Filed: Jun. 17, 2020
Latest Update: Jun. 17, 2020
Summary: Case: 19-1918 Document: 123 Page: 1 Filed: 06/17/2020 United States Court of Appeals for the Federal Circuit _ IN RE: PERSONALWEB TECHNOLOGIES LLC, - PERSONALWEB TECHNOLOGIES LLC, Plaintiff-Appellant LEVEL 3 COMMUNICATIONS, LLC, Plaintiff v. PATREON, INC., Defendant-Appellee AMAZON.COM, INC., AMAZON WEB SERVICES, INC., Intervenors - PERSONALWEB TECHNOLOGIES LLC, Plaintiff-Appellant LEVEL 3 COMMUNICATIONS, LLC, Plaintiff v. DICTIONARY.COM, LLC, Defendant-Appellee AMAZON.COM, INC., AMAZON WEB SERV
Summary: Case: 19-1918 Document: 123 Page: 1 Filed: 06/17/2020 United States Court of Appeals for the Federal Circuit _ IN RE: PERSONALWEB TECHNOLOGIES LLC, - PERSONALWEB TECHNOLOGIES LLC, Plaintiff-Appellant LEVEL 3 COMMUNICATIONS, LLC, Plaintiff v. PATREON, INC., Defendant-Appellee AMAZON.COM, INC., AMAZON WEB SERVICES, INC., Intervenors - PERSONALWEB TECHNOLOGIES LLC, Plaintiff-Appellant LEVEL 3 COMMUNICATIONS, LLC, Plaintiff v. DICTIONARY.COM, LLC, Defendant-Appellee AMAZON.COM, INC., AMAZON WEB SERVI..
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Case: 19-1918 Document: 123 Page: 1 Filed: 06/17/2020
United States Court of Appeals
for the Federal Circuit
______________________
IN RE: PERSONALWEB TECHNOLOGIES LLC,
--------------------------------------------
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
PATREON, INC.,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
--------------------------------------------
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
DICTIONARY.COM, LLC,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
Case: 19-1918 Document: 123 Page: 2 Filed: 06/17/2020
2 IN RE: PERSONALWEB TECHNOLOGIES LLC
INC.,
Intervenors
--------------------------------------------
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
VOX MEDIA, INC.,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
- - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
VICE MEDIA, LLC,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
--------------------------------------------
Case: 19-1918 Document: 123 Page: 3 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 3
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
OATH INC.,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
--------------------------------------------
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
BUZZFEED, INC.,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
--------------------------------------------
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
Case: 19-1918 Document: 123 Page: 4 Filed: 06/17/2020
4 IN RE: PERSONALWEB TECHNOLOGIES LLC
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
POPSUGAR, INC.,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
--------------------------------------------
PERSONALWEB TECHNOLOGIES LLC,
Plaintiff-Appellant
LEVEL 3 COMMUNICATIONS, LLC,
Plaintiff
v.
ZIFF DAVIS, LLC,
Defendant-Appellee
AMAZON.COM, INC., AMAZON WEB SERVICES,
INC.,
Intervenors
______________________
2019-1918
______________________
Appeal from the United States District Court for the
Northern District of California in Nos. 5:18-cv-05599-BLF,
5:18-cv-05606-BLF, 5:18-cv-05969-BLF, 5:18-cv-05970-
BLF, 5:18-cv-06044-BLF, 5:18-cv-06046-BLF, 5:18-cv-
Case: 19-1918 Document: 123 Page: 5 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 5
06612-BLF, 5:18-cv-07119-BLF, 5:18-md-02834-BLF,
United States District Judge Beth Labson Freeman.
______________________
Decided: June 17, 2020
______________________
MICHAEL AMORY SHERMAN, Stubbs Alderton &
Markiles LLP, Sherman Oaks, CA, argued for plaintiff-ap-
pellant. Also represented by VIVIANA H. BOERO HEDRICK,
JEFFREY F. GERSH, WESLEY WARREN MONROE, STANLEY
HUGH THOMPSON, JR.; SANDEEP SETH, SethLaw, Houston,
TX.
J. DAVID HADDEN, Fenwick & West, LLP, Mountain
View, CA, argued for all defendants-appellees and for in-
tervenors. Defendants-appellees Vox Media, Inc., Vice Me-
dia, LLC, Oath Inc., BuzzFeed, Inc., Dictionary.com, LLC,
Patreon, Inc., Ziff Davis, LLC, Popsugar Inc. and interve-
nors Amazon.com, Inc., Amazon Web Services, Inc. also
represented by SAINA S. SHAMILOV, RAVI RAGAVENDRA
RANGANATH; TODD RICHARD GREGORIAN, San Francisco,
CA. Defendant-appellee Vice Media, LLC also represented
by BENJAMIN J. BYER, Davis Wright Tremaine LLP, Seat-
tle, WA; KIMBERLY HERMAN, Sullivan & Worcester, Boston,
MA; CHRISTOPHER T. MCWHINNEY, Washington, DC. In-
tervenors Amazon.com, Inc., Amazon Web Services, Inc.
also represented by JEFFREY H. DEAN, Amazon.com, Inc.,
Seattle, WA.
______________________
Before WALLACH, BRYSON, and TARANTO, Circuit Judges.
BRYSON, Circuit Judge.
