Patent Law

Acumed v. Stryker 07–1115 (Fed. Cir. 2008)

Acumed and Stryker have been battling for years over patented orthopedic surgery equipment.  The original suit ended with a final judgment in April 2006 for Acumed. This second suit, filed in May 2006, alleges that one of Stryker’s new orthopedic nails infringes the patent.  The new version (named T2) was developed and put on the market during the original litigation, and Acumed deliberately chose not to include allegations against that product for fear of delaying the first trial.

The Oregon federal district court dismissed Acumed’s second lawsuit – finding the claim precluded by the prior judgment on the merits.

On appeal, Acumed argued that its second infringement action is not precluded by the first action even though (1) the original action was concluded by a final judgment on the merits; (2) the parties and patents of the second suit are identical to those of the original suit; and (3) Acumed was in a position to assert infringement against T2 in the original suit but consciously chose not to pursue an infringement claim against T2. a

Issue Preclusion: 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.  Although the particular elements of claim preclusion may vary, the Ninth Circuit finds preclusion only when the original litigation was terminated by a final judgment on the merits and second action has the same parties or privies as the original and the same claim or cause of action.

Taking a narrow view of “same claim or cause of action” – the Federal Circuit held that in patent law, issue preclusion can only be found where the accused products in the two actions are “essentially the same.”

‘[C]laim preclusion does not apply unless the accused device in the action before the court is "essentially the same" as the accused device in a prior action between the parties that was resolved by a judgment on the merits… Accused devices are “essentially the same” where the differences between them are merely “colorable” or “unrelated to the limitations in the claim of the patent.”…Finally, the party asserting claim preclusion has the burden of showing that the accused devices are essentially the same.’ 

In its opinion, the court a “could have” defense — instead holding that “claim preclusion does not bar a claim merely because it could have been raised in a prior action between the parties that was resolved by a final judgment on the merits.”  Along this same line, a patentee therefore does not lose rights by filing suit against only some of an accused infringer’s products (because “two claims for patent infringement do not arise from the same transactional facts unless the accused devices in each claim are ‘essentially the same’”).

Stryker admitted that the T2 was not essentially the same as its prior product — thus eliminating any possibility of claim preclusion. Stryker’s admission is the result of a tough litigation decision. To win on claim preclusion, it must argue that the new product is the same as the old product. However, if it did not win on claim preclusion, that argument would place the defendant’s non-infringement argument in serious peril. 

Notes:

• As the court noted, claim preclusion refers to a legal action rather than a patent claim.
• 2006 Acumed appeal on claim construction