DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc.

Filing 92

MEMORANDUM. Signed by Judge William C. Bryson on 8/11/2014. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

DIETGOAL INNOVATIONS LLC,
Plaintiff,
v.
CHIPOTLE MEXICAN GRILL, INC.,
Defendant.

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CIVIL ACTION NO.
2:12-cv-00764-WCB-RSP

ORDER
The Court has the parties’ memorandums regarding the effect on this case of the decision
in DietGoal Innovations LLC v. Bravo Media LLC, No. 1:13-cv-8391 (S.D.N.Y. July 8, 2014)
(“Bravo”). In that case, the United States District Court for the Southern District of New York
invalidated the same patent that is at issue in these cases on the ground that it was directed to
unpatentable subject matter. The defendants in this case have filed motions raising the same
challenge to the patent. The plaintiff has advised the Court that it has taken an appeal to the
Federal Circuit from the district court’s decision in the Bravo case, and it has asked the Court to
stay proceedings in these cases until the Federal Circuit has decided the appeal in that case. The
defendants urge the Court not to stay this case, but to grant judgment in their favor on the issue
of unpatentability under the doctrine of collateral estoppel.
The Court is not inclined to follow either suggestion without further guidance from the
parties. In particular, the Court needs additional briefing with respect to the grounds that the
plaintiff regards as barring the application of collateral estoppel in this case. In its memorandum,
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the plaintiff stated simply that “the Bravo decision’s analysis of the patent-eligibility of the
claims of the ’516 Patent is so fundamentally flawed that it demonstrates that DietGoal did not
have a fair opportunity procedurally, substantively, and evidentially to defend the validity of the
’516 Patent in that court, precluding application of the doctrine of collateral estoppel.” Dkt. No.
90, at 3. That statement comes perilously close to asserting that because the first decision was
wrong, it must have been the product of one or more flaws that render it ineligible to be given
collateral estoppel effect. Except for what the Supreme Court referred to as “those relatively rare
instances where the courts wholly failed to grasp the technical subject matter and the issues in
suit,” Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 333 (1971), assertions
that the first decision was incorrect do not defeat the application of collateral estoppel. See
Pharmacia & Upjohn Co. v. Mylan Pharm., Inc., 170 F.3d 1373, 1380 (Fed. Cir. 1999) (the
inquiry into whether the plaintiff was afforded a full opportunity to litigate is “quite narrow” and
does not consider “whether the prior finding of invalidity was correct”); Mississippi Chem. Corp.
v. Swift Agric. Chems. Corp., 717 F.2d 1374, 1378-79 (Fed. Cir. 1983); Stevenson v. Sears,
Roebuck & Co., 713 F.2d 705, 709 (Fed. Cir. 1983) (“[A]n inappropriate inquiry is whether the
prior finding of invalidity was correct; instead, the court is only to decide whether the patentee
had a full and fair opportunity to litigate the validity of his patent in the prior unsuccessful
suit.”); Westwood Chem., Inc. v. United States, 525 F.2d 1367, 1375 (Ct. Cl. 1975) (“[T]he
correctness of the earlier decision is not an issue and is not a prerequisite to the application of
[collateral] estoppel.”). 1

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Decisions of the Court of Claims are binding on the Federal Circuit. Because Federal
Circuit law governs this Court’s rulings on the application of collateral estoppel principles in
patent cases, the Court of Claims decisions are also binding on this Court.
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Beyond that, the plaintiff’s memorandum offers little of substance from which the Court
might conclude that the proceedings in the New York action deprived the plaintiff of a full and
fair opportunity to litigate the validity of the patent in suit, U.S. Pat. No. 6,585,516. However,
the Court will not rule on the collateral estoppel issue without providing the plaintiff an
opportunity to make a more complete presentation of the reasons that it does not believe
application of collateral estoppel is warranted in this case. Accordingly, the Court directs the
plaintiff to file a supplemental memorandum, no more than 15 pages in length, setting forth in
detail why the plaintiff regards the proceedings in the Bravo case as having been so flawed as to
deprive it of a full and fair opportunity to litigate the invalidity issue, and whether there is any
other reason that judgment should not be entered in the defendants’ favor on collateral estoppel
grounds. The memorandum should focus on the asserted procedural flaws in the manner in
which the Bravo case was litigated; it should not be directed to criticism of the district court’s
legal analysis or its ultimate conclusion in that case. To the extent that the plaintiff contends that
the process employed by the district court was flawed, the plaintiff should set out, with
specificity, what showing the plaintiff could have made in the Bravo case, but was prevented
from making, that could have affected the outcome in that case.
The plaintiff’s memorandum is to be filed within 14 days of the date of this order. The
defendants, if they elect to do so, may file a joint responsive memorandum, no more than 15
pages in length, within seven days of the date that the plaintiff’s memorandum is filed. The
plaintiff, if it elects to do so, may file a reply memorandum, no more than five pages in length,
within seven days of the date that the defendants’ memorandum is filed.

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The parties are advised that the briefing described above will complete the briefing on the
issue of collateral estoppel.

The Court will at that time decide whether (1) to grant the

defendants’ motion for summary judgment of patent invalidity under 35 U.S.C. § 101 based on
the doctrine of collateral estoppel, (2) to grant a stay pending the appeal to the Federal Circuit in
the Bravo case, or (3) to decide the pending motions for summary judgment on the merits
without regard to the doctrine of collateral estoppel.
IT IS SO ORDERED.
SIGNED this 11th day of August, 2014.

_____________________________
WILLIAM C. BRYSON
UNITED STATES CIRCUIT JUDGE

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