Case: 24-1106 Document: 38 Page: 1 Filed: 10/15/2025

United States Court of Appeals for the Federal Circuit ______________________ INLAND DIAMOND PRODUCTS CO., Plaintiff-Appellant v. CHERRY OPTICAL INC., Defendant-Appellee ______________________ 2024-1106 ______________________ Appeal from the United States District Court for the Eastern District of Wisconsin in No. 1:20-cv-00352-WCG, Chief Judge William C. Griesbach. ______________________ Decided: October 15, 2025 ______________________ MARK A. JOTANOVIC, Dickinson Wright PLLC, Troy, MI, argued for plaintiff-appellant. Also represented by JOHN S. ARTZ, Ann Arbor, MI.

TIFFANY WOELFEL, Amundsen Davis LLC, Green Bay, WI, argued for defendant-appellee. Also represented by SHERRY DAWN COLEY, JASON JUST. ______________________ Before PROST, REYNA, and CHEN, Circuit Judges.

PROST, Circuit Judge.

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Inland Diamond Products Co. (“Inland”) appeals from a summary judgment of the U.S. District Court for the Eastern District of Wisconsin. The district court relied on issue preclusion to hold that claims 2, 4, and 6 of U.S. Pa- tent No. 8,636,360 (“the ’360 patent”) and claim 4 of U.S. Patent No. 9,405,130 (“the ’130 patent”) (collectively, the “Asserted Claims”) are invalid for obviousness. We vacate the district court’s judgment and remand.

BACKGROUND In 2019, the Patent Trial and Appeal Board (“Board”) issued a final written decision in each of two inter partes reviews (“IPRs”)—one for the ’360 patent, the other for the ’130 patent. 1 In these decisions, the Board determined as unpatentable claims 1, 3, 7–8, and 12 of the ’360 patent and claims 1, 3, 6–8, and 10 of the ’130 patent (collectively, the “Unpatentable Claims”). The Asserted Claims—all of which depend exclusively from Unpatentable Claims 2— were also challenged in the IPRs, but the Board deter- mined that the Asserted Claims had not been proven un- patentable. These decisions were not appealed.

Then, in 2020, Inland filed the instant case against Cherry, in which it alleged that Cherry infringed the As- serted Claims.

On Cherry’s motion, the district court granted sum- mary judgment that the Asserted Claims are invalid for ob- viousness. The court began by concluding that, because the

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Asserted Claims depend from—and thus contain the limi- tations of—Unpatentable Claims, issue preclusion stem- ming from the IPRs prohibited relitigating validity issues as to those limitations. See Inland Diamond Prods. Co. v. Cherry Optical Inc., 695 F. Supp. 3d 1031, 1039 (E.D. Wis. 2023) (concluding that issue preclusion applied, so Cherry was “not required to perform an independent invalidity analysis” for limitations of Unpatentable Claims contained in the Asserted Claims). The court therefore focused on the remaining limitations added by the Asserted Claims. See id. at 1040–41. And while the court did allow Inland to defend the Asserted Claims’ validity (at least as to issues concerning those remaining limitations), it appeared to do so only because the Asserted Claims had been adjudicated as not unpatentable in the IPRs. See id. at 1039 (“Because the [Asserted Claims] were adjudicated before the [Board], the court will not estop [Inland] from disputing invalid- ity . . . .”). Ultimately, the court’s issue-preclusion ruling and Cherry’s asserted prior art led the court to grant sum- mary judgment that the Asserted Claims are invalid for ob- viousness. Id. at 1040–42.

Inland timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

DISCUSSION We review a district court’s grant of summary judg- ment under the law of the regional circuit—here, the Sev- enth Circuit, which reviews such grants de novo. See Molon Motor & Coil Corp. v. Nidec Motor Corp., 946 F.3d 1354, 1358 (Fed. Cir. 2020) (citing and applying Seventh Circuit law). And while we also review a district court’s application of general principles of issue preclusion (a.k.a. collateral estoppel) under the law of the regional circuit, Federal Circuit law applies when substantive patent-law issues are implicated. See, e.g., Kroy IP Holdings, LLC v. Groupon, Inc., 127 F.4th 1376, 1379 (Fed. Cir. 2025).

Whether issue preclusion applies is reviewed de novo. See Case: 24-1106 Document: 38 Page: 4 Filed: 10/15/2025

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id.; see also EEOC v. AutoZone, Inc., 707 F.3d 824, 831 (7th Cir. 2013).

Since the district court’s summary judgment, we have issued two decisions—ParkerVision and Kroy—that re- quire concluding that the district court erred in applying issue preclusion here. See ParkerVision, Inc. v. Qualcomm Inc., 116 F.4th 1345 (Fed. Cir. 2024); Kroy, 127 F.4th 1376.

In ParkerVision, the Board had determined apparatus claims unpatentable in an IPR, and the patentee then as- serted method claims of that same patent in district court.

The same prior art that was raised in the IPR against the apparatus claims was raised in district court against the method claims. When the patentee sought to present ex- pert testimony about why that prior art did not invalidate the method claims, the district court barred the testimony.

It reasoned that, because the Board had decided factual is- sues concerning that prior art against the patentee when determining the apparatus claims unpatentable, issue pre- clusion prevented the patentee from relitigating any of those same issues in district court. See 116 F.4th at 1354.

On appeal, we reversed. We observed that one “well-known exception[]” to issue preclusion is where “the second action involves application of a different legal standard.” Id. at 1361 (quoting B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 148, 154 (2015)). And we concluded that, because the standard of proof for unpatentability in an IPR (preponderance) is less than that for invalidity in district court (clear and convincing), no Board finding es- topped the patentee from presenting evidence on the “un- resolved question” of whether the patent challenger could prove the prior-art-related facts by clear and convincing ev- idence. Id. at 1362. 3

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In Kroy, as in ParkerVision, the Board in an IPR had determined some claims of a patent unpatentable, and the patentee then asserted other claims of that same patent in district court. The district court dismissed the patentee’s complaint due to issue preclusion because it deemed the asserted claims immaterially different (for invalidity pur- poses) from those the Board had determined unpatentable.