Appellant PersonalWeb Technologies LLC filed a num-
ber of lawsuits charging dozens of customers of Ama-
zon.com, Inc., and Amazon Web Services, Inc., (collectively
“Amazon”) with infringing several related patents.
Case: 19-1918 Document: 123 Page: 6 Filed: 06/17/2020
6 IN RE: PERSONALWEB TECHNOLOGIES LLC
Amazon responded with a declaratory judgment action
seeking an order declaring that PersonalWeb’s lawsuits
against Amazon’s customers were barred as a result of a
prior lawsuit brought by PersonalWeb against Amazon,
which was dismissed with prejudice. In the eight cases
that are now on appeal, the district court agreed with Am-
azon that the consequence of the prior dismissal was to bar
PersonalWeb’s infringement actions against Amazon’s cus-
tomers. In re: PersonalWeb Techs., LLC, No. 5:18-md-
02834-BLF, 2019 WL 1455332 (N.D. Cal. Apr. 2, 2019). We
affirm.
I
A
There are five patents at issue in this appeal: U.S. Pa-
tent Nos. 5,978,791 (“the ’791 patent”), 6,928,442 (“the ’442
patent”), 7,802,310 (“the ’310 patent”), 7,945,544 (“the ’544
patent”), and 8,099,420 (“the ’420 patent”) (collectively,
“the True Name patents”). All five patents share a largely
common specification and claim priority to the same aban-
doned patent application, which was filed on April 11,
1995.
According to the specification, there was a problem
with the way prior art computer networks of the mid-1990s
identified data in their systems. There was “no direct rela-
tionship between the data names” and the contents of the
data item. ’442 patent, col. 2, ll. 13–14. The same file name
in two different folders could refer to different data items,
or two different file names could refer to the same data
item. Id. at col. 2, ll. 15–17. Consequently, computer net-
works could become clogged with duplicate data, and the
efficiency and integrity of data processing systems could be
impaired.
Id. at col. 2, line 30, through col. 3, line 43.
The inventors of the patents in suit purported to solve
this problem by devising what they referred to as “True
Names” for data items. Id. at col. 6, ll. 7–11. The True
Case: 19-1918 Document: 123 Page: 7 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 7
Name system created a “substantially unique” identifier
for each data item that depended only on the content of the
data itself. Id.; see also
id. at col. 3, ll. 30–33. The True
Name system thus did not depend on other purportedly
less reliable means of identifying data items, such as user-
provided file names.
The common specification of the patents in suit teaches
that file names in the True Name system can be created
using a “hash function.” Id. at col. 12, ll. 57–63. A hash
function is a mathematical function that reduces a data
block of arbitrary size and converts it into a relatively
small, fixed-length sequence, “such that the True Name of
the data block is virtually guaranteed to represent the data
block B and only data block B.”
Id.
In the True Name system, a large file is first parti-
tioned into smaller segments. The hash function is then
applied to each segment.
Id. at col. 14, ll. 16–35. The re-
sulting values are strung together, and a hash function is
applied to the entire string of values, to compute the True
Name of the large file.
Id.
The specification summarizes a variety of applications
for the True Name invention, including using True Names
(1) to avoid storing multiple copies of a file, when those cop-
ies have been assigned different names; (2) to avoid copying
data from a remote location when a local copy is already
available; and (3) to verify that data retrieved from a re-
mote location is the data that was intended to be retrieved.
Id. at col. 3, ll. 49–55; see also
id. at col. 4, ll. 25–27.
B
In December 2011, PersonalWeb sued Amazon and one
of Amazon’s customers, Dropbox, Inc., for patent infringe-
ment in the United States District Court for the Eastern
District of Texas. In the complaint, PersonalWeb alleged
that “Amazon has infringed and continues to infringe [the
True Name patents, among others] by its manufacture,
Case: 19-1918 Document: 123 Page: 8 Filed: 06/17/2020
8 IN RE: PERSONALWEB TECHNOLOGIES LLC
use, sale, importation, and/or offer for sale of the following
products and services within the PersonalWeb Patent
Field: Amazon Simple Storage Service (S3)[.]”
Amazon S3 provides web-based storage to certain cus-
tomers, typically companies with websites. The customers
can use S3 to store static content, such as images, for their
websites. Information that is stored in the S3 system is
stored in the form of “objects” that are organized into cus-
tomer-created containers called “buckets.” Once an object
is stored in S3, it can be made available over the entire In-
ternet.
To use an example featured in Amazon’s brief, if a com-
pany creates a webpage containing a picture of a puppy,
that picture can be stored in S3. When a user visits the
company’s website, the user’s web browser is directed to
download the puppy picture from S3 in order to display the
website. The way the user’s web browser asks to download
the puppy picture from S3 is through a Hyper Text Trans-
fer Protocol (“HTTP”) “GET” request. 1
S3 automatically generates an “ETag” for every object
stored in S3. ETags provide useful identifying information
about an object. For most objects, S3 creates an ETag by
running a particular hash function on the object’s content.
If the object’s content changes, the ETag changes. S3 uses
ETags in several of its operations where it is helpful to
know that identifying information.
For example, when the user downloads the puppy pic-
ture described above from S3, the user’s computer might
store that picture in the computer’s temporary memory or
cache. If the user requests the same file again, S3 com-
pares the ETag for the file stored in the user’s cache to the
1 HTTP is a standard communication protocol that
web browsers and web servers follow in order to communi-
cate with each other on the Internet.
