Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01475/USCOURTS-ca13-14-01475-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

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United States Court of Appeals 

for the Federal Circuit ______________________ 

SPEEDTRACK, INC.,

Plaintiff-Appellant

v.

OFFICE DEPOT, INC., CDW CORPORATION, 

NEWEGG, INC., PC CONNECTION, INC.,

Defendants-Appellees

CIRCUIT CITY STORES, INC., COMPUSA, INC.,

Defendants

______________________ 

2014-1475

______________________ 

Appeal from the United States District Court for the 

Northern District of California in No. 4:07-cv-03602-PJH, 

Judge Phyllis J. Hamilton.

______________________ 

Decided: June 30, 2015

______________________ 

 DANIEL LUKE GEYSER, McKool Smith, P.C., Dallas, 

TX, argued for plaintiff-appellant. Also represented by

ALAN PETER BLOCK, RODERICK GEORGE DORMAN, McKool 

Smith Hennigan, P.C., Los Angeles, CA.

 STEVEN M. BAUER, Proskauer Rose LLP, Boston, MA, 

argued for defendants-appellees. Also represented by

JOHN E. ROBERTS; COLIN CABRAL, Los Angeles, CA. 

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2 SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 

Defendant-appellee CDW Corporation also represented by

BENJAMIN T. HORTON, THOMAS LEE DUSTON, Marshall, 

Gerstein & Borun LLP, Chicago, IL for CDW Corporation 

only.

______________________ 

Before PROST, Chief Judge, MAYER, and O’MALLEY,

Circuit Judges.

O’MALLEY, Circuit Judge.

SpeedTrack, Inc. (“SpeedTrack”) filed suit against Office Depot, Inc., CDW Corporation, Newegg Inc., and PC 

Connection, Inc. (together, “Appellees”) alleging infringement of U.S. Patent No. 5,544,360 (“the ’360 Patent”), 

which is directed to a computer filing system for accessing 

files and data according to user-designated criteria. 

Specifically, SpeedTrack alleged that Appellees’ online 

retail websites infringe the ’360 Patent by using software 

developed by Endeca Technologies, Inc. (“Endeca”): the 

Endeca Information Access Platform (“IAP” or “IAP 

software”). 

Appellees moved for summary judgment on grounds 

that SpeedTrack’s claims were precluded by a prior lawsuit where we affirmed the district court’s judgment that 

the same IAP software did not infringe the ’360 Patent. 

SpeedTrack, Inc. v. Endeca Techs., Inc., 524 F. App’x 651 

(Fed. Cir. 2013) (“Walmart”). The district court granted 

judgment as a matter of law in favor of Appellees, finding 

that SpeedTrack’s claims are barred in part by res judicata and in full under the Kessler doctrine as announced in 

Kessler v. Eldred, 206 U.S. 285 (1907). SpeedTrack, Inc. 

v. Office Depot, Inc., No. 4:07-cv-3602, 2014 WL 1813292 

(N.D. Cal. May 6, 2014). Because we agree that the 

Kessler doctrine precludes SpeedTrack’s infringement 

claims in full, we affirm. 

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SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 3

I. BACKGROUND

A. The ’360 Patent 

SpeedTrack is the owner by assignment of the ’360 

Patent, entitled “Method for Accessing Computer Files 

and Data, Using Linked Categories Assigned to Each 

Data File Record on Entry of the Data File Record.” The 

’360 Patent describes methods for searching and accessing 

files stored on a computer system. “The invention allows 

a user to define categories for files stored in a computer 

system, and to edit such categories as they are used, to 

designate all applicable categories for each file, and to 

link categories in user-definable ways.” ’360 Patent, col. 3 

l. 66-col. 4 l. 2. 

The claimed methods require use of: (1) “category descriptions” that correspond to one or more of the stored 

files, Walmart, 524 F. App’x at 655-56; (2) a “file information directory” containing information linking the 

“category descriptions” to specific files stored in the system, ’360 Patent, col. 4 ll. 58-62; and (3) a “search filter” 

which is used to search through the “file information 

directory” to locate those files that have “category descriptions” matching those in the search filter, id. at col. 10 ll. 

54-60. 

Representative claim 1 recites the following:

A method for accessing files in a data storage system of a computer system having means for reading and writing data from the data storage 

system, displaying information, and accepting user input, the method comprising the steps of:

(a) initially creating in the computer system a category description table containing a plurality of 

category descriptions, each category description 

comprising a descriptive name, the category descriptions having no predefined hierarchical relationship with such list or each other;

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(b) thereafter creating in the computer system a 

file information directory comprising at least one 

entry corresponding to a file on the data storage 

system, each entry comprising at least a unique 

file identifier for the corresponding file, and a set 

of category descriptions selected from the category 

description table; and 

(c) thereafter creating in the computer system a 

search filter comprising a set of category descriptions, wherein for each category description in the 

search filter there is guaranteed to be at least one 

entry in the file information directory having a set 

of category descriptions matching the set of category descriptions of the search filter.

