Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01145/USCOURTS-casd-3_09-cv-01145-2/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 The licensing agreement was originally entered into by the predecessors of SLR Partners,

LLC, Rozi Medical Devices Limited and B. Braun Medical Inc. For the sake of convenience, the

court will refer to the parties and their predecessors as one entity each. 

- 1 - 09cv1145

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SLR PARTNERS, LLC and ROZI

MEDICAL DEVICES LIMITED,

Plaintiffs,

CASE NO. 09 CV 1145 JM RBB

ORDER GRANTING

DEFENDANT’S MOTION TO

DISMISS

Doc. No. 9 vs.

B.BRAUN MEDICAL INC.,

 Defendant.

Plaintiffs SLR Partners, LLC and Rozi Medical Devices Limited (collectively, “SLR”) own

United States Patent No. 5,006,114 (the “‘114 patent”) for technology that facilitates sterile, needleless injections into intravenous lines. In 1992, SLR approached B. Braun Medical Inc. (“Braun”)

about a joint effort to develop the ‘114 patent into a commercial product.1

 To that end, the parties

entered an exclusive licensing agreement. 

Nearly one year after entering the license agreement, SLR hired ViR Engineering (“ViR”) to

develop commercially viable designs based on the ‘114 patent at SLR’s expense. ViR developed five

designs that were ultimately presented to Braun by SLR. Braun then began funding ViR’s work.

Case 3:09-cv-01145-JM-RBB Document 31 Filed 10/26/09 Page 1 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 - 09cv1145

Unbeknownst to SLR, Braun began developing ViR’s plans into a commercial product called the

UltraSite valve. In 1995, Braun obtained United States Patent No. 5,439,451 (the “‘451 patent”) on

the UltraSite valve, naming four ViR engineers as the inventors. Two years later, in 1997, SLR

learned about the development of the UltraSite valve and the ‘451 patent. SLR terminated the license

agreement. 

In 1998, Braun sought a declaratory judgment that Braun, and not SLR, owned the ‘451 patent.

SLR counterclaimed for conversion, possession of personal property, fraud, and misappropriation of

trade secrets. SLR prevailed at trial and won damages based upon past and future sales of the

UltraSite valve, as well as punitive damages. At a subsequent equitable trial, the court gave SLR the

option of owning the ‘451 patent and foregoing future damages. SLR elected to own the ‘451 patent,

but this ruling was ultimately struck down by the Ninth Circuit. The parties then settled, with SLR

receiving approximately $26 million (slightly more than the trial court initially awarded) and Braun

maintaining ownership of the ‘451 patent. 

SLR now sues Braun for patent infringement, alleging that the UltraSite valve infringes the

‘114 patent. Braun moves to dismiss under Federal Rule of Civil Procedure 12(b)(6) on three

grounds: claim preclusion, issue preclusion, and a release of claims provision contained in the parties’

prior settlement agreement. For the reasons stated below, the court grants Braun’s motion to dismiss

on claim preclusion grounds. 

I. LEGAL STANDARDS

A motion to dismiss on claim preclusion grounds is appropriate under Federal Rule of Civil

Procedure 12(b)(6) when there is no dispute of material fact. Scott v. Kuhlman, 746 F.2d 1377, 1378

(9th Cir. 1984). The court can take notice of judicial documents to determine the extent of prior

litigation. Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). 

“Claim preclusion, or res judicata, applies where: (1) the same parties, or their privies, were

involved in the prior litigation, (2) the prior litigation involved the same claim or cause of action as

the later suit, and (3) the prior litigation was terminated by a final judgment on the merits.” Cent.

/ / /

/ / /

Case 3:09-cv-01145-JM-RBB Document 31 Filed 10/26/09 Page 2 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 In this patent case, the court applies Ninth Circuit law because “the claim preclusion issues

in this case do not depend on any rule of law having special application to patent cases.” Pactiv Corp.

v. Dow Chemical Co., 449 F.3d 1227, 1230 (Fed. Cir. 2006) (internal quotations and citations

omitted). 

- 3 - 09cv1145

Delta Water Agency v. United States, 306 F.3d 938, 952 (9th Cir. 2002).2 To determine whether the

prior and current claims are the same, the court considers:

(1) whether rights or interests established in the prior judgment would be destroyed or

impaired by prosecution of the second action; (2) whether substantially the same

evidence is presented in the two actions; (3) whether the two suits involve

infringement of the same rights; and (4) whether the two suits arise out of the same

transactional nucleus of facts.

A.V. Costantini v. Trans Worlds Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982). Of these factors,

the fourth is the most important. Cent. Delta Water Agency, 306 F.3d at 952. It is irrelevant whether

the plaintiff asserted the same grounds for recovery or arguments in the prior action; rather, it only

matters whether the plaintiff could have asserted them. United States v. Barajas, 147 F.3d 905, 909

(9th Cir. 1998). 