Case: 19-1918 Document: 123 Page: 9 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 9
file stored on S3. If the ETags are identical, S3 responds
with a status code indicating that the user’s computer al-
ready has a copy of the picture, so there is no need to down-
load the picture again. If S3 does not contain a file with
the same ETag, however, that indicates that the contents
of the file have been changed. In that event, S3 will send
the user’s web browser the file containing the updated ver-
sion of the picture. The parties refer to the request for a
file in that scenario as a “conditional get request” because
the operation will be performed only if a certain condition
is met. PersonalWeb also refers to such conditional get re-
quests as “cache control.” Conditional get requests help
avoid unnecessary downloads, thereby saving time and
network bandwidth.
S3 also uses ETags when customers, such as companies
with websites, upload objects to S3. One method of upload-
ing that S3 supports is what Amazon calls the Multipart
Upload Application Program Interface. The multipart up-
load function allows users to upload an object larger than
five gigabytes as a series of parts. Once all the parts have
been uploaded, S3 can assemble them into a single object
for storage. S3 generates an ETag for each uploaded part
as well as for the completed object. The ETags can be used
to verify that none of the parts were corrupted during the
upload.
In its infringement contentions in the Texas case, Per-
sonalWeb referenced S3’s use of both multipart upload and
conditional get requests. The contentions are extensive,
but they consist mainly of similar and sometimes identical
material repeated numerous times. A commonly appearing
feature in the infringement contentions is a reference to
S3’s use of ETags to compare the identity of different ob-
jects in order to determine whether or not to perform cer-
tain operations. See, e.g., J.A. 1651 (“Amazon S3 causes
the content-dependent name of the particular data item
(the ‘ETag’) to be compared to a plurality of values (other
‘ETags’). . . . When doing GET, HEAD, PUT/COPY
Case: 19-1918 Document: 123 Page: 10 Filed: 06/17/2020
10 IN RE: PERSONALWEB TECHNOLOGIES LLC
operation with certain conditional parameters, the exist-
ence of the particular item at a particular location is deter-
mined with Etag.”); J.A. 1652 (“GetIfMatchEtags uses the
received Etag attached by the user request and compares
it with the digest contained in the node for that specific ob-
ject to determine whether or not access to the object is al-
lowed based upon the match or non-match of hashes.”); J.A.
1653 (“Upon receiving the parts during multipart upload,
the user’s list of etags is used to compare with the etags
that are generated for the parts to check for the correct
parts before combining the parts.”).
Consistent with its infringement contentions in the
Texas case, PersonalWeb represented in a discovery mo-
tion in that case that S3’s use of ETags to perform condi-
tional operations infringed the True Name patents:
The accused products in this case are Amazon’s
Simple Storage Service (“S3”) and Amazon Web
Services, LLC’s Storage Gateway. S3 is a cloud
storage service, and the accused functionalities of
S3 include but are not limited to its “multipart up-
load” feature and “conditional operations.” . . . In
response to receiving each uploaded part of a file,
S3 creates an ETag for the part uploaded, which is
a MD5 hash of the contents of the part. Personal-
Web maintains that S3’s use of these hash values
infringes the patents-in-suit.
A customer who stores files using S3 is able to
send a variety of different requests to Amazon, e.g.,
to get a file, to copy a file, or to put a file into stor-
age. The customer can optionally require that the
operation succeed or fail based on a comparison of
a user-provided ETag against the ETag S3 has
stored for the file in question, referred to as “condi-
tional operations.” For example, in S3’s “condi-
tional copy” feature, the two options are “If-Match”
and “If-None-Match”—the former allowing a
Case: 19-1918 Document: 123 Page: 11 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 11
successful copy operation only if the ETags match,
and the latter only if the ETags do not match. If
the match succeeds, then the copy operation is al-
lowed to be performed; otherwise, S3 returns an er-
ror. PersonalWeb maintains that S3’s conditional
operations infringe the patents-in-suit.
J.A. 2045–46 (emphasis added).
After the district court issued its claim construction or-
der in the Texas case, PersonalWeb stipulated to the dis-
missal of all its claims against Amazon with prejudice. 2
Pursuant to that stipulation, the district court in June
2014 issued an order dismissing all claims against Amazon
with prejudice; the court subsequently entered final judg-
ment against PersonalWeb.
C
Beginning in January 2018, PersonalWeb filed dozens
of new lawsuits in various districts against website opera-
tors, many of which were Amazon’s customers. Personal-
Web alleged that by using S3, Amazon’s customers had
infringed the True Name patents.
Amazon intervened in the actions against its custom-
ers and undertook the defense of the customer-defendants
in all the cases now before this court. In addition, Amazon
filed a declaratory judgment complaint against Personal-
Web, seeking an order barring PersonalWeb’s infringement
actions against Amazon and its customers based on the
prior action against Amazon in the Eastern District of
Texas. The Judicial Panel on Multidistrict Litigation con-
solidated the customer cases and the Amazon declaratory
judgment action in a multi-district litigation proceeding,
2 PersonalWeb had previously dismissed its claims
against Dropbox, Inc., without prejudice. Dropbox is not a
party to any of the cases before this court.
