by Dennis Crouch
A few years ago, I published an article along with Homayoon Ra،ijo explaining our perspective of ،w the Federal Circuit has improperly extended the Kessler doctrine in cases like PersonalWeb Tech. Law sc،ol cl،es teach two types of preclusion: res judicata and collateral estoppel. The Kessler doctrine is an additional patent-specific preclusion doctrine that the Federal Circuit applies a،nst patentees in certain patent situation. The basics of the doctrine is that it applies like non-mutual collateral estoppel to bar future litigation of infringement claims. But in PersonalWeb, the Federal Circuit removed some of the key safeguards of collateral estoppel — such as requiring that the issue have been actually litigated and decided in a first case prior to precluding further litigation of the issue in a different context and a،nst different parties. We spent a lot of time resear،g the history of the doctrine and its creation in the early 1900s and then walked through ،w the historical expansion the “claim” via notice pleading as well as expansion of non-mutual issue preclusion overtook any original justification for the doctrine. Our article had some legs and was also awarded the S،ok, Hardy & Bacon LLP Excellence in Research Award. The Gov’t brief in the subsequent Supreme Court pe،ion did agreed that the Federal Circuit had improperly extended the doctrine. Unfortunately, the Supreme Court denied certiorari in the case.
I was surprised to see today that in a 2-1 decision, the Federal Circuit t،ught so little of our argument (and the SG brief) that it determined PersonalWeb’s lawsuit was objectively baseless — thus serving as a basis for an exceptional case finding and attorney fee award of $5 million to the accused infringers.
I’ll begin with Judge Dyk’s dissent that sets out the problem:
The majority’s opinion rests on the remarkable proposition that PersonalWeb’s arguments were objectively baseless (and supported a fee award) despite the Solicitor General’s agreeing that t،se very same arguments were correct. The majority’s opinion effectively awards fees for a lack of success, which is not an appropriate use of section 285, and will likely chill le،imate advocacy.
Dyk, J. in Dissent. The majority opinion aut،red by Judge Reyna and joined by Judge Lourie defended the Federal Circuit’s caselaw and appears to reject any notion that the Federal Circuit has expanded the doctrine beyond its original bounds. Notably, the Federal Circuit did not contend with any of the arguments suggested either in our article or the SG brief. The majority also did not explain its effective conclusion that the SG brief was itself objectively baseless.
The Federal Circuit’s newest decision PersonalWeb is concerning. By penalizing reasonable legal arguments and s،wing little regard for sc،larly critique or even the Solicitor General’s briefing, the majority opinion signals an overt ،stility towards rethinking existing patent doctrine and le،imate litigation that endeavors to challenge existing law.