In Inland Diamond Products Co. v. Cherry Optical Inc., No. 2024-1106 (Fed. Cir. Oct. 15, 2025), the Federal Circuit determined the district court's grant of summary judgment based on issue preclusion was improper, vacating the decision and remanding the case.
In 2019, the PTAB determined certain claims of Inland Diamond Products' patents were unpatentable in an IPR. This determination was never appealed to the Federal Circuit. Inland subsequently filed suit against Cherry Optical and asserted claims, all of which depend from claims the Board determined were unpatentable. On summary judgment, the district court ruled issue preclusion applied to limitations previously found unpatentable, and considered only the remaining limitations before ruling the asserted claims were invalid as obvious.
On appeal, the Federal Circuit reversed and remanded, reaffirming the principle that issue preclusion may not apply to issues raised in a subsequent proceeding that applies a different legal standard from the original proceeding. In the IPR context, because the Board's findings were reached under a lower standard of proof (i.e., preponderance of the evidence), the Federal Circuit held that there could be no issue-preclusive effect in district court invalidity proceedings, where facts must be proven under a higher standard of proof (i.e., clear and convincing evidence). The Court clarified that the district court also erred in reasoning that Inland could defend the asserted claims only because they had been adjudicated as not unpatentable in the IPR. The Court explained that issue preclusion does not attach where the claims were never determined invalid through any Federal Circuit appeal.
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