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Change In Advocated Claim Construction Theory Permitted On Appeal


Estoppel does not bar departure on appeal from an unsuccessful claim construction theory advocated before a trial court, a divided Federal Circuit panel majority concludes in Lava Trading, Inc. v. Sonic Trading Management, LLC (Nos. 05-1177, -1192; April 19, 2006).

Lava sued Sonic et al. for infringement of its patent relating to software that aggregates and integrates securities trading and order placement information from alternative trading systems. Lava's initial counsel at trial argued the claim term “distributing” should be construed as providing information for only one security. Although the trial court rejected Lava's proposed definition, Lava obtained new counsel who, in a motion for reconsideration, advanced Lava's current claim construction theory that “distributing” should be interpreted as providing information for one security or more than one security . The trial court rejected Lava's motion for reconsideration, without comment, and subsequently provided a claim construction ruling from the bench. The parties thereafter stipulated to final judgment of non-infringement. Although Royalblue's invalidity and unenforceability counterclaims remained pending, the district court issued a certification under Fed. R. Civ. P. 54(b), which allows entry of final judgment by a district court on fewer than all claims. Lava appeals the stipulated final judgment.

Over a dissent asserting that the case should be dismissed for lack of jurisdiction, the panel majority concludes that Lava did not waive its current theory, sets aside the district court's claim construction and final judgment orders, and remands for further proceedings. Estoppel does not bar Lava from departing from a claim construction theory unsuccessfully advocated before the trial court, the panel majority concludes, since the departure here does not result in a meaningful change in position or evidence relied upon, and since judicial estoppel prevents a party from taking a contrary position in a subsequent legal proceeding when that party successfully urges a particular position in an initial proceeding.

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