Case: 19-1918 Document: 123 Page: 12 Filed: 06/17/2020
12 IN RE: PERSONALWEB TECHNOLOGIES LLC
and assigned the consolidated cases to the United States
District Court for the Northern District of California for
pretrial proceedings. That court decided to proceed with
the Amazon declaratory judgment action first. Based on
input from the parties, the court selected one representa-
tive customer case (the case against Twitch Interactive,
Inc.) to proceed along with the Amazon declaratory judg-
ment action. The court stayed all the other customer cases.
Because PersonalWeb represented that it would not be able
to proceed in the other customer cases if it lost its case
against Twitch, the district court relied on PersonalWeb’s
pleadings against Twitch as being representative of Per-
sonalWeb’s pleadings in the other customer cases.
In its counterclaim against Amazon in the declaratory
judgment action, PersonalWeb alleged that S3 infringed
the True Name patents when S3 used ETags to perform
conditional operations. In particular, PersonalWeb ac-
cused S3’s use of ETags to determine whether a customer’s
web browser should reuse its cached data or download a
new, updated version of the data. According to Personal-
Web, “Amazon thereby reduced the bandwidth and compu-
tation required by its S3 web host servers (acting as origin
servers for its web server customers) and any intermediate
cache servers . . . .” J.A. 2929. PersonalWeb made similar
allegations in its complaints against Amazon’s customers.
PersonalWeb’s infringement contentions tracked the
complaints against Amazon’s customers. For example,
PersonalWeb alleged that “[t]he distribution of hosted
webpage file content (content) to other computers such as
outside intermediate cache servers and computers running
web browsers . . . is controlled from an S3 website file host
server (a first computer). This is done in response to a con-
ditional HTTP GET request (a request) obtained by an S3
website file host server (a first device in the system) from
another computer (a second device in the system) . . . .”
J.A. 381. The conditional HTTP GET requests included
Case: 19-1918 Document: 123 Page: 13 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 13
ETags that, according to PersonalWeb, corresponded to the
claimed “content-dependent name.”
D
Amazon moved for summary judgment in its declara-
tory judgment action and partial summary judgment in
PersonalWeb’s infringement action against Twitch. Ama-
zon argued that, in light of the with-prejudice dismissal of
PersonalWeb’s action against Amazon in the Texas case,
PersonalWeb was barred from suing Amazon or its custom-
ers for infringement based on Amazon’s S3 system.
The district court granted the motion in part. It held
that claim preclusion barred PersonalWeb’s claims regard-
ing acts of infringement occurring prior to the final judg-
ment in the Texas action, and that the Kessler doctrine,
first adopted by the Supreme Court in Kessler v. Eldred,
206 U.S. 285 (1907), barred PersonalWeb’s claims of in-
fringement relating to S3 after the final judgment in the
Texas action.
With respect to claim preclusion, the district court held
that all the requirements of that doctrine were met. First,
the court determined that the with-prejudice dismissal in
the Texas action was a final judgment on the merits, and
that PersonalWeb did not reserve any rights in the stipu-
lated dismissal in that case. In re PersonalWeb, 2019 WL
1455332, at *6–7.
Second, the court concluded that Amazon’s customers
were in privity with Amazon. As the court explained, Am-
azon and its customers share the same interest in the un-
fettered use of Amazon’s web services; Amazon adequately
represented that interest in the Texas action; and Amazon
agreed to indemnify its customers and assumed the de-
fense of its customers against PersonalWeb’s infringement
charges. Id. at *7–9.
Third, the court ruled that the causes of action asserted
in the Texas case and in the customer cases were the same.
Case: 19-1918 Document: 123 Page: 14 Filed: 06/17/2020
14 IN RE: PERSONALWEB TECHNOLOGIES LLC
The court rejected PersonalWeb’s contention that the
claims against Amazon in the Texas case were limited to
the multipart upload features of S3, and did not extend to
S3 generally.
Id. at *10–13. The court concluded that “both
the complaint and the infringement contentions in the
Texas Action indisputably support the Court’s conclusion
that the Texas Action asserted infringement against all of
S3 and was not limited only to [the multipart upload fea-
ture].”
Id. at *12. Different features of the same product,
the court ruled, do not give rise to separate causes of action.
Id. at *13.
Finally, the court rejected Amazon’s argument that
claim preclusion applies through the expiration of the pa-
tents, and instead concluded that claim preclusion applies
only up to the date of the final judgment in the Texas ac-
tion.
Id. at *13–14.
With respect to the Kessler doctrine, the district court
held that the judgment in the Texas case gave rise to a lim-
ited trade right to continue producing, using, and selling
the product at issue in that case “even when the acts of in-
fringement occurred post-final judgment and even when it
was third parties who allegedly engaged in those acts of
infringement.”
Id. at *15 (internal quotation marks and
citation omitted). The court rejected PersonalWeb’s argu-
ment that the Kessler doctrine is “rooted in . . . issue pre-
clusion” and does not apply because the judgment in the
Texas case did not specifically adjudicate the issue of non-
infringement.
Id. at *14–16.
The district court then determined that its summary
judgment ruling had the effect of disposing of the eight cus-
tomer cases in which PersonalWeb alleged infringement
based solely on the customer’s use of Amazon’s S3 system.
Accordingly, the court dismissed those eight cases. Person-
alWeb appeals from the judgment in those cases.
