Factor2 Multimedia Systems, LLC v. United States

In the United States Court of Federal Claims FACTOR2 MULTIMEDIA SYSTEMS, LLC, Plaintiff, No. 24-cv-0475 (Filed: June 25, 2026) v. THE UNITED STATES, Defendant. Joseph J. Zito, DNL Zito, Washington, D.C., for Plaintiff. Jhaniel James, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for Defendant. Also on the briefs were Brian M. Boynton, Principal Deputy Assistant Attorney General, Scott Bolden, Director, and Grant D. Johnson, Of Counsel. OPINION AND ORDER Meriweather, Judge. This case arises from a family of related patents pertaining to methods and systems for implementing two-factor authentication. Plaintiff Factor2 Multimedia Systems, LLC (“Factor2”), alleges that the United States has violated its patents by utilizing some form of two- factor authentication on various websites and applications. The United States has filed a Motion to Dismiss, ECF No. 11, arguing that the District Court for the Eastern District of Virginia (“EDVA”) has already invalidated one of the patents in this family, and therefore Factor2 is collaterally estopped from asserting these related patents here. Alternatively, the United States contends that the asserted patents are invalid for the same reasons stated in the EDVA opinion. After reviewing the pleadings, the parties’ arguments, 1 and the relevant law, the Court issued an Order granting the United States’ Motion to Dismiss and dismissing the Amended Complaint. This Memorandum Opinion provides the detailed analysis underlying that ruling and clarifies that the dismissal is with prejudice. 1 This Opinion is based primarily on the following filings: Compl., ECF No. 1; Am. Compl., ECF No. 10; Def.’s Mot. to Dismiss, ECF No. 11 (“Mot.”); Pl.’s Opp’n to Mot. to Dismiss, ECF No. 14 (“Resp.”); Def.’s Reply in Supp. of Mot. to Dismiss, ECF No. 15 (“Reply”). Throughout, page citations to documents in the record refer to the document’s original pagination, unless the page number is designated with an asterisk (e.g., *1), in which case the reference is to the pagination assigned by PACER/ECF. The Court also relies on the parties’ representations during oral argument. See Cert. Oral Arg. Tr., ECF No. 18 (“Tr.”).  BACKGROUND 2 A. Factual History Factor2 is the current assignee and owner of all rights for the following patents at issue in this litigation: 8,281,129 “Direct Authentication System and Method Via Trusted Authenticators” 9,703,938 “Direct Authentication System and Method Via Trusted Authenticators” 9,727,864 “Centralized Identification and Authentication System and Method” 9,870,453 “Direct Authentication System and Method Via Trusted Authenticators” 10,083,285 “Direct Authentication System and Method Via Trusted Authenticators” and 10,769,297 “Centralized Identification and Authentication System and Method” (collectively “Asserted Patents”). See Am. Compl. ¶¶ 1, 8, 11–16. Each of the Asserted Patents is a member of the same patent family, which pertains to a system or method of two-factor authentication. See id. ¶ 17; id. Ex. A at *1, ECF No. 1-2 (U.S. Patent No. 8,281,129); id. Ex. B at *1, ECF No. 1-3 (U.S. Patent No. 9,703,938); id. Ex. C at *1, ECF No. 1-4 (U.S. Patent No. 9,727,864); id. Ex. D at *1, ECF No. 1-5 (U.S. Patent No. 9,870,453); id. Ex. E at *1, ECF No. 1-6 (U.S. Patent No. 10,083,285); id. Ex. F at *1, ECF No. 1-7 (U.S. Patent No. 10,769,297). The ‘129 patent 3 was filed by named inventors Nader Asghari-Kamrani and Kamran Asghari- Kamrani (“the Asghari-Kamrani brothers”) on January 18, 2006, as a continuation-in-part 4 to U.S. Patent No. 7,356,837, which was filed on August 29, 2001. See id. Ex. A at *1; see also Mot., Ex. 1 (U.S. Patent No. 7,356,837). The ‘938, ‘453, and ‘285 patents all purport to be continuations of the ‘129 patent and continuations-in-part of the ‘837 patent. See Compl., Ex. B at *1–2, *8; id. Ex. D at *1–2, *8; id. Ex. E at *1–2, *8. The ‘864 and ‘297 patents purport to be continuations of U.S. Patent No. 8,266,432, which is itself a continuation of the ‘837 patent. See 2 As this case is at the Motion to Dismiss stage, this Opinion recites and assumes the truth of the factual allegations in the Complaint. See Gen. Mills Inc. v. Kraft Foods Global, Inc., 487 F.3d 1368, 1371 n.1 (Fed. Cir. 2007). As explained further below, the Court additionally relies on matters of public record that are subject to judicial notice, including patent documents and litigation histories. See Mobility Workx, LLC v. Unified Pats., LLC, 15 F.4th 1146, 1151 & n.1 (Fed. Cir. 2021). 