Ron Nystrom v. Trex and Snavely Forest Products and Home Depot (CAFC 2009-1026) precedential

Home Depot and Snavely Forest Products are distributors of Trex products. In the [second] complaint, Nystrom alleged that Trex had released second-generation products (Trex II boards) that infringed the '831 patent. According to Nystrom, these products could not have been included in the first suit because they reached the market after the filing date of the original December 2001 complaint. In this suit, Nystrom based his infringement claim solely on the doctrine of equivalents. Trex then moved for summary judgment to bar Nystrom under the doctrine of res judicata from relitigating infringement because the Trex II boards were essentially the same as the Trex I boards. Trex also moved for summary adjudication to prohibit Nystrom from relying on the doctrine of equivalents because of: (1) claim vitiation; (2) argument-based estoppel; and (3) amendment-based estoppel. The district court granted summary judgment on vitiation and argument-based estoppel, but denied Trex's motion on res judicata and amendment-based estoppel. Nystrom timely appealed.

"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). Because the present issue of claim preclusion is one particular to patent law, this court applies its own law without reference to regional circuit law. See Hallco, 256 F.3d at 1294.

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).

Were the Trex boards different?

Significantly, for purposes of its summary judgment motion and this appeal, Defendants concede material differences between the Trex I boards and the Trex II boards. These differences include shape, smoothness, and surface irregularity. Defendants, however, note that the only two limitations leading to the judgment of noninfringement in the first suit--"board" and "manufactured to have"--are in all material respects the same in the Trex I boards and the Trex II boards. That is, Defendants maintain that Trex made the Trex I and Trex II boards using the same process to produce the wood composite. Without material differences, Defendants seek to bar Nystrom from litigating his suit against the Trex II boards. The district court rejected this argument focusing instead on Defendants' admission of material differences in other claimed features.

Now to undeveloped case law. Claim preclusion had gone to differences in the accused products, but had not addressed the significance of product differences in light of the claims.

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.

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.

The changes in the Trex boards were incidental to the claimed features.

These changes, however, do not alter the application of claim preclusion. Nystrom's alleged differences fall squarely within the "colorable changes" category that this court has highlighted in the past. Foster, 947 F.2d at 480.

Nystrom was nailed to the floor for not pursuing doctrine of equivalents.

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.

Affirmed.

Judge Rader, with an "additional view," thoughtfully speculated on claim vitiation intersecting the doctrine of equivalents.

While I endorse the reasoning and results of the panel, I write separately to address the doctrine of 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?