By Karin C. Khan

Acumed LLC (“Acumed”) appealed the District Court’s decision that its claim for patent infringement was barred by claim preclusion because it should have been brought in a prior case between Acumed and Stryker Corporation (“Stryker”).  In the prior case between Acumed and Stryker, Acumed sued for patent infringement of its U.S. Patent No. 5,472,444 (“the ‘444 patent”) relating to an intermedullary nail for fixing fractures of the proximal humeral cortex.  In this case, the jury made a finding of infringement and willfulness against Stryker.

            Also during this prior case, Acumed had discovered that Stryker begun marketing and selling another potentially infringing product, the T2 Long.  However, although they considered adding another infringement claim, Acumed ultimately decided not to because doing so would have prolonged the trial date for another year.

            Shortly after judgment was entered, Acumed brought another action for patent infringement of the ‘444 patent based on Stryker’s T2 Long nail product, which the District Court then dismissed pursuant to F.R.C.P. 12(b)(6).  The Court of Appeals reviews whether a claim is barred by claim preclusion de novo and considers whether a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action.  The Court of Appeals also used Ninth Circuit law regarding general principles of claim preclusion.  In particular, the Court of Appeals focused on the Ninth Circuit law that states that claim preclusion applies when the prior litigation involved the same claim or cause of action as the later suit.
           
            In considering whether the same set of transactional facts gave rise to the current action, the Court of Appeals looked to Hallco Mfg. Co. v. Foster, which held that one of the essential transactional facts that gives rise to a patent infringement claim is the structure of the device or devices.  In other words, unless the accused device is essentially the same as the accused device in the prior action, claim preclusion does not apply.  The District Court had not taken the same view, as it only decided that claim preclusion applied because the accused device could have been litigated in the previous case.