Inguran, LLC v. Abs Global, Inc.

Case: 22-1385 Document: 44 Page: 1 Filed: 07/05/2023
United States Court of Appeals
for the Federal Circuit
______________________
INGURAN, LLC, DBA STGENETICS,
Plaintiff-Appellant
v.
ABS GLOBAL, INC., GENUS PLC,
Defendants-Appellees
______________________
2022-1385
______________________
Appeal from the United States District Court for the
Western District of Wisconsin in No. 3:20-cv-00085-wmc,
Judge William M. Conley.
______________________
Decided: July 5, 2023
______________________
Z.W. JULIUS CHEN, Akin Gump Strauss Hauer & Feld
LLP, Washington, DC, argued for plaintiff-appellant. Also
represented by KRISTEN LOVELAND, PRATIK A. SHAH;
DANIEL LYNN MOFFETT, San Antonio, TX.
STEVEN J. HOROWITZ, Sidley Austin LLP, Chicago, IL,
argued for defendants-appellees. Also represented by
STEPHANIE P. KOH, THOMAS D. REIN.
______________________
Before LOURIE, BRYSON, and REYNA, Circuit Judges.
Case: 22-1385 Document: 44 Page: 2 Filed: 07/05/2023
2 INGURAN, LLC v. ABS GLOBAL, INC.
REYNA, Circuit Judge.
Appellant Inguran, LLC appeals the dismissal by the
Western District of Wisconsin of the induced infringement
suit it brought against Appellee ABS Global, Inc. The dis-
trict court found that Inguran’s claim was precluded by res
judicata based on an earlier judgment the court entered
against Appellee. On appeal, Inguran challenges the dis-
trict court’s res judicata finding and the court’s interpreta-
tion of the scope of its earlier judgment. We reverse.
BACKGROUND
The patent at issue, U.S. Patent No. 8,206,987 (the
“’987 patent”), titled “Photo-Damage Method for Sorting
Particles,” is directed to a method for sorting bull sperm
cells according to a specific DNA characteristic in order to
preselect the gender of a domestic animal’s offspring. ’987
patent, col. 19 ll. 40–44. Claim 1 of the ’987 patent recites:
1. A method of sorting a mixture of stained sperm
cells having either characteristic A or characteris-
tic B into at least one population, the method com-
prising the steps of:
a. flowing a fluid stream containing stained
sperm cells through a flow path at a fluid
delivery rate;
b. exciting fluorescence emissions from the
stained sperm cells having characteristic A
and the stained sperm cells having charac-
teristic B flowing in the flow path;
c. detecting the fluorescence emissions
from the excited sperm cells;
d. classifying the stained sperm cells as ei-
ther having characteristic A or having
characteristic B based upon the fluores-
cence emissions;
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INGURAN, LLC v. ABS GLOBAL, INC. 3
e. selecting stained sperm cells in the flow
path based on their classification; and
f. photo-damaging the selected sperm cells
to produce an enriched population of sperm
with respect to either characteristic A or
characteristic B.
Id. at col. 212 l. 57–col. 213 l. 8. Appellant Inguran, LLC
is the patent holder of the ’987 patent. Inguran, doing busi-
ness as STGenetics (“ST”), provides bull semen-processing
services, including to, at one time, Appellee ABS Global,
Inc. and Appellee’s parent company Genus PLC (“ABS”).
J.A. 6776–78.
ABS is a “bull stud.” A bull stud is a specialized busi-
ness that sells semen drawn from its own bulls that is pack-
aged in small tubes, or “straws,” for use in artificial
insemination. J.A. 6777; Appellee’s Br. 4. Artificial insem-
ination is needed by, for example, dairy farmers and beef
producers to increase fertility rates of female calves, which
is profitable for milk production. Appellee’s Br. 4. “Con-
ventional” bovine straws tend to produce an offspring of
each sex approximately 50% of the time, since it has ap-
proximately 50% of each X-chromosome and Y-chromo-
some-bearing sperm cells. Id. ST provides bull studs like
ABS with “sexed semen straws,” which consist either of
predominantly male or female sperm cells. J.A. 6777. This
appeal focuses on “sexed semen straws.”
