Monday, September 28, 2009

Waive doctrine of equivalents in the 1st litigation, you can't resurrect in the 2nd substantially similar litigation

Ron Nystrom was awarded U.S. Patent 5,474,831 entitled "Board for use in constructing a flooring surface." This wood-flooring board is shaped to shed water from the upper surface, while still maintaining a comfortable surface on which walk.

In 2001, he sued Trex for infringement. Trex's allegedly infringing product consisted of a plastic and sawdust mixture, which was compressed and then hardened into a decking board shape.

After claim construction, Nystrom conceded that he could not prove infringement. The court entered summary judgment of non-infringement, and Nystrom appealed. Nystrom was able to reverse one of the claim constructions, and attempted to prove liability through the doctrine of equivalents. But because he had moved for summary judgment of non-infringement, the district court held that he had waived his right to rely on the doctrine of equivalents. Again he appealed, but the Federal Circuit per curiam affirmed.

Shortly thereafter, Nystrom sued Trex again (and also named Home Depot and Snavely Forest Products as defendants). His allegations this time pertained to Trex's next generation wood board, which Trex sold after the first sued had originated. Nystrom based his entire infringement argument on the doctrine of equivalents. Trex sought summary judgment on the basis of res judicata because the boards at issue in this second suit were "essentially the same" as in the first.
“In its simplest construct, res judicata precludes the relitigation of a claim, or cause of action, or any possible defense to the cause of action which is ended by a judgment of the court. This aspect of res judicata, known in modern parlance as ‘claim preclusion’, applies whether the judgment of the court is rendered after trial and imposed by the court or the judgment is entered upon the consent of the parties.” Foster v. Hallco Mfg. Co., 947 F.2d 469, 476 (Fed. Cir. 1991) (citations omitted). ...

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. Foster, 947 F.2d at 480. “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.” Id. 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.” Young Eng’rs, Inc. v. U.S. Int’l. Trade Comm’n, 721 F.2d 1305, 1316 (Fed. Cir. 1983).
Defendants conceded material differences in the boards at issue in the first suit and those at issue in the second, but argued that the 2 claim limitations at issue in the first suit were in all material respects the same as those at issue in this later suit. The Court presented the issue as follows:

This case thus presents a slightly new angle on claim preclusion. It 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. This court has previously emphasized that the focus for claim preclusion should be on “material differences” between the two accused devices, see Foster, 947 F.2d at 480, but has not addressed directly whether the focus of the “material differences” test is on the claim limitations at issue in each particular case.

Turning to that question, this court has already determined in the earlier case that Trex I boards do not infringe the ’831 patent. That judgment applies to both literal infringement and, as a result of Nystrom’s waiver, infringement by equivalents. For Nystrom to succeed on his infringement claim against the Trex II boards, he will have to prove infringement of each claim limitation. See Catalina Mktg. Int’l, Inc. v., Inc., 289 F.3d 801, 812 (Fed. Cir. 2002) (“To prove infringement, the patentee must show that the accused device meets each claim limitation either literally or under the doctrine of equivalents.”). The only claim limitations at issue in the first suit were “board” and “manufactured to have.” The constructions for these terms in this suit are the same as the constructions in the first suit. The bases of noninfringement in the first suit were these constructions. If, therefore, the accused device of the second suit remains unchanged with respect to the corresponding claim limitations at issue in the first suit, then Nystrom has no remaining avenue to pursue his claims now. In essence, Nystrom would be attempting to prove infringement of the same claim limitations as to the same features of the accused devices. As such, this case presents the exact situation that res judicata seeks to prevent. Res judicata thus bars this second attempt to adjudicate the same issues.

* * *
In sum, Nystrom made a tactical decision in his initial suit to forego any infringement theory based on the doctrine of equivalents. That choice did not pay off. Given that the Trex II boards remain materially identical to the Trex I boards with respect to the pertinent claim limitations at issue, this court cannot under res judicata permit Nystom to have a second bite at the apple.

Judge Rader's Additional Views -- Claim Vitiation

Judge Rader endorsed the panel's opinion, but wrote separately to address claim vitiation:
In Warner-Jenkinson, the Supreme Court adopted this court’s established “all-elements” rule. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 39 n.8 (1997) (“[U]nder the particular facts of a case, . . . if a theory of equivalence would entirely vitiate a particular claim element, partial or complete judgment should be rendered by the court . . . .”). “Informed by this guidance, we have held that in certain instances, the ‘all elements’ rule forecloses resort to the doctrine of equivalents because, on the facts or theories presented in a case, a limitation would be read completely out of the claim — i.e., the limitation would be effectively removed or ‘vitiated.’” DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 469 F.3d 1005, 1017 (Fed. Cir. 2006). Nonetheless, this court has also warned that an overly broad application of the all elements rule may improperly “swallow the doctrine of equivalents entirely” and limit infringement to “a repeated analysis of literal infringement.” Ethicon Endo-Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1317 (Fed. Cir. 1998).
Ironically, the Supreme Court adopted this vitiation limitation on the doctrine of equivalents at a point near the time that this court had learned of its internal inconsistency. Claim vitiation limits the doctrine of equivalents. The doctrine of equivalents, by definition, acknowledges that a specific claim limitation is not expressly found in the accused product or process. Claim vitiation proceeds from the same acknowledgment that a specific claim limitation is missing from the accused product or process. The doctrine of equivalents permits a finding of infringement, despite the missing limitation, because the deficit is not substantial. Claim vitiation bars infringement because the same deficit is substantial. In other words, claim vitiation, by definition, simply rewinds and replays the doctrine of equivalents test for substantiality of a missing claim limitation. Thus, a finding of insubstantial difference to show equivalency obviates any further vitiation analysis—the wholly insignificant equivalent, by definition, would not vitiate the claim. On the other hand, a finding of substantial difference renders vitiation unnecessary. Thus, the vitiation doctrine is really subsumed within the test for equivalents itself. In other words, the all elements rule is simply a circular application of the doctrine of equivalents.
While the tests for equivalents and vitiation are coterminous, the Supreme Court’s Warner-Jenkinson decision did create one difference: the identical equivalents and vitiation tests are made by different decision makers. “The determination of equivalency is a question of fact . . . .” Upjohn Co. v. Mova Pharm. Corp., 225 F.3d 1306, 1309 (Fed. Cir. 2000). Conversely, this court has instructed—as required by Warner-Jenkinson—that application of the all elements rule is a question of law. See Panduit Corp. v. HellermannTyton Corp., 451 F.3d 819, 826 (Fed. Cir. 2006) (“The determination of infringement under the doctrine of equivalents is limited by two primary legal doctrines, prosecution history estoppel and the ‘all elements’ rule, the applications of which are questions of law.”). The problem with this conflict is apparent. Judges decide vitiation; juries decide equivalents. Although the tests are the same, the testers are different, which could produce different results in application of the same rules.
This case can serve to illustrate this situation. Trex argued to the district court that a finding of equivalents on a product comprised of forty to fifty percent wood would necessarily vitiate the claim language requiring the board to be “made [entirely] from wood.” The district court agreed and barred Nystrom from pursuing an infringement theory based on equivalents. Would the result be different, however, if the accused device was comprised of fifty-five or sixty percent wood? Seventy percent? Should this question be resolved by a jury, by a judge, or by both?

No comments:

Post a Comment