by Dennis Crouch
I like to think about collateral estoppel alongside binding precedent. Each contain a set of (at the least) two separate instances, and the query is at all times whether or not some conclusion drawn within the earlier motion forecloses relitigation of identical (or comparable) situation within the latter motion. Precedent is broader as a result of it applies across-the-board whatever the events concerned. Collateral estoppel (often known as situation preclusion) is narrower as a result of it solely applies when the celebration being estopped within the latter motion was additionally a celebration within the earlier motion. However, when that same-party requirement is met, collateral estoppel might be far more highly effective.
Most significantly, collateral estoppel has the magical high quality of binding each horizontally and upwardly. Which means points determined on the district or administrative courtroom stage might be binding on all different courts: district courts, administrative courts, appellate courts, and even the Supreme Court docket. Alternatively, precedent feels the gravitational pull and flows downhill. District courtroom selections are usually not binding precedent as a result of they’re on the backside. The Supreme Court docket precedent flows all the way down to bind appellate courts whose precedent binds their assigned district courts. Though each the Supreme and Appellate Courts respect their very own prior precedent, it’s not binding in the identical sense as these courts are additionally self-empowered to change their very own precedent. One other necessary characteristic of collateral estoppel is that it applies to each problems with truth and regulation. Though some courts have disagreed on this level, precedent is simply binding for questions of regulation.
The Federal Circuit’s latest Uniloc preclusion determination in a tricky one and exemplifies an necessary characteristic of collateral estoppel energy: it’s most strident when the unique courtroom determination is wrongly determined, however nonetheless binds later courts (together with later appellate courts). Uniloc USA, Inc. v. Motorola Mobility LLC, 52 F.4th 1340 (Fed. Cir. 2022). Despite the fact that the unique decrease courtroom determination violated precedent, it nonetheless binds the events.
Some background and the way this Performed out for Uniloc: HP offered a number of patents to Uniloc again in 2017 who then sued Apple, Motorola, and Blackboard for patent infringement. Uniloc has a litigation financing relationship with Fortress with the patents serving as collateral for the deal. The phrases of the Fortress financing turned necessary for the next litigation. Mainly, if Uniloc failed to satisfy sure income objectives, Fortress can be given a license to the patents (together with a proper to sublicense). Uniloc then failed to satisfy the purpose, and, by the phrases of the deal, these license rights arguably routinely handed to Fortress.
After some venue-action, Uniloc v. Apple ended up earlier than Decide Alsup within the Northern District of California. Apple’s attorneys have been capable of persuade the choose that the license to Fortress meant that Uniloc now not held full rights to the patent and thus lacked standing to sue. For my part, Decide Alsup’s conclusion is fallacious on the deserves. A patentee who has non-exclusively licensed its patents nonetheless has standing to sue. Decide Lourie detailed the regulation on this in his “additional-views” whereas the lead opinion merely said that “there may be appreciable power to Uniloc’s argument” on the deserves. Uniloc v. Motorola, 52 F.4th at 1350 (Fed. Cir. 2022). Uniloc appealed the Apple determination and (once more, for my part) would have probably received on attraction. . . BUT, the events reached a settlement within the midst of appellate briefing and requested the appellate courtroom to dismiss the attraction. Uniloc didn’t search vacatur of the decrease courtroom determination as a part of the settlement. So, on the finish of the day, Uniloc v. Apple ended with district courtroom judgment remaining in power, together with the choice that the Fortress license left Uniloc with out standing.
The 2 different instances, Uniloc v. Motorola and Uniloc v. Broadcom, have been nonetheless pending in D.Del on December 4, 2020 when Decide Alsup issued his dismissal order of the Apple case. Two days later, on December 6, Motorola moved to dismiss on the identical floor of lack-of-standing as a result of license. Oddly, in its briefing Motorola indicated that Apple determination was “not binding” however did present necessary authority. I count on that Motorola’s “not binding” comment was a sign of its precedential worth reasonably than its preclusive affect. Decide Connolly dismissed the Motorola case, on standing grounds (and with out referring to collateral estoppel). Performing sua sponte, Decide Connolly then dismissed the Broadcom in a brief opinion that would possibly have been based mostly upon situation preclusion (from the prior Motorola determination), however with out really stating as-such and with out Broadcom making that declare. One backside line right here, though the events and the courtroom have been all conscious of the prior Apple determination, no person steered on the district courtroom stage that it had situation preclusive impact.
Uniloc appealed the dismissals — arguing that the 2 selections have been wrongly interpreted the Constitutional necessities of standing with regard to patent infringement actions. At that time, the 2 defendants for the primary time raised the prospect that Apple had preclusive impact.