PROCEDURAL HISTORY
The parties have a lengthy litigation history that stems
from a contractual relationship. J.A. 6777. In 2006, ABS
and ST entered into a contract for sorting semen. Id. The
parties entered into another related agreement in 2012. Id.ABS I
In 2014, ABS filed an antitrust lawsuit in the Western
District of Wisconsin, ABS Global Inc. v. Inguran, LLC, No.
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4 INGURAN, LLC v. ABS GLOBAL, INC.
14-cv-503 (W.D. Wis. 2014) (“ABS I”), against ST alleging
that ST was maintaining a monopoly power for sexed se-
men processing by its contractual terms and acquisition of
patents on the technology. J.A. 6777. ST brought counter-
claims and third-party claims for trade secret misappropri-
ation, breach of contract, and, relevant here, patent
infringement. J.A. 6778. ST alleged, in a counterclaim,
that ABS’s competing GSS System or technology directly
infringed at least one claim of the ’987 patent. J.A. 6798.
ABS stipulated to direct infringement of claims 1, 2, and 7
of the ’987 patent. See J.A. 3, 271, 3439, 6798; Appellant’s
Br. 3.
The parties presented to a jury expert testimony as to
damages. ST’s damages expert based his proposed royalty
rate by considering many factors, including by conducting
a hypothetical negotiation based on the framework in Geor-
gia-Pacific Corp. v. United States Plywood Corp., 318 F.
Supp. 1116 (S.D.N.Y. 1970) (“Georgia-Pacific factors”). 1
J.A. 7227–28. ST’s expert highlighted agreements between
ABS and prospective licensees to show what royalty rates
ST would expect to receive in exchange for giving another
company the right to use its technology to process and sell
sexed straws. Appellant’s Br. 32; Appellee’s Br. 11; J.A.
7300. ST’s expert calculated that ABS would charge a
1 The fifteen Georgia-Pacific factors set out an ana-
lytical framework for assessing a reasonable royalty and
for determining the value of the patented technology to
parties in the marketplace. Georgia-Pacific Corp., 318 F.
Supp. at 1120; see also LaserDynamics, Inc. v. Quanta
Comput., Inc., 694 F.3d 51, 60, 60 n.2, 76 (Fed. Cir. 2012).
Relevant here is factor 6: “[t]he effect of selling the pa-
tented specialty in promoting sales of other products of the
licensee; that existing value of the invention to the licensor
as a generator of sales of his non-patented items; and the
extent of such derivative or convoyed sales.” Georgia-Pa-
cific, 318 F. Supp. at 1120.
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INGURAN, LLC v. ABS GLOBAL, INC. 5
royalty rate of $2.05 per straw. Appellant’s Br. 9–10; Ap-
pellee’s Br. 11. ST’s expert testified that ABS’s licensing
plan would open additional lines of revenue for ABS. Ap-
pellee’s Br. 10. ST’s expert further opined that the parties
would have agreed in a hypothetical negotiation to a per-
straw royalty rate of $1.50. Appellant’s Br. 10.
The jury found that claim 2 of the ’987 patent was in-
valid and that the remaining claims were infringed. J.A.
3, 6798. The jury awarded ST a “lump sum for ABS’s past
infringement in the amount of $750,000, and a per straw
royalty on future sales of sexed semen straws sold by ABS
of $1.25.” J.A. 3802.
The district court provided that:
Judgment is entered for ABS or Genus’s future in-
fringement of the ’987 patent, granting ST an on-
going royalty of One Dollar and Twenty-Five Cents
($1.25) per straw of sexed semen sold by ABS that
was processed with the infringing GSS technology,
or any technology not more than colorably differ-
ent, where such sale or processing took place in the
United States through the remaining life of the
’987 patent.
