CAFC Nixes New Trial for WARF Against Apple on Doctrine-of-Equivalents Theory

The U.S. Court of Appeals for the Federal Circuit (CAFC) in a precedential decision today upheld two district court judgments for Apple, Inc. that found Wisconsin Alumni Research Foundation (WARF) had 1) abandoned its doctrine-of-equivalents theory (“WARF I”) and 2) that a second suit claiming infringement of the same patent via next-generation Apple products was barred by the previous decision (WARF II).

The underlying litigation spans ten years and relates to a patent that expired in 2016 (U.S. Patent No. 5,781,752). WARF first sued Apple in January 2014, accusing a number of Apple processors of infringing the ‘752 patent. Before that trial was held, WARF sued Apple again, accusing subsequent versions of Apple processors of infringing.

In WARF I, Apple originally claimed both literal infringement and infringement under the doctrine-of-equivalents, but dropped the latter theory after Apple opposed WARF’s motion in limine to exclude evidence relating to Apple’s U.S. Patent Application No. 13/464,647, which later issued as U.S. Patent No. 9,128,725. The district court ultimately denied the motion in limine “but ordered, based on the parties’ agreement, that ‘neither side may introduce evidence or argument regarding the ’647 application . . . during the liability phase of trial,’” according to the CAFC’s opinion.

The jury then issued a verdict of literal infringement in favor of WARF. Apple moved for judgment as a matter of law that no reasonable jury could find literal infringement based in part on the “plain and ordinary meaning” of the term “particular”. Apple said its “LSD Predictor” did not “produce a prediction associated with the particular [load] instruction” because “the plain and ordinary meaning of ‘particular’ meant that the claimed ‘prediction’ must be associated with a single load instruction (i.e., one and only one load instruction), rather than with a group of load instructions.” The district court did not grant Apple’s request for a jury instruction on this point, however, because the parties had failed to seek a claim construction of the term and entered final judgment of infringement against Apple. But the CAFC reversed in a 2018 decision, explaining that “the plain meaning of ‘particular,’ as understood by a person of ordinary skill in the art after reading the ’752 patent, requires the prediction to be associated with a single load instruction. The opinion added that even “drawing all reasonable inferences in favor of WARF, there is insufficient evidence to support the jury’s finding that Apple’s products literally satisfy the ‘particular’ limitation.”

WARF requested a new trial on infringement relating to WARF I, this time based on a doctrine of equivalents theory. The district court denied the request, finding first that “WARF ‘abandoned its doctrine of equivalents theory in response to Apple’s agreement not to introduce its newly-acquired patent on a LSD Predictor despite the patent-in-suit to demonstrate that the accused technology was separately patentable and therefore, not equivalent,’” and second, that, because the CAFC confirmed in its 2018 decision that “the plain and ordinary meaning of ‘particular’ is “associated with a single load instruction,” any “equivalent where the prediction could be associated with a group of load instructions” was foreclosed.

In WARF II, however, WARF still sought to argue that Apple’s later processors infringed under the doctrine of equivalents and Apple opposed, arguing that WARF I precluded that finding under the doctrines of claim preclusion, issue preclusion, the Kessler doctrine, and judicial estoppel. The district court agreed with Apple, citing Nystrom v. Trex Co., 580 F.3d 1281 (Fed. Cir. 2009), which it said shared the same procedural posture as WARF II.

WARF first argued in the latest appeal that it “did not and could not have waived” its doctrine-of-equivalents theory in WARF I, according to the CAFC opinion. WARF said it “‘believed Apple literally infringed’ under the plain and ordinary meaning of ‘particular,’ and such claim construction ‘did not require’ a doctrine-of-equivalents theory.” WARF added that Apple waived claim construction for the term “particular” and that a change in claim construction as a result of an appeal is controlled by Exxon Chemical Patents, Inc. v. Lubrizol Corp., which, according to WARF, said that “when the doctrine of equivalents becomes a critical issue only after a new claim construction is adopted on appeal, a plaintiff’s prior choice to not present that theory at trial does not constitute abandonment.” Apple, on the other hand, argued that “WARF made the strategic choice to abandon its [doctrine-of-equivalents] theory in order to prevent Apple from introducing evidence of Apple’s own patent during the trial’s liability phase.”

The CAFC held that its 2018 decision simply clarified the plain and ordinary meaning of “particular” that it was evident Apple already agreed with according to documents dating back to 2016, six months before trial. WARF also was not precluded “from raising the doctrine of equivalents at trial as an alternative to literal infringement given Apple’s noninfringement position,” said the opinion. WARF’s argument that it was confident in its literal infringement theory, “does not excuse WARF from failing to litigate the doctrine of equivalents,” said the CAFC. The CAFC also separately held that WARF waived its doctrine-of equivalents theory because “the record speaks for itself: before the WARF I trial, WARF intentionally relinquished and abandoned its doctrine-of-equivalents theory in exchange for Apple’s agreement not to present its own patent at trial.”

As for WARF’s reliance on the Exxon case, the CAFC said WARF’s understanding of the holding in that case is “too broad”. That case is distinguished from the facts here because 1) while in Exxon there was no reason for the jury to consider a doctrine-of-equivalents theory, here there were reasons for WARF to pursue one; 2) WARF affirmatively abandoned its doctrine-of-equivalents theory via a “quid-pro-quo exchange” with Apple; and 3) “Exxon II did not grant a per se right to a new trial on the doctrine of equivalents as WARF appears to suggest,” but rather, simply “allow[ed] an opening for a claim of infringement under the doctrine of equivalents” but “did not dictate th[at] result.”

Secondly, the CAFC agreed with the district court that WARF I precludes WARF from pursuing a doctrine of equivalents theory in WARF II based on issue preclusion and the Kessler doctrine. The CAFC first found no clear error with the district court’s determination that the processors at issue in WARF II were “essentially the same” as the processors in WARF I and then rejected WARF’s reliance on a trademark case, B & B Hardware, Inc. v. Hargis Industries, Inc., to support its theory that “because literal infringement and the doctrine of equivalents have different tests, they must be different issues,” for purposes of issue preclusion. The CAFC Said WARF read this decision too broadly as well, explaining:

“Critical here, B & B Hardware does not hold that the factors or tests must be identical for issues to be identical. Indeed, the ‘likelihood of confusion’ factors at the TTAB were different from (albeit similar to) those in district-court proceedings. For this reason, WARF reads B & B Hardware too broadly, and WARF’s mere observation that the tests for literal infringement and the doctrine of equivalents are different is insufficient to demonstrate that the issues are different.”

Since the statutory basis for direct infringement covers both literal infringement and the doctrine of equivalents, the “issue” is the same.

The Kessler doctrine, as defined by the court via citation to Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1056 (Fed. Cir. 2014) “fills the gap between [claim and issue] preclusion doctrines . . . allowing an adjudged non-infringer to avoid repeated harassment for continuing its business as usual post-final judgment.” While the CAFC acknowledged it has applied Kessler in limited circumstances where there is clear harassment, “WARF II presents exactly this type of litigation harassment, applied to a second suit against the very same defendant, the manufacturer itself.” The CAFC Also rejected WARF’s argument that Kessler does not apply because the processors at issue “were sold before any final judgment of noninfringement,” noting that “this court has indeed relied on the Kessler doctrine to bar assertion of claims against essentially the same products made or sold before the judgment of noninfringement in the earlier case.”

Thus, both district court decisions on appeal were affirmed.

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