Forfeiture/Waiver: From the setup, you have to be pondering forfeiture or Waiver. Ordinarily a brand new protection can’t be raised for the primary time on attraction. Slightly, a celebration planning to attraction some situation ought to first well timed increase the problem to the district courtroom. This rule of appellate process applies to the res judicata doctrines of situation and declare precl. Arizona v. California, 530 U.S. 392 (2000) (“res judicata [is] an affirmative protection ordinarily misplaced if not well timed raised”). Right here although, we even have the specific assertion from Motorola that the Apple case is “not binding.” That seems to create waiver.
On attraction, the Federal Circuit excused the delay by Motorola and Broadcom and located no forfeiture or waiver. Specifically, the courtroom famous that, though the Apple determination was closing, it wasn’t final-final. For situation preclusion to connect, the unique motion have to be “closing,” which usually signifies that the district courtroom reached closing judgment on all points within the case. However, the Federal Circuit right here held that there isn’t a forfeiture except the primary case is what I name final-final–not solely reached closing judgment, but additionally exhausted all direct appeals. That further step is necessary for this case as a result of the Apple attraction was nonetheless pending as Motorola/Broadcom district courtroom was deciding these instances. The Federal Circuit famous “robust coverage causes supporting a discovering of no forfeiture of collateral estoppel when the argument was first raised after the attraction technique of the preclusive case was concluded, and we conclude that forfeiture shouldn’t be acceptable right here.”
As to waiver based mostly upon the “not binding” assertion from Motorola, the Federal Circuit concluded that the intent of that assertion was as regards to stare decisis and binding precedent reasonably than binding as a matter of preclusion.
Lastly, the courtroom additionally issued a catch-all assertion that–even when there was an unexcused delay, the courtroom has discretion to excuse the forfeiture. “[W]e have discretion to excuse any forfeiture.” Id. That declare by the courtroom appears to be an overstatement since an appellate courtroom excusing forfeiture or waiver ought to contemplate the equities of the state of affairs earlier than transferring ahead.
Deserves of Challenge Preclusion: On the deserves, it appears to be a reasonably open-and-shut case of situation preclusion:
- Identical Challenge: The problem of the license and the ensuing no-standing determination was litigated determined within the first case (Apple); and that very same situation is now at situation within the second case (Motorola).
- Truly Litigated: The problem was really litigated in Apple.
- Topic to a Legitimate and Ultimate Judgment: The Apple district courtroom correctly entered closing judgment (and it was not reversed on attraction).
- Important: The license/standing situation was important to the Apple judgment.
Conventional collateral estoppel had a same-parties rule, events in first case be the identical as these within the second case. In its 1979 Parklane Hosiery determination, the Supreme Court docket opened the door to “nonmutual situation preclusion” that enables non-parties to claim collateral estoppel. The brand new rule is a same-party rule and is singular reasonably than plural; consequence being that situation preclusion can apply as long as the celebration towards whom nonmutual situation preclusion is being invoked was a celebration to the earlier continuing that already determined the identical situation. Right here, Uniloc was a celebration to the primary case, and the estoppel is being utilized towards Uniloc within the second case–so this suits the same-party rule. Courts distinguish between nonmutual defensive and nonmutual offensive situation preclusion; being extra immune to making use of situation preclusion within the offensive situation. Right here, the preclusion is defensive in nature–Motorola is utilizing the doctrine to as a protection towards Uniloc’s infringement declare. With all this collectively, the appellate courtroom simply concluded preclusion utilized and thus that the defendants ought to routinely win on the problem of standing.
Two elements of this case make me uncomfortable. The primary half is an underlying characteristic of situation preclusion — that generally the primary courtroom reaches the fallacious reply, and situation preclusion can nonetheless apply. Right here, the wrong-answer is amped-up as a result of it’s a Constitutional determination stripping the plaintiff of standing. Second, and maybe extra importantly is that the appellate courtroom skips over a core rule that prohibits the appliance of collateral estoppel to work an injustice. In its opinion, the Federal Circuit repeatedly cited Wright & Miller, however skipped that whole part of the treatise. Right here, the seeming error by Uniloc was settling the Apple attraction. In fact, that was a world dispute involving a number of different patents. However, by the point of the Apple settlement, the Delaware courtroom had already issued its selections within the two later instances and, regardless of a full alternative, nothing in any of these instances steered that the Apple district courtroom determination would have a collateral estoppel affect. It isn’t clear to me that these concerns are sufficient to flip the result, however plainly the courtroom ought to have at the least thought-about the problems.