J.A. 7503. Both parties disputed the scope of the ongoing
royalty, and the district court issued an order attempting
to resolve the dispute, stating: “th[e] ongoing royalty covers
straws sold by ABS that were processed with GSS technol-
ogy and imported into the United States for sale.” J.A. 5.
The judgment was appealed to the Seventh Circuit.
ABS Glob., Inc. v. Inguran, LLC, 914 F.3d 1054 (7th Cir.
2019). The Seventh Circuit affirmed the district court’s va-
lidity findings for the claims and issued a remand order
that did not concern judgment of the ongoing royalty of
ABS I. Appellant’s Br. 12–13.
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6 INGURAN, LLC v. ABS GLOBAL, INC.
ABS II
On June 7, 2017, ST filed another patent infringement
suit against ABS in the Western District of Wisconsin, In-
guran, LLC v. ABS Global, Inc., No. 17-cv-446 (W.D. Wis.)
(“ABS II”).
ABS II was consolidated with the remand proceedings
in ABS I for trial. Appellee’s Br. 14. During trial, ST
learned that, in addition to using the GSS System to sort
semen and produce straws for both itself and others, ABS
had begun selling and licensing the GSS System to third
parties and teaching them how to use the technology so
that those parties could process and produce their own
sexed straws. Appellant’s Br. 13; J.A. 273–74.
Addressing remaining issues after trial and the re-
mand order from the Seventh Circuit in ABS I, the district
court entered judgment that included an ongoing royalty
“subject of course to a renewed finding of the [’987] patent’s
validity,” J.A. 7552, along with supplemental damages for
sexed semen straws processed by foreign ABS licensees
and imported for sale in the United States, J.A. 7551–67;
Appellee’s Br. 14–15.
ABS III
On January 29, 2020, ST filed a third suit against ABS
before the Western District of Wisconsin, Inguran LLC v.
ABS Global, Inc., No. 20-cv-85 (“ABS III”). J.A. 266–83.
ST asserted additional patent infringement claims on the
same ’987 patent and filed two motions to supplement its
complaint to assert two recently issued patents, U.S. Pa-
tent Nos. 10,583,439 (the “’439 patent) and 10,689,210 (the
“’210 patent”). J.A. 2–3. ST asserted, among other claims,
induced infringement under 35 U.S.C. § 271(b) based on
ABS’s selling or licensing GSS machines to third parties.
J.A. 3.
ABS filed a motion to dismiss the induced infringement
claims of the ’987 patent on the grounds that the claims
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INGURAN, LLC v. ABS GLOBAL, INC. 7
were precluded by the judgment in ABS I. J.A. 4. The dis-
trict court agreed with ABS, finding that ABS I “resolve[d]
the claims asserted in the original complaint in the ’085
[ABS III] case,” and dismissed the action. J.A. 2–3. The
district court also ruled to stay the pending case regarding
the ’439 patent pending conclusion of the Patent Trial and
Appeal Board’s inter partes review of that patent. J.A. 3.
The district court denied ST’s motions to supplement as
moot and noted that, if ST wanted to add additional in-
fringement claims concerning the ’210 patent, they must
seek leave to amend in its patent infringement claims and
explain “why those claims should proceed at this time in
light of the stay of the infringement claims under the ’439
patent.” Id.In June 2020, the district court clarified the scope of its
previous order in a second amended judgment. J.A. 7564–
67; Reply Br. 9–11; J.A. 7572–78. In December 2021, the
district court did so again. J.A. 2–10. To that effect, the
district court stated that “the judgment is reasonably in-
terpreted to cover straws produced by third parties using
GSS technology as licensed by ABS” and that “the court
agrees that Count I of [ABS III] is precluded by the judg-
ment in ABS I.” J.A. 7. ST appeals both the district court’s
interpretation of the scope of the ongoing royalty and the
finding of claim preclusion. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
STANDARD OF REVIEW
Whether a claim is barred by claim preclusion is a
question of law that we review de novo. Acumed LLC v.