’360 Patent, col. 16 l. 54-col. 17 l. 11.

B. The Prior Walmart Litigation 

In November 2006, SpeedTrack filed suit against 

Walmart, alleging that Walmart’s online retail website 

infringed the ’360 Patent. Specifically, SpeedTrack alleged that Walmart’s use and maintenance of its website 

infringed the ’360 Patent by permitting visitors to search 

for products available for sale by selecting pre-defined 

categories descriptive of the products. SpeedTrack, Inc. v. 

Wal-Mart Stores, Inc., No. 06-cv-7336, 2012 WL 581338, 

at *1 (N.D. Cal. Feb. 22, 2012). Walmart licensed and 

used Endeca’s IAP software to achieve this search functionality. 

Because SpeedTrack’s allegations were based on 

Walmart’s use of the IAP software, Endeca sought and 

obtained permission to intervene. In its complaint in 

intervention, Endeca sought: (1) declaratory judgment 

that its IAP software does not infringe the ’360 Patent, 

either literally or under the doctrine of equivalents; and 

(2) declaratory judgment that the ’360 Patent is invalid. 

Endeca Techs., Inc. Compl. in Intervention at 4, SpeedCase: 14-1475 Document: 53-2 Page: 4 Filed: 06/30/2015
SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 5

Track, Inc. v. Wal-Mart Stores, Inc., No. 06-cv-7336 (N.D. 

Cal. Apr. 13, 2007), ECF No. 64. 

The district court conducted claim construction proceedings and issued its claim construction order in June 

2008. In relevant part, the court construed the term 

“category description” as “information that includes a 

name that is descriptive of something about a stored file.” 

Walmart, 524 F. App’x at 655-56. After claim construction, Endeca filed a petition for reexamination of the ’360 

Patent with the Patent and Trademark Office (“PTO”). 

Id. at 654. The district court stayed proceedings pending 

the outcome of the reexamination. In March 2011, the 

PTO issued its decision confirming the patentability of the 

’360 Patent and allowing an additional independent 

claim. Id. at 654-55.

The parties subsequently filed cross-motions for 

summary judgment. As part of their motion, Walmart 

and Endeca presented a new argument on the term 

“category description,” arguing that the accused product 

did not infringe because it did not include a “name that is 

descriptive of something about a stored file,” but instead 

included a number. SpeedTrack, 2014 WL 1813292, at *1 

(emphasis in original). The district court ordered additional briefing on that issue, and, in December 2011, 

SpeedTrack moved to amend its final infringement contentions to add an allegation that Walmart and Endeca 

infringed the “category description” limitation under the 

doctrine of equivalents. Id. The district court denied the 

motion for leave to amend, “finding that SpeedTrack had 

actually been on notice of defendants’ non-infringement 

argument since June 23, 2011, when defendants served a 

supplemental interrogatory response indicating that their 

software used numbers, rather than names, and thus did 

not meet the patent’s ‘category description’ limitation.” 

Id. 

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In February 2012, the district court granted summary 

judgment of noninfringement in favor of Walmart and 

Endeca. The court found that, because the accused IAP 

software uses numerical identifiers instead of descriptive 

words, IAP users did not use “category descriptions” as 

required by the ’360 Patent. SpeedTrack, 2012 WL 

581338, at *10. Specifically, the court stated that: 

As the court construes the “category description” 

limitation . . . plaintiff must demonstrate that the 

“walmart-sgmt0.records.binary” file in Wal-Mart’s 

system contains entries that are comprised of alphabetic descriptive names, if it is to prove that 

defendants’ accused system infringes. And since 

it is undisputed that plaintiff has not come forward with evidence that “walmartsgmt0.records.binary” includes alphabetic descriptive names, plaintiff cannot demonstrate that the 

accused system infringes.

Id. 

The district court entered final judgment of noninfringement on March 30, 2012, awarding Walmart a 

declaration that it “has not infringed and does not infringe” the asserted patent claims. Final Judgment at 3, 

SpeedTrack, Inc. v. Wal-Mart Stores, Inc., No. 06-cv-7336

(N.D. Cal. Mar. 30, 2012), ECF No. 369. As to Endeca’s 

complaint in intervention, the court awarded final judgment that: (1) Endeca does not directly infringe the asserted patent claims “by making, using, offering to sell or 

selling the Endeca Information Access Platform”; and 

(2) “Walmart’s use of the Endeca Information Access 

Platform does not infringe, directly or indirectly,” those 

same claims. Id. 