3 For ease of reference, and following the common practice in patent cases, the Court utilizes the last three digits of the U.S. Patent Nos. to refer to each individual patent; e.g., U.S. Patent No. 8,281,129 is referred to as “the ‘129 patent,” and so forth. The parties also utilize this naming convention in their briefs. 4 Every patent application must contain a disclosure, also called the specification, setting forth the background, summary, and detailed description of the invention claimed by the patent. See, e.g., 35 U.S.C. § 112 (specification). “The difference between a continuation application and a continuation-in-part application is that a continuation contains the same disclosure found in an earlier application, whereas a continuation-in-part contains a portion or all of the disclosure of an earlier application together with added matter not present in the earlier application.” Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1321 n.2 (Fed. Cir. 2008). 2 id. Ex. C at *1–2, *9; id. Ex. F at *1–2, *10; Mot., Ex. 2 at *2 (U.S. Patent No. 8,266,432). The named applicants and inventors are identical for each of the Asserted Patents, and every Asserted Patent is subject to a terminal disclaimer 5 for any statutory term beyond the expiration date of the parent ‘837 and ‘432 patents. See, e.g., Compl., Ex. F at *1. The ‘837 and ‘432 patents likewise list the Asghari-Kamrani brothers as inventors, and the ‘432 patent also includes a terminal disclaimer. See Mot., Ex. 1 at *2; id. Ex. 2 at *2. Asserted Patents 6 ‘837 patent (filed Aug. 29, 2001) (continuation) // \\ (continuation-in-part) ‘432 patent (filed Sept. 15, 2008) ‘129 patent (filed Jan. 18, 2006) || || ‘864 patent (filed Sept. 7, 2012) ‘938 patent (filed Oct. 2, 2012) || || ‘297 patent (filed June 30, 2017) ‘453 patent (filed Sept. 21, 2017) || ‘285 patent (filed Dec. 6, 2017) Factor2 states that “[t]he claims of the ‘297 patent are representative of the family of patents.” Am. Compl. ¶ 18. Factor2 also identifies the ‘129 patent as being “representative of the method claims” asserted here. Id. ¶ 19. Aside from Claim 1 of the ‘297 patent and Claim 1 of the ‘129 patent, Factor2 recites no other specific claims in the Amended Complaint. See id. ¶¶ 18–19. Having identified no substantive differences among the Asserted Patents or the claims in the Amended Complaint, the Court likewise focuses on the ‘129 and ‘297 patents for purposes of this section. The ‘129 patent proposes “a new ‘two-factor’ authentication technique” to combat “[f]raud and identity theft” by utilizing a “trusted authenticator,” such as “a bank or other financial institution with whom the customer has a trusted relationship.” Compl., Ex. A at *1. Claim 1 of the ‘129 patent claims the following invention: A computer implemented method to authenticate an individual in communication with an entity over a communication network during a 5 The term for a patent is generally 20 years from the date of filing. See 35 U.S.C. § 154(a)(2). A patentee may also disclaim the terminal part of a patent’s term. See id. § 154(c)(1); 37 C.F.R. § 1.321(a). Such a terminal disclaimer is commonly used to restrict the term of a continuation patent to the term of the original patent to avoid rejection for “obviousness-type double patenting,” i.e. unlawfully extending the term of a patent by claiming the same invention multiple times in succession. See generally Boehringer Ingelheim Int’l GmbH v. Barr Lab’ys, Inc., 592 F.3d 1340, 1346–47 (Fed. Cir. 2010). 6 For ease of reference, the Court includes this graph roughly depicting the relationships between the Asserted Patents in this family of related patents. The United States supplied a similar chart in its briefing. See Mot. at 4. The Asserted Patents at issue are in bold. 3  communication between the entity and the individual, the computer implemented method comprising: receiving electronically a request for a dynamic code for the individual, which request is received from the individual by a trusted-authenticator’s computer during an authentication of the individual by the entity; calculating by the trusted-authenticator’s computer the dynamic code for the individual in response to the request during the authentication of the individual by the entity, wherein the dynamic code is valid for a predefined time and becomes invalid after being used; sending by the trusted-authenticator’s computer electronically the dynamic code to the individual during the authentication of the individual by the