Case: 19-1918 Document: 123 Page: 15 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 15
II
PersonalWeb raises two primary challenges to the dis-
trict court’s decision. First, PersonalWeb contends that
claim preclusion is inapplicable to the actions against Am-
azon’s customers because the Texas case involved a differ-
ent feature of Amazon’s S3 system, and therefore a
different cause of action, than the feature that is at issue
in the customer cases. Second, PersonalWeb contends that
the with-prejudice dismissal of the action against Amazon
in the Texas case did not constitute an adjudication of non-
infringement and is therefore insufficient to trigger the
Kessler doctrine. 3 We reject both challenges.
A
Under the doctrine of claim preclusion, ‘‘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.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326
n.5 (1979). Claim preclusion bars both those claims that
were brought as well as those that could have been brought
in the earlier lawsuit. Lucky Brand Dungarees, Inc. v.
Marcel Fashions Grp., Inc.,
140 S. Ct. 1589, 1594–95
(2020); Brain Life, LLC v. Elekta Inc.,
746 F.3d 1045, 1053
(Fed. Cir. 2014); Owens v. Kaiser Found. Health Plan, Inc.,
244 F.3d 708, 713 (9th Cir. 2001).
3 In the trial court, PersonalWeb also contended that
claim preclusion applies only up to the date of the operative
complaint in the prior action. PersonalWeb has not chal-
lenged the trial court’s ruling that “claim preclusion bars
PersonalWeb’s claims through the date of the final judg-
ment in the Texas Action.” In re PersonalWeb, 2019 WL
1455332, at *13. Because PersonalWeb has not appealed
that aspect of the trial court’s decision, we do not address
it.
Case: 19-1918 Document: 123 Page: 16 Filed: 06/17/2020
16 IN RE: PERSONALWEB TECHNOLOGIES LLC
To the extent that a case turns on general principles of
claim preclusion, as opposed to a rule of law having special
application to patent cases, this court applies the law of the
regional circuit in which the district court sits—here the
Ninth Circuit. Acumed LLC v. Stryker Corp., 525 F.3d
1319, 1323 (Fed. Cir. 2008). However, the question
whether two causes of action for patent infringement are
the same is an issue peculiar to patent law, and we there-
fore analyze that issue under Federal Circuit law.
Id.
For purposes of claim preclusion, PersonalWeb does
not dispute the district court’s ruling that the with-preju-
dice judgment in the Texas case is a final judgment on the
merits. PersonalWeb also does not challenge the district
court’s determination that Amazon and its customers are
in privity, and thus are regarded as the same parties for
claim preclusion purposes. The sole basis for Personal-
Web’s challenge to the district court’s finding on claim pre-
clusion is its contention that the Texas action and the
customer suits involved different causes of action.
In determining whether causes of action for patent in-
fringement are the same, we are guided by the Restate-
ment (Second) of Judgments (1982). See SimpleAir, Inc. v.
Google LLC, 884 F.3d 1160, 1165 (Fed. Cir. 2018);
Acumed,
525 F.3d at 1323–24. Following the approach taken in the
Restatement, we define a cause of action by the transac-
tional facts from which it arises, and we consider the extent
of the factual overlap between the two alleged claims at is-
sue. See Gillig v. Nike, Inc.,
602 F.3d 1354, 1363 (Fed. Cir.
2010) (“Claims arising from the same nucleus of operative
facts are barred by res judicata.”); Senju Pharm. Co. v. Apo-
tex Inc.,
746 F.3d 1344, 1349 (Fed. Cir. 2014);
Acumed, 525
F.3d at 1323–24 (citing Restatement § 24); Foster v. Hallco
Mfg. Co.,
947 F.2d 469, 478 (Fed. Cir. 1991) (noting that a
“claim,” i.e., a cause of action, “is used in the sense of the
facts giving rise to the suit”).
Case: 19-1918 Document: 123 Page: 17 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 17
In patent cases, one of the areas of factual overlap we
consider “is the overlap of the product or process accused in
the instant action with the product or process accused in
the prior action.” Senju, 746 F.3d at 1349. Claim preclu-
sion does not apply unless the products or processes are es-
sentially the same.
Id. (citing Acumed, 525 F.3d at 1324);
SimpleAir, 884 F.3d at 1167. “Accused devices are ‘essen-
tially the same’ where the differences between them are
merely ‘colorable’ or ‘unrelated to the limitations in the
claim of the patent.”’
Acumed, 525 F.3d at 1324 (quoting
Foster, 947 F.2d at 480). We also consider whether the
same patents are involved in both suits.
Senju, 746 F.3d
at 1349.
Importantly, under well-settled principles of claim pre-
clusion, different arguments or assertions in support of li-
ability do not all constitute separate claims. See Foster,
947 F.2d at 478. Regardless of the number of substantive
theories available to a party and regardless of the differ-
ences in the evidence needed to support each of those theo-
ries, a party may not split a single claim into separate
grounds of recovery and raise those separate grounds in
successive lawsuits. See Mars Inc. v. Nippon Conlux Ka-
bushiki-Kaisha,
58 F.3d 616, 619 (Fed. Cir. 1995); Restate-
ment § 24 cmt. a. Rather, the party must raise in a single
lawsuit all the grounds of recovery arising from a particu-
lar transaction that it wishes to pursue.
Mars, 58 F.3d at
619.
