Patent Law and Collateral Estoppel

In a patent case, under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case. Once a patent has been declared invalid via judicial inquiry, a collateral estoppel barrier is created against further litigation involving the patent, unless the plaintiff can demonstrate that he or she did not have a full and fair chance to litigate the validity of the patent in the prior case. Defendants may be collaterally estopped from contesting issues of infringement and patent validity.

The collateral estoppel barrier also applies where reissue is sought of a patent which has been held invalid or unenforceable for fraud or violation of duty of disclosure in procuring of the patent that is at issue. Ordinarily, collateral estoppel is an affirmative defense that must be raised by the party seeking to use it, or else it is waived.

Collateral estoppel requires the following:

  • the issue at stake is identical to the one involved in the prior proceeding;
  • the issue was actually litigated in the prior proceeding;
  • the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the first action; and
  • the party against whom collateral estoppel is asserted must have had a full and fair opportunity to litigate the issue in the prior proceeding.

The collateral estoppel bar is inapplicable when the claimant did not have a full and fair opportunity to litigate the issue decided by the other court. Thus, a claimant can file a federal suit to challenge the adequacy of state procedures. The preclusive effect of a state court judgment in a federal proceeding is governed by state law.
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