The Wisconsin Alumni Research Foundation (WARF), a nonprofit patent management arm of the University of Wisconsin, has seen another key setback in its litigation against Apple. In 2018, the Federal Circuit overturned a $506M judgment for the plaintiff in the first of two cases, holding that Apple had not literally infringed the asserted patent through the provision of certain mobile chips based on the plain and ordinary meaning of a key claim limitation. Now, the Federal Circuit has affirmed a 2022 ruling that the company could not revive that first suit based on a doctrine-of-equivalents (DOE) theory, concluding in an August 28 precedential decision that WARF had waived that theory by agreeing not to raise it at trial. The Federal Circuit additionally held that a second WARF suit targeting newer versions of the accused Apple processors, also under a DOE theory, was precluded by the outcome of the first case—in the process expanding the standards governing issue preclusion and the Kessler doctrine.
WARF filed its first suit against Apple in January 2014 in the Western District of Wisconsin (3:14-cv-00062), targeting Apple's A7 and A8 mobile processors over their incorporation of a Load-Store Dependency (LSD) Predictor. At issue was a single patent (5,781,752) that generally relates to preventing microprocessors capable of performing commands out of their sequential order from committing errors by tracking commands that have caused problems when taken out of order in the past. Its second suit against the company (3:15-cv-00621)—filed in September 2015, two weeks before trial in the first suit—accused Apple of infringing the '752 patent with its newer A9 and A9X processors, subsequently adding the A10 via amended complaint, each targeted over their inclusion of the same accused technology as the first case. Soon after filing, that second case was stayed as to all matters except discovery pending the outcome of the first lawsuit, including any appeals.
In the first case, WARF asserted that in addition to its claims of literal infringement, it would pursue an alternative DOE theory for any claim element Apple challenged as not being met literally, including such a theory in its expert reports. As the case approached trial, Apple sought to introduce a soon-to-issue patent application (13/464,647) covering its own LSD Predictor as evidence of noninfringement on that basis. WARF then filed a motion in limine to exclude any evidence, testimony, or argument regarding the application, with Apple opposing on the basis that the LSD Predictor being separately found patentable was relevant to WARF's DOE infringement theory. However, as would later prove pivotal, WARF agreed to "drop doctrine of equivalents and make no doctrine of equivalents argument whatsoever at trial" in exchange for Apple agreeing not to offer the patent, which had by that point issued (9,128,725). In October 2015, that trial then culminated in an infringement verdict that included $234M in damages against Apple, the court later entering a final judgment that totaled $506M, including the jury's damages award plus supplemental damages, ongoing royalties, pre- and post-judgment interest, and costs.
The Federal Circuit reversed that judgment on appeal in September 2018, agreeing with Apple that the processors at issue do not satisfy a key limitation for the "predictor" described by the '752 patent: specifically, the "particular" limitation, where the predictor "produce[s] a prediction associated with [a] particular [load] instruction". Here, the Federal Circuit noted that the district court had accepted Apple's argument, at trial, that the term should be given its plain and ordinary meaning. Turning to the term itself, the Federal Circuit then ruled that "the plain meaning of 'particular,' as understood by a person of ordinary skill in the art after reading the '752 patent, requires the prediction to be associated with a single load instruction", further clarifying that "[a] prediction that is associated with more than one load instruction does not meet this limitation". Applying that definition, the Federal held in relevant part "that no reasonable juror could have found literal infringement in this case", as the claimed "load tags"—"each generated by hashing information about a load instruction", and corresponding to certain predictions—"can . . . be associated with a group of load instructions".
WARF then asked the court to remand with respect to DOE infringement in its petition for en banc rehearing, but the court denied that petition altogether. Once the Federal Circuit issued its mandate in January 2019, WARF again attempted to revive the litigation by moving to have the district court reopen the case, arguing that the mandate only applied to literal infringement and that it had not waived its DOE arguments under Federal Circuit precedent.
