3D Cinema Systems: ITC Declines to Apply Issue Preclusion Based on PTAB’s IPR Decision

3D GlassesIn 3D Cinema Systems (Inv. 939), the Commission issued an opinion that explained why it did not give deference to a decision of invalidity by the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR).

As we previously reported, certain claims of the asserted U.S. Patent 8,220,934 were found unpatentable by the PTAB while the Commission was reviewing the ALJ’s final Initial Determination (ID).  The Commission suspended enforcement of the limited exclusion order and cease-and-desist order with respect to those claims, pending appeal to the Federal Circuit of the PTAB’s final written decision.

In the public version of the Commission’s opinion, issued on August 23, 2016, the Commission took care to explain why it did not apply issue preclusion to give deference to the PTAB’s final decision.  Under the doctrine of issue preclusion, also known as collateral estoppel, a court or agency decision in prior litigation can have preclusive effect in subsequent litigation.  The party seeking the application of issue preclusion has the burden of showing that four elements are satisfied:

  1. (1) the issue decided in the prior litigation is identical to that before the tribunal; (2) the issue was actually litigated in the prior proceeding; (3) the resolution of the issue in the prior litigation was necessary to its resulting judgment; and (4) the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate its position.[1]

Moreover, there are certain exceptions to issue preclusion, such as when the issues are not identical because the prior litigation and subsequent litigation involve applications of different legal standards.[2]

The Commission found that respondent failed to show that the four elements of issue preclusion were satisfied.  In particular, respondent failed to show that the issues were identical where the PTAB and the Commission apply different legal standards for claim construction and invalidity.  With respect to claim construction, the PTAB applied the “broadest reasonable construction in light of the specification” standard, whereas the Commission applied the Phillips standard for construing claims in view of claim language, the specification, and prosecution history.[3]  On invalidity, the PTAB required the petitioner challenging validity to meet the “preponderance of the evidence” standard, but the Commission requires “clear and convincing evidence” of invalidity.  Respondent tried to argue that the differences between these standards were theoretical where the PTAB and the ALJ essentially applied the same claim construction, but the Commission rejected this argument.


[1] Certain Three-Dimensional Cinema Systems and Components Thereof, Inv. No. 337-TA-939, 2016 WL 7635412, Commission Op., at *33 (Aug. 23, 2016) (citing Certain Digital Set-Top Boxes and Components Thereof, Inv. No. 337-TA-712, USITC Pub. No. 4332 (June 2012), Comm’n Op. at 5 (Sept. 23, 2011); Restatement (Second) of the Law of Judgments § 27).

[2] Id. at *33-34.

[3] See Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005).