Overlooked Patent Cases: Preclusion's Effect On Settlement

The U.S. Court of Appeals for the Federal Circuit expanded the century-old Kessler doctrine in the 2020 In re: PersonalWeb Technologies LLC decision to give preclusive effect to issues that were not actually litigated but were finally decided through voluntary dismissal with prejudice in a prior litigation.¹

As recent, potentially overlooked district court decisions demonstrate, parties must consider the potentially long-reaching preclusive impact of dismissing a litigation with prejudice when drafting terms of settlement agreements.

History of the Kessler Doctrine

The Kessler doctrine was adopted almost 115 years ago by the U.S. Supreme Court in Kessler v. Eldred.² In that case, customers of a manufacturer that withstood an infringement action were sued for infringement of the previously asserted patents for their separate use of the manufacturer's products.³