SpeedTrack appealed the court’s final judgment to 

this court. On appeal, we affirmed the district court’s 

construction of “category description” and held that “the 

district court did not err in granting Endeca’s motion for 

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SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 7

summary judgment of noninfringement.” Walmart, 524 

F. App’x at 657. We reiterated that it was SpeedTrack’s

burden to show that the “walmart-sgmt0.records.binary” 

file in the accused system “contains entries that are 

comprised of alphabetic descriptive names” to show 

infringement. Id. Because it was undisputed that the 

entries consisted only of numerical identifiers, we concluded that Endeca was entitled to summary judgment of 

noninfringement as a matter of law. Id. 

C. Procedural History 

SpeedTrack filed its initial complaint in this case in 

July 2007, while the Walmart action was pending. 

SpeedTrack alleged that Appellees infringed the ’360 

Patent based on their use of the same IAP software at 

issue in Walmart. Given the overlap in issues, the district 

court stayed proceedings in this case pending the outcome 

of the Walmart litigation. While the present case was 

stayed, Oracle Corporation (“Oracle”) acquired Endeca in 

2011. 

After this court issued its decision in Walmart, the 

district court lifted the stay. At that point, SpeedTrack 

informed the district court that it would limit its claims to 

infringement under the doctrine of equivalents. Appellees 

moved to dismiss SpeedTrack’s complaint on grounds that 

the asserted infringement claims were barred by: (1) res 

judicata or claim preclusion; (2) collateral estoppel or 

issue preclusion; and (3) the Supreme Court’s Kessler

doctrine, which bars suits against customers for use of a 

product previously found not to infringe in a suit against 

the supplier of that product. SpeedTrack, 2014 WL 

1813292, at *2.

The district court denied the motion to dismiss, finding that the issues raised required consideration of materials outside of the pleadings, and thus were more

appropriately raised in a motion for summary judgment. 

The court also granted SpeedTrack’s request for time to 

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8 SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 

conduct discovery from Appellees regarding their indemnification agreements with Endeca. After the parties 

conducted discovery, Appellees moved for summary 

judgment, arguing that the district court already found in 

the Walmart case that the accused Endeca IAP software 

does not infringe the ’360 Patent, and that they use the 

software in the same way. Id. 

On May 6, 2014, the district court granted Appellees’ 

motion for summary judgment based on res judicata (in 

part) and the Kessler doctrine (in full), but held that 

collateral estoppel did not apply. First, the court found 

that SpeedTrack’s infringement claims were barred by res 

judicata to the extent they related to acts occurring on or 

before March 30, 2012—the date of the final judgment in 

Walmart. Id. at *7. In reaching this conclusion, the court 

found that Appellees presented evidence to show that 

they use the Endeca IAP software in “essentially the 

same” way as Walmart—using numbers rather than 

names as a category descriptor. Id. at *4-5. Although 

SpeedTrack argued that, even if its literal infringement 

claims were barred, it could still assert claims of infringement under the doctrine of equivalents because 

those claims were not asserted in Walmart, the district 

court found that res judicata “bars both claims that were 

brought as well as those that could have been brought.” 

Id. at *5 (quoting Brain Life, LLC v. Elekta, Inc., 746 F.3d 

1045, 1053 (Fed. Cir. 2014) (emphasis in original)). The 

court further found that Appellees were in privity with 

Endeca by virtue of their indemnification agreements. Id. 

at *6. 

Next, the district court held that the Kessler doctrine 

precluded “the entirety of SpeedTrack’s suit.” Id. at *9. 

The court cited our decision in Brain Life as evidence that 

“Kessler is still in force,” and can preclude some claims 

“that are not otherwise barred by claim or issue preclusion.” Id. at *8 (quoting Brain Life, 746 F.3d at 1055-56). 

Applying Kessler, the court found that, “[b]y virtue of the 

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SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 9

Wal-Mart decision, the accused Endeca technology acquired the status of a non-infringing product.” Id. at *9. 

In reaching this conclusion, the court explained that: 

(1) Appellees “have shown that their implementation of 

the Endeca software is ‘essentially the same’ as the implementation adjudged to be non-infringing in Wal-Mart;” 

and (2) SpeedTrack “has been unable to identify any 

material differences between [Appellees’] use of the software and Wal-Mart’s non-infringing use of the same 

software.” Id. Although SpeedTrack argued that it had 

not yet litigated the issue of whether Appellees’ use of the 

IAP software infringes under the doctrine of equivalents, 

the court cited Brain Life for the proposition that “the 

Kessler doctrine bars all subsequent assertions of the 

same patent.” Id. (citing Brain Life, 746 F.3d at 1059)

(emphasis in original). The court reasoned that, “if the 

Kessler doctrine bars the assertion of new claims, it must 

also bar the assertion of new theories involving the same, 

already-asserted claims.” Id. (emphases in original). The 

court concluded that, “by failing to prevail in its infringement suit against Wal-Mart, SpeedTrack lost the right to 

assert any claims of the ’360 patent against any customers of Endeca who use the accused software in ‘essentially 

the same’ manner as did Wal-Mart.” Id. 

