The Kessler Cat is Still in the Studio: Restabilizing Res Judicata

By Dennis Crouch

Claim preclusion and issue preclusion are conceptually difficult, but the Federal Circuit has further confused preclusion doctrines in its patent law jurisprudence. In a series of recent decisions, the appellate court improperly created and then expanded upon a separate-and-distinct form of res judicata that it labels the Kessler Doctrine. We argued recently that this expansion is in error and should be eliminated as an improper destabilization of settled res judicata principles.[1] In a recent amicus filing, the United States Solicitor General agreed that the Federal Circuit’s precedent is in error.[2]  Despite that core agreement, the SG brief is rife with misleading guidance. The SG asserted the non-legal maxim “two wrongs make a right” to effectively conclude that the Kessler expansion error was rendered harmless by compounding errors in the court’s claim preclusion doctrine.  The SG’s brief implicitly calls for a wholesale reevaluation of preclusion doctrine rather than addressing the issues at hand. The brief includes other doublespeak. At one point, for example, the SG argues that Kessler remains “practically significant” and “relevant as a practical matter.” Later, the same document concludes that the question presented—i.e., the viability of Kessler—“does not have practical importance.”  Of course, the law of judgments remains critically important to both ensure justice and stability.

On May 12, 2022, the Supreme Court is set to decide whether to move forward with the pending case of PersonalWeb Technologies, LLC v. Patreon, Inc., No. 20-1394 which focuses on the Federal Circuit’s aforementioned doctrinal expansions.

Kessler and its Progeny: Kessler v. Eldred is an old and largely dormant 1907 Supreme Court case permitting a manufacturer to bring an equity action to stop an infringement lawsuit against its customers.[3]  The manufacturer (Kessler) had already won on non-infringement grounds against the patentee (Eldred), thus freeing Kessler to continue freely commercialize his product. The Supreme Court saw the subsequent lawsuit against Kessler’s customers as an affront to Kessler’s right to manufacture and sell as guaranteed by the non-infringement judgment.[4]  A lot has happened in procedural law 1907. Some of the relevant changes here include the merger of law and equity; adoption of the Federal Rules of Civil Procedure and its expansion of claim preclusion under the broader “transaction or occurrence” test; adoption of the Declaratory Judgment Act and its expanded use in counterclaims; and allowance of non-mutual issue preclusion, especially in the defensive setting.  These changes are major, but they had had all been recognized as the Restatement (Second) of Judgments was being adopted in the early 1980s. In the 40 years since, the law of judgments has remained remarkably stable, with the courts adopting the stated principles of the Restatement embodied in the two preclusion principles of claim and issue preclusion.

But, the Federal Circuit has taken the law of judgments on a major tangent: Particularly, the court has identified a third form of preclusion, the Kessler doctrine, that it offers as separate and distinct from standard principles of preclusion.  The court’s Kessler doctrine operates applies to bar litigation in situations where these traditional forms of preclusion do not.  Despite its references to the 1907 decision, the appellate court’s Kessler decisions are also unmoored from that original precedent.  In particular, the court has applied Kessler to situations where the issue of infringement was not actually litigated or even decided; as well as apply non-mutually.  The effective approach is an odd blend of issue preclusion and claim preclusion where the due process safeguards of each are relaxed or removed.

The effect of judgment is inherent to every litigation, and the confusion created by the Federal Circuit in these cases is ripe for resolution.

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[1] See, Dennis Crouch and Homayoon Rafatijo, Resorbing Patent Law’s Kessler Cat into the General Law of Preclusion, 55 Akron L. Rev. 51 (2022). We argue that the newly expanded doctrine is improper for several reasons.  Most pointedly, the Supreme Court has chastised lower courts from fashioning new rules of preclusion “unmoored from the two guideposts of issue preclusion and claim preclusion.” Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589, 1595 (2020).

[2] SG Brief in PersonalWeb Techs. [20220408144608169_20-1394PersonalWeb-CVSG-final].

[3] Kessler v. Eldred, 206 U.S. 285 (1907).

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11 thoughts on “The Kessler Cat is Still in the Studio: Restabilizing Res Judicata

  1. 4

    “Some of the relevant changes here include the merger of law and equity; adoption of the Federal Rules of Civil Procedure and its expansion of claim preclusion under the broader “transaction or occurrence” test”

    That’s where it went wrong, when Law and Equity were merged. The Founders had them separate for good reasons. Ask Josh Malone what he thinks of the merger of Law and Equity…..

    Most lawyers behave reactionarily, and analyze what others’ did, and few are proactive, policitally, mainly out of reasons of personal comforts – very few willing to take risks, over what’s in their head, that they really want to say or write, I’ve been around them 30 yrs and know. Contrast modern Lawyers with the likes of Patrick Henry, John Adams….. not even close…. attornment is the key word – altering the allegiance of the People from one King, to another. yawn, its sooo old-hat. Where’s the Testosterone in the Bar lately ? hahahaha, the joke is on your kids, hahaha

    1. 4.1

      I would sincerely be interested in any early formation writings that actually discuss a choice of maintaining a division of law and equity (as opposed to being merely an artifact of natural legal development).

  2. 3

    Off topic, but yesterday the CAFC accepted the parties’ joint agreement in In re Broadcom to dismiss two mandamus petitions for the WDTX. Today, the CAFC denied mandamus to the WDTX in In re Trend Micro. In other words, three failed mandamus petitions in two days. This is not especially significant (mandamus petition fails is much more “dog bites man” than “man bites dog”), but I like to take note of these so that folks do not only hear about the successful mandamus petitions.

