Nystrom v. Trex and Home Depot (Fed. Cir. 2009)
Ron Nystrom’s patent covers a type of decking board that is shaped in a way to shed water. In a prior case, the Federal Circuit, limited the claim term “board” to cover only boards made of “wood cut from a log.” Nystrom’s case was one of the first examples of how Phillips v. AWH could be used to limit claim scope based on statements in the specification and prosecution history – even when those statements do not rise to either a disavowal of scope or definition of a term. Because the Trex’s product is a wood-composite, it did not literally infringe the asserted claims. The district court also held that Nystrom had waived its right to argue infringement under the doctrine of equivalents.
A few days after losing the first case, Nystrom filed a second lawsuit against Trex and its distributors (Home Depot, et al.). Asserting infringement under the doctrine of equivalents against a second generation of Trex products.
On appeal, the Federal Circuit has held that the second lawsuit is barred by the claim preclusion doctrine of res judicata. Following a final judgment on the merits, claim preclusion binds parties from re-litigating the merits presented and also from raising “any other admissible matter which might have been offered” on the merits. In patent law, claim preclusion only arises when the accused product in the second suit is “essentially the same” as the accused product in the first suit.
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).
Notably, claim preclusion applies applies even against issues that are waived – as here – rather than contested in open court.
In the present case, Trex admits that its new products are different, but argues that they avoid infringement in the same way – namely that its boards are not “cut from a log.” The Federal Circuit recognized this as a novel question of whether the “essentially the same” requirement should focus only on the claim terms at issue in the original case:
This court has previously emphasized that the focus for claim preclusion should be on “material differences” between the two accused devices, but has not addressed directly whether the focus of the “material differences” test is on the claim limitations at issue in each particular case.
Agreeing with the accused infringer Trex, the Federal Circuit ruled that claim preclusion applies – since the second suit would involve Nystrom “attempting to prove infringement of the same claim limitations as to the same features of the accused devices.”
Vitiation: Judge Rader authored the majority opinion, which was joined by Chief Judge Michel and Judge Prost. In addition, Judge Rader filed three pages of “additional views” focusing on the doctrine of equivalents (DOE) and its sub-doctrine of claim vitiation. DOE allows a patentee to prove infringement even when an accused device is missing certain claim limitations – so long as the difference from the claimed limitation is only insubstantial. One limitation of the DOE is that does not apply where its application would “vitiate a claim limitation.”
Judge Rader argues that the two potentially inconsistent doctrines can be reconciled into a single doctrine that both focus on the “substantiality of a missing claim limitation.” In other words, Judge Rader argues that vitiation is not a separate sub-doctrine, but rather is wholly “subsumed within the test for equivalents itself.”
[C]laim 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.
The problem with this approach is the hodge-podge of law vs. fact differentiation created by the Federal Circuit. Notably, DOE is a question of fact (decided by juries) while vitiation is a question of law (decided by judges).
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?