entity; receiving by the trusted-authenticator’s computer electronically an authentication request from the entity to authenticate the individual based on a user information and the dynamic code included in the authentication request, wherein the entity receives the user information and the dynamic code from the individual; and authenticating by the trusted-authenticator’s computer an identity of the individual based on the user information and the dynamic code included in the authentication request, wherein the result of the authentication is provided to the entity. Id. at *12. Subsequent claims expand upon the invention to include scenarios where the dynamic code is time-dependent, encrypted, or alphanumeric, or where the individual steps are completed by different computers, among other slight variations. See id. at *13–15. For example, Claim 15 presents the same basic scenario but from the perspective of “a website” authenticating an individual by requesting “user identification and a dynamic code” and then verifying that information by sending an “authentication request message to the computer associated with the trusted-authenticator.” Id. at *13. The term “trusted-authenticator” is defined as “an entity that already knows the individual” or business, such as “a bank or other financial institution.” Id. at *10. The term “dynamic code” is undefined but appears elsewhere in the patent description as “dynamic key” or “SecureCode,” which is defined as “a key or information that is variable and is provided to the individual by the individual’s trusted-authenticator at the time it is needed for authentication,” consisting of “an alphanumeric code” with “a different value each time” that may only be “valid for some period of time.” Id. (internal references omitted). These terms and definitions are identical 7 in the ‘938, ‘453, and ‘285 patents. See Compl., Ex. B at *11; id. Ex. D at *11; id. Ex. E at *11. Likewise, the ‘297 patent, filed on June 30, 2017, proposes a system and method “for enabling online entities to determine whether a user is truly the person who he says using a two- factor authentication technique” through an independent “authenticator.” Compl., Ex. F at *1. As depicted in Figures 3 through 5 of the ‘297 patent, a user first signs up for an account with a 7 Although the definitions sections appear to be identical, the ‘453 patent simply uses the term “SecureCode” instead of “dynamic code” in its claims. See Compl., Ex. D at *14–15. Whereas the ‘285 patent uses the undefined term “user-authentication code,” with Claim 2 providing the scenario “wherein the user-authentication code is a SecureCode.” Id. Ex. E at *14–15. 4 “Central-Entity” by providing their personal or financial information to receive a username and password. Id. at *7. To access a restricted website or purchase goods or services, the user requests a “SecureCode” from the Central-Entity and then provides their username and SecureCode to a “External-Entity.” Id. at *8. The External-Entity then cross-references the provided information with the Central-Entity to confirm the user’s identity. Id. at *9. Claim 1 of the ‘297 patent claims the following invention: An authentication system for enhancing computer network security by authenticating a user in an electronic communication between a computing device of the user and an online computer system, the authentication system comprising one or more computing devices configured to perform operations comprising: while the online computer system is connected to the computing device of the user via a communication network, electronically receiving a request for a SecureCode; generating the SecureCode; while the online computer system is connected to the computing device of the user via the communication network, electronically providing to the user the SecureCode in response to the request for the SecureCode, wherein: the SecureCode is invalid after a predetermined time passes, the SecureCode is invalid after one use of the SecureCode for authentication, and the SecureCode is only valid for authenticating the user; and while the online computer system is connected to the computing device of the user via the communication network, electronically receiving from the online computer system a digital authentication request for authenticating the user, wherein: the digital authentication request comprises a digital identity of the user, and the digital identity includes the SecureCode; and while the online computer system is connected to the computing