Though the district court granted summary judgment 

in favor of Appellees, it found that Appellees could not 

invoke collateral estoppel. Id. at *7. The court explained 

that SpeedTrack could have raised its theory of infringement under the doctrine of equivalents in Walmart, but 

failed to do so. Because that issue was not “actually 

litigated” in the Walmart case, the court concluded that 

collateral estoppel cannot bar SpeedTrack’s claims that 

Appellees infringed the ’360 Patent under the doctrine of 

equivalents. Id. 

SpeedTrack timely appealed the district court’s final 

judgment to this court. We have jurisdiction under 28 

U.S.C. § 1295(a)(1) (2012). 

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II. STANDARD OF REVIEW

We review a grant or denial of summary judgment 

under the law of the regional circuit, here the Ninth 

Circuit. SkinMedica, Inc. v. Histogen Inc., 727 F.3d 1187, 

1194 (Fed. Cir. 2013). The Ninth Circuit reviews the 

district court’s grant of summary judgment without 

deference. S. Cal. Darts Ass’n v. Zaffina, 762 F.3d 921, 

925 (9th Cir. 2014). Summary judgment is appropriate if 

“the movant shows that there is no genuine dispute as to 

any material fact and the movant is entitled to judgment 

as a matter of law.” Fed. R. Civ. P. 56(a). “Viewing the 

facts in the light most favorable to the nonmoving party, 

we must determine whether a genuine issue of material 

fact exists, and whether the district court applied the law 

correctly.” S. Cal. Darts, 762 F.3d at 925. 

III. DISCUSSION

On appeal, SpeedTrack argues that the district court 

“misapplied the settled rules of res judicata, and it wrongly invoked the Kessler doctrine.” Appellant Br. 15. Specifically, SpeedTrack submits that Appellees failed to 

satisfy the elements of the controlling res judicata test 

and that Kessler is both obsolete and distinguishable on 

its facts.

In response, Appellees argue that: (1) the Kessler doctrine bars SpeedTrack from suing Oracle’s customers 

based on their use of the same IAP software that was 

already found to be noninfringing in Walmart; and 

(2) claim preclusion prohibits SpeedTrack from relitigating its infringement claims against Appellees who, by 

virtue of their indemnification agreements, are in privity 

with Endeca. We agree with Appellees on their first 

point, and find that the Kessler doctrine precludes SpeedTrack’s infringement claims in their entirety. Because 

this conclusion is dispositive, we need not reach SpeedTrack’s additional arguments on appeal. 

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SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 11

A. The Kessler Doctrine 

The Kessler doctrine “bars a patent infringement action against a customer of a seller who has previously 

prevailed against the patentee because of invalidity or 

noninfringement of the patent.” MGA, Inc. v. Gen. Motors 

Corp., 827 F.2d 729, 734 (Fed. Cir. 1987). As noted, this 

doctrine originated in the Supreme Court’s decision in 

Kessler v. Eldred, 206 U.S. 285 (1907). There, Eldred held 

a patent for an electric lighter and brought a claim of 

infringement against Kessler, a manufacturer and retailer of electric cigar lighters. Id. at 285. The district court 

found that Kessler’s product did not infringe, and the 

Seventh Circuit affirmed on appeal. Id. at 286. Six years 

later, Eldred filed suit alleging that one of Kessler’s 

customers infringed the same patent. Kessler intervened 

to indemnify its customer, and also filed a separate suit 

against Eldred, seeking to enjoin him from filing infringement suits against Kessler’s customers for use of 

the same lighter that had already been found to be noninfringing in the prior action. See id. at 286-87.

On appeal, the Supreme Court agreed with Kessler, 

finding that the final decision in the first suit against 

Kessler had “settled finally and everywhere . . . that 

Kessler has the right to manufacture, use and sell” the 

product in question. Id. at 288. The Court further found 

that the prior suit “conclusively decreed the right of 

Kessler to manufacture and sell his manufactures free 

from all interference from Eldred . . . and the corresponding duty of Eldred to recognize and yield to that right 

everywhere and always.” Id. In reaching this conclusion, 

the Supreme Court indicated that it “need not stop to 

consider whether the judgment in the case of Eldred v. 

Kessler had any other effect than to fix unalterably the 

rights and duties of the immediate parties to it, for the 

reason that only the rights and duties of those parties are 

necessarily in question here.” Id. The Court further 

stated that “[i]t may be that the judgment in Kessler v. 

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Eldred will not afford Breitwieser, a customer of Kessler, 

a defense to Eldred’s suit against him. Upon that question we express no opinion.” Id. Instead, the relevant 

inquiry was “whether, by bringing a suit against one of 

Kessler’s customers, Eldred has violated the right of 

Kessler.” Id. at 289. The Court concluded that, “[l]eaving 

entirely out of view 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. 

