Facts

United States Patent No. 7,458,825, entitled "Double-Sided USB-Compatible Plug Connector Adapted for Insertion in Either Orientation into a USB-Compatible Receptacle," relates to "a double-sided male USB connector and various card-shaped devices having one or more male USB connectors, which may be single or double sided and are dimensioned to fit into a USB receptacle." Reversible Connections LLC, the exclusive licensee of the '825 Patent, filed a patent infringement action against AS Rock America, Inc. Thereafter, AS Rock joined a motion to stay pending inter partes review (IPR) filed in a related case, which was granted. Three years later, the parties sought to lift the stay upon the conclusion of various U.S. Patent and Trademark Office (PTO) proceedings. In IPR2018-01538, the Patent Trial and Appeal Board (PTAB) held that all claims of the '825 Patent were unpatentable. The Federal Circuit affirmed. Meanwhile, while the IPR was in process, the PTO granted an ex parte reexamination request filed by Walletex, the patent assignee, based on prior art references. During the reexamination, certain claims of the '825 Patent were canceled, and other claims were added. The PTO issued a reexamination certificate, which determined that the added claims were patentable.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that defendant infringed the '825 Patent. Plaintiff claimed that, unlike standard connectors that could only be inserted in one direction, plaintiff's device features a connector with electrical contacts on the top and the bottom so the connector could be inserted in either direction into a USB port. Plaintiff argued that, by selling computers and other electronics with USB Type C Ports, defendant infringed the '825 Patent. Thus, plaintiff alleged direct, induced, and contributory infringement. In response to defendant's contentions that the doctrine of issue preclusion barred the litigation of plaintiff's claims, plaintiff argued that defendant had not carried its burden to show an applicable final judgment on the merits for the reissued claims because the PTAB invalidated the original claims under the preponderance of the evidence standard, which is different than the clear and convincing standard applicable here. In other words, plaintiff argued that, because the standards changed, the infringement issues raised by the first amended complaint could not have been raised earlier. Plaintiff contended that defendant had not shown privity between it and Walletex, the patent holder; defendant had not shown that the accused products were essentially the same; and plaintiff originally asserted infringement of products that had models of ports and controller chips that were different from new models of those products sold at the time of this action.

DEFENDANT'S CONTENTIONS: Defendant moved to dismiss the first amended complaint based on claim and issue preclusion, intervening rights, and pleading insufficiency. Specifically, defendant argued that the Federal Circuit's decision affirming the PTAB's IPR decision, in which all off the then-existing claims of the '825 Patent were canceled, had an immediate issue preclusive effect on this case; because all claims were held invalid, plaintiff could not reassert that defendant infringed the '825 Patent by incorporating standard USB Type-C Connectors into its products, as it asserted before; and plaintiff should not be allowed to relitigate the same issues by asserting narrowed claims that resulted from a reexamination because the reexamined claims were a subset of the original claims and no cause of action was created. Defendant argued that claim preclusion applied because this action involved the same parties as the IPR, because Walletex is Reversible Connection's privy; the FAC alleged the same claims as alleged in the original complaint and raised in the IPR because the reissued claims were a narrower subset of the original claims covering USB type-connectors; and the IPR resulted in a final judgment on the merits when the Federal Circuit affirmed. Defendant contended that plaintiff failed to show that the reexamination resulted in the issuance of new patent claims that were so materially different from the original patent claims as to create a new cause of action. Defendant argued that, even if some product features had changed over time, it was immaterial to the analysis of this case because the product within the product that was truly accused of infringement was always the USB Type C port.

Result

Defendant's motion to dismiss with prejudice was granted.