PTAB Not Bound by District Court Judgment of No Invalidity

In a final written decision, the Board rejected the patent owner's argument that res judicata or collateral estoppel barred the Board from determining that the challenged claims were unpatentable under §101 in light of an earlier district court judgment. "Patent Owner argues that collateral estoppel . . . applies to Petitioner’s challenge under 35 U.S.C. § 101 because the question is purely one of law, rather than fact, to which the clear and convincing standard is not applicable. Thus, Patent Owner argues that in this case, the patent is expired and cannot be amended, the Board adopted the Court’s claim construction, and that for questions of law, district courts and the Board apply the same standard. Patent Owner’s underlying assumption that subject matter eligibility determinations are pure questions of law, not subject to the clear and convincing evidence standard, is not supported by the Federal Circuit. Because the Board applies to the underlying facts an evidentiary standard that is different from the standard applied by the courts, the issue decided by the Board is not identical to the one decided or litigated in the first action and could not have been essential to the final judgment in the first action. Petitioner did not have an opportunity to litigate the issue in the first action. Therefore, we conclude that Petitioner’s challenge under 35 U.S.C. § 101 is not barred by res judicata or collateral estoppel."

Petition for Covered Business Method Patent Review by INTERTHINX, INC. , CBM2012-00007 (PTAB January 30, 2014, Order) (McNamara, APJ)