District Judge William M. Conley disagreed in a May 10, 2022 order entered in both Apple suits, taking particular issue with WARF's reliance on the Federal Circuit's 1998 decision in Exxon Chemical Patents v. Lubrizol (Exxon II). While Judge Conley agreed that "Exxon [II] allows an opening for a claim of infringement under the doctrine of equivalents' upon remand from an appeal reversing a finding of literal infringement", he held that the decision does not require that result. Judge Conley also distinguished the case on procedural grounds. While the plaintiff in Exxon II had its DOE claim mooted by a claim construction order that was reversed on appeal, Judge Conley observed that here, it was WARF that decided not to pursue such a claim—a decision that did not result from any decision later overturned. Regardless, Judge Conley noted that since the Federal Circuit had also affirmed that WARF had abandoned its doctrine of equivalents theory, that was "now the law of the case". In any event, Judge Conley held that even if a "do-over" were permitted under Exxon II, the Federal Circuit's construction of "particular" as requiring a "single load instruction" precluded WARF's claim "that this limitation allows for an equivalence infringement based on the prediction being associated with a group of load instructions".
Additionally, Judge Conley rejected WARF's argument that it should be able to argue DOE infringement in the second suit targeting the newer A9, A9X, and A10 processors. Here, the court agreed with Apple that this was precluded under the Federal Circuit's 2009 Nystrom v. Trex decision. In Nystrom, the appellate court—"after having already affirmed a non-infringement judgment and the district court's finding of waiver of the doctrine of equivalents claim—determined that the assertion of patent infringement in a new lawsuit against second-generation products released during the pendency of the first suite was barred by preclusion principles", as the newer products were unchanged with respect to the claim limitations at issue.
The court found that the situation was effectively identical in this case—noting that (for reasons further detailed below) the parties did not dispute (at least, until the filing of this appeal) that the accused LSD Predictors in the newer Apple chips were essentially the same as those in the older ones. As to WARF's insistence that claim preclusion could not apply because the district court had not actually decided the DOE issue, Judge Conley held that "WARF no longer has any viable doctrine of equivalence infringement claim on the merits" as a result of the Federal Circuit's interpretation of the claim term "particular".
The Federal Circuit's Decision on Appeal
WARF I: Plaintiff Waived DOE Theory
Ruling on appeal on August 28, the Federal Circuit began with WARF I, in which the plaintiff-appellant argued that it had not waived its DOE theory with respect to the A7 and A8.
– Plaintiff's DOE Theory Not Foreclosed by Federal Circuit's 2018 Clarification of Term's "Plain and Ordinary" Meaning
The appellate court rejected each of WARF's arguments on this point, starting with its position that the Federal Circuit's 2018 decision applied a different construction of the term "particular". WARF claimed that because it believed Apple literally infringed under the plain and ordinary meaning of that term—since, according to WARF, Apple had by that point allegedly waived a narrower reading of "particular" by not seeking a construction of that term—WARF agreed not to present its DOE theory under an agreement to resolve an "evidentiary dispute" with Apple (under which, as noted above, Apple agreed not to present its own patent on an LSD predictor as evidence relevant to rebutting WARF's position on DOE).
However, the Federal Circuit disagreed, holding that whether it had adopted a narrower construction was "not the correct inquiry": The proper question, rather, was whether this construction changed in a manner that "would excuse WARF's failure to raise, at the previous trial, the doctrine-of-equivalents theory that it now attempts to reassert in WARF I". That was not the case, the court ruled: Its construction in the 2018 decision was "wholly consistent with", and "substantively identical to", Apple's reading of the plain and ordinary meaning of "particular" as requiring an association with a single load instruction. Here, the Federal Circuit noted that Apple had presented this theory throughout trial, and that the district court had adopted the same position in rejecting WARF's motion to exclude Apple's noninfringement argument.
Indeed, the Federal Circuit determined that WARF had not been foreclosed from raising DOE as an alternative theory at trial; it was merely the plaintiff's "subjective[]" belief that it would prevail on literal infringement that led it not to pursue DOE as a matter of trial strategy. "That confidence in the strength of its literal infringement theory does not excuse WARF from failing to litigate the doctrine of equivalents". Moreover, it rejected WARF's position that the 2018 Federal Circuit decision only bars it from further litigating literal infringement, finding this to be "unavailing because it is irrelevant to whether WARF waived its right to assert a doctrine-of-equivalents theory" (emphasis in original).
