A plaintiff in a patent infringement case isn’t barred from changing its characterization of the defendant’s allegedly infringing product, the U.S. Court of Appeals for the Federal Circuit has ruled.

The March 9 unanimous ruling in Altair Engineering Inc. v. LEDdynamics Inc. reversed an Eastern District of Michigan summary judgment ruling for LEDdynamics due to noninfringement.

Altair, a technology company that sells various types of business software and lighting technology, sued LEDdynamics in July 2007 for allegedly infringing several claims of a patent for a light tube that uses light-emitting diodes (LEDs).

During the district court hearing to analyze the patent claims in question — the so-called Markman hearing — Altair characterized LEDdynamics’ light tube as containing 36 LEDs.

LEDdynamics filed a summary judgment motion for noninfringement after the Markman proceedings.

In its opposing motion, Altair changed its position. It asserted that each of what had appeared to be one LED was actually six LEDs arranged very close together, so that each light tube included 216 LEDs. Altair also filed a motion to amend its infringement contentions to add new claims of the patent at issue that it believed LEDdynamics infringed.

In March 2009, District Judge George Caram Steeh ruled that Altair was estopped from changing its infringement allegations against LEDdynamics on three grounds. Steeh ruled that Altair’s “new argument…is clearly at odds with its consistent position during the Markman proceedings.” He also noted that the court had adopted “Altair’s definition of LEDs in the accused device,” and that LEDdynamics would be prejudiced in the litigation if the definition changed.

Circuit Judge Timothy Dyk wrote for the court, joined by Chief Judge Randall Rader and Judge Sharon Prost

Dyk cited 6th Circuit case law because “judicial estoppel is not an issue unique to patent law.” He noted that the 6th Circuit reviews a district court’s use of the judicial estoppel doctrine de novo, according to a 2002 ruling, Browning v. Levy.

Dyk agreed with Altair’s argument that because “the issue of the nature of the accused product was never contested, and it never prevailed on the definition of LED,” it can’t be barred from changing its characterization of that product.

Dyk also applied the three factors the U.S. Supreme Court used in the 2001 ruling New Hampshire v. Maine to decide whether judicial estoppel is applicable. The first is whether the later position is clearly inconsistent with the earlier one. The second consideration is whether the party seeking the change “has succeeded in persuading a court to accept that party’s earlier position.” If so, a court’s acceptance of an inconsistent position “would create the perception that either the first or the second court was misled. The third issue is whether the party seeking a change would be unfairly advantaged or if its opponent would be unfairly disadvantaged by the change.

Dyk noted that Altair “did not prevail in any phase of the case” and lost its claim construction argument. He also concluded that Altair’s new evidence about the grouping of LEDs in the accused product “raises a substantial issue of material fact.”

Dyk concluded that the district court erred in granting LEDdynamics’ motion for summary judgment: “While Altair may not ultimately prevail in its infringement suit based on its new characterization of the accused product, it is at least entitled to try.”

Christopher C. Darrow, one of Altair’s lawyers at Young Basile Hanlon & MacFarlane in Troy, Mich., said that the company is pleased with the Federal Circuit’s ruling. “Altair will now get to proceed with its patent infringement case against LEDdynamics,” Darrow said. “Altair also has an additional patent that it will be asserting against LEDdynamics in a companion case.”

Neither LEDdynamics nor its lawyer, R. Bradford Fawley, a Brattleboro, Vt. Partner at St. Johnsbury, Vt.’s Downs Rachlin Martin, responded to requests for comment.

For both plaintiffs and defendants in patent cases, the decision illustrates the importance of crafting a claim construction argument that’s flexible enough, said Erik Belt, a Boston partner at Newark, N.J.-based McCarter & English who isn’t involved in the case.

“You need to assume that the claim construction may not always go your way,” Belt said. “When you say to the court: ‘Here’s what the accused device is and here’s what it has,’ you need to do it in a way that’s flexible enough to argue that it infringes or doesn’t infringe on either [side's proposed] claim construction.”

If there’s no dispute about a claim, a party’s description of the claim during the Markman hearing may not apply if the party wants to change its contentions about the product later on in the case, said David Segal, a partner in the an Irvine, Calif., office of Gibson Dunn & Crutcher, who also isn’t involved in the case. “If there’s no dispute about how that product is described, judicial estoppel may not preclude a different infringement theory later on,” Segal said.

Sheri Qualters can be contacted at squalters@alm.com.