791 F.3d 1317
Fed. Cir.2015Background
- SpeedTrack owns U.S. Patent No. 5,544,360 (the ’360 Patent), claiming a category-based method for accessing computer files (category descriptions, a file information directory, and a search filter).
- SpeedTrack sued Walmart alleging Walmart’s website (using Endeca’s IAP software) infringed the ’360 Patent; Endeca intervened and sought declaratory judgment of noninfringement.
- The district court and this court found the accused IAP used numeric identifiers (not descriptive names) and granted summary judgment of noninfringement; final judgment entered in March 2012 (SpeedTrack v. Wal‑Mart, affirmed at 524 F. App’x 651).
- SpeedTrack later sued Office Depot, CDW, Newegg, and PC Connection alleging they infringe the same patent by using the same Endeca/Oracle IAP software; the district court stayed the case pending the Walmart appeal and later lifted the stay.
- Defendants moved for summary judgment arguing SpeedTrack’s claims are precluded by res judicata, collateral estoppel, and the Kessler doctrine; the district court held res judicata barred pre‑March 30, 2012 acts and the Kessler doctrine barred the suit in full.
- On appeal, the Federal Circuit affirmed, holding the Kessler doctrine precludes SpeedTrack’s claims against these customers because their use of the IAP is essentially the same as the noninfringing use adjudicated in Walmart.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kessler bars SpeedTrack from suing customers of a supplier previously adjudged a noninfringer | Kessler is limited to the manufacturer; customers cannot invoke it | Kessler bars suits against customers when accused product was adjudged noninfringing and customers use it the same way | Held: Customers may invoke Kessler; doctrine precludes suit because IAP gained noninfringing status |
| Whether res judicata/collateral estoppel bar SpeedTrack’s equivalent‑theory claims | Equivalents claims weren’t litigated in Walmart, so they aren’t precluded | Claims/claims that could have been brought are barred; customers are in privity with Endeca via indemnities | Held: Res judicata bars pre‑March 30, 2012 acts; collateral estoppel did not fully apply to equivalents, but Kessler subsumes and bars the suit in full |
| Whether Rubber Tire exception (product component combined later) prevents Kessler application | The asserted method claims target combined systems (IAP + customers’ own hardware/data), so Kessler shouldn’t shield customers | The suits target the same IAP use adjudged noninfringing; no material differences in customers’ implementations | Held: Rubber Tire inapplicable — here the right attaches to the IAP use itself and customers’ use is essentially identical |
| Whether Kessler is obsolete after Blonder‑Tongue and modern preclusion doctrine | Kessler displaced by modern preclusion; Blonder‑Tongue makes Kessler unnecessary | Kessler remains a necessary, distinct protection preventing harassment via new theories/claims against customers | Held: Kessler remains binding and fills gaps left by claim/issue preclusion; it precludes SpeedTrack’s suit |
Key Cases Cited
- Kessler v. Eldred, 206 U.S. 285 (1907) (establishes doctrine preventing patentee from suing customers for use of product previously adjudged noninfringing)
- Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co., 232 U.S. 413 (1914) (trade right from a noninfringement judgment attaches to the particular product and may not protect after component is combined into a new product)
- MGA, Inc. v. Gen. Motors Corp., 827 F.2d 729 (1987) (Kessler bars suits against customers of a seller who previously prevailed on noninfringement or invalidity)
- Brain Life, LLC v. Elekta, Inc., 746 F.3d 1045 (2014) (reaffirms Kessler’s continued vitality and explains that an adjudged noninfringing device acquires noninfringing status vis‑à‑vis asserted claims)
- Blonder‑Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313 (1971) (permitted non‑mutual collateral estoppel; discussed by parties regarding modern preclusion developments)