Question

Inventor sues Producer for making a product. Inventor claims that he has a patent on the

product, and Producer made it without a license. He also claims that Producer engaged in
unfair competition under a state statute by making the product after leaving Inventor's
employment. Producer defends based on a denial of infringement, denying he engaged in
unfair competition, and a challenge to the validity of Inventor's patent. Inventor wins a general
verdict for $50,000 in compensatory damages. Inventor later sues Producer again for later
making the same product. Producer defends by arguing that the patent is invalid. Inventor
asserts that Producer should be barred from making that argument under preclusion law.
Which of the following is true?
a-A party cannot be precluded from raising an affirmative defense
b-Issue preclusion does not apply because the issue of validity was not actually decided, and claim preclusion does not apply because the second suit arises from a different set of operative facts
c- Producer will be precluded from arguing invalidity in the second lawsuit under claim preclusion
d-Producer will be precluded from arguing invalidity in the second lawsuit under issue preclusion

Answer 1

In this case, the producer will be precluded from arguing the invalidity of the patent in the second lawsuit under claim preclusion.

Step-by-step explanation:

In this scenario, the true statement is:

c- Producer will be precluded from arguing invalidity in the second lawsuit under claim preclusion

The principle of claim preclusion, also known as res judicata, prevents the same parties from relitigating the same claim that has already been finally adjudicated. In this case, the inventor already won a general verdict for $50,000 in compensatory damages in the first lawsuit. When the inventor sues the producer again for making the same product, the producer can be precluded from arguing the invalidity of the patent as it is considered the same claim as in the previous lawsuit. This is because the validity of the patent was already an essential issue in the first lawsuit, even though it was not explicitly decided.