Blonder-Tongue Laboratories v. University of Illinois Foundation

Supreme Court of the United States
(1971)

ELI5:

Rule of Law:

The doctrine of mutuality of estoppel is abandoned in patent infringement litigation. A patent holder is precluded from relitigating the validity of a patent once a court in a prior lawsuit, where the patentee had a full and fair opportunity to litigate the issue, has determined the patent to be invalid.

Facts:

The University of Illinois Foundation (Foundation) was the owner of the Isbell patent for a television antenna.
In a prior infringement suit brought by the Foundation against the Winegard Co., a federal district court in Iowa conducted a full trial on the merits.
The Iowa court determined that the Isbell patent was invalid because it would have been obvious to one skilled in the art.
The U.S. Court of Appeals for the Eighth Circuit unanimously affirmed the Iowa court's judgment of invalidity.
Subsequently, the Foundation filed a new lawsuit in Illinois, accusing a customer of Blonder-Tongue Laboratories, Inc. (B-T) of infringing the same Isbell patent.
B-T chose to intervene in the lawsuit to defend its customer against the infringement claim.

Procedural Posture:

The Foundation sued a customer of Blonder-Tongue Laboratories, Inc. (B-T) in the U.S. District Court for the Northern District of Illinois.
B-T intervened in the suit.
The District Court, relying on the rule from Triplett v. Lowell, declined to be bound by the prior judgment of invalidity from the Eighth Circuit and held that the Isbell patent was valid and infringed.
B-T, as appellant, appealed the judgment to the U.S. Court of Appeals for the Seventh Circuit.
The Seventh Circuit affirmed the District Court's holding that the Isbell patent was valid and infringed.
B-T, as petitioner, filed a petition for a writ of certiorari with the U.S. Supreme Court, which was granted.

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Issue:

Should the holding of Triplett v. Lowell, which allows a patent holder to relitigate the validity of a patent that has been previously declared invalid in a suit against a different defendant, be adhered to?

Opinions:

Majority - Justice White

No. The holding of Triplett v. Lowell is overruled to the extent that it forecloses a plea of estoppel by a defendant facing an infringement charge on a patent previously declared invalid. The Court abandons the requirement of mutuality of estoppel in patent cases, reasoning that the doctrine has been widely eroded and criticized as unjust. Permitting a patentee to relitigate the validity of a patent after having a full and fair opportunity to do so in a prior action misallocates judicial and private resources, encourages nuisance settlements by alleged infringers who cannot afford costly litigation, and is inconsistent with the public interest in challenging invalid patents. Instead of allowing endless relitigation, a defendant may plead collateral estoppel, and the patentee will be bound by the prior judgment of invalidity unless it can demonstrate that it did not have a full and fair opportunity to litigate the issue in the earlier case.

Analysis:

This decision significantly altered the landscape of patent litigation by introducing non-mutual defensive collateral estoppel into the field. By overruling Triplett v. Lowell, the Court eliminated a patentee's ability to sue a series of alleged infringers on a patent previously found invalid. This strengthened the finality of judicial decisions, promoted judicial economy, and shifted the focus of inquiry from the identity of the parties to the fairness of the prior proceeding. The ruling makes it more difficult for holders of patents of questionable validity to extract nuisance-value licenses through the threat of repeated, expensive litigation.

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