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Doubling Up: Federal Circuit Mischaracterizes each its own Precedent and the Lower Court Ruling


by Dennis Crouch

I’m struggling considerably to wrap my head across the Federal Circuit’s latest declare preclusion choice in Sowinski v. California Air Resources Bd. (CARB) (Fed. Cir. 2020).   I consider that it seems to be a extremely poor choice — most likely prompted by poor lawyering within the first-place.  In specific, the court docket reaches its outcome right here solely after mischaracterizing each (1) the decrease court docket holding and (2) its own prior precedent.

Claim preclusion all the time includes (a minimum of) two lawsuits.  Here, Sawinski’s first lawsuit in opposition to CARB was dismissed “with prejudice” for lack of subject-matter-jurisdiction primarily based on sovereign immunity (12(b)(1)) and likewise for failure to state a declare upon which reduction will be granted (12(b)(6)).  Sowinski later re-filed his lawsuit — however specializing in subsequent acts of alleged infringement that occurred after the prior case ended.  The district court docket dismissed on res judicata and the Federal Circuit right here affirms.

Sowinski’s Patent No.  6,601,033 claims a air pollution credit score system that he argues is infringed by California’s Cap-and-Trade Program.

Sowinski at the start sued CARB (and others) for patent infringement in California state court docket. The defendants first eliminated the case to Federal Court after which moved for dismissal for lack of subject material jurisdiction and failure to state a declare.  One minor observe about that submitting is that Kamala Harris represented CARB in her position as California AG.

After some wrangling, Sowinski failed to reply to the movement to dismiss and the district court docket subsequently dismissed the case.  In dismissing, the C.D.Cal. court docket pointed to a neighborhood rule that “failure to file any required document, or the failure to file it within the deadline, may be deemed consent to the granting or denial of the motion . . . .”  And, the court docket dismissed the case “with prejudice.”  That dismissal was affirmed by the Federal Circuit back in 2017 — with the court docket noting that Sowinski had acknowledged that the Motion to Dismiss was probably dispositive however nonetheless didn’t oppose.

Sowinski then re-filed the lawsuit which was dismissed on res judicata grounds.  On appeal, Sowinski raised two arguments.

[Sowinski] raises two principal arguments:

(1) that res judicata doesn’t apply as a result of his current grievance seeks damages just for infringement that occurred after conclusion of his prior suits and

(2) that res judicata doesn’t apply as a result of the prior go well with was resolved on procedural grounds, with out reaching the deserves of infringement.

Failure to Prosecute Was not the Reason: Taking these grounds in reverse-order.  In its choice right here, the Federal Circuit characterised the unique court docket’s dismissal as considered one of failure-to-prosecute.  And, there may be prior precedent supporting declare preclusion following from dismissal on these grounds.

Federal Rule of Civil Procedure 41(b) gives {that a} dismissal for failure to prosecute “operates as an adjudication on the merits,” with exceptions not right here relevant

Slip Op. The downside with the court docket’s holding right here is that it someway didn’t delve into the small print of the three-page dismissal order. [DismissalOrder].

Contrary to the appellate panel’s statements right here, the unique case was not dismissed for failure to prosecute. Rather the case was dismissed for failure state a declare and lack of subject material jurisdiction. But, these motions had been granted due to Sowinski’s failure to oppose.  The distinction is suitable as a result of R.41(b) (quoted by the Federal Circuit in its choice) distinguishes between the 2 situations: Dismissals for failure to prosecute are treated as “adjudication[s] on the merits.” Dismissals for “lack of jurisdiction” aren’t treated as such. FRCP 41(b).  The court docket ought to pick-up this case a second time and take into account the affect of lack-of-jurisdiction on the res judicata query or else talk about how the concern was waived (and is waivable).

Later Infringement: The court docket additionally held that Sowinski was barred from pursuing motion in opposition to post-judgment infringement — as long as the infringing activity was the identical.  The court docket quoted a 10% rule of thumb from the ninth Circuit:

[T]he plaintiff alleges information which by the defendants’ own concession are a minimum of 10 % completely different from the information alleged in Harkins I, and, after all, the plaintiff alleges conduct that occurred in a special time interval.

Harkins Amusement Enters., Inc. v. Harry Nace Co., 890 F.second 181 (ninth Cir.
1989) (discovering no preclusion).

Here, Sowinski didn’t allege any completely different conduct by the defendants besides that it occurred after the unique lawsuit.  So — lower than 10% distinction.   The oddity of the choice is that it then attracts in what appear to be subject preclusion and Kessler doctrine rules:

[W]hen the act has been adjudged not wrongful, its repetition can’t be challenged in a subsequent go well with. . . .

