Steuben Foods, Inc. did not have a good week at the Federal Circuit. On March 13, 2018, two decisions were rendered against it in two patent cases, although for different rationales. The first, Nestlé USA, Inc. v. Steuben Foods, Inc.,[1] the Court of Appeals for the Federal Circuit ruled that Steuben Foods could not argue a different claim term because the same term had already been construed in an earlier litigation, and therefore, the doctrine of collateral estoppel attached, preventing the same term from being defined differently in the later litigation.
The facts are as follows.
Nestlé USA filed an IPR asserting claim 9 of Steuben Foods’ U.S. Patent No. 6,481,468 (‘468) was obvious. The PTAB found that the patent was not obvious, but Nestlé argued the PTAB erred in its construction of the claim terms “aseptic” and “aseptically disinfecting.”
The panel, composed of Judges Dyk, Reyna, and Hughes, with Judge Hughes writing for the panel, first illustrated the doctrine of collateral estoppel. Collateral estoppel prevents a party from re-litigating issues that were fully and fairly adjudicated in a prior action and adversely resolved against that party.[2] Further, collateral estoppel, also known as issue preclusion, applies in administrative proceedings.[3]
Here, the earlier case between Nestlé and Steuben Foods involved claims 18-20 of U.S. Patent No. 6,945,013 (‘013).[4] The PTAB’s construction of “aseptic” was vacated, and the term was construed according to the specification, which was “FDA level of aseptic.”
There was no dispute that “aseptic” was used by the parties in both cases. To illustrate, the panel compared the term “aseptic” in the ‘013 (earlier) and the ‘468 (later) patents:
“aseptic”
‘013: “aseptically disinfecting the bottles,” and “aseptically filling the bottles with aseptically sterilized foodstuffs.”
‘468: “aseptically disinfecting a plurality of bottles.”
The panel further noted that the two specifications contained the same lexicography of “aseptic,” in that both denoted the “FDA level of aseptic.” As a result, the panel found that Steuben Foods had a full and fair opportunity to litigate the issue of claim construction of “aseptic” in a previous litigation. The case was vacated and remanded.[5]
The takeaway is a difficult one for Steuben Foods, which probably knew the ‘013 appellate result would hinder its prospects in this appeal. However, it must be underscored that stability in the law are necessary, especially in patent law which has undergone major changes in the legal landscape that collateral estoppel principles provide some consistency for a practitioner trying to navigate the legal landmines.
[1] ___F.3d___ (Fed. Cir. 2018), vacating and remanding Nestlé USA, Inc. v. Steuben Foods, Inc., Case No. IPR2015-00249 (PTAB 2017).
[2] See Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013).
[3] see Maxlinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1376 (Fed. Cir. 2018).
[4] See Nestlé USA, Inc. v. Steuben Foods, Inc., 686 F. App’x 917, 918 (Fed. Cir. 2017).
[5] Collateral estoppel also applies in prosecution, but in a slightly different context. See MPEP 2012.01: “. . . once a patent has been declared invalid via judicial inquiry, a collateral estoppel barrier is created against further litigation involving that patent, unless the patentee-plaintiff can demonstrate that ‘he did not have’ a full and fair chance to litigate the validity of his patent in the ’earlier case.’” Here, the issue preclusion relates to the same claim term from an earlier different patent.