The Supreme Court subsequently explained that, under Kessler, a party who obtains a final adjudication in its 

favor obtains “the right to have that which it lawfully 

produces freely bought and sold without restraint or 

interference.” Rubber Tire Wheel Co. v. Goodyear Tire & 

Rubber Co., 232 U.S. 413, 418 (1914). The Court specified

that this right “attaches to its product—to a particular 

thing—as an article of lawful commerce . . . .” Id. We 

have likewise recognized that Kessler granted a “limited 

trade right” that attaches to the product itself. MGA, 827 

F.2d at 734-35 (“Since the accused machines here are 

admittedly the same in both suits, it is LaSalle Tool’s 

right that the accused machines be freely traded without 

interference from MGA.”). 

More recently, we reaffirmed the continued vitality of 

the Kessler doctrine, holding that it “precludes some 

claims that are not otherwise barred by claim or issue 

preclusion.” Brain Life, 746 F.3d at 1055-56. In Brain 

Life, we explained that, in an action against a manufacturer or supplier of an allegedly infringing device, “when 

[the] alleged infringer prevails in demonstrating noninfringement, the specific accused device(s) acquires the 

‘status’ of a noninfringing device vis-à-vis the asserted 

patent claims.” Id. at 1057 (citation omitted). There, the 

plaintiff’s predecessor in interest—MIDCO—accused 

defendant Elekta of infringing its patent. Although 

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MIDCO accused Elekta of infringing both the patent’s 

apparatus and method claims, it ultimately abandoned 

the method claims prior to trial. Id. at 1058. At trial, the 

jury found that Elekta infringed the apparatus claims, 

but on appeal, we reversed the infringement finding, and 

remanded the case to the district court to enter judgment 

of noninfringement as a matter of law in favor of Elekta. 

Id. at 1050. On remand, MIDCO attempted to revive the 

method claims, but the district court refused to reopen the 

case, and instead entered final judgment in favor of 

Elekta. MIDCO appealed that judgment and we summarily affirmed the district court’s decision not to reopen the 

case. Id. 

MIDCO subsequently licensed the patent at issue to 

another company which, in turn, licensed it to Brain Life. 

Id. Brain Life filed suit against Elekta, seeking to assert 

the method claims that were dismissed prior to trial in 

the previous MIDCO case. Although the district court 

granted summary judgment in Elekta’s favor on res 

judicata grounds, we found that only those claims predating the final judgment in the MIDCO litigation were 

barred on those grounds. We went on to find, however, 

that, though not barred by res judicata, Brain Life’s 

claims were barred by the Kessler doctrine. Specifically, 

we found that, “once the accused devices in the MIDCO 

Litigation were adjudged to be noninfringing with respect 

to the asserted claims and judgment was entered as to all 

claims, Elekta was free to continue engaging in the accused commercial activity as a non-infringer.” Id. at 

1058. We concluded that, “by virtue of gaining a final 

judgment of noninfringement in the first suit—where all 

of the claims were or could have been asserted against 

Elekta—the accused devices acquired a status as noninfringing devices, and Brain Life is barred from asserting 

that they infringe the same patent claims a second time.” 

Id. 

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The district court here found that “the Kessler doctrine, as applied by the Brain Life court, is directly applicable to this case,” and that the IAP software acquired the 

status of a noninfringing product in Walmart. SpeedTrack, 2014 WL 1813292, at *9. There is no doubt that if 

Oracle were a party to this action, the facts here would 

fall squarely within Kessler. SpeedTrack alleged in a 

prior suit that Walmart’s use of the IAP software infringed the ’360 Patent. Walmart, 524 F. App’x at 653-54. 

Oracle’s predecessor, Endeca, intervened in that suit and 

sought declaratory judgment that its technology does not 

infringe. Both the district court and this court agreed, 

finding that the IAP software, and Walmart’s use of that 

software, does not infringe the ’360 Patent. Id. at 657. 

SpeedTrack is now pursuing the same infringement 

claims against other Oracle customers for allegedly infringing the same patent using the same IAP software 

found not to infringe in Walmart. As the district court 

found, Appellees in this case demonstrated that their use 

of the IAP software is “‘essentially the same’ as the implementation adjudged to be non-infringing in WalMart—specifically, [Appellees] have shown that they use 

numbers, rather than names, as category descriptors.” 

SpeedTrack, 2014 WL 1813292, at *9.1 And, the district 

court found that, despite discovery, SpeedTrack “has been 

unable to identify any material differences between 

1 Likewise, at oral argument, counsel for SpeedTrack conceded that Appellees’ use of the IAP software is 

“essentially the same” as that at issue in Walmart. See

Oral Argument at 3:08-3:20, available at http://www.cafc.

uscourts.gov/oral-argument-recordings/14-1475/all (“Their 

other use of the software is essentially the same as the 

use of the software in Walmart—we concede that—but 

that is not dispositive for claim preclusion and it is certainly not dispositive for issue preclusion.”).

