PTO Not Collaterally Estopped in a Reexamination by Prior District Court Claim Constructions

Case: In re Trans Texas Holdings Corp., (Fed. Cir. No. 2006-1599, 2006-1600 8/22/07)

The One Sentence Summary: The panel affirmed a decision of the Board of Patent Appeals and Interferences rejecting patent claims for a system of inflation-adjusted bank accounts as obvious - the Board was not collaterally estopped by claim constructions in prior district court litigation to which the PTO was not a party.


What They Were Fighting About: The Board of Patent Appeals and Interferences (the "Board") had affirmed the examiner's rejection on reexamination of patents claiming the matching of inflation adjustments in deposit and savings accounts as obvious. Trans Texas appealed.

Federal Circuit Holdings:

• The PTO was not bound by claim constructions from earlier district court litigation to which it was not a party. Issue preclusion and collateral estoppel were not appropriate where the PTO was not a party and did not participate in the earlier litigation.
• The claim construction requiring continuous one-to-one inflation adjustments was rejected as inconsistent with the specification and the dictionary definition of "direct."
• The Board correctly found that the claims were obvious in light of the prior art.