PersonalWeb asserts that in the Texas case it accused
only the multipart upload functionality of Amazon’s S3 sys-
tem. In the customer cases before the California court, Per-
sonalWeb contends it has accused the “cache control”
functionality, an entirely different feature of Amazon’s S3
system. According to PersonalWeb, these different fea-
tures constitute different products or processes for
Case: 19-1918 Document: 123 Page: 18 Filed: 06/17/2020
18 IN RE: PERSONALWEB TECHNOLOGIES LLC
purposes of claim preclusion analysis. 4 PersonalWeb thus
contends that the accused activity in the customer cases is
not essentially the same as the activity that was accused in
the Texas case, and that claim preclusion is therefore inap-
plicable in the customer cases.
Although PersonalWeb contends that the accused fea-
ture in the customer cases is different from the accused fea-
ture in the Texas case, PersonalWeb concedes that “the
conditional GET commands” that are at issue in the cus-
tomer cases were identified in the infringement conten-
tions in the Texas case. Appellant’s Br. at 37. Nonetheless,
PersonalWeb contends that there were only a “handful” of
references to those conditional operations in the Texas in-
fringement contentions, not enough to constitute a sub-
stantial factual overlap. Moreover, PersonalWeb contends
that it referred to that infringement theory in the Texas
case only by way of “analogy.”
Contrary to PersonalWeb’s assertions, PersonalWeb
did not limit its infringement contentions in the Texas case
to S3’s multipart upload functionality. As PersonalWeb
told the trial court in the Texas case, “the accused function-
alities of S3 include but are not limited to its ‘multipart up-
load’ feature and ‘conditional operations.’” PersonalWeb’s
assertion that it included conditional get requests in the
Texas infringement contentions as analogies, not accusa-
tions, is thus at odds with the representations Personal-
Web made in the Texas case. Because PersonalWeb
accused the use of “conditional operations” in the Texas
case, PersonalWeb’s arguments regarding the purported
4 PersonalWeb also contends that the customer cases
are different because they include a new product, Amazon
CloudFront. None of the customer cases before this court,
however, involve accusations against CloudFront, so that
argument is irrelevant to the resolution of this appeal.
Case: 19-1918 Document: 123 Page: 19 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 19
differences between the multipart upload and the “cache
control” functionalities of S3 are irrelevant.
In any event, regardless of the breadth of the specific
infringement theories PersonalWeb pursued in the Texas
case, it is clear that the complaints in the customer cases
and the complaint in the Texas case relate to the same set
of transactions. In the Texas case, PersonalWeb alleged
that it had been injured by acts of infringement consisting
of the manufacture, use, sale, importation, and/or offer for
sale of the Amazon S3 product. Every alleged act of in-
fringement in the eight customer cases before us is likewise
based on the use of the same Amazon S3 product.
At most, PersonalWeb has shown that it emphasized
different facts in support of a different theory of infringe-
ment in the prior case. But that is not enough to avoid
claim preclusion. See Restatement § 24 cmt. c (“That a
number of different legal theories casting liability on an ac-
tor may apply to a given episode does not create multiple
transactions and hence multiple claims. This remains true
although the several legal theories depend on different
shadings of the facts, or would emphasize different ele-
ments of the facts . . . .”). We therefore uphold the district
court’s ruling that claim preclusion principles bar Person-
alWeb from pursuing infringement claims in the eight cus-
tomer cases for actions predating the judgment in the
Texas case.
B
In addition to the two traditional pillars of preclusion
law—claim and issue preclusion—there is a separate and
less frequently invoked doctrine that derives from the Su-
preme Court’s decision in Kessler v. Eldred. We have gen-
erally held that claim preclusion cannot apply to acts of
alleged infringement that occur after the final judgment in
the earlier suit. See Brain Life, 746 F.3d at 1054; see also
Dow Chem. Co. v. Nova Chems. Corp. (Canada),
803 F.3d
620, 626 (Fed. Cir. 2015) (“It is well-established that, as to
Case: 19-1918 Document: 123 Page: 20 Filed: 06/17/2020
20 IN RE: PERSONALWEB TECHNOLOGIES LLC
claims for continuing conduct after the complaint is filed,
each period constitutes a separate claim.” (citations omit-
ted)). Likewise, if the requirements of issue preclusion are
not satisfied, relief under that doctrine will not be available
to protect post-judgment activity. Brain
Life, 746 F.3d
at 1056. The Kessler doctrine, however, “fills the gap” left
by claim and issue preclusion, by “allowing an adjudged
non-infringer to avoid repeated harassment for continuing
its business as usual post-final judgment in a patent action
where circumstances justify that result.”
Id.
PersonalWeb contends that the Kessler doctrine does
not apply in this case because Amazon is not an “adjudged
non-infringer.” In particular, PersonalWeb contends that
the Kessler doctrine is based on principles of collateral es-
toppel, and that the doctrine therefore cannot be invoked
unless the issue of infringement or invalidity was “actually
litigated” in the prior case. PersonalWeb contends that “no
issues” were actually litigated in the Texas case because
PersonalWeb dismissed its claims before there was any ad-
judication.