device of the user via the communication network, authenticating the user by evaluating a validity of the SecureCode included in the digital authentication request. Id. at *12–13. Subsequent claims of the ‘297 patent offer minor variations on the same invention, such as SecureCode that includes a symbol or electronic communication for accessing a restricted website. See id. at *13–14. For example, Claim 19 centers around an “authentication system” that communicates with “the computing device of the user” to confirm whether the user correctly submitted “a SecureCode.” Id. The term “SecureCode” is defined as “any dynamic, non-predictable and time dependent alphanumeric code, secret code, PIN or other code, which may be broadcast to the user over a communication network, and may be used as part of a digital identity to identify a user as an authorized user.” Id. at *10. The term “Central-Entity” is defined as “any party that has user’s personal and/or financial information, UserName, Password and generates dynamic, non-predictable and time dependent SecureCode for the user,” such as “banks, credit card issuing companies or any intermediary service companies.” Id. The patent description also defines the term “External-Entity” as “any party offering goods or services that users utilize by directly providing their UserName and SecureCode as digital identity,” such as 5 “a merchant, service provider or an online site,” or any “entity that receives the user’s digital identity indirectly from the user through another External-Entity, in order to authenticate the user,” including “a bank or a credit card issuing company.” Id. These terms and definitions are identical in the ‘864 patent, as well as the related ‘837 and ‘432 patents. Compare id., with id. Ex. C at *9; Mot., Ex. 1 at *8; id. Ex. 2 at *9. Even the accompanying figures and background information are largely identical among the ‘837, ‘297, ‘864, and ‘432 patents. See Compl., Ex. C at *4–11; id. Ex. F at *5–12; Mot., Ex. 1 at *3–10; id. Ex. 2 at *4–11. Although Factor2 does not raise a claim based on the related ‘432 patent, it is relevant to this litigation. See, e.g., Compl., Ex. F at *2 (noting that the ‘297 patent is a continuation of the ‘432 patent). The ‘432 patent, filed on September 15, 2008, purports to be a continuation of the ‘837 patent. See Mot., Ex. 2 at *1. Claim 1 of the ‘432 patent claims the following invention: A method for authenticating a user during an electronic transaction between the user and an external-entity, the method comprising: receiving electronically a request for a dynamic code for the user by a computer associated with a central-entity during the transaction between the user and the external-entity; generating by the central-entity during the transaction a dynamic code for the user in response to the request, wherein the dynamic code is valid for a predefined time and becomes invalid after being used; providing by the computer associated with the central-entity said generated dynamic code to the user during the transaction; receiving electronically by the central-entity a request for authenticating the user from a computer associated with the external-entity based on a user- specific information and the dynamic code as a digital identity included in the request which said dynamic code was received by the user during the transaction and was provided to the external-entity by the user during the transaction; and authenticating by the central-entity the user and providing a result of the authenticating to the external-entity during the transaction if the digital identity is valid. Id. at *11. Once again, subsequent independent and dependent claims all offer slight variations on the same general invention. See id. at *11–13. B. Litigation History In 2015, the Asghari-Kamrani brothers filed suit for patent infringement against the United Services Automobile Association (“USAA”) in the Eastern District of Virginia. Asghari- Kamrani v. United Servs. Auto. Ass’n, No. 2:15cv478, 2016 WL 3670804, at *1 (E.D. Va. July 5, 2016), amended, No. 2:15cv478, 2016 WL 11642758 (E.D. Va. Aug. 15, 2016). The plaintiffs alleged that USAA infringed multiple claims of the ‘432 patent. Id. That patent, much like the Asserted Patents here, pertained “to a system and method . . . for centralized identification and authentication of users and their transactions to increase security in e-commerce.” Id. The district court reasoned that Claim 1 of the ‘432 patent was representative of the asserted dependent