Here the accused CARB activity had been held to not be infringing, for Dr. Sowinski’s failure to reply to the motions to dismiss was treated as a judgment on the deserves.

Slip Op.  I’ll observe right here that the district court docket didn’t truly make any ruling relating to infringement, however as a substitute dismissed the case on different grounds. Thus, whereas the infringement declare could have been dismissed on the deserves, it’s completely improper to state that there was any holding of “non-infringement.”

The appellate court docket goes-on with this level by citing to Brain Life, LLC v. Elekta Inc., 746 F.3d 1045 (Fed. Cir. 2014). The panel utilized Brain Life as follows:

[T]he [Brain Life] court docket thought-about the impact of a previous judgment of non-infringement; the court docket defined that preclusion doesn’t apply to new or modified merchandise or strategies, however does apply when the accused merchandise or strategies are basically the identical.

Slip Op. Citing Brain Life at 1054. It seems that Brain Life truly holds the alternative.

[W]e discover that Brain Life’s second go well with is not barred by declare preclusion—no matter whether or not the identical transactional information are current in each suits—to the extent Brain Life’s present infringement allegations are temporally restricted to acts occurring after remaining judgment was entered within the first go well with. . . .

[T]raditional notions of declare preclusion don’t apply when a patentee accuses new acts of infringement, i.e., post-final judgment, in a second go well with—even what place the merchandise are the identical in each suits.

Id. at 1054.  The holding right here is totally the alternative to what .

Now, the court docket in Brain Life does go on to use the Kessler Doctrine to ban re-litigation of the infringement query for post-judgment merchandise, however solely after holding significantly that its choice is exterior of the standard bounds of declare preclusion.  In Sowinski, the court docket doesn’t cite the Kessler Doctrine as the premise for its choice, however somewhat misapplies the court docket’s declare preclusion precedent.

= = = = = =

In the top, Sowinski most likely ought to lose anyway – as a result of the patent is invalid under up to date eligibility evaluation.

1. A knowledge processing equipment for establishing considered one of a air pollution offset and tax offset, for a vendor utilizing gasoline inside gasoline distribution system of a house, enterprise or the like, to deliver a couple of discount of recognized pollution being emitted into the environment related to stated vendor’s house, enterprise or the like, on a day-to-day foundation or on a catastrophic foundation, comprising:

(a) a central controller together with a CPU and a reminiscence operatively linked up to stated CPU,

(b) a minimum of one terminal tailored for speaking with stated central controller for transmitting thereto, air pollution credit score or tax credit score data to achieve a conditional air pollution discount credit score (“CPRC”) for stated vendor,

(c) stated reminiscence containing a program tailored to be executed by stated CPU for

(1) authenticating authorized foundation of the vitality best use of time means employed in opposition to an information base of eligible vitality best use of time means,

(2) authenticating the eligibility of the vendor in opposition to an information base of eligible sellers,

(3) if the vitality best use of time means pertains to non-filtering of pollution, producing a CPRC for tax credit score offset functions for stated vendor as a operate of a vendor identifier,

(4) if the vitality best use of time means pertains to filtering of pollution, figuring out the eligibility of every pollutant in opposition to a pollutant information base,

(5) figuring out the quantities of discount of every eligible pollutant normalized to a typical time period;

(6) producing a CPRC for every pollutant primarily based on (5), and

(7) storing every CPRC producing at (3) and (6) as a operate of a vendor identifier which can embrace a vendor’s bank card quantity,

whereby financial incentive has been offered to stated vendor to deliver a couple of substantial discount of emission of pollution to the environment whether or not on a day-to-day foundation or on a catastrophic foundation.

Dr. Sowinski is the listed inventor on various different patents that every one relate to technical features of gasoline and gasoline distribution.   In a separate lawsuit, Sowinski sued cereal producers Post, General Mills, and Kellogg– arguing that their merchandise ought to embrace a Cancer warning under California’s Proposition 65 due to their acrylamide content.  That case was dismissed on preemption grounds. In specific, the California appellate court docket discovered the existence of a complete federal scheme selling consumption of entire grains to preempt the marking requirement. Post Foods, LLC v. Super. Ct., 235 Cal. Rptr. 3d 641, 644 (Cal. App. second Dist. 2018), as modified on denial of reh’g (Aug. 15, 2018), evaluate denied and ordered to not be formally printed (Oct. 31, 2018).



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