Want To Avoid Having Your Complaint Dismissed? Plead It With Sufficient Particularity And Don't Take Positions Contrary To What You Told PTAB

• Published date: 05 October 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Shannon Patrick, Thomas Irving, Kathleen Hanley, Stacy Lewis and Amanda Murphy

When attempting to bring an early end to a litigation, a defendant may have several options, such as filing a motion to dismiss for failure to state a claim or arguing that the plaintiff is collaterally estopped from asserting the claims. The outcomes of these motions depend on the sufficiency of the plaintiff's pleading and the similarity of the asserted claims to claims asserted in prior cases. The court in Grecia Estate Holdings LLC v. Meta Platforms, Inc. provided guidance to parties in patent cases involving complex technologies regarding both types of motions.

Background:

Grecia asserted infringement of U.S. Patent No. 8,402,555 ("the '555 patent") against defendant Meta Platforms, Inc. ("Facebook") in the Western District of Texas, Waco Division. Grecia Estate Holdings LLC v. Meta Platforms, Inc., No. 6:21-CV-00677-ADA, 2022 WL 2019296, at *1 (W.D. Tex. June 6, 2022). The '555 patent addressed the problem faced by users in "digital rights management" ("DRM") of losing access to purchased digital content when "content providers . . . discontinue servers or even go out of business some years after DRM encrypted content was sold to consumers causing the ability to access files to terminate." '555 patent, 2:54-62. Under traditional DRM systems, "paying customers [may] lose[] the rights to recover purchased products" when servers face "hardware failure or property theft." Id. 2:63-67. Grecia claimed that the '555 patent solved this problem by "employ[ing] electronic IC, as part of a web service membership, to manage access rights across a plurality of devices." Id. 1:23-26. Grecia asserted that Facebook's Messenger app and Facebook Pay infringed claim 16 of the '555 patent. Grecia, 2022 WL 2019296, at *2. In response, Facebook moved for dismissal of the complaint for failure to state a plausible infringement claim and under the collateral estoppel doctrine. Id. at *2–3.

Collateral estoppel applies when there is "identity of the issues"

Collateral estoppel applies if "(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; and (3) the previous determination was necessary to the decision." Bradberry v. Jefferson Cty., Tex., 732 F.3d 540, 548 (5th Cir. 2013). In the context of patent law, collateral estoppel does not require that two patent claims be identical; rather collateral estoppel requires an "identity of the issues." Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013) (emphasis in...