We have previously addressed whether the Kessler doc-
trine precludes relitigation only of issues that were actu-
ally litigated in a prior action, albeit in slightly different
contexts. In Brain Life, we explained that the Kessler doc-
trine barred all claims that were brought or “could have
been brought” in the prior action. Brain Life, 746 F.3d
at 1058–59; see also 18 Charles A. Wright et al., Federal
Practice & Procedure § 4409 & n.34 (3d ed. 2020 update)
(characterizing Brain Life as utilizing the Kessler doctrine
as a “substitute for claim preclusion” to bar claims against
“conduct that the parties reasonably should expect to con-
tinue without change”). Similarly, in SpeedTrack, Inc. v.
Office Depot, Inc., we explained that
the Kessler doctrine is a necessary supplement to
issue and claim preclusion: without it, a patent
owner could sue a manufacturer for literal
Case: 19-1918 Document: 123 Page: 21 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 21
infringement and, if unsuccessful, file suit against
the manufacturer’s customers under . . . any [pa-
tent] claim or theory not actually litigated against
the manufacturer as long as it challenged only
those acts of infringement that post-dated the judg-
ment in the first action. That result would author-
ize the type of harassment the Supreme Court
sought to prevent in Kessler when it recognized
that follow-on suits against customers could de-
stroy the manufacturer’s judgment right.
791 F.3d 1317, 1328 (Fed. Cir. 2015).
Likewise, in SimpleAir we said that the Kessler doc-
trine serves to fill the “temporal gap” left by claim preclu-
sion, even if that gap is not filled by issue preclusion. 884
F.3d at 1170. As Brain Life, SpeedTrack, and SimpleAir
illustrate, we have treated the Kessler doctrine as a close
relative to claim preclusion, without its temporal limita-
tion, rather than as an early version of non-mutual collat-
eral estoppel, as PersonalWeb characterizes it.
None of the other cases PersonalWeb cites requires
that issues of noninfringement or invalidity be actually lit-
igated before the Kessler doctrine can be invoked. In MGA,
Inc. v. General Motors Corp., we said that “in its effect,” the
Kessler doctrine may be compared to defensive collateral
estoppel. 827 F.2d 729, 734 (Fed. Cir. 1987). PersonalWeb
relies on that statement in an effort to confine the Kessler
doctrine to instances in which collateral estoppel would ap-
ply. But PersonalWeb’s reliance on that statement from
MGA is misplaced. The question presented in MGA was
whether Michigan state courts would have applied the
Kessler doctrine.
Id. at 733. We concluded that they would
do so because the Kessler doctrine was sufficiently similar
to the collateral estoppel law applied by Michigan state
courts at the time.
Id. at 734 (“[W]e discern from a review
of the law of the state of Michigan, that its courts would
apply the Kessler doctrine, which in its effect may be
Case: 19-1918 Document: 123 Page: 22 Filed: 06/17/2020
22 IN RE: PERSONALWEB TECHNOLOGIES LLC
compared to defensive collateral estoppel[.]”). As our sub-
sequent decisions interpreting MGA demonstrate, how-
ever, nothing we said in MGA limited Kessler to requiring
that the issue of noninfringement or invalidity be “actually
litigated,” as PersonalWeb contends. See Brain
Life, 746
F.3d at 1058–59;
SpeedTrack, 791 F.3d at 1328.
Nor does Mentor Graphics Corp. v. EVE-USA, Inc., 851
F.3d 1275 (Fed. Cir. 2017), impose such a requirement. In
that case, Mentor sued EVE for patent infringement. The
parties subsequently settled the case, with EVE taking a
license to the patents. Following the licensing agreement
and settlement, the trial court dismissed Mentor’s claims
with prejudice.
Id. at 1297–98. Later, however, the licens-
ing agreement was terminated.
Id. at 1298. When Mentor
sought to bring a second infringement action, EVE argued
that the Kessler doctrine barred the lawsuit. We disagreed
and held that the Kessler doctrine did not bar the second
lawsuit against EVE over actions that took place after the
termination of the license. Although the first suit was dis-
missed with prejudice, we noted that EVE was a willing
licensee, not an adjudicated non-infringer.
Id. at 1301.
Under those circumstances, we held that Kessler did not
permit EVE to infringe the patents with impunity after the
license was no longer in effect.
Id.
The with-prejudice dismissal of PersonalWeb’s action
against Amazon in the Texas case is quite different from
the licensing agreement that ended the first action in the
Mentor case. The dismissal in Mentor was contingent on
the license; when the license was terminated, the contin-
gency disappeared, and Mentor was free to re-initiate its
infringement action. In this case, by contrast, there was no
contingency attached to the with-prejudice dismissal to
which PersonalWeb stipulated. 5 PersonalWeb abandoned
5 PersonalWeb points to a provision in the stipula-
tion and order of dismissal in the Texas case providing that
Case: 19-1918 Document: 123 Page: 23 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 23
its claims against Amazon without reservation, explicit or
implicit. The judgment in that case therefore stands as an
adjudication that Amazon was not liable for the acts of in-
fringement alleged by PersonalWeb.
The policy that drove the Supreme Court’s decision in
Kessler would be ill-served by adopting the rule proposed
by PersonalWeb. The Court in Kessler recognized that
even if a manufacturer of goods were to prevail in a patent
infringement suit, the manufacturer could be deprived of
the benefits of its victory if the patentee were free to sue
the manufacturer’s customers. The Court asked rhetori-
cally whether, after Kessler had earned, “by virtue of the
judgment, the right to sell his wares freely, without hin-
drance from Eldred [the patentee], must Kessler stand by
and see that right violated . . . ?” Kessler, 206 U.S. at 289.