  3. 2

    From other thread:

    “Neither of these are cogent reasons available to an examiner.”

    Oh I assure you, they very much so are. Very ve ry ve ry much.

    “You have no such budget, and you have no such recourse to “avoidance.””

    LOL.

    “LOL – that’s a given (from the start), given that examiners are bureaucrats. That is also simply not a cogent reason for “being worn out.””

    Not sure how “being worn out” got into the conversation. Seems like moving go alpo sts. “Burned out” is different from “worn out”.

    “That things “may be tough” ”

    I never said “dur h things are tough lol”. I said what I said, which is fundamentally different.

    ““Caving in” has no part of that job,”

    Not in your fantasy land anyway. Back in real life, I’m pretty sure it’s fair common, though it goes under a different guise most of the time, simply taking it easy on the examination (1/8th-as s ing it). This obviously leads to the same result as “caving”. But it’s much easier to get away with just not trying super hard.

    “You simply appeal to the wrong authority by trying to make this “it’s just human nature” thing.”

    I never stated it is human nature dm bfck. I said it is lack of budget and avoiding “burnout” (this being a distinct thing as discussed in the video I posted the other day). Neither of white are “human nat urede rp”.

    “YOU get to deal with a singular snapshot and sum total of “stuff” that is made at filing.”

    Right and in your fantasy we actually do deal with the whole of that “singular snapshot” at initial examination. But that’s not what happens in real life, never has been, never will be. It’s your personal fantasy. We’ve discussed it to death and you will never believe it, you hold it dear to your wittle heart and construct your worldview around it being correct, despite people telling you the opposite to your face. Then you get on here and tell us about how if only people examined to your fantasy then everything would only get easier (after a massive time/effort dump up front of about a week to a month per app, in your fantasy).

    “IF you do your job as I have noted (and yes 6, I DO note that I have corrected you from your past view that you need not bother even reading the spec and could just do a key word search from the claims), then it is simply NO fantasy that continued prosecution is necessarily easier, as the finite starting point means that examination can only encompass a limited amount of material.”

    Right, but that is a fantasy. Even presuming that we did your magical fantasy examination, it actually would be still not entirely the case that cases would only get easier through prosecution. That being as it is super easy to cause complications in prosecution that gobble up time. 1121st, 1122nd, new complicated to write 103’s, having to look deep into references for more details etc. etc. constantly make things harder in further down the line actions but you ignore all that in your fantasy. As I’ve had to repeat a gazillion times in response to your fantasy reality.

    “THAT is reality. You do not get to make up your own reality here.”

    I live this reality dmbfuck. This isn’t an academic exercise. It’s real life. When I send an action after a search with a bunch of 102’s in 10 hrs. Then address a tiny amendment repeating slightly modified grounds of rejection for a total time of 18-20 hrs for an app and then, on RCE, they amend the claims massively to be more tight, and it takes 10 hours just to write the 103’s for the next action, and then takes 10 hours to write the 103’s for the next action after that (and address some 112’s they introduced at 3rd action) then magically the after RCE prosecution “took longer”/”was harder”. How you have such trouble understanding this in your fantasy is near beyond me. It’s literally kindergarten tier math.

    1. 2.1

      An even longer version with the same translation:

      “Wah.”

    2. 2.2

      Profanity (though understandable) aside, 6, I’m with you here.

      I don’t understand why someone with my friend anon’s experiential expertise so often unjustifiably harangues the large majority of conscientious, hard-working — but time-constricted — Examiners.

      I sure couldn’t do what you folks do . . . in the time you’re permitted to do it in.

      1. 2.2.1

        Profanity (though understandable) aside, 6, I’m with you here.

        Hey – you can be with anyone, but you should realize that this ‘spat’ between 6 and I spans like more than a decade and even as he protests, does include my correcting him on his stated beliefs as to what is required of examiners.

        so often unjustifiably harangues the large majority of conscientious, hard-working — but time-constricted — Examiners.

        There – you got that simply wrong. Certainly, I deal with a fair number of actually conscientious, and hard-working examiners – and I have never “harangued” those.

        But the minute you impact my client and attempt to do LESS THAN what is required by law (merely to meet some internal imposed metric) – I WILL “harangue” you – and justifiably so.

        “I ran out of time” is never a reason to not examine “under the law.”

        Part of this ongoing spat with 6, Pro Say, is my emphasizing that examiners DO HAVE A UNION.

        If that cannot – legitimately – do the job required under the law because of “time” (read that as unduly punished for attempting to follow the law) AND their union cannot protect them, then they need to – and can – do something about that vis a vis their union.

        After all, that is what unions are for.

      2. 2.2.2

        As has been noted here several times, expecting to get anything like IPR or patent litigation quality prior art searches for the mere $700 USPTO application search fee is irrational. Can you imagine any patent attorney asked by a client for a validity opinion on a patent quoting such a small amount for studying the claim scopes and doing prior art searching on them in such a mere 2 or 3 hours of attorney billing time?

        1. 2.2.2.1

          Your notion of “irrational” is itself irrational.

          The Office sets its fees on a life-cycle basis – NOT on a strictly cost recovery basis.

          Pretending otherwise – as you do – is the epitome of MISinformation.

  4. 1

    Dennis, was the actual 1907 situation of Kessler v. Eldred also made “dormant” by BLONDER TONGUE V. UNIVERSITY OF ILLINOIS 402 U. S. 313, 1971? Or did the latter only apply to a prior invalidity decision, not a non-infringement decision?
    P.S. If only more manufacturers and major sellers WOULD step in to protect their customers from patent suits deliberately brought only against customers.

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