Kroy, 127 F.4th at 1378–79. On appeal, we reversed. We concluded that, “even assuming the asserted claims [were] immaterially different from the unpatentable claims for purposes of invalidity,” id. at 1379, issue preclusion did not apply, because the standard of proof for unpatentability in an IPR was less than that for invalidity in district court, see id. at 1380–81 (citing, among other authorities, Par- kerVision, 116 F.4th at 1361–62).

ParkerVision and Kroy both stand for the principle that the Board’s fact findings under a lower standard of proof (preponderance) do not have issue-preclusive effect in dis- trict-court invalidity proceedings, where facts must be proven under a higher standard of proof (clear and convinc- ing). In ParkerVision, the Board had determined some claims unpatentable, and the attempt to apply issue pre- clusion in district court concerned the Board’s specific un- derlying fact findings. In Kroy (as in ParkerVision), the

L.C., 890 F.3d 1282 (Fed. Cir. 2018). We explained that XY “involved a different situation”—namely, the application of issue preclusion to bar assertion of a patent claim that had been adjudicated as invalid or unpatentable through any appeals to this court. See ParkerVision, 116 F.4th at 1362; id. (“Once we have affirmed the invalidity of a patent claim[,] . . . the claim no longer exists and cannot be as- serted as a basis for infringement . . . .”). In ParkerVision, we were “dealing with claims that ha[d] not been found un- patentable,” id. (emphasis in original), and the same is true in the instant case.

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Board had determined some claims unpatentable. And though, on its face, the attempted district-court preclusion in Kroy concerned other (ostensibly immaterially different) claims in their entirety—as opposed to just specific fact findings—it really concerned whatever fact findings sup- ported the Board’s unpatentability determinations. That is because, if those other claims in Kroy had been held in- valid in district court due to issue preclusion (as was essen- tially attempted there), such a holding would have ultimately been on the strength of the fact findings neces- sary for the Board’s unpatentability determinations. See Kroy, 127 F.4th at 1381 (“[W]hen a district court would nec- essarily rely on the Board’s fact findings, and those facts have only been proven in a prior proceeding under a lower [standard] of proof than what is required in district court, collateral estoppel does not apply.”). So, although the con- texts were somewhat different as between the cases, the underlying principle was the same: fact findings made un- der a lower standard of proof do not have issue-preclusive effect in proceedings in which facts must be proven under a higher standard of proof. See, e.g., Grogan v. Garner, 498 U.S. 279, 284–85 (1991).

The district court’s summary judgment in this case erred by violating that principle, and that error leads us to vacate and remand. Specifically, when adjudicating the Asserted Claims’ invalidity under the clear-and-convincing standard, the court gave issue-preclusive effect to facts found under the lesser, preponderance standard. See In- land, 695 F. Supp. 3d at 1039 (relying on issue preclusion to relieve Cherry of having to “perform an independent in- validity analysis” for limitations of Unpatentable Claims contained in the Asserted Claims). In this respect, the court’s error was indistinguishable from the errors dis- cussed above in ParkerVision and Kroy. And, although Cherry invites us to affirm on alternative grounds—saying that even without issue preclusion, and even under the clear-and-convincing standard, it is entitled to summary Case: 24-1106 Document: 38 Page: 7 Filed: 10/15/2025

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judgment of invalidity on the merits—we decline its invita- tion. Instead, the better course is for the district court to conduct the proper analysis in the first instance on re- mand. 4 Further, to the extent the district court allowed Inland to defend (i.e., did not estop it from defending) the Asserted Claims’ validity only because those claims had already been adjudicated as not unpatentable, that reasoning was erroneous. The main reasons that issue preclusion does not apply here are simply: (1) the standard of proof for un- patentability in IPRs is less than that for invalidity in dis- trict court; and (2) the Asserted Claims themselves have never been determined invalid or unpatentable through any appeals to this court, see, e.g., ParkerVision, 116 F.4th at 1362 (discussing XY, 890 F.3d at 1294). That the

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Asserted Claims happened to survive an unpatentability challenge (as opposed to, say, having never been challenged at all) is irrelevant to issue preclusion’s inapplicability to those claims in this district-court setting. 5 We note finally that, in a given case, 6 it may be that some of the same (or similar) evidence and argument that led the Board to determine unpatentability of one claim by a preponderance of evidence could lead a district court to grant summary judgment that another claim is invalid— i.e., to conclude that a reasonable jury could only find, by clear and convincing evidence, that the other claim is inva- lid. But any such summary judgment must stand on its own merits on the evidence and argument presented in court. A fact cannot be deemed established against the pa- tentee in court simply because the Board found it; instead, a patent challenger must still carry its burden of proof, and a patentee may still dispute whether that burden has been met.

On remand, if the district court is to grant summary judgment that an Asserted Claim is invalid (for anticipa- tion or obviousness), it must conclude—on the basis of evi- dence and argument presented in court, as opposed to issue preclusion stemming from the IPRs—that a reasonable jury could only find, by clear and convincing evidence, facts showing that the prior art disclosed or would have ren- dered obvious the Asserted Claim as a whole (i.e., not just whatever limitations it contains beyond the relevant Un- patentable Claim(s)).

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CONCLUSION We have considered Cherry’s remaining arguments and find them unpersuasive. For the foregoing reasons, we vacate the district court’s judgment and remand.

VACATED AND REMANDED COSTS Costs to Inland.