Gillig, et al., v. Nike, Inc., 2009-1415 (Fed. Cir. Apr. 20, 2010).

In 2004, Triple Tee initiated its first lawsuit against Nike claiming that Nike had misappropriated Triple Tee’s trade secrets involving golf club technology. Triple Tee alleged that its principal, Gillig, assigned all of his rights in the trade secrets to Triple Tee in October 2000, thereby making Triple Tee the proper plaintiff. On summary judgment, the district court held that there was no evidence that Triple Tee acquired any of those rights in 2000, and dismissed the action both based on lack of standing and on the merits. In October 2008, Triple Tee initiated another suit against Nike, this time with Gillig as co-plaintiff and also asserting correction of inventorship claims under 35 U.S.C. § 256, claiming that Gillig was an inventor of various patents relating to golf clubs owned by Nike. These inventorship claims had not been considered in the first action. The district court nevertheless held that the inventorship claims were barred by res judicata.

On appeal, the Federal Circuit reversed and remand on the inventorship claims, finding that res judicata largely did not apply. “Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” The Federal Circuit determined that the district court incorrectly found that Gillig was in privity with Triple Tee, and further rejected Nike’s reliance on the “control of litigation” exception to establish privity because that exception applies only to collateral estoppels rather than to res judicata.

However, the parties agreed that the inventorship claims arose from the same nucleus of operative facts as the trade secret claims. Thus, to the extent that Triple Tee was asserting an inventorship correction claim based on the purported 2000 assignment, that claim was barred since the district court already found that there was no assignment of rights in 2000. But to the extent that Triple Tee was asserting an inventorship correction claim based on a later 2005 assignment, there was no bar. Because any claim by Triple Tee based on a 2005 assignment did not accrue until after the second suit was filed and was not decided in the first action, the doctrine of res judicata does not apply – “the doctrine of res judicata does not punish a plaintiff for exercising the option not to supplement the pleadings with an after-acquired claim.”

A copy of the opinion can be found here.