On April 2, 2009, the Federal Circuit issued a non-precedential order denying Respondent Cypress Semiconductor Corporation’s (“Cypress”) petition for a writ of mandamus directing the Commission to halt its investigation in the matter of Certain Semiconductor Integrated Circuits Using Tungsten Metallization and Products Containing Same (337-TA-648).

The patent-in-suit held by Complainants Agere Systems Inc. and LSI Corporation (“Agere”) was previously the subject of an infringement suit brought by Agere against Atmel Corporation in the Eastern District of Pennsylvania, which ruled the patent invalid.  After judgment was entered, the parties settled and, on motion, the district court vacated its summary judgment orders, the jury verdict and the judgment.  When Agere then submitted a complaint to the Commission alleging infringement of the same patent, Cypress filed a motion for summary determination arguing that Agere is precluded from relitigating validity in light of the district court’s rulings.  The ALJ denied the motion, and the Commission affirmed.

Cypress argued in its petition to the Federal Circuit that Third Circuit law should govern the preclusion question because the vacated judgment was issued by the Eastern District of Pennsylvania, and that Third Circuit law provides that the vacated judgment retains preclusive effect.  Cypress argued in the alternative that if the court applies Federal Circuit law, it should rule that the vacated judgment retains collateral estoppel effect and precludes Agere from asserting the patent before the Commission.

Agere argued that Federal Circuit law governs because the question is whether the Commission should give preclusive effect to the judgment, not whether the judgment was correctly vacated.  The Commission argued that Federal Circuit law governs because the controlling law on procedural matters such as preclusion is that of the circuit to which an appeal would normally lie, which for appeals of Commission decisions is the Federal Circuit.  Both Agere and the Commission cited Federal Circuit law providing that a vacated judgment has no preclusive effect.

The Federal Circuit agreed with Agere and the Commission and applied Federal Circuit law to the res judicata issue, which provides that vacatur of a judgment generally “clears the path for future relitigation of the issues between the parties and eliminates a judgment.”  The court noted that it was skeptical as to whether the vacated judgment could bar Agere from asserting its patent before the Commission, but it did not decide the issue.  The court held only that Cypress did not meet its burden of showing that the Commission clearly and indisputably erred in ruling that it may proceed with its investigation.