– WARF's Agreement Not to Pursue DOE Theory Constituted Waiver
The Federal Circuit additionally held that WARF had waived its DOE theory for separate reasons unrelated to claim construction, because it had "intentionally relinquished and abandoned its doctrine-of-equivalents theory in exchange for Apple's agreement not to present its own patent at trial". This, explains the Federal Circuit, "was a relinquishment of a known right", which constitutes waiver under applicable Supreme Court, Federal Circuit, and Seventh Circuit law. The Federal Circuit thus refused to allow WARF to revive its DOE theory due to this abandonment, rejecting its request as one that "essentially asks this court to allow WARF to relitigate WARF I under a doctrine-of-equivalents theory that would have been available and realistically useful to it in WARF I in essentially the same form as it is today".
– No Reprieve for WARF Under Prior Ruling Addressing Revival of DOE Theory
The court also distinguished the circumstances in this case from those underpinning its decision in Exxon II, which WARF argued establishes that "when the doctrine of equivalents becomes a critical issue only after a new claim construction is adopted on appeal, a plaintiff's prior choice to not present that theory at trial does not constitute abandonment". This reading is "too broad", countered the court—noting that while the cases resemble one another "[a]t a bird's eye view", there are "critical differences": First, while the court in that case issued a jury charge that adopted one of multiple proposed constructions of a key claim term, therefore rendering a DOE argument based on another construction moot, the Federal Circuit noted that there was no such mootness here. Second, while a request to put the alternative DOE theory before the jury in Exxon would have resulted in an advisory verdict, the Federal Circuit ruled that this would not have been the case here. Third, the court found, Exxon II "simply [held] that our prior mandate did not deprive the district court of the authority to entertain the motion [for a new trial]" and "did not grant a per se right to a new trial on the doctrine of equivalents as WARF appears to suggest".
Having rejected each of WARF's arguments on appeal, the Federal Circuit affirmed the district court's denial of its motion for a new trial in WARF I.
WARF II: Further Litigation of DOE Theory Precluded by WARF I
The Federal Circuit next addressed whether WARF I precludes further litigation of WARF's DOE theory in WARF II—concluding that it does, based on both issue preclusion and the Kessler doctrine.
– Issue Preclusion: Literal and DOE Infringement Are the Same Issue
The court began with issue preclusion, which under governing Seventh Circuit law applies where an "issue" 1) is the same as one "involved in a prior action", 2) that issue was "actually litigated", 3) the resolution of the "issue was essential to the final judgment", and 4) the party to be estopped had representation in the prior action. The parties' dispute focused on the first two factors.
As to factor 1), the court began its analysis of whether the "issue" is the same by addressing whether the accused products are "essentially the same". Here, the Federal Circuit found no clear error in the district court's determination that the LSD Predictors found in the A7/A8 and in the A9/A10 are essentially the same. The Federal Circuit remarked that WARF had "waffle[d]" on this question during the course of its appeal, rejecting both of its ultimate arguments as to why the accused processors might not be essentially the same. As to one such argument, that there was a "potential 'significant change involving the [LSD] Predictor" in the later A9 and A10 processors from the earlier A7 and A8 processors'", the court countered that this was based on a statement regarding potential design changes during the development of the newer chips, but noted that Apple subsequently characterized certain of those chips' LSD predictors as "not more than colorably different", a fact not disputed by either party until the filing of this appeal. For the other argument, that further discovery was required on the A9/A10, the court pointed out that this was "damages-related discovery—not technical discovery for the purposes of determining the products were essentially the same".
The Federal Circuit then turned to the parties' dispute over the nature of the issue to be potentially precluded. While Apple argued that the issue in both cases is infringement, WARF contended that the issues are separate/distinct theories of infringement. In support of this point, WARF quoted language from the Supreme Court's 2015 decision in B & B Hardware v. Hargis Industries establishing that "[i]ssues are not identical if the second action involves application of a different legal standard, even though the factual setting of both suits may be the same", concluding that because literal and DOE infringement have different tests, they are different issues. However, the Federal Circuit held that WARF read this statement too broadly. Rather, the court noted that B & B Hardware—addressing the preclusive effect of trademark opposition proceedings before the Trademark Trial and Appeal Board (TTAB) on trademark infringement litigation brought in district court—"[critical[ly] . . . does not hold that the factors or tests must be identical for issues to be identical", the court here pointing to the different (albeit similar) factors applied in the TTAB and district court proceedings in that case.
