Rule 36 Affirmance Can Create Issue Preclusion for Claim Construction
Addressing the scope of collateral estoppel from a Rule 36 affirmance, the US Court of Appeals for the Federal Circuit determined that despite the summary nature of such decisions and the absence of a written opinion outlining any reasons for affirmance, the prior judgment in this case had a preclusive effect on the issue of claim construction in the patent owner’s subsequent assertion of infringement. Phil-Insul Corp. v. Airlite Plastics Co., Case No. 16-1982 (Fed. Cir., Apr. 17, 2017) (O’Malley, J).
The patent at issue relates to insulated concrete forms (ICFs) used as molds for casting concrete walls. After the concrete sets in the mold, the ICFs remain in place to serve as insulation around the wall. The ICFs not only interconnect sideways, they also stack on top of each other, allowing the molds to reach the desired height for the final wall. The patent claimed a structure that made it “easier to interconnect” the stacked ICFs by having “adjacent” rows of “alternating projections and recesses” with “substantially the same dimension.”
In a first litigation between the patent owner, IntegraSpec, and a first defendant, Reward Wall, the district court construed the terms “adjacent” and “dimension” of asserted claim 1. Applying its construction, the district court granted Reward Wall’s motion for summary judgment of non-infringement. Because literal infringement was not at issue, the district court decided only whether Reward Wall’s products infringed under the doctrine of equivalents. IntegraSpec appealed the district court’s claim construction, and the Federal Circuit affirmed under Rule 36, which allows the Court to summarily affirm the judgment without a written opinion when certain conditions exist and the “opinion would have no precedential value.”
In a second litigation (the subject of this appeal), IntegraSpec asserted dependent claim 2 against a second defendant, Airlite, arguing for a new claim construction of the same terms “adjacent” and “dimension.” In this case, the district court granted Airlite’s motion for summary judgment, finding that the Federal Circuit’s prior Rule 36 judgment had collaterally estopped IntegraSpec from seeking a new claim construction because the issue of claim construction had been fully and fairly litigated to finality. IntegraSpec appealed, arguing that Rule 36 opinions have no precedential value and therefore cannot create issue preclusion in other cases. IntegraSpec also argued that the construction of claim 1 in the prior case was a different issue, so it could not be estopped from litigating new claim construction issues raised with respect to claim 2 in the subsequent litigation.
The Federal Circuit disagreed. The Court explained that a Rule 36 judgment is preclusive as long as the issues are necessary to the Court’s final judgment. Because claim construction is a necessary first step to any infringement analysis, a summary judgment of non-infringement that is clearly based on resolving a claim construction dispute means that claim construction is an issue necessarily decided by appellate affirmance. Here the earlier district court’s judgment of non-infringement depended entirely on its claim construction of the terms “adjacent” and “dimension,” and the Federal Circuit affirmed that prior judgment. Thus, the prior claim construction was necessary to the previous judgment and had a preclusive effect.
In addition, the Federal Circuit rejected IntegraSpec’s argument regarding the new issue it allegedly raised under claim 2. Because claim 2 included all of the limitations of claim 1 and the same claim terms must be used consistently throughout the patent, this was effectively the same issue that was previously raised, was fully litigated and became binding on IntegraSpec with finality of the prior appeal.