Claim Preclusion and Section 101- Insights into Judge Albrights Approach

During May, when most of the country was reeling from the spread of COVID-19, Judge Albright issued a very thorough opinion concerning res judicata, or claim preclusion. Because the opinion provides great insight into Judge Albright’s patent philosophy as it concerns the scope of a patented invention, I thought the order was worth discussing now.

The case is Videoshare, LLC v. Google LLC, No. 6-19-cv-00663-ADA. In a prior case litigated in the District of Delaware, a district court found that Videoshare’s patents asserted against Google were invalid pursuant to 35 U.S.C. § 101. Several years later, Videoshare filed the aforementioned case in the Waco Division of the Western District of Texas, alleging that similar patents and the same technology was infringed by Google. Google sought to dismiss the case pursuant to claim preclusion.

In its order (ECF 30), the Court recognized the primary dispute centered around the fourth element required to show claim preclusion—whether the earlier case and the later case involve the same cause of action. The main argument Google put before the Court was that the “scope of the asserted patent claims in the two suits are essentially the same.” Thus, Google argued claim preclusion ought to prevent Videoshare’s current lawsuit. Order at 5. While the Court agreed there was substantial overlap between the present case and the prior case, the Court ultimately found claim preclusion was not appropriate.

Judge Albright focused on the narrow issue of claim scope. First, he recognized that “claim preclusion has never been applied where a patent was found invalid under § 101 in the first case and a different patent was asserted in the second case.” He continued: “The reasons for that make sense. Unlike invalidity based on 35 U.S.C. §§ 102 and 103 where a court has to first determine the scope of the claims in order to find that prior art anticipates or renders obvious, respectively, the claims, patent eligibility under 35 U.S.C. § 101 does not concern the scope of a patent’s claims.” Thus, Judge Albright concluded that because the Delaware district court did not determine the scope of the claims of the prior patent, he could not now compare the respective scopes of the current and former patents to determine if they were essentially the same.

Furthermore, Judge Albright anticipated the obvious follow-up argument to his analysis thus far: why not determine whether the claims in the two patents have the same scope at this stage in the litigation (the motion to dismiss stage)? Here, Judge Albright provides great guidance for litigators practicing in his Court and insight into his view of the early stages of patent litigation. First, Judge Albright stated that he believed a determination of claim scope at such an early stage in the litigation was inappropriate without the benefit of “formal claim construction.” In other words, Judge Albright believes any determination of claim scope or eligibility is more appropriate after formal claim construction. He also offered an additional reason for his position. He stated “to determine whether the claims in the two patents have the same scope would require this Court to determine the claim scope of the ’301 Patent—which has not been asserted in this case, and is also invalid—and ’341 Patent—which has been asserted in this case. To do so, the Court would need to construe the claim terms in both patents and then conduct a § 101 analysis on both patents (which may require factual evidence).” He concluded that such an approach is impractical and outside the scope of the present case.

Finally, Judge Albright concluded that the “doctrine of claim preclusion cannot be readily applied to analyzing patent eligibility.” Moreover, he found that that the doctrine of claim preclusion cannot be readily applied to either step of the Alice two-step test.

In summary, what can litigators learn from Judge Albright’s claim preclusion order? Well, a couple of things. First, Judge Albright is probably not likely to grant a § 101 motion prior to a formal claim construction. (For an opinion that discusses in depth Judge Albright’s general approach to early § 101 motions, I also recommend the Court’s October 2019 order in Slyce Acquisition Inc. v. Syte – Visual Conception Ltd., No. 6:19-cv-257, ECF 23.) Second, he believes that claim preclusion is generally inapplicable in the early stages of a patent case, at least in situations where no determination of claim scope was made in the prior case and no ­Markman hearing has been held in the current case. However, even under this type of situation, Judge Albright is still skeptical if claim preclusion could apply. He states “[b]ut even if the prior court determined that the first patent was directed to a patent ineligible concept, that determination is unlikely to have any preclusive effect on whether the second patent is also directed to a patent ineligible concept for a few reasons.” In fact, he goes on to say “given that it takes clear and convincing evidence to invalidate a patent, it appears that the applicability of claim preclusion to the first step of the Alice analysis will be rather limited, if not rare.” In other words, any party would be hard-pressed to convince Judge Albright that claim preclusion is applicable in the early stages of a patent case.