and independent claims. Id. at *2. The district court further noted that all asserted 6 “claims of the patent require a Central-Entity, a user, and an External-Entity,” as well as “the use of a dynamic code.” Id. The USAA moved to dismiss the complaint, asserting that “the claims of the ‘432 patent are directed to an abstract idea and are thus ineligible for patent protection.” Id. at *1. Applying the Supreme Court’s two-step framework for patentability 8 to the representative claim of the ‘432 patent, the district court held that the asserted claims “are invalid because they are directed to an abstract idea and thus ineligible for patent protection.” Id. at *6. This was because: despite the electronic setting and purportedly Internet specific problem addressed, the patent claims are directed to a common method for solving an old problem. The claims are directed to the abstract idea of using a third party and a random, time-sensitive code to confirm the identity of a participant to a transaction. This formulation is admittedly verbose. It is verbose because the patent claims combine two abstract ideas: the use of a third party intermediary to confirm the identity of a participant to a transaction and the use of a temporary code to confirm the identity of a participant to a transaction. It is an obvious combination, and nothing about the combination removes the patent claims from the realm of the abstract. Id. at *4. Analogizing the claimed concept to furniture sales and espionage activity, the district court reasoned that “the concept could easily be performed by hand” and was in no way dependent upon “implementation by computers.” Id. Addressing whether the claims’ elements somehow “transform the nature of the claims into a patent-eligible application,” the district court found no “inventive concept.” Id. at *5. Instead, the district court found that the individual “claim elements describe[] conventional computer functions,” and even considered together, “[t]hey simply instruct a generic computer or computers to verify the identity of a participant to a transaction using a randomly generated code.” Id. The district court further rejected the plaintiffs’ arguments on claim construction as “empty.” Id. at *6. Finding the claims of the ‘432 patent invalid, the district court dismissed the complaint with prejudice. Id. Following the district court’s invalidation of the ‘432 patent, the Patent Trial and Appeal Board (“PTAB”) entered concurrent decisions similarly concluding that those same claims of the ‘432 patent were “unpatentable as obvious.” United Servs. Auto. Ass’n v. Asghari-Kamrani, No. CBM2016-00064, 2017 WL 3525359, at *24 (P.T.A.B. Aug. 15, 2017); see accord United Servs. Auto. Ass’n v. Asghari-Kamrani, No. CBM2016-00063, 2017 WL 3525356, at *24 (P.T.A.B. Aug. 15, 2017). On appeal, the Federal Circuit issued a one-sentence decision summarily 8 The Asghari-Kamrani court applied Section 101 of the Patent Act and the two-step Alice/Mayo framework to determine whether a patent is directed to ineligible abstract ideas. See 2016 WL 3670804, at *2–3; see generally 35 U.S.C. § 101; Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014); Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 72–73 (2012). Under that framework, step one requires a court to determine if the claims are directed to a patent-ineligible concept, such as abstract ideas. See Alice, 573 U.S. at 217. If so, step two asks whether the claims contain an “inventive concept” and “whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 72, 78). 7 affirming the district court’s ruling. Asghari-Kamrani v. United Servs. Auto. Ass’n, 737 F. App’x 542 (Fed. Cir. 2018), cert. denied, 587 U.S. 919 (2019). The Federal Circuit simultaneously vacated and dismissed as moot appeals of the PTAB decisions based on affirmance of the district court’s ruling. Asghari-Kamrani v. United Servs. Auto. Ass’n, 737 F. App’x 539 (Fed. Cir. 2018). LEGAL STANDARD On a Rule 12(b)(6) motion to dismiss, the Court must determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “[T]he court accepts all well-pleaded factual allegations as true and construes all reasonable inferences in favor of the plaintiff.” Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337, 1347 (Fed. Cir. 2018). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The affirmative defenses of res judicata and collateral estoppel are also properly considered under a RCFC 12(b)(6) motion to dismiss.” Copar Pumice Co. v. United States, 112 Fed. Cl. 515, 527 (2013). The Court “must consider the complaint in its entirety, . . . in particular, documents incorporated into the complaint by reference” in ruling on a motion to dismiss. Rocky Mtn. Helium, LLC v. United States, 841 F.3d 1320, 1325–26 (Fed. Cir. 2016) (quoting Tellabs, Inc. v. Makor Issues & Rts, Ltd., 551 U.S. 308, 322 (2007)). Courts may also generally consider “matters incorporated by reference or integral to the claim, items subject to judicial notice, and matters of public record” on a motion to dismiss. A & D Auto Sales, Inc. v. United States, 748 F.3d 1142, 1147 (Fed. Cir. 2014) (quoting 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed.2004)) (citation modified). In the context of patent disputes, patent documents and “[p]rosecution histories constitute public records.” Data Engine Techs. LLC v. Google LLC, 906 F.3d 999, 1008 n.2 (Fed. Cir. 2018); see also Hoganas AB v. Dresser Indus., Inc., 9 F.3d 948, 954 n.27 (Fed. Cir. 1993) (taking judicial notice of related patent on appeal). DISCUSSION I. The Court Excludes Certain Evidence Outside the Pleadings. Rule 12(d) of the Rules of the Court of Federal Claims (“RCFC”) provides that on a motion to dismiss for failure to state a claim under Rule 12(b)(6), all matters outside the pleadings must be excluded. However, this Court has clarified that it “may properly consider allegations in the complaint, exhibits attached to the complaint, and public record materials under an RCFC 12(b)(6) motion to dismiss.” Copar Pumice Company, 112 Fed. Cl. at 527. Judicial notice of an adjudicative fact is permissible where it “is generally known” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned” and therefore “is not subject to reasonable dispute.” Fed. R. Evid. 201(b). The parties attached copious exhibits to their briefs without mentioning whether or how the Court can consider that outside evidence at the current procedural posture. The Court ordered the parties to each file a notice either setting forth the legal basis for each exhibit or 8 arguing whether the Court should convert the matter into a motion for summary judgment. See Minute Order (May 7, 2025). The parties complied, largely agreeing on which exhibits the Court may consider. See Def.’s Notice, ECF No. 19; Pl.’s Notice, ECF No. 20. The parties agree that Exhibits 1 through 11 to the United States’ Motion to Dismiss are public records published on the U.S. Patent and Trade Office (“USPTO”) website that pertain to the family of patents asserted here. See Def.’s Notice at 3–4; Pl.’s Notice at 3–4. The parties also agree that the Court may take notice of Factor2’s exhibits as public documents. See Def.’s Notice at 4–5; Pl.’s Notice at 3–4. The parties raise no objections as to those exhibits. 9 However, the parties recognize that not all submitted exhibits fall under an established exception to Rule 12(d). Exhibit 12 to the United States’ motion is a Law360 article from April 2, 2024. See Mot., Ex. 12, ECF No. 11-12. Exhibit 13 is a copy of email correspondence from opposing counsel dated July 26, 2024. See id., Ex. 13, ECF No. 11-13. Because those exhibits “are not official government publications” and otherwise lack “assurance[s] of reliability” necessary for judicial notice under Rule 201, Factor2 argues the Court must exclude those documents from consideration or convert the Motion and permit supplemental briefing. Pl.’s Notice at 4–5. The United States acknowledges this oversight and states its intent to withdraw those exhibits from its Motion. See Def.’s Notice at 4. The Court agrees with the parties’ general assessment of the evidence. Because Exhibits 1–11 to the Motion and Exhibits A–D to the Response are publicly available and subject to judicial notice, the Court need not exclude them at this stage. Neither party objects to the Court’s reliance on those documents—at least for purposes of judicially noticing the documents themselves, rather than for the truth of the statements contained therein. The Court therefore proceeds to evaluate the parties’ arguments in light of those attached documents. In contrast, Exhibits 12 and 13 to the Motion do not meet the requirements for judicial notice, and the United States explains that it is no longer relying on those documents. 