Stryker Corp., 525 F.3d 1319, 1323 (Fed. Cir. 2008). When
assessing the general principles of claim preclusion, this
court applies the law of the regional circuit in which the
district court sits, here, the Seventh Circuit. SimpleAir,
Inc. v. Google LLC, 884 F.3d 1160, 1165 (Fed. Cir. 2018).
Under Seventh Circuit law, there are three elements to
claim preclusion: “(1) an identity of the parties or their
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8 INGURAN, LLC v. ABS GLOBAL, INC.
privies in the first and second lawsuits; (2) an identity of
the cause of action; and (3) a final judgment on the merits
in the first suit.” Adams v. City of Indianapolis, 742 F.3d
720, 736 (7th Cir. 2014). We apply our own authority and
precedent when addressing questions of U.S. patentability.
Superior Indus., LLC v. Thor Glob. Enters. Ltd., 700 F.3d
1287, 1291 (Fed. Cir. 2012). For example, in the context of
claim preclusion in a patent case, this court looks to its own
precedent to resolve “the operative facts involved in a claim
for patent infringement.” Id. Here, we have interpreted
“same cause of action” to mean “the second claim is based
on the same set of transactional facts as the first.” Jet, Inc.
v. Sewage Aeration Sys., 223 F.3d 1360, 1362 (Fed. Cir.
2000).
We review a district court’s interpretation of the scope
of equitable authority and its orders for abuse of discretion.
Amado v. Microsoft Corp., 517 F.3d 1353, 1358–60 (Fed.
Cir. 2008). The Seventh Circuit has cautioned against giv-
ing “[t]oo much deference” to a court’s later interpretation
where doing so would “create[] the risk that interpretation
of an order becomes a means to rewrite it.” Grede v.
FCStone, LLC, 746 F.3d 244, 257 (7th Cir. 2014).
DISCUSSION
On appeal, ST challenges both the district court’s find-
ing that the ABS I judgment precluded ST’s induced in-
fringement claims in ABS III, and the district court’s
interpretation of the scope of its order regarding the ongo-
ing royalty. We first address the issue of res judicata or
claim preclusion.
I
As noted above, under Seventh Circuit law, there are
three elements to claim preclusion: “(1) an identity of the
parties or their privies in the first and second lawsuits; (2)
an identity of the cause of action; and (3) a final judgment
on the merits in the first suit.” Adams, 742 F.3d at 736.
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INGURAN, LLC v. ABS GLOBAL, INC. 9
The parties only dispute one element of the test, element
two: the “same cause of action.” Appellant’s Br. 19; Appel-
lee’s Br. 20. There is no dispute that the parties and the
asserted ’987 patent are the same between ABS I and ABS
III, or that there was a final judgment on the merits. Ap-
pellee’s Br. 15; Appellant’s Br. 19–20.
Under claim preclusion, “a judgment on the merits in a
prior suit bars a second suit involving the same parties or
their privies based on the same cause of action.” Acumed,
525 F.3d at 1323. Thus, whether the induced patent in-
fringement claim asserted in ABS III is precluded by the
ABS I judgment hinges on whether the same “cause of ac-
tion” or set of “transactional facts” are at issue. We have
held that “a cause of action” is based on the transactional
facts from which it arises. SimpleAir, 884 F.3d at 1165 (“In
a patent suit, essential transactional facts include both the
asserted patents and the accused activity.”) (cleaned up).
ST asserts that the patent infringement claims raised
in ABS I and III are separate and distinct causes of action
involving different infringing acts. Appellant’s Br. 19–20.