 

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[Appellees’] use of the software and Wal-Mart’s noninfringing use of the same software.” Id. Given these 

circumstances, the judgment in the Walmart case “settled 

finally and everywhere” that the IAP software does not 

infringe the ’360 Patent. Kessler, 206 U.S. at 288. 

Applying Kessler, it is Oracle’s right that its “customers should, in respect of the [IAP software], be let alone 

by” SpeedTrack, and it is SpeedTrack’s “duty to let them 

alone.” Id. at 289. Because Kessler creates a limited 

trade right that attaches to the IAP software itself, Oracle 

would have the right to an order prohibiting SpeedTrack 

from asserting that Oracle’s customers infringe the ’360 

Patent by their use of the same software litigated in the 

Walmart case. See Rubber Tire, 232 U.S. at 418; MGA, 

827 F.2d at 734-35. SpeedTrack does not seriously dispute this conclusion on appeal. Instead, it argues that: 

(1) the right recognized in Kessler is one assertable, if at 

all, only by the product manufacturer or supplier, not by 

its customers; (2) Kessler does not apply where the manufacturer supplies only a component which is combined 

with other components and it is the combined configuration that infringes; and (3) Kessler is a doctrine which has 

been rendered obsolete by later developments in the law. 

We address each of these arguments in turn. 

B. Customer Invocation of Kessler 

SpeedTrack submits that, if Kessler is still good law, it 

should be limited to its “original footprint.” Appellant Br. 

52. SpeedTrack asserts that Kessler does not apply to the 

facts presented here because the Supreme Court explicitly 

reserved the question of whether a customer is entitled to 

invoke Kessler and we should conclude that a customer 

may not do so. We decline to limit Kessler as SpeedTrack 

urges. 

The question of whether a customer can invoke the 

Kessler doctrine has divided circuits, and we have not 

specifically addressed it. See Tech. Licensing Corp. v. 

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16 SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 

Thomson, Inc., 738 F. Supp. 2d 1096, 1101 (E.D. Cal. 

2010) (“The Supreme Court, Federal Circuit, and Ninth 

Circuit[] . . . have declined to address the issue of whether 

the customer has the right to invoke the Kessler doctrine 

as a defense to patent infringement suits.”). 

For its part, the Fourth Circuit has said that a customer can raise the Kessler doctrine as a defense to suit. 

Gen. Chem. Co. v. Standard Wholesale Phosphate & Acid 

Works, Inc., 101 F.2d 178, 179-80 (4th Cir. 1939). In that 

case, the court recognized that, after Kessler, a manufacturer, successful in an infringement suit, could intervene 

in a suit “by the patentee against one of the manufacturer’s customers and have the suit dismissed on the sole 

ground of the prior adjudication.” Id. at 180 (citation 

omitted). The court reasoned that, “if the suit against the 

customer may be dismissed upon the intervention and at 

the request of the manufacturer, there is no valid reason 

why it may not be dismissed upon the motion of the 

customer himself.” Id. (“Since the customer can hold the 

manufacturer from whom he has purchased for any 

damage which he may be required to pay because the 

article infringes the patent, he should be held to be subrogated to the right of the manufacturer under the judgment against the patentee adjudging that there is no 

infringement with respect to such article.”); see also

Molinaro v. Am. Tel. & Tel. Co., 460 F. Supp. 673, 675-76 

(E.D. Pa. 1978) (citing General Chemical for the proposition that “[c]ourts soon recognized that the rationale 

underlying the Kessler doctrine would support the assertion not only by a manufacturer, but also by a customer, 

of the preclusive effect of a prior judgment in favor of the 

manufacturer-supplier and against the patentee”). 

The Sixth Circuit has reached the opposite conclusion, 

noting that the “cause of action against the manufacturer 

for injunction and damages and accounting is, in general, 

a distinct cause of action from that against the purchasing 

user for an injunction against him and for damages and 

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profits coming from his infringement.” Wenborne-Karpen 

Dryer Co. v. Dort Motor Car Co., 14 F.2d 378, 379 (6th 

Cir. 1926). The court found that, “[a]lthough plaintiff had 

a suit pending against the manufacturer in another 

circuit, it had the (initial) right to sue a user in this circuit 

and get the judgment of different courts as to the patent.” 

Id. at 379-80. In dissent, however, Judge Donahue noted 

that the manufacturer, the Cutler Company, alleged in its 

intervening petition that it “entered into a contract with 

its customer, the Dort Company, to defend that company 

against any action brought for infringement against it, 

and to save the Dort Company harmless from the payment of any damages that may be assessed against it in 

such suit.” Id. at 381 (Donahue, J., dissenting). According to Judge Donahue, once judgment was entered in the 

first suit in favor of the manufacturer, “it was equally the 

duty of plaintiff to dismiss any suits then pending against 

the customers . . . as it was its duty to refrain from bringing other suits.” Id. (“Any other course would permit the 

plaintiff to trifle with courts and by subterfuge evade the 

effect of a final decree against it.”). 

