Federal Circuit Court Reverses District Court on e.Digital's Collateral Estoppel Appeal

SAN DIEGO, CA--(Marketwired - November 19, 2014) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced that the Federal Circuit Court of Appeals issued a ruling on the Company's appeal, formally reversing the ruling by the District Court to apply the collateral estoppel doctrine against e.Digital's US Patent No. 5,839,108 ("the '108 patent").

Background

e.Digital filed multiple lawsuits in the Federal Court in and for the Southern District of California asserting claims of patent infringement against several companies. The defendants as a group filed a joint motion asking the District Court to prevent the Company from relitigating the meaning of certain terms of the Company's US Patent No. 5,491,774 ("the '774 patent") which are also present in its unrelated '108 patent. The Company's law firm, Handal & Associates, opposed the motion on a number of grounds. In spite of the Company's opposition, the District Court in San Diego granted the defendants' joint motion to apply collateral estoppel. The ruling meant that the Company was bound to the interpretations of certain claim terms reached in the 2010 Colorado District Court action. The Company appealed the lower court's decision to the United States Federal Circuit Court of Appeal.

Federal Circuit Court's Ruling

The Federal Circuit Court of Appeal ("the Appellate Court") accepted briefing and held oral argument on the Company's appeal. Today, the Appellate Court in a written opinion, found that the lower court's holding to apply collateral estoppel as to the Company's '108 patent was in error and should be reversed. This means that the Company is not bound to the construction of certain terms in the '108 patent that were construed by the Colorado action as to the '774 patent. This opens the door for the Company to argue at a new claim construction hearing the meaning of those terms unencumbered by the 2010 Colorado construction. The Appellate Court, however, did uphold the lower court's application of collateral estoppel to the '774 patent, which is now expired.

Moving Forward

As a result of the decision, unless the defendants appeal the Appellate Court's ruling, several outstanding cases that have been stayed pending the Appellate Court's proceedings will move forward towards final determination. Cases affected by today's ruling include the Company's actions against Huawei, GoPro, SanDisk and Pantech.

Management Statement

"e.Digital takes very seriously its obligations to its shareholders as evidenced by its digging in and asserting its intellectual property rights wherever and whenever it can. It is not easy to maneuver the litigation landscape but thanks to the efforts of the Company's employees and its attorneys we have and we will continue to advocate for the assertion and protection of e.Digital's intellectual property rights," said Fred Falk, president and CEO of e.Digital.