FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MEDIA RIGHTS TECHNOLOGIES,

INC.,

Plaintiff-Appellant,

v.

MICROSOFT CORPORATION,

Defendant-Appellee.

No. 17-16509

D.C. No.

3:17-cv-01925-SK

OPINION

Appeal from the United States District Court

for the Northern District of California

Sallie Kim, Magistrate Judge, Presiding

Argued and Submitted December 17, 2018

San Francisco, California

Filed May 2, 2019

Before: Ronald M. Gould and Marsha S. Berzon, Circuit 

Judges, and Frederic Block,* District Judge.

Opinion by Judge Gould

 * The Honorable Frederic Block, United States District Judge for the 

Eastern District of New York, sitting by designation.
2 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

SUMMARY**

Claim Preclusion / Copyright

The panel affirmed in part and reversed in part the 

district court’s dismissal of claims of copyright 

infringement, violation of the Digital Millennium Copyright 

Act, and breach of contract.

Media Rights Technologies, Inc. (“MRT”) developed a 

technology to protect electronic files from content piracy. 

MRT claimed that Microsoft Corp. developed a similar 

technology following exchanges between the parties and in 

doing so used information learned from MRT. In 2013, 

MRT brought a patent infringement suit against Microsoft. 

Later, MRT filed this suit.

The panel held that claim preclusion would apply if the 

patent infringement suit involved the same claim or cause of 

action as the later suit, reached a final judgment on the 

merits, and involved identical parties or privies. The parties 

disagreed whether MRT could have raised its claims in the 

prior patent infringement suit (on the theory they did not 

accrue until after commencement of that action) and whether 

the two suits involved the same claim or cause of action.

Affirming in part, the panel held that claim preclusion 

barred MRT’s claims that had accrued at the time of its 

patent infringement action: namely, copyright infringement 

claims arising from the sale of Microsoft products before 

 ** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 3

MRT filed its patent infringement suit; the DCMA claim; 

and the breach of contract claims. The panel concluded that 

these claims all arose from the same events—Microsoft’s 

alleged misappropriation of MRT’s software—as the prior 

patent infringement claims and merely offered different 

legal theories for why Microsoft’s alleged conduct was 

wrongful. The panel held that the two suits involved the 

same claims or causes of action.

Reversing in part, the panel held that claim preclusion 

did not bar MRT from asserting copyright infringement 

claims that accrued after it filed its patent-infringement suit: 

namely, claims arising from the sale of Microsoft products 

after MRT filed its patent infringement suit.

COUNSEL

Ian N. Feinberg (argued), Elizabeth Day, Marc Belloli, and 

David Alberti, Feinberg Day Alberti & Thompson LLP, 

Menlo Park, California, for Plaintiff-Appellant.

Jonathan J. Lamberson (argued) and Alana C. Mannigé, Fish 

& Richardson P.C., Redwood City, California, for 

Defendant-Appellee.
4 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

OPINION

GOULD, Circuit Judge:

This case requires that we apply longstanding principles 

of claim preclusion to a contemporary set of facts. PlaintiffAppellant Media Rights Technologies, Inc. (“MRT”) 

developed a technology in the early 2000s to protect 

electronic files, such as music files, from content piracy. 

MRT claims that Defendant-Appellee Microsoft 

Corporation developed a similar technology following 

exchanges between the parties and in doing so used 

information learned from MRT. In 2013, MRT brought a 

patent infringement suit against Microsoft. After a court in 

a separate proceeding declared one of the patents at issue 

invalid, MRT voluntarily dismissed that suit with prejudice.

But that dismissal did not end the dispute in which the 

parties were embroiled. MRT then filed this suit against 

Microsoft, asserting claims for copyright infringement, 

violation of the Digital Millennium Copyright Act 

(“DMCA”), and breach of contract. The key question before 

us is whether MRT’s first suit for patent infringement 

precludes this later suit for copyright infringement under the 

doctrine of claim preclusion even though the current claims 

have different elements.