As previously discussed, Kessler provides a party who 

has prevailed in a patent litigation the right to manufacture, use, or sell the product that has been deemed not to 

infringe without fear of continued challenges to that right 

based on the same patent. This court recognized in MGA

that the “Kessler doctrine bars a patent infringement 

action against a customer of a seller who has previously 

prevailed against the patentee because of invalidity or 

noninfringement of the patent; otherwise, the effect of the 

prior judgment would be virtually destroyed.” 827 F.2d at 

734. Kessler emphasized the right of the adjudged noninfringing manufacturer to “sell his wares freely,” and the 

patent owner’s corresponding duty to leave that manufacturer’s customers alone. Kessler, 206 U.S. at 289. Accordingly, Kessler sought to prevent patent owners from 

undermining adverse final judgments by relitigating 

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18 SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 

infringement claims against customers who use the 

product at issue.

We conclude that the rationale underlying the Kessler

doctrine supports permitting customers to assert it as a 

defense to infringement claims. Although the Supreme 

Court in Kessler focused exclusively on the manufacturer’s 

rights, and expressed no opinion on whether a customer 

could assert the defense, it recognized the fact that the 

manufacturer and customer’s interests are intertwined, 

remarking that “[n]o one wishes to buy anything if with it 

he must buy a law suit.” See id. Allowing customers to 

assert a Kessler defense is consistent with the Court’s goal 

of protecting the manufacturer’s right to sell an exonerated product free from interference or restraint. A manufacturer cannot sell freely if it has no customers who can 

buy freely. Indeed, the Court subsequently explained that 

the Kessler doctrine grants a limited trade right that 

attaches to the “product—to a particular thing—as an 

article of lawful commerce.” Rubber Tire, 232 U.S. at 418; 

MGA, 827 F.2d at 734. Because it is a right that attaches 

to the noninfringing product, and it is a right designed to 

protect the unencumbered sale of that product, SpeedTrack’s argument that the Kessler doctrine can only be 

invoked by a manufacturer must fail.2 

2 Oracle filed a motion to intervene in this appeal, 

seeking to protect its interests in the IAP software at 

issue and to prevent SpeedTrack from asserting infringement claims against Oracle’s customers. A motions panel 

of this court denied Oracle’s request on grounds that 

Oracle was not a party in the underlying case and did not 

move to intervene in the district court proceedings. 

Order, SpeedTrack, Inc. v. Office Depot, Inc., No. 14-1475 

(Fed. Cir. June 30, 2014), ECF No. 16. Oracle maintains 

that the case below never progressed to a stage where it 

should have intervened because it was stayed pending the 

 

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SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 19

C. This Case Does Not Fall Within the Rubber Tire

Exception to Kessler

SpeedTrack next argues that the Kessler doctrine does 

not apply to cases where the manufacturer is selling a 

component that is later combined with other objects and 

that combined product infringes. SpeedTrack cites Rubber Tire for the proposition that the trade right set forth 

in Kessler attaches to the product and “continues only so 

long as the commodity to which the right applies retains 

its separate identity.” Rubber Tire, 232 U.S. at 418-19. 

In Rubber Tire, Goodyear successfully defended its new 

tire design from an infringement claim brought by Rubber 

Tire. Id. at 414. Goodyear subsequently sold rubber to a 

customer, who manufactured its own version of the Goodyear tire found not to infringe. Id. at 416. Rubber Tire 

then sued that customer for infringement. Goodyear 

argued that, under the Kessler doctrine, “by virtue of the 

decree in its favor in the infringement suit,” it has the 

right to restrain suits “not only against those who buy 

from it the structure which is the subject of the patent but 

also against those who buy its rubber and themselves 

make the patented tire.” Id. at 416-17. 

Walmart case and terminated at an early stage, before 

any of the defendants had even filed answers to SpeedTrack’s complaint. Notably, however, in opposing intervention in this court, SpeedTrack argued that Oracle’s 

interests “are adequately represented by the existing 

parties.” Opp. for Plaintiff-Appellant SpeedTrack, Inc. to 

Oracle America, Inc.’s Motion to Intervene at 10, SpeedTrack, Inc. v. Office Depot, Inc., No. 14-1475 (Fed. Cir. 

June 19, 2014), ECF No. 15. That statement seems to 

suggest that “the existing parties”—Appellees (who are 

Oracle’s customers)—would be able to assert the same 

defenses as Oracle, which would include the Kessler 

doctrine. 

 

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20 SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 

The Supreme Court disagreed, holding that Kessler

only protects an adjudged noninfringer’s right to make 

and sell its noninfringing article. Id. at 417-18. The 

Court explained that, although Goodyear was entitled to 

make and sell both the tire and its rubber without threat 

of suit, that “trade right” attaches to the particular product “as an article of lawful commerce.” Id. at 418. “If that 

commodity is combined with other things in the process of 

the manufacture of a new commodity, the trade right in 

the original part as an article of commerce is necessarily 

gone.” Id. at 419. Accordingly, although Goodyear could 

“demand protection for its trade rights in the commodities 

it produced,” it could not insist that customers who purchase its rubber are allowed to make and sell the patented structure. Id. 