To allow follow-up suits by the patentee against Kessler’s
customers, the Court explained, “will be practically to de-
stroy Kessler’s judgment right.”
Id. at 289–90. Accord-
ingly, the Court concluded that, setting aside “any rights
which Kessler’s customers have or may have, it is Kessler’s
right that those customers should, in respect of the articles
before the court in the previous judgment, be let alone by
Eldred, and it is Eldred’s duty to let them alone.”
Id.
at 289. As the Court put the matter a few years after Kess-
ler, a party that obtains a final adjudication in its favor ob-
tains “the right to have that which it lawfully produces
Amazon retains “the right to challenge validity, infringe-
ment, and/or enforceability of the patents-in-suit via de-
fense or otherwise, in any future suit or proceeding” and
suggests that the language in question somehow limits the
preclusive effect of the dismissal. Appellant’s Reply Br. at
10 (quoting J.A. 335). That is plainly not so. The proviso
protects Amazon, not PersonalWeb, and therefore does not
in any way qualify the effect of the with-prejudice dismissal
of PersonalWeb’s claims in the Texas case.
Case: 19-1918 Document: 123 Page: 24 Filed: 06/17/2020
24 IN RE: PERSONALWEB TECHNOLOGIES LLC
freely bought and sold without restraint or interference.”
Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co.,
232 U.S. 413, 418 (1914); see also
SpeedTrack, 791 F.3d
at 1323.
Based on the Supreme Court’s analysis in Kessler and
Rubber Tire Wheel, we have characterized the Kessler doc-
trine as granting a “limited trade right” that attaches to
the product itself. SpeedTrack, 791 F.3d at 1323 (quoting
MGA, 827 F.2d at 734–35). The scope of that right is not
limited to cases involving a finding of non-infringement
that was necessary to the resolution of an earlier lawsuit,
but extends to protect any products as to which the manu-
facturer established a right not to be sued for infringement.
For that reason, the judgment in the Texas case, pursuant
to a with-prejudice dismissal, protected Amazon’s S3 prod-
uct from subsequent infringement challenges, even when
those challenges were directed at Amazon’s customers ra-
ther than at Amazon itself.
Under PersonalWeb’s narrower construction of the
Kessler doctrine, a final, adverse disposition of a patentee’s
claims against the manufacturer of a particular product
would not give the manufacturer protection from infringe-
ment actions against its customers for the use of the same
product, unless the adverse decision was accompanied by a
specific, contested adjudication of non-infringement. Such
a proposition would leave the patentee free to engage in the
same type of harassment that the Supreme Court sought
to prevent in Kessler, a result that would be inconsistent
both with Kessler itself and with this court’s cases inter-
preting Kessler. See Kessler, 206 U.S. at 289–90; Speed-
Track, 791 F.3d at 1328–29; Brain
Life, 746 F.3d at 1056,
1058–59.
We do not agree with PersonalWeb’s contention that
applying Kessler to voluntary dismissals with prejudice
would contravene the public interest in the settlement of
patent litigation. See Foster, 947 F.2d at 477 (“[T]he
Case: 19-1918 Document: 123 Page: 25 Filed: 06/17/2020
IN RE: PERSONALWEB TECHNOLOGIES LLC 25
Federal Circuit has repeatedly expressed the view that
there is a strong public interest in settlement of patent lit-
igation.”). Contrary to PersonalWeb’s assertions, the rule
we apply here will not interfere with the ability of parties
to resolve patent disputes. To the extent that a plaintiff
wishes to settle an infringement action while preserving its
rights to sue the same or other parties in the future, it can
do so by framing the dismissal agreement to preserve any
such rights that the defendant is willing to agree to. Set-
tling parties will remain free to limit the preclusive effect
of a dismissal; they simply have to fashion their agreement
in a way that makes clear any limitations to which they
wish to agree as to the downstream effect of the dismissal.
See, e.g., Hallco Mfg. Co. v. Foster,
256 F.3d 1290, 1295
(Fed. Cir. 2001); Pactiv Corp. v. Dow Chem. Co.,
449 F.3d
1227, 1231 (Fed. Cir. 2006).
We therefore reject PersonalWeb’s contention that the
issue of non-infringement must be “actually litigated” in
order to invoke the Kessler doctrine. PersonalWeb’s stipu-
lated dismissal with prejudice in the Texas case operated
as an adjudication on the merits for claim preclusion pur-
poses. Levi Strauss & Co. v. Abercrombie & Fitch Trading
Co., 719 F.3d 1367, 1372–73 (Fed. Cir. 2013) (citing 18A
Charles A. Wright et al., Federal Practice and Procedure
§ 4435 (2d ed. 2002)). That is, the with-prejudice dismissal
resolved the dispute about liability for the alleged patent
infringement that gave rise to the Texas action. Thus, the
dismissal operated as an adjudication of non-liability for
infringement for purposes of invoking the Kessler doctrine.
Under that doctrine, the stipulated dismissal with preju-
dice conferred upon Amazon a limited trade right to con-
tinue producing, using, and selling Amazon S3 without
further harassment from PersonalWeb, either directly or
through suits against Amazon’s customers for using that
product.
AFFIRMED