According to ST, ABS I focuses on direct infringement
while ABS III focuses on induced infringement. Id. ST ar-
gues that an action involving direct infringement cannot
preclude a subsequent action based on induced infringe-
ment. Id. at 21–24. As support, ST highlights the different
elements needed to prove direct infringement under 35
U.S.C. § 271(a) from those needed to prove induced in-
fringement under § 271(b). Id. at 20–21; see also Power In-
tegrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 843
F.3d 1315, 1332 (Fed. Cir. 2016). ST argues that it would
have been premature to bring an induced infringement ac-
tion against ABS during ABS I because, at that time, ABS
had not yet begun selling or licensing its GSS technology to
third parties. Appellant’s Br. 23. ST argues that, even if
it was “on notice” that ABS planned to license its GSS Sys-
tem during ABS I, notice of a potentially infringing activity
cannot form the basis of a justiciable claim. Id. at 24–25.
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10 INGURAN, LLC v. ABS GLOBAL, INC.
ABS contends that ST accused the same conduct—its
licensing program—in both ABS I and ABS III and that the
transactional facts “are all but identical.” Appellee’s Br.
17, 21–22. ABS disagrees with ST’s argument that it was
premature to raise an induced infringement claim in ABS
I because the entire accused activity in ABS I had not yet
occurred; ABS had “neither sold a single sexed semen
straw nor entered into a single fee-for-service contract” by
the time of trial in ABS I such that the relief sought was
already prospective in nature. Id. at 22. ABS cites the tes-
timony from ABS I of its business development director
who explained the company’s three “business models” for
selling the GSS technology such that ST and the jury knew
and understood the “anticipated commercial uses” at that
time. 2 Id. at 22–23.
In patent cases, this court applies the general rule that
res judicata does not bar the assertion of “new rights ac-
quired during the action which might have been, but which
were not, litigated.” Gillig v. Nike, Inc., 602 F.3d 1354,
1363 (Fed. Cir. 2010) (quoting Comput. Assocs. Int’l, Inc. v.
Altai, Inc., 126 F.3d 365, 370 (2d Cir. 1997)); see also Man-
ning v. City of Auburn, 953 F.2d 1355, 1360 (11th Cir.
1992) (“[F]or res judicata purposes, claims that ‘could have
been brought’ are claims in existence at the time the origi-
nal complaint is filed or claims actually asserted by supple-
mental pleadings or otherwise in the earlier
action.”). Indeed, claim preclusion requires that the claim
2 At oral argument, ABS described two main busi-
ness models: “fee-for-service” and “licensee.” Oral Arg. at
20:57–22:34. In both models, ABS makes the GSS machine
and delivers it to the customers configured to the “nature
of the animal genetics at play.” Id. at 21:43–21:46. ABS
employees operate the machine in the first model while, in
the second model, the machine is operated by the cus-
tomer’s employees according to ABS’s operations. Id. at
32:43–33:39.
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INGURAN, LLC v. ABS GLOBAL, INC. 11
either was asserted, or could have been asserted, in the
prior action. Aspex Eyewear, Inc. v. Marchon Eyewear, Inc.,
672 F.3d 1335, 1342 (Fed. Cir. 2012). If, for example, the
claim did not exist at the time of the earlier action, it could
not have been asserted in that action and is not barred by
res judicata. Id.In view of the foregoing, we first address whether ST
asserted an induced infringement claim against ABS in
ABS I. It did not. ST’s reference to § 271(b) in its answer
was its induced infringement claim against the parent
company Genus for the actions taken by ABS. We find no
support in the record that ST asserted or cited induced in-
fringement against ABS for actions taken by third parties
as a result of ABS’s activities. J.A. 3270–71; contra Appel-
lee’s Br. 9–10.