SpeedTrack cites Rubber Tire and argues that its patent claims are method claims that “target [Appellees’] 

use of Oracle’s software combined with their own hardware, software, and data.” Appellant’s Reply Br. 16 

(emphasis in original). According to SpeedTrack, “[a]ny 

protection for Oracle’s product cannot shield acts combining Oracle’s product with other components to practice a 

claimed method.” Id. But the allegations in SpeedTrack’s 

complaint were directed specifically to Appellees’ use of 

the IAP software to provide search functionality for their 

respective websites, not to any other components or any 

other activities. And, Appellees are invoking Kessler with 

respect to the same IAP software that acquired noninfringing status in Walmart, not as to other aspects of their

computer systems. 

In the Walmart case, Oracle’s predecessor was awarded judgment that it does not infringe the ’360 Patent by 

making, using, or selling the IAP software, and that its 

customer’s use of that software does not infringe. The 

district court here found that SpeedTrack was unable to 

identify any material differences between Appellees’ use 

of the IAP software and Walmart’s noninfringing use of 

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SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 21

that same software. SpeedTrack, 2014 WL 1813292, at 

*9. Given these circumstances, Rubber Tire’s discussion 

of combining components to create the patented device is 

inapplicable. SpeedTrack’s attempt to distinguish Kessler 

on these grounds is without merit. 

D. Kessler Remains Binding Precedent

Finally, SpeedTrack argues that “the Kessler doctrine 

has been effectively displaced by modern preclusion 

principles.” Appellant Br. 40. SpeedTrack concedes, as it 

must, that Kessler has not been overturned. It argues, 

however, that Kessler became unnecessary when the 

Supreme Court authorized non-mutual collateral estoppel 

in Blonder-Tongue Laboratories, Inc. v. University of 

Illinois Foundation, 402 U.S. 313, 349 (1971). The Court 

in Blonder-Tongue did not cite Kessler, however, and 

there is no indication that the Court sought to overrule it. 

See Shalala v. Ill. Council on Long Term Care, Inc., 529 

U.S. 1, 18 (2000) (“This Court does not normally overturn, 

or so dramatically limit, earlier authority sub silentio.”). 

We recognized in MGA that Kessler was issued “in the 

heyday of the federal mutuality of estoppel rule,” when 

preclusion was limited to parties or privies in earlier 

litigation. MGA, 827 F.2d at 733 (citing Blonder-Tongue, 

402 U.S. at 320-27). According to SpeedTrack, Kessler

carved a narrow exception to this mutuality principle by 

permitting a manufacturer to enjoin suits against its 

customers. SpeedTrack maintains that, after BlonderTongue, issue preclusion is sufficient to prevent a patent 

owner from filing suit against an adjudged non-infringer’s 

customers. As the facts of this case demonstrate, however, the Kessler doctrine is a necessary supplement to issue 

and claim preclusion: without it, a patent owner could sue 

a manufacturer for literal infringement and, if unsuccessful, file suit against the manufacturer’s customers under 

the doctrine of equivalents. Or, a patent owner could file 

suit against the manufacturer’s customers under any 

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22 SPEEDTRACK, INC. v. OFFICE DEPOT, INC. 

claim or theory not actually litigated against the manufacturer as long as it challenged only those acts of infringement that post-dated the judgment in the first 

action. That result would authorize the type of harassment the Supreme Court sought to prevent in Kessler

when it recognized that follow-on suits against customers 

could destroy the manufacturer’s judgment right. Kessler, 

206 U.S. at 289 (“The effect which may reasonably be 

anticipated of harassing the purchasers of Kessler’s 

manufactures by claims for damages on account of the use 

of them, would be to diminish Kessler’s opportunities for 

sale.”); see Brain Life, 746 F.3d at 1056 (“The Kessler

Doctrine fills the gap between these preclusion doctrines,

however, 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.” (emphasis in original)).

As we noted in MGA and stated in Brain Life, regardless of whether the Kessler doctrine was created as an 

exception to the mutuality of estoppel rule that existed at 

the time or as a matter of substantive patent law, we 

must apply the law as it exists. See MGA, 827 F.2d at 

733-34; Brain Life, 746 F.3d at 1058. Because we must 

follow Kessler unless and until the Supreme Court overrules it, and because this appeal fits within its bounds, we 

agree with the district court that the entirety of SpeedTrack’s suit against Appellees is barred. 

IV. CONCLUSION

For the foregoing reasons, we conclude that the Kessler doctrine precludes SpeedTrack from asserting any 

claims of the ’360 Patent against Appellees. Accordingly, 

the district court’s judgment is affirmed.

AFFIRMED

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