We hold that claim preclusion bars the claims in this suit 

that had accrued at the time of MRT’s patent-infringement 

action: namely, (1) copyright infringement claims arising 

from the sale of Microsoft products before MRT filed its 

patent-infringement suit; (2) the DMCA claim; and (3) the 

breach of contract claims. These claims all arise from the 

same events—Microsoft’s alleged misappropriation of 

MRT’s software—as the prior patent infringement claims. 

They merely offer different legal theories for why 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 5

Microsoft’s alleged conduct was wrongful. We affirm the 

district court’s dismissal of these claims.

However, we hold, under Howard v. City of Coos Bay, 

871 F.3d 1032 (9th Cir. 2017), that claim preclusion does not 

bar MRT from asserting copyright infringement claims that 

accrued after it filed its patent-infringement suit: namely, 

claims arising from the sale of Microsoft products after MRT 

filed its patent-infringement suit. We reverse the district 

court’s dismissal of these copyright infringement claims, 

and remand for further proceedings.

I

A1

In the early 2000s, MRT’s cofounder, Hank Risan, 

developed a technology that came to be known as the 

Controlled Data Pathway (“CDP”). MRT claims that its 

CDP technology was the first digital rights management 

(“DRM”) technology to prevent various types of content 

piracy, such as the piracy of music files. For the years 

thereafter, MRT incorporated that technology into its X1 

Recording Control software, BlueBeat SeCure Player, 

BlueBeat SeCure Player for Windows Media Player, and 

BlueBeat SeCure Player for Microsoft Vista (collectively, 

the “MRT Software”). MRT holds several patents on its 

CDP technology (the “CDP Patents”).

 1 What follows are the well-pleaded facts from MRT’s complaint, 

which we accept as true at the motion-to-dismiss stage. See Garity v. 

APWU Nat’l Labor Org., 828 F.3d 848, 851 n.1 (9th Cir. 2016) (citing 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
6 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

To help identify any unlawful copying of the MRT 

Software’s source code,2 MRT inserted a piece of inert code 

(the “Watermark”). The Watermark appears as follows:

if ( FindWindow((TCHAR *) 32770, 

szProdName)

!= (HWND) 0)

{

/* indicate application found */

nRetVal = 1;

}

The Watermark is detectable in object code3 compiled from 

any source code containing the Watermark. In other words, 

if a party copied the portion of the MRT Software’s source 

code that contains the Watermark, MRT could detect such 

copying by looking for the Watermark in the object code of 

the other software. Thus, the Watermark served to reveal 

copying.

In 2003, the recording and motion picture industries took 

notice of MRT’s X1 Recording Control software and its 

potential to prevent content piracy. The Recording Institute 

of America and the Motion Picture Association of America 

evaluated the software, and, after concluding that it 

 2 “Source code” is a “specialized alphanumeric language[]” written 

by a human programmer; it is a set of commands. Sega Enters. Ltd. v. 

Accolade, Inc., 977 F.2d 1510, 1514 n.2 (9th Cir. 1992), as amended 

(Jan. 6, 1993).

3 “Object code” is code that has been “translated into computer 

readable form” by an “assembler” or “compiler.” Sega Enters., 977 F.2d 

at 1514 n.2. It is “the end product of the compilation of the source 

program” and “is required for the program’s execution by a computer.” 

Reiffin v. Microsoft Corp., 214 F.3d 1342, 1344 (Fed. Cir. 2000).
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 7

effectively prevented content piracy, recommended to 

Microsoft that Microsoft implement the X1 Recording 

Control software in its own products.

