On Friday April 19 the Federal Circuit, in a divided decision, emphasized the importance of adhering to the appeal rules by establishing that if a patent infringer does not appeal a trial court’s validity decision, then that infringer/defendant cannot challenge the validity of the claims on subsequent appeals. On its face, this seems quite logical; however, the complicated procedural history of Lazare Kaplan International Inc. vs. PhotoScribe makes this decision slightly quirky.
Lazare holds a patent for laser engraving microscopic inscriptions onto diamonds. In 2006, they sued PhotoScribe for infringement, since PhotoScribe was manufacturing devices to do the same. The trial court concluded that the patent was of value but that the PhotoScribe process did not literally infringe but that infringement could be determined under the doctrine of equivalents. A jury trial in 2008 concluded no infringement under the doctrine of equivalents and ruled in favor of PhotoScribe. Lazare then appealed to the Federal Circuit in 2009.
On this appeal, the Federal Circuit determined that jury erroneously reached a conclusion of noninfringement by misreading two of the claims. The Federal Circuit vacated the decision, broadened the claims’ scope (since the Federal Circuit can review all claim construction de novo), and remanded the case for rehearing. Here lies the rub.
On remand, the trial court was required to revisit infringement. However, since the Federal Circuit had also expanded the claims, the trial court also reviewed whether or not the claims were still valid under the newly broadened interpretation of the Federal Circuit. Since the first trial court earlier ruling on invalidity was based on claim construction, it follows that invalidity would also be an issue on remand. The district court, with new claim constructions in hand, granted PhotoScribe’s motion for summary judgment that the claims of Lazare’s patent were invalid. The trial court no longer needed to address infringement given its finding grant of summary judgment of invalidity.
Lazare, once again, appealed to the Federal Circuit. The court reinstated the jury’s original finding on validity. The Federal Circuit stated that a court cannot reopen a final decision on a patent’s validity if the accused defendant/infringer never appealed that original decision. The Federal Circuit rejected the trial court’s conclusion that infringement and invalidity were inexorably intertwined, which allowed the trial court to revisit the invalidity issue. The Federal Circuit, once again, remanded the case to the trial court to rule on the question of infringement using the construction that the Federal Circuit provided in the first appeal.
Although the law is straightforward—if you do not raise the issue of invalidity on appeal, the patent claims cannot be voided—it has lead to a rather odd set of circumstances in this case. Since validity was never appealed, Lazare was able to defend its invalidity claim under a narrow claim construction and now is able to assert infringement under a broad claim construction. In other words, the same exact claims have two different interpretations that apply to two different issues in the same case.
So what does this mean for patent litigators? Always preserve all your issues on appeal. Anything related to claim construction must be preserved for appeal even if you won at the trial court level. In an ideal world, the same claim construction would always apply to invalidity and infringement issues, but as we know, we do not live in an ideal world.