Acumed v. Stryker (CAFC 2007-1115)

Under the doctrine of claim preclusion,² "a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action." Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n.5 (1979). The Supreme Court has also explained:

The rule [of claim preclusion] provides that when a court of competent jurisdiction has entered a final judgment on the merits of a cause of action, the parties to the suit and their privies are thereafter bound "not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose."

Comm'r of Internal Revenue v. Sunnen, 333 U.S. 591, 597 (1948) (quoting Cromwell v. County of Sac, 94 U.S. 351, 352 (1876)). Whether a claim is barred by claim preclusion is a question of law that appellate courts review de novo. See, e.g., Faust v. United States, 101 F.3d 675, 677 (Fed. Cir. 1996); E&J Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1287 (9th Cir. 1992).

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² In the interest of precision, courts often use the term "claim preclusion" in place of the more general term "res judicata." See Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 77 n.1 (1984); Foster v. Hallco Mfg. Co., Inc., 947 F.2d 469, 478 (Fed. Cir. 1991) (hereinafter "Foster"). Although the term res judicata was once used primarily to denote the concept of claim preclusion, usage of the term res judicata has evolved to include "any preclusion of litigation arising from a judgment, including collateral estoppel." Foster, 947 F.2d at 478. Thus, to maintain the analytical distinction between res judicata and collateral estoppel, courts often substitute the terms "claim preclusion" and "issue preclusion." Id. See generally Restatement (Second) of Judgments, Introductory Note before ch. 3 (1982) (discussing the terminology of res judicata); 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4402 (2d ed. 2002) (same).

In addition, because the term "claim" has a special meaning in patent law, we note that we use the term "claim" in our discussion of claim preclusion to denote a cause of action, not a patent claim.

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Claim preclusion for patent infringement falls under Federal Circuit law, while, more generally, claim preclusion applies under the law of the regional circuit.

Infringement by different products justifies successive actions. A defendant holds the burden to demonstrate "that the accused devices are essentially the same."

It follows from Young Engineers that claim preclusion does not apply unless the accused device in the action before the court is "essentially the same" as the accused device in a prior action between the parties that was resolved by a judgment on the merits. Foster, 947 F.2d at 479-80. Accused devices are "essentially the same" where the differences between them are merely "colorable" or "unrelated to the limitations in the claim of the patent." See id. at 480; cf. KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1526 (Fed. Cir. 1985) (holding that "contempt proceedings . . . are available only with respect to devices previously admitted or adjudged to infringe, and to other devices which are no more than colorably different therefrom and which clearly are infringements of the patent" (emphasis added)). Finally, the party asserting claim preclusion has the burden of showing that the accused devices are essentially the same. Foster, 947 F.2d at 480.

Oregon district court neglected job one: compare the accused devices.

In this case, the district court held that Acumed's infringement claim against Stryker is precluded by a prior action between the parties that was resolved by a final judgment on the merits, namely the judgment in Acumed I. Acumed II, 2006 WL 3253115 at *18. However, the district court did not compare the accused device in this case with the accused device in Acumed I to determine whether they are "essentially the same" under Foster.

Instead, the district court figured that Acumed had its chance in the first suit. No second chance. Long-standing case law states otherwise.

[T]he Supreme Court explained as early as 1876 that claim preclusion does not bar a claim merely because it could have been raised in a prior action between the parties that was resolved by a final judgment on the merits.

[T]wo claims for patent infringement do not arise from the same transactional facts unless the accused devices in each claim are "essentially the same." Id. at 479-80.

Stryker has conceded in its brief to this court that the accused device in the present action (i.e., the T2 Long) is not essentially the same as the accused device in Acumed I (i.e., the T2 PHN).

Accordingly, Stryker has failed to show that Acumed I bars the present action under the doctrine of claim preclusion.

Reversed and remanded.