Shortly after, in August 2004, Microsoft’s Chief 

Technology Officer contacted MRT concerning a potential 

investment from Microsoft. MRT and Microsoft entered a 

nondisclosure agreement (the “2004 NDA”) prohibiting 

Microsoft from, among other things, reverse engineering 

MRT technology shared under the agreement. MRT, in turn, 

gave Microsoft information regarding its CDP technology, a 

copy of MRT software containing the Watermark, and 

information regarding the CDP Patents. Following 

evaluation, Microsoft offered to invest $50 million in MRT 

in return for a 51% stake in the company. MRT declined the 

offer as too low.4

One year later, in 2005, Microsoft began testing its 

Protected Media Pathway (“PMP”) software. Like the MRT 

Software, Microsoft’s PMP software is a DRM technology 

designed to prevent content piracy. MRT alleges that 

Microsoft had been trying for years to develop its own 

effective DRM software, but had been unable to do so until 

MRT provided Microsoft information concerning its CDP 

technology. MRT contends that Microsoft used the 

information it learned from MRT to create the PMP 

 4 The parties also crossed paths at other points over the years. In 

2006, MRT demonstrated its BlueBeat SeCure Player for Windows 

Media Player software to Microsoft and others members of the Digital 

Media Association. Microsoft had access to the software’s object code 

as a result. In May 2012, Microsoft considered acquiring the CDP 

Patents from MRT. In connection with that transaction, MRT and 

Microsoft entered into a confidentiality agreement, and MRT gave 

Microsoft access to confidential and proprietary information. In the end, 

Microsoft opted not to purchase the patents.
8 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

software. The PMP software allegedly “contains a copy 

and/or derivative work of the MRT software,” as evidenced 

by the presence of the Watermark.

In January 2007, Microsoft released the first commercial 

version of the Vista operating system, which included 

Microsoft’s PMP software. Since Vista, Microsoft has 

incorporated its PMP software into other products.

B

On April 25, 2013, MRT filed its first suit against 

Microsoft (“MRT I”). MRT claimed that Microsoft had built 

its PMP software—which Microsoft included in Windows 

Vista, Windows 7, Windows 8, Windows Media Center, and 

Windows Media Player—using information that MRT had 

shared with Microsoft. Based on those facts, MRT alleged 

that the PMP software infringed four CDP Patents. 

However, the district court stayed the case in January 2014, 

when a district court in a separate action declared one of the 

patents at issue invalid. See Media Rights Techs., Inc. v. 

Capital One Fin. Corp., No. l:13-cv-476, 2013 WL 6506176 

(E.D. Va. Dec. 9, 2013).

While MRT I was stayed, MRT decided to investigate 

whether Microsoft had copied the MRT Software’s source 

code. MRT hired a technical expert to do so. In April 2014, 

MRT’s technical expert identified the Watermark in 

Windows XP Service Pack 3, Windows Vista, Windows 8, 

Windows 10, Windows Media Player 11, Windows Media 

Player 12, Windows Media Player SDK, Internet Explorer 8, 

Internet Explorer 9, Internet Explorer 10, and Internet 

Explorer 11. The expert identified Microsoft’s PMP 

software as the source of the Watermark in each of these 

products. Because MRT never provided Microsoft access to 

the MRT Software’s source code, the expert concluded that 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 9

the Watermark was present as a result of Microsoft reverse 

engineering that source code and copying it in Microsoft’s

PMP software.

On September 4, 2015, the Federal Circuit affirmed the 

district court decision invalidating one of the CDP Patents at 

issue in MRT I, holding that the claims in the patent were 

indefinite. Media Rights Techs., Inc. v. Capital One Fin. 

Corp., 800 F.3d 1366, 1375 (Fed. Cir. 2015). In April 2016, 

MRT voluntarily dismissed MRT I with prejudice.

C

MRT filed this action (“MRT II”) one year later. MRT 

claims that Microsoft’s PMP software “contains a copy of 

and/or is a derivative work of” the MRT Software and thus 

infringes MRT’s copyrights. MRT also alleges that 

Microsoft violated the DMCA by circumventing measures 

in the MRT Software meant to prevent reverse engineering 

and copying. Finally, MRT claims that Microsoft violated 

the 2004 NDA and MRT’s End User License Agreement 

(“EULA”)—which Microsoft allegedly agreed to when it 

used the MRT Software—by reverse engineering and 

copying the MRT Software’s source code.

