District Court Erred in Applying Collateral Estoppel

Last week, the United States Court of Appeals for the Federal Circuit issued an opinion in ArcelorMittal Atlantique et Lorraine v. AK Steel Corp., 2017-1637 (November 14, 2018). The district court had granted summary judgment against ArcelorMittal, concluding its infringement claims were collaterally estopped by a judgment of non-infringement entered in a prior case between the same parties. The Federal Circuit reversed. The prior suit involved an experimental version of a hot-rolled coated steel sheet, while the later suit involved a commercialized version. The asserted patent claim included a product by process limitation requiring the sheet to exhibit “mechanical resistance in excess of 1500 MPa after thermal treatment.” In the prior suit, the jury found the experimental version non-infringing because there was no evidence it met this mechanical resistance limitation. In the later suit, ArcelorMittal presented evidence the commercialized version differed from the experimental version in that the commercialized version exhibited mechanical resistance in excess of 1500 MPa after thermal treatment. Reversing the district court, the Federal Circuit explained “[d]ifferences with respect to the claimed limitations constitute changes in controlling facts, such that collateral estoppel does not apply.” The Court further held the district court erred in focusing its analysis solely on the characteristics of the steel sheets before thermal treatment. The Court explained doing so failed to give full effect to the product by process limitation of the claim, which specified resistance properties required after thermal treatment. Finally, the Court concluded the district court abused its discretion in refusing ArcelorMittal discovery concerning AK Steel’s commercialized version of the steel sheet. Given the evidence of differences between the experimental and commercialized products, and the fact the commercialized version did not exist at the time of the prior trial, the Court concluded it was error to limit ArcelorMittal’s discovery to that conducted in the prior litigation. The Court directed the district court to allow ArcelorMittal its requested discovery on remand.