Richards Layton & Finger
 

Judge Connolly Holds that Validity Is Not a Single Issue for Purposes of Preclusion

June 5, 2019

In Orexo AB v. Actavis Elizabeth LLC, No. 17-205-CFC (Mar. 12, 2019), Judge Connolly denied the plaintiffs’ motion for summary judgment to preclude the defendants from challenging the invalidity of the asserted patent. In an earlier case, the plaintiffs had accused one of the defendants here of infringing the same patent, but by a different product. The Court in that action found that the patent was not invalid as obvious, which was the only invalidity theory presented at trial.

In this action, the defendants alleged that the same patent was invalid. The plaintiffs moved for summary judgment on the basis that issue preclusion prevented the defendants from challenging the validity of the asserted patent, arguing further that due to various corporate transactions, all the defendants here were bound by the judgment in the earlier case.

The Court denied the motion, ruling that validity is not a single issue for purposes of issue preclusion. First, Judge Connolly stated that the reasoning in the Supreme Court’s decision in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1971), assumed that validity can include more than one “issue” for preclusion. The Court next cited Third Circuit authority stating that, for preclusion, the issues must be subject to the same standard to satisfy the “identity of issues” element, whereas each invalidity defense has its own set of requirements. Finally, the Court found that the public policy of encouraging validity challenges favored treating invalidity as capable of constituting more than a single issue. To hold otherwise, according to Judge Connolly, would lead not to efficiency but to its opposite, since defendants would have an incentive to raise every invalidity defense at the first opportunity or risk being precluded in a later proceeding.

Key Point: Although finding that invalidity was not a single issue for purposes of issue preclusion, the Court did not consider whether obviousness itself was a single issue.