10 Accordingly, Exhibits 12 and 13 to the Motion will be excluded from the Court’s consideration of the pending Motion to Dismiss. II. Factor2 is Collaterally Estopped from Relitigating the Asserted Patents. A. The Elements of Collateral Estoppel. The United States moves to dismiss Factor2’s Amended Complaint as collaterally estopped by the prior Asghari-Kamrani litigation. See Mot. at 11–20. “[O]nce the claims of a patent are held invalid in a suit involving one alleged infringer, an unrelated party who is sued for infringement of those claims may reap the benefit of the invalidity decision under principles 9 Further, the Court can generally take judicial notice of the Asghari-Kamrani court’s decisions and public docket for those same reasons. See, e.g., L.A. Biomed. Rsch. Inst. v. Eli Lilly & Co., 849 F.3d 1049, 1061 n.6 (Fed. Cir. 2017) (noting in a patent dispute that courts “can properly take judicial notice of the records of related court proceedings”). 10 Ostensibly, the United States included those documents to establish that Factor2 “is in privity with the original owners of the Asserted Patents.” Def.’s Notice at 4. But because Factor2 concedes that issue, see Pl.’s Notice at 4 n.2, the documents are no longer necessary. 9 of collateral estoppel.” Soverain Software LLC v. Victoria’s Secret Direct Brand Mgmt., LLC, 778 F.3d 1311, 1315 (Fed. Cir. 2015) (quoting Mendenhall v. Barber-Greene Co., 26 F.3d 1573, 1577 (Fed. Cir. 1994)). Under the doctrine of collateral estoppel, also called issue preclusion, “a judgment on the merits in a first suit precludes relitigation in a second suit of issues actually litigated and determined in the first suit.” Innovad Inc. v. Microsoft Corp., 260 F.3d 1326, 1334 (Fed. Cir. 2001). The Federal Circuit applies the following four-prong test to determine whether collateral estoppel applies: (1) the issue sought to be precluded must be the same as the one involved in the prior action [(“Identical Issue Prong”)]; (2) the issue must have been actually litigated; (3) the issue must have been determined by a valid and final judgment; and (4) the determination must have been essential to the prior judgment. Uniloc USA, Inc. v. Motorola Mobility LLC, 52 F.4th 1340, 1347 (Fed. Cir. 2022). “The party against whom preclusion is asserted must also have been a party or been in privity with a party to the prior adjudication.” Id. at 1346 n.4. Complete privity of all parties is not necessary, however, as “collateral estoppel is applied against the losing party in the original action even in situations where the party asserting collateral estoppel was not a party to the original action.” Id. at 1347. But where the parties to a subsequent action are not identical, the Federal Circuit often reframes these four prongs to include whether “the party against whom estoppel is invoked had a full and fair opportunity to litigate the issue in the first action.” Innovad, 260 F.3d at 1334; see also Soverain Software, 778 F.3d at 1315-16. 11 The Identical Issue Prong is especially pertinent here. Federal Circuit “precedent does not limit collateral estoppel to patent claims that are identical. Rather, it is the identity of the issues that were litigated that determines whether collateral estoppel should apply.” Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013). Collateral estoppel applies where any “differences between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity.” Id.; see also Bourns, Inc. v. United States, 537 F.2d 486, 493 (Ct. Cl. 1976) (“Where the differences revealed by a comparison of the claims do not vary the relevant issues bearing on obviousness, collateral estoppel should apply.”). Thus, when presented with “substantially similar” patent claims, the use of “slightly different language to describe substantially the same invention” is generally immaterial. Ohio Willow Wood, 735 F.3d at 1342. In other words, “patent claims need not be identical for collateral estoppel to apply. Rather, collateral estoppel requires that the issues of patentability be identical.” Google LLC v. Hammond Dev. Int’l, Inc., 54 F.4th 1377, 1381 (Fed. Cir. 2022) (internal citation omitted); see 11 Another overarching concern of applying non-mutual collateral estoppel is fundamental fairness. See Blonder-Tongue Lab’ys, Inc. v. Univ. of Ill. Found., 402 U.S. 313, 349 (1971) (rejecting “rigid requirements of mutuality” in subsequent patent disputes and endorsing approach of considering whether “it is appropriate and fair to impose an estoppel against a party who has already litigated an issue once and lost”); In re Freeman, 30 F.3d 1459, 1467 (Fed. Cir. 1994) (“The doctrine of issue preclusion is premised on principles of fairness. Thus, a court . . . [has] some discretion to decide whether a particular case is appropriate for