II. DISCUSSION

The parties do not dispute that the first and third elements of claim preclusion are established.

Both the prior and current cases involve the same parties or their privies, and the prior case ended with

a final judgment on the merits. Therefore, the court need only determine whether the prior case—with

its causes of action for conversion, possession of personal property, fraud, and misappropriation of

trade secrets—encompassed the same claim as the current patent litigation. 

The most important factor in determining whether the claims are the same is “whether the two

suits arise out of the same transactional nucleus of facts.” Costantini, 681 F.2d at 1202. While SLR

is correct that trade secret misappropriation is different than patent infringement, both causes of action

arise out of the development and sale of one device: the UltraSite valve. This complained-of conduct

by Defendants—not the separate rights of the Plaintiff—is the most important touchstone of claim

preclusion. Cf. Fund for Animals, Inc. v. Lujan, 962 F.2d 1391, 1399 (9th Cir. 1992) (denying

application of claim preclusion where plaintiff complains of different conduct by defendant). 

It is also significant that the source of damages in both suits would be from the same pool of

money. Cf. Barajas, 147 F.3d at 910 (applying claim preclusion where plaintiff already recovered

Case 3:09-cv-01145-JM-RBB Document 31 Filed 10/26/09 Page 3 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 The court also notes that, during oral argument, counsel for SLR commendably

acknowledged that SLR chose not to claim patent infringement in its initial case largely because of

practical considerations, including the anticipated cost of prosecuting a patent claim. 

- 4 - 09cv1145

damages on same product invoice); Costantini, 681 F.2d at 1202 (applying claim preclusion where

both suits sought damages for harm to plaintiff’s business relationship with same company). In the

prior case, both parties presented expert witnesses on the appropriate scope of damages. Both expert

witnesses opined on the value of past and future UltraSite valve sales in giving guidance to the jury.

The court would apply a similar measure of damages in the current case. If SLR were ultimately

successful on its patent infringement claim, the measure of damages would be that portion of UltraSite

valve sales attributable to the value of the ‘114 patent. But SLR has already received compensation

for its contributions to the design of the UltraSite valve in the prior case. SLR will not be awarded

an opportunity for double recovery. 

Moreover, all of the facts relevant to SLR’s patent infringement claim were known in 1998

when Braun initiated the declaratory judgment action that ultimately led to SLR’s recovery on its trade

secret misappropriation and fraud claims. Prior to the 1998 litigation, SLR obtained an UltraSite valve

with which it could have done an infringement analysis against the ‘114 patent. Therefore, SLR could

have brought its patent infringement claim then. Cf. Barajas, 147 F.3d at 909. 

The remaining Costantini factors are relatively balanced: SLR does invoke a different right

in the current patent infringement case than that previously asserted, and although there would be

some overlap in the evidence presented in both cases—in particular the damages evidence—much of

the evidence would be different. This patent infringement case, however, would drastically impair

Braun’s interest in the finality of its settlement agreement with SLR regarding the Ultrasite valve. Cf.

Costantini, 681 F.2d at 1202 (“[defendant’s] freedom from liability for the loss of appellant’s license

agreement, established by the [prior] action, could be impaired by this instant action.”) Therefore, the

first, second, and third Constantini factors cannot overcome the importance of the common

transactional nucleus of facts between the two cases. Because both cases arise from this common

transactional nucleus of facts, and the remaining Constantini considerations do not weight

substantially in SLR’s favor, the current patent infringement suit cannot continue.3

 

The court in Triple Tee Golf, Inc. v. Nike, Inc., 618 F. Supp. 2d 586 (N.D. Tex. 2009) reached

Case 3:09-cv-01145-JM-RBB Document 31 Filed 10/26/09 Page 4 of 5
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 - 09cv1145

the same conclusion on similar facts. There, plaintiff Triple Tee Golf had sued Nike for trade secret

misappropriation. Id. at 588. Then, eight years later, Triple Tee Gold sued Nike again, this time

seeking a declaration of patent inventorship. Id. Because both suits involved the same technology,

that technology was allegedly transferred only one time, and the patent inventorship claims could have

been brought in the first suit, the court granted Nike’s motion for dismissal on claim preclusion

grounds. Id. at 599. This court agrees with the analysis in Triple Tee Golf, and finds that the facts of

the instant case are similar enough to compel the same conclusion. 

III. CONCLUSION

For the foregoing reasons, the court finds that SLR’s patent infringement claim is precluded

by prior litigation between the parties. There is no need to address Braun’s issue preclusion and

release of claims arguments. Defendant’s motion to dismiss is GRANTED. The Clerk of the Court

is directed to close the file. 

IT IS SO ORDERED.

DATED: October 23, 2009

 Hon. Jeffrey T. Miller

 United States District Judge

Case 3:09-cv-01145-JM-RBB Document 31 Filed 10/26/09 Page 5 of 5