Clarifying the application of res judicata in patent cases, the U.S. Court of Appeals for the Federal Circuit held that an analysis of the “material differences” between the products in each case must focus only on the claim limitations being contested. Nystrom v. Trex Co., Inc., Case No. 09-1026 (Fed. Cir., Sept. 8, 2009) (Rader, J.) (Rader J., additional views regarding claim element vitiation).

In December 2001, Ron Nystrom sued Trex, alleging Trex’s wood-composite boards infringed its patent. During the initial district court litigation the court construed three terms. Based on the court’s construction, Nystrom conceded that he “lacked sufficient evidence to prove infringement” and summary judgment was granted. On appeal, the Federal Circuit affirmed two of the three constructions. On remand, Nystrom attempted to argue infringement under the doctrine of equivalents (See IP Update, Vol. 8 No. 9.) The district court held that Nystrom had waived that argument based on his prior concession. The Federal Circuit affirmed in a per curiam opinion.

Nystrom subsequently filed the instant case alleging that Trex’s newer, “second-generation boards” infringe the patent-in-suit. The district court granted Trex summary judgment based on claim vitiation and argument based estoppel, but denied Trex’s motion on res judicata and amendment-based estoppel. Nystrom appealed.

The Federal Circuit held that the district court erred in denying Trex’s argument that the second suit was barred by the doctrine of res judicata. In particular, the Court held that in patent cases res judicata applies when the accused infringer shows that the accused product in the second suit is “essentially the same” as the product accused in the first litigation, i.e., there are no “material differences” between the two products. The Court held that the “material differences” inquiry must be limited solely to the contested claim limitations rather than the products as a whole.

In the Nystrom cases only two claim limitations were at issue. Allowing Nystrom to point to differences unrelated to the contested limitations would result in a repeat of the prior litigation with Nystrom arguing that the same elements of the accused devices meet the same contested limitations. This is the very situation that res judicata seeks to prevent.

Writing separately, Judge Rader also questioned the necessity of the doctrine of claim vitiation. The doctrine of claim vitiation only applies if a substantial limitation is not literally present. In such cases, however, the missing substantial limitation would also prevent a finding of infringement under the doctrine of equivalents. Thus, according the Judge Rader, the doctrine of claim vitiation is subsumed within the test for equivalents.