Next, we address whether ST could have brought an
induced infringement claim against ABS at the time the
complaint was filed before the district court. Here, we look
to whether an induced infringement claim could have been
raised out of the transactional facts in ABS I. Superior In-
dus., 700 F.3d at 1291; see also Acumed, 525 F.3d at 1323–
24 (“Under the Restatement approach to claim preclusion,
a claim is defined by the transactional facts from which it
arises.”). To be sure, courts have wrestled with how to as-
sess the portion of the test stating that any claims that
“could have been raised in a prior action.” See, e.g., Hells
Canyon Pres. Council v. U.S. Forest Serv., 403 F.3d 683,
686 n.2 (9th Cir. 2005). For example, some courts will find
that a claim is precluded by a prior action if it involves the
same legal theory or cause of action. Id. Here, we resolve
whether a claim “could have been raised” on the basis of
the same transactional facts. We hold that the induced in-
fringement claim brought in ABS III is not precluded by
the direct infringement claim brought in ABS I because the
claims are not based on the same transactional facts.
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12 INGURAN, LLC v. ABS GLOBAL, INC.
The accused activity and the transactional facts differ
between the direct infringement claims asserted in ABS I
and the induced infringement claims raised in ABS III.
ABS I centered around ABS’s activity for direct infringe-
ment, while the induced infringement claim of ABS III cen-
ters around third parties whose direct infringement
activities are induced by ABS. Appellant’s Br. 21–22.
Framed differently, the evidence that ST needs to support
a claim for direct infringement by ABS is different from the
evidence required to sustain a claim of induced infringe-
ment by third parties. ST would need additional facts to
plausibly allege an induced infringement claim—facts that
largely came to light during discovery in ABS II.
We agree with ST that an induced infringement claim
rests on evidence and elements beyond those required by
direct infringement. Niazi Licensing Corp. v. St. Jude
Medical S.C., Inc., 30 F.4th 1339, 1351 (Fed. Cir. 2022)
(“For induced infringement under 35 U.S.C. § 271(b), the
two steps become three. In addition to showing direct in-
fringement . . . , the patentee must also show that the al-
leged infringer ‘knowingly induced infringement and
possessed specific intent to encourage another’s infringe-
ment.’” (quoting Enplas Display Device Corp. v. Seoul Sem-
iconductor Co., 909 F.3d 398 407 (Fed. Cir. 2018)).; see also
Gammino v. Am. Tel. & Tel. Co., No. 12-666, 2013 WL
6154569, at *2 (D. Del. Nov. 22, 2013) (finding that res ju-
dicata did not bar a direct infringement claim because in-
duced and indirect infringement claims arise under
different statutes and comprise different causes of action).
We recognize that minimal evidence exists in the ABS I
record that arguably supports an allegation that ABS in-
duced third parties to infringe ST’s patent. At the time of
the ABS I trial, ABS had not yet commercially launched its
GSS System. Appellee’s Br. 7, 9–10; Appellant’s Br. 4–5.
The evidence established that ABS directly infringed ST’s
’987 patent by the sale of sexed straws sold by ABS. Ap-
pellant’s Br. 5, 31. The only evidence that ABS’s proposed
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INGURAN, LLC v. ABS GLOBAL, INC. 13
business model involved third parties, which is what ST
refers to as “sublicensing,” was a single “brainstorming” in-
ternal-facing document. Oral Arg. at 2:32–3:30; Conf. J.A.
3347; J.A. 4250–51. 3 Even so, we have held that a suit may
not be barred by claim preclusion, even where the same
transactional facts are present in both suits, if infringe-
ment allegations are “temporally limited to acts occurring
after final judgment was entered in the first suit.” Brain
Life, LLC v. Elekta Inc., 746 F.3d 1045, 1054 (Fed. Cir.
2014).
An induced patent infringement claim brought at the
time of trial in ABS I would have been based on specula-
tion, in part because the parties stipulated to direct in-
fringement and the question of inducement was not before
the jury. Oral Arg. at 25:12–26:48. We agree with ST that
it could not have asserted an inducement claim during
ABS I. Accordingly, the district court erred in applying res
judicata or claim preclusion to ST’s induced infringement
claim. With that context in mind, we turn to whether the
district court, in its later interpretation of its ABS I order,
improperly expanded the scope of the order.
