In Re PERSONALWEB TECHNOLOGIES LLC, 961 F.3d 1365

PersonalWeb owns five related “True Name” patents covering content-based hashing (True Names) for identifying data; specification describes hashing segments and using hashes (ETags) to avoid duplicate storage and enable conditional GETs.
In Dec. 2011 PersonalWeb sued Amazon (and Dropbox) in E.D. Texas alleging S3 infringed (multipart upload and “conditional operations” using ETags); after claim construction PersonalWeb stipulated to dismissal of its claims against Amazon with prejudice and final judgment entered.
Beginning in 2018 PersonalWeb sued numerous Amazon customers, alleging those customers’ use of Amazon S3 (e.g., conditional GET/cache-control via ETags) infringed the same patents; Amazon intervened and filed a declaratory judgment action to bar the customer suits.
The MDL consolidated the matters and the N.D. Cal. court took the Amazon DJ action and a representative customer case to decide preclusion issues; the court granted summary judgment that claim preclusion barred pre-judgment claims and the Kessler doctrine barred post-judgment customer suits.
The district court found (1) the Texas with-prejudice dismissal was a final judgment on the merits, (2) Amazon’s customers were in privity with Amazon, and (3) the Texas action accused S3 broadly (including conditional operations), so the customer suits were barred; the court dismissed eight customer cases and PersonalWeb appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claim preclusion (res judicata) bars PersonalWeb’s suits against Amazon customers	PersonalWeb: Texas suit accused only multipart upload; customer suits accuse distinct cache-control/conditional GET functionality, so different causes of action	Amazon: Texas case accused S3 including conditional operations; customers are in privity; causes of action arise from same transactions and product	Affirmed. Claims barred: Texas judgment was final; factual overlap (same S3 product and conditional operations) means causes of action are the same
Whether the Kessler doctrine bars post-judgment infringement suits against customers when the prior suit ended in a voluntary dismissal with prejudice	PersonalWeb: Kessler requires an actual adjudication of noninfringement (issue actually litigated); a stipulated dismissal is not such an adjudication	Amazon: A with-prejudice dismissal is an adjudication on the merits that confers the limited trade right Kessler protects; permitting relitigation would allow harassment of manufacturers and customers	Affirmed. Kessler applies; the with-prejudice dismissal operated as an adjudication of non-liability for the accused S3 product and precludes follow-on suits against customers

Kessler v. Eldred, 206 U.S. 285 (1907) (establishes limited trade-right protecting a successful manufacturer from follow-on suits against its customers)
Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (defines final-judgment and preclusion principles)
Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co., 232 U.S. 413 (1914) (recognizes right to freely sell goods after adjudication)
Brain Life, LLC v. Elekta Inc., 746 F.3d 1045 (Fed. Cir. 2014) (Kessler doctrine fills temporal gap left by claim/issue preclusion)
SpeedTrack, Inc. v. Office Depot, Inc., 791 F.3d 1317 (Fed. Cir. 2015) (Kessler prevents harassment by suing customers after manufacturer prevails)
SimpleAir, Inc. v. Google LLC, 884 F.3d 1160 (Fed. Cir. 2018) (Kessler as supplement to claim preclusion for post-judgment conduct)
Acumed LLC v. Stryker Corp., 525 F.3d 1319 (Fed. Cir. 2008) (use regional-circuit law for general preclusion issues; Federal Circuit law for patent-specific cause-of-action identity)
Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275 (Fed. Cir. 2017) (distinguishes licensed settlements so Kessler may not shield willing licensees)
Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589 (2020) (res judicata bars claims that were or could have been brought)
Foster v. Hallco Mfg. Co., 947 F.2d 469 (Fed. Cir. 1991) (different legal theories from same transaction do not create multiple claims)