc. v. Sony Ericsson Mobile Commc’ns AB, 820 F.3d 419, 421 (Fed. Cir. 2016), reversing, vacating and remanding SimpleAir, Inc. v. Google Inc., 70 F. Supp. 3d 747, 752 (E.D. Tex. 2014) (SimpleAir I).
[5] See SimpleAir, Inc. v. Google Inc., No. 2:14-cv-11 (E.D. Tex. Nov. 4, 2015) (SimpleAir II/III).
[6] See Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 326 (1955).
[7] See New Hampshire v. Maine, 532 U.S. 742, 748-49 (2001).
[8] 746 F.3d 1344 (Fed. Cir. 2014).
[9] See MPEP 2258 (citing 37 C.F.R. §1.552(b)): “claims in an ex parte reexamination proceeding will not be permitted to enlarge the scope of the claims of the patent,” and MPEP 2658 (citing 37 C.F.R. §1.906(b)): “claims in an inter partes reexamination proceeding will not be permitted to enlarge the scope of the claims of the patent.”
[10] See Motionless Keyboard Co. v. Microsoft Corp., 486 F.3d 1376, 1385 (Fed. Cir. 2007).
[11] See Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 941 (Fed. Cir. 1992).
[12] See Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870, 874 (Fed. Cir. 1991).
[13] See Kessler v. Eldred, 206 U.S. 285, 290 (1907).
[14] See generally Christopher Petroni, Aspex Eyewear, Inc. v. Marchon Eyewear, Inc. and Brain Life, LLC v. Elekta, Inc.: Irreconcilable Conflict in the Law Governing Claim Preclusion in Patent Cases, 14 Chi.-Kent J. Intell. Prop. 379, 396-97 (2015).
[15] SimpleAir IV, supra (slip op. at 16).