Federal Circuit Clarifies How Claim Preclusion Applies in Patent Infringement Actions
In a case appealed from the Eastern District of Virginia, the Federal Circuit has clarified how the doctrine of res judicata / claim preclusion applies to subsequent patent infringement actions.
On September 8, 2009, the Federal Circuit affirmed Nystrom v. Trex Co., 553 F. Supp. 2d 628 (E.D. Va. 2008) [Norfolk – Kelley, J.]. See Nystrom v. Trex Co., case no. 09-1026, 2009 U.S. App. LEXIS 20016 (Fed. Cir.). The opinion has been marked as precedential but not yet assigned an F.3d citation. The Federal Circuit affirmed on alternative grounds, however, reaching a different conclusion with respect to claim preclusion than the Eastern District of Virginia did.
This appeal was from Plaintiff Ron Nystrom’s second suit against several defendants, including Home Depot, alleging infringement of a particular patent related to certain types of boards for decking (“the ‘831 patent”). In the first suit, the judge construed the claims in the patent to apply to materials made of wood and manufactured with woodworking techniques and thus found no infringement in the challenged products because they were made of composite materials and not through woodworking techniques.
Although the Eastern District granted summary judgment against Nystrom, it rejected Defendants’ claim preclusion argument in the second suit. Relying primarily on Hallco Mfg. Co. v. Foster (“Hallco II”), 256 F.3d 1290, 1294 (Fed. Cir. 2001), and Del Mar Avionics, Inc. v. Quinton Instrument Co., 836 F.2d 1320 (Fed. Cir. 1987), Judge Kelley explained that claim preclusion did not apply because the allegedly infringing product in the second suit was materially different from the allegedly infringing product in the first suit and because the proper way to apply the “essentially the same” test from prior Federal Circuit cases was to “compare[ ] device to device,” rather than the device to the claim. See Nystrom, 553 F.Supp.2d at 632, 633.
The Federal Circuit began with the same patent preclusion principles:
For claim preclusion in a patent case, an accused infringer must show that the accused product or process in the second suit is “essentially the same” as the accused product or process in the first suit. “Colorable changes in an infringing device or changes unrelated to the limitations in the claim of the patent would not present a new cause of action.” Where an accused infringer has prevailed in an infringement suit, “the accused devices have the status of noninfringements, and the defendant acquires the status of a noninfringer to that extent.”
Id. at 7-8 (citations omitted).
It then explained the “new angle on claim precision” at issue in this appeal was that this case “asks whether the accused infringer may assert claim preclusion when the sole claim limitations at issue in the first suit remain unchanged in the second suit.” That was a question of first impression because the Federal Circuit previously “ha[d] not addressed directly whether the focus of the ‘material differences’ test is on the claim limitations at issue in each particular case.” Id. at 9.
The Federal Circuit held that was the focus. It concluded that the grounds for finding noninfringement in the first suit were the same constructions of the two relevant claim limitations as were at issue in the second suit. Id. Accordingly, “[i]f … the accused device of the second suit remains unchanged with respect to the corresponding claim limitations at issue in the first suit, then [the patent plaintiff] has no remaining avenue to pursue his claims now” because he “[i]n essence … would be attempting to prove infringement of the same claim limitations as to the same features of the accused devices.” Id. at 9-10. Remarking that this was “the exact situation that res judicata seeks to prevent,” the Court held that “[r]es judicata thus bars this second attempt to adjudicate the same issues.” Id. at 10. The Court also reiterated its holding on a previous appeal by Nystrom that he had waived any infringement theory based on the doctrine of equivalents.
Judge Rader also wrote separately to address the doctrine of claim vitiation.
The lesson of Nystrom for patent litigants is two-fold. First, a litigant should bring all infringement theories at once and be careful of waiving them. Second, any dispositive claim limitations, if unchanged with respect to future products, may allow defendants to take advantage of claim preclusion.
The Nystrom decision is available from the Federal Circuit’s website at: http://www.cafc.uscourts.gov/opinions/09-1026.pdf
