Res Judicata on Procedural Grounds Precludes Similar Claims Arising After Prior Judgment

By on September 2, 2020
Posted In Patents

The US Court of Appeals for the Federal Circuit affirmed a district court decision that res judicata can apply to dismissals on procedural grounds and to claims arising after a prior judgment. Sowinski v. California Air Resources Board, Case No. 19-1558 (Fed. Cir. Aug. 21, 2020) (Newman, J.)

Richard Sowinski is the inventor of a patent directed to an “electronic method and apparatus for validating and trading consumer pollution-control tax credits.” In a first set of lawsuits starting in 2015, Sowinski sued the California Air Resources Board (CARB) in state court, alleging infringement by CARB’s Cap-and-Trade Program. CARB removed the case to district court and filed several motions to dismiss. The district court dismissed the complaint after Sowinski failed to respond to these motions before the deadline. The dismissal was upheld on appeal.

As part of a second round of lawsuits starting in 2018, Sowinski filed a complaint in federal court that was “substantially identical” to the 2015 case, except the 2018 complaint sought infringement damages arising after the 2015 case decision. CARB moved to dismiss, arguing that the claim was barred based on the doctrine of res judicata, which prevents a civil claim from being tried if it arises out of the “same transaction or common nucleus of operative facts” of a prior case where the merits were adjudicated. The district court agreed and granted CARB’s motion to dismiss. Sowinski appealed.

Sowinski argued that res judicata did not apply to his case because the prior suit was resolved on procedural grounds, not the merits of infringement, and because the current complaint sought infringement damages occurring after the conclusion of his last lawsuit. For res judicata on what Sowinski called a “technicality,” the Federal Circuit applied Ninth Circuit procedural law. Under Ninth Circuit law, preclusion applies when a prior suit involved the same claim as the later suit, reached a final judgment on the merits and involved identical parties. The Court also noted that for preclusion purposes, dismissal for failure to prosecute is an adjudication on the merits. Applying these factors, the Federal Circuit affirmed the district court’s decision, explaining that res judicata generally applies when “a patentee seeks to assert the same patent against the same party and the same subject matter.”

The Federal Circuit found that preclusion can also apply to claims arising after the prior judgment, explaining that one cannot challenge the repetition of an act in a subsequent suit if the act was judged not wrongful. The Court explained that preclusion applies when the accused products or methods are essentially the same. Here, CARB activity was held not to be infringing in the 2015 case because of Sowinski’s failure to respond, and Sowinski’s 2018 complaint described CARB’s ongoing activities as the same as those in the 2015 case. The Federal Circuit therefore affirmed the district court’s decision, explaining that Sowinski alleged no different conduct or acts against the same defendant.

Cecilia Choy, Ph.D.
Cecilia Choy, Ph.D., focuses her practice on intellectual property matters and is a certified patent agent. Read Cecilia Choy's full bio.