II
Subsequent to entering judgment in ABS I, the district
court clarified that the language in its order covered straws
sold by ABS that were processed with the GSS technology
and imported into the United States for sale. J.A. 5. Years
later, the district court again “conclude[d]” that the judg-
ment of ABS I “reasonably . . . cover[ed] straws produced
by third parties using GSS technology as licensed by ABS.”
3 ST stated at oral argument that it believes ABS be-
gan sublicensing its GSS technology to third parties at
some point after the judgment in ABS I was entered. Oral
Arg. at 11:53–12:17. ABS clarified that the record contains
evidence of foreign licensing with payments made but no
known domestic licensing. Id. at 13:09–14:11.
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14 INGURAN, LLC v. ABS GLOBAL, INC.
J.A. 7. Thus, the district court found that the ongoing roy-
alty rate of ABS I reached induced infringement by ABS.
See Appellant’s Br. 26. The district court’s finding relied
on its interpretation of its order as well as the testimony of
ST’s damages expert. J.A. 4–7. On appeal, ST challenges
the district court’s interpretation and its order in ABS I.
ST asserts that its expert’s testimony confirms that the
ongoing royalty in ABS I is limited to ABS’s direct infringe-
ment of the ’987 patent. Appellant’s Br. 31–33; Oral Arg.
at 9:37–58, 29:29–31:56. ST argues that the district court’s
interpretation of its order was given five years after the or-
der was issued and is “plainly” broader in scope and “incon-
sistent with the language of the order.” Reply Br. 28 (citing
Advanced Software Design Corp. v. Fiserv, Inc., 641 F.3d
1368, 1381 (Fed. Cir. 2011) and Int’l Rectifier Corp. v. IXYS
Corp., 383 F.3d 1312, 1315 (Fed. Cir. 2004)). On the other
hand, ABS cites various portions of ST’s damages expert
testimony that ABS claims reflect the understanding that
ABS intended to license the GSS technology, which ABS
argues was factored into the proposed reasonable royalty
rate and award in ABS I. Appellee’s Br. 23–24.
We have admonished district courts for issuing sweep-
ing injunctions that cover potential infringing activities.
Aspex, 672 F.3d at 1344 (citing Forest Lab’ys., Inc. v. Ivax
Pharms., Inc., 501 F.3d 1263, 1272 (Fed. Cir. 2007)). The
Seventh Circuit has also cautioned that too much deference
to an issuing court’s much-later interpretation of an order
“would undermine the ability of parties and non-parties to
rely on a court order” and “creates the risk” where inter-
pretation can become a means to “rewrite it after unin-
tended consequences have given rise to regrets.” Grede,
746 F.3d at 257. We conclude that the district court’s sub-
sequent interpretation or clarification of its initial order es-
sentially rewrites that order.
Here, the plain language of the royalty is limited to
straws. Oral Arg. at 1:02–37. The plain language of the
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INGURAN, LLC v. ABS GLOBAL, INC. 15
clarifying order first issued by the court is also limited to
straws. J.A. 5. While “GSS technology” is mentioned
throughout ABS I, see, e.g., Conf. J.A. 5785; Conf. J.A.
7673, the scope of ABS’s direct infringement allegations
cannot reasonably be expanded to cover actions of third-
party licensees using GSS technology to make their own
straws.
In light of the reasons we state above that claim pre-
clusion does not apply in this case, we hold that the district
court improperly broadened the scope of the ABS I judg-
ment to address induced infringement activity. See
Amado, 517 F.3d at 1359; see also Grede, 746 F.3d at 257.
We therefore reverse the district court’s interpretation of
its prior order.
CONCLUSION
We hold that ST was not precluded from bringing an
induced patent infringement claim in ABS III based on the
judgment in ABS I. We also hold that the district court
abused its discretion by interpreting its initial order in
ABS I in a way that expanded that scope of the order.
Thus, we reverse the district court’s dismissal order with
respect to claim preclusion.
REVERSED
COSTS
No costs.