application of the doctrine.” (citations omitted)). Neither party argues this underlying principle here. 10 also Soverain Software, 778 F.3d at 1319 (noting that “[c]omplete identity of claims is not required” and “difference in claim scope [i]s not fatal to the application of estoppel”). B. The United States Properly Raised Collateral Estoppel in Its Motion to Dismiss. “The affirmative defenses of res judicata and collateral estoppel are . . . properly considered under a RCFC 12(b)(6) motion to dismiss.” Copar Pumice, 112 Fed. Cl. at 527; see also Fletcher v. United States, 178 Fed. Cl. 241, 249 (2025); Chisolm v. United States, 82 Fed. Cl. 185, 193, aff’d 298 F. Ap’x 957 (Fed. Cir 2008). Factor2 contends otherwise, asserting that the Court cannot, or should not, resolve collateral estoppel on a motion to dismiss. See Resp. at 8, 11, 21. Specifically, Factor2 contends that dismissal would be improper because the United States has “not submitted any supporting evidence, only attorney argument.” Id. at 21. But “[t]he application of issue preclusion presents a question of law.” SynQor, Inc. v. Vicor Corp., 988 F.3d 1341, 1347 (Fed. Cir. 2021). Accordingly, courts routinely resolve collateral estoppel at the motion to dismiss stage. See, e.g., Reese v. Verizon Cal., Inc., 498 Fed. App’x 980, 984 (Fed. Cir. 2012) (affirming grant of motion to dismiss in patent case based on collateral estoppel); Winfrey v. U.S. Dep’t of Com., No. 2024-1260, 2024 WL 4284692, at *3 (Fed. Cir. Sept. 25, 2024) (affirming grant of motion to dismiss based on collateral estoppel); Khan v. Artivion, Inc., No. 2023-2347, 2024 WL 3419942, at *1 (Fed. Cir. July 16, 2024) (same). The fact that the allegedly estopped claims concern patentability does not require deviation from that general rule. See generally, e.g., Allergan, Inc. v. Sandoz, Inc., 681 F. App'x 955, 959 (Fed. Cir. 2017) (analyzing whether collateral estoppel required dismissal of patent infringement claims); Bondyopadhyay v. United States, 149 Fed. Cl. 176, 185 (2020), aff'd, 850 F. App'x 761 (Fed. Cir. 2021) (dismissing patent infringement case because res judicata precluded litigating claims that were resolved in prior litigation). In any event, Factor2 has identified no factual disputes pertinent to the issue preclusion analysis. See Reply at 16 n.7. C. The Asserted Patents Present Identical “Issues of Patentability” as the Related ‘432 Patent Invalidated in the Asghari-Kamrani Litigation. The United States argues that, while the claims of the Asserted Patents themselves vary slightly in phrasing, “the issue of patent subject matter eligibility” is identical to that litigated in the Asghari-Kamrani case. Mot. at 16. The United States asserts that the Asserted Patents “merely use slightly different language to describe substantially the same invention” set forth in the ‘432 patent. Id. at 18. The Court agrees. For example, focusing on Claim 1 of the ‘129, ‘297, and ‘432 patents, 12 the language follows this basic pattern: Claim 1 of the ‘432 patent Claim 1 of the ‘129 patent Claim 1 of the ‘297 patent A method for authenticating A computer implemented An authentication system a user during an electronic method to authenticate an for enhancing computer transaction between the individual in communication network security by 12 The United States provides a similar table for comparison in its Motion. See Mot. at 16–18. In the table here, terms in bold appear to be the primary steps in the claimed process or method, while bold italics denote similar language apparently moved to a different step. 11 user and an external-entity, with an entity over a authenticating a user in an the method comprising: communication network electronic communication during a communication between a computing device between the entity and the of the user and an online individual, the computer computer system, the implemented method authentication system comprising: comprising one or more computing devices configured to perform operations comprising: receiving electronically a receiving electronically a while the online computer request for a dynamic code request for a dynamic code system is connected to the for the user by a computer for the individual, which computing device of the user associated with a central- request is received from the via a communication entity during the transaction individual by a trusted- network, electronically between the user and the authenticator’s computer receiving a request for a external-entity; during an authentication of