Rather than requiring identical factors or tests, explained the Federal Circuit, the Supreme Court in B & B Hardware instead "looked to the statutes, the history, and the Restatement (Second) of Judgments". Applying this approach, the Federal Circuit found it significant that just one statute governs patent infringement (35 U.S.C. § 271), and that the provision establishing the statutory basis for direct infringement (§ 271(a)) "covers both literal infringement and the doctrine of equivalents". The court further found that the history of the statute supports treating them as the same issue, as prior caselaw applying the statute has "treated infringement, either literal or doctrine of equivalents, as a single issue". Additionally, the court found that the standard offered in the Restatement (Second) of Judgments § 27 supports this reading: That section asks whether there is substantial overlap in the evidence to be considered, the court here remarking that the inquiry for both literal and DOE infringement will always boil down to a comparison between the asserted claim and the accused product/method; and whether there would be such overlap in the pretrial preparations and discovery, the Federal Circuit observing that both "could be 'reasonably expected' to embrace both literal infringement and the doctrine of equivalents". This position is further supported by Federal Circuit precedent, the court found—including its 2009 Nystrom decision.
For those reasons, the Federal Circuit held that "literal infringement and the doctrine of equivalents are the same issue for issue-preclusion purposes. To conclude otherwise would allow a patentee to proceed through the entirety of litigation only on a theory of literal infringement and, after losing its case, allow that same party to accuse the same entity of infringing the same patent, accusing the same or essentially the same products, as long as those products were sold after judgment of the first suit".
As a result, the Federal Circuit concluded, "when the district court entered a judgment of noninfringement in WARF I, issue preclusion barred WARF II which accuses essentially the same products of infringement".
– WARF II Is Also Barred Under the Kessler Doctrine
The Federal Circuit additionally held that "WARF II is barred by the Kessler doctrine", a patent-specific preclusion doctrine designed to bar subsequent harassing litigation over products previously judged not to infringe, treating the accused products themselves as having noninfringing status. Kessler fills the gap between claim preclusion, which bars claims that could have been raised in a prior action but only covers infringing conduct occurring before final judgment; and issue preclusion, which encompasses post-judgment infringement but would not bar claims asserting a different infringement theory. The Federal Circuit underscored the type of harassment that could occur were it not for Kessler, citing its prior holding in SpeedTrack v. Office Depot. Per that case, without Kessler,
[A] patent owner could sue a manufacturer for literal infringement and, if unsuccessful, file suit against the manufacturer's customers under the doctrine of equivalents. Or, a patent owner could file suit against the manufacturer's customers under any claim or theory not actually litigated against the manufacturer as long as it challenged only those acts of infringement that post-dated the judgment in the first action. That result would authorize the type of harassment the Supreme Court sought to prevent in Kessler . . .
This was the case here, held the Federal Circuit: "WARF II presents exactly this type of litigation harassment, applied to a second suit against the very same defendant, the manufacturer itself". The court found that the only difference from SpeedTrack—that case involved the same software as the earlier suit, whereas WARF II involves subsequent versions of the accused products—was "immaterial" in light of caselaw extending Kessler's noninfringing status to later versions with "no material differences" from the earlier ones.
WARF's arguments on Kessler focused instead on timing, asserting that the Federal Circuit has "relied on the Kessler doctrine only to bar assertion of the claims at issue against essentially the same products made or sold after the judgment of noninfringement in the earlier case. However, the Federal Circuit found that WARF was "mistaken"—as was the language it relied upon from the court's 2018 SimpleAir v. Google decision, here dismissing that language as dicta. Rather, in that case, the Federal Circuit explained, it had applied Kessler to bar a second case filed "well before there was a first judgment. . . . In other words, this court has indeed relied on the Kessler doctrine to bar assertion of claims against essentially the same products made or sold before the judgment of noninfringement in the earlier case".
The Federal Circuit then concluded by denying WARF's motion for a new trial in WARF I and upholding the lower court's ruling that the first case precludes WARF II.
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