The district court dismissed MRT’s complaint on the 

basis of claim preclusion. See Media Rights Techs. v. 

Microsoft Corp., Case No. 17-cv-01925-SK, 2017 WL 

4685702 (N.D. Cal. July 20, 2017).5

 It reasoned that MRT I 

 5 The district court used the terms “res judicata” and “claim 

preclusion” interchangeably. Historically, courts have used the term “res 

judicata” to mean “two different concepts.” Weaver Corp. v. Kiddle, 

Inc., 701 F. Supp. 61, 63–64 (S.D.N.Y. 1988). Some have “use[d] it to 

mean claim preclusion,” while others have used it “in a general sense, to 
10 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

and MRT II arose from the same nucleus of facts, the suits 

would share much of the same evidence, allowing MRT II to 

proceed could impair rights established by MRT I, and both 

MRT I and MRT II concerned intellectual property rights in 

the MRT Software. Id. at 5–7. The district court entered 

judgment for Microsoft.

II

MRT appeals the district court’s dismissal of its claims. 

We review de novo whether claim preclusion bars MRT’s 

claims in this action. Harris v. Cty. of Orange, 682 F.3d 

1126, 1131 (9th Cir. 2012).

III

The related doctrines of claim and issue preclusion, by 

“preclud[ing] parties from contesting matters that they have 

had a full and fair opportunity to litigate,” “protect against 

‘the expense and vexation attending multiple lawsuits, 

conserv[e] judicial resources, and foste[r] reliance on 

judicial action by minimizing the possibility of inconsistent 

decisions.’” Taylor v. Sturgell, 553 U.S. 880, 892 (2008) 

(alterations in original) (quoting Montana v. United States, 

440 U.S. 147, 153–54 (1979)); see also Amadeo v. Principal 

Mut. Life Ins. Co., 290 F.3d 1152, 1160 (9th Cir. 2002) 

(“Preclusion doctrine is intended to promote judicial 

efficiency and the finality of judgments by requiring that all 

related claims be brought together or forfeited (claim 

preclusion) and by prohibiting any party from litigating an 

issue that has been fully litigated previously (issue 

preclusion).”). Claim preclusion bars a party in successive 

 encompass both claim and issue preclusion.” Id. For clarity, we use the 

more descriptive terms of claim and issue preclusion.
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 11

litigation from pursuing claims that “were raised or could 

have been raised in [a] prior action.” Owens v. Kaiser 

Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001) 

(quoting Western Radio Servs. Co. v. Glickman, 123 F.3d 

1189, 1192 (9th Cir. 1997)); see also Tahoe-Sierra Pres. 

Council, Inc. v. Tahoe Reg’l Planning Agency, 322 F.3d 

1064, 1077–78 (9th Cir. 2003) (claim preclusion “bars 

relitigation of all grounds of recovery that were asserted, or 

could have been asserted, in a previous action. . . . It is 

immaterial whether the claims asserted subsequent to the 

judgment were actually pursued in the action that led to the 

judgment; rather, the relevant inquiry is whether they could 

have been brought” (quoting United States ex rel. Barajas v. 

Northrop Corp., 147 F.3d 905, 909 (9th Cir. 1998)). “Issue 

preclusion, in contrast, bars ‘successive litigation of an issue 

of fact or law actually litigated and resolved in a valid court 

determination essential to the prior judgment . . . .’” Taylor, 

553 U.S. at 892 (quoting New Hampshire v. Maine, 532 U.S. 

742, 748–49 (2001)); see also Af-Cap, Inc. v. Chevron 

Overseas (Congo) Ltd., 475 F.3d 1080, 1086 (9th Cir. 2007).

This case involves claim preclusion. If MRT I 

“(1) involved the same ‘claim’ or cause of action as 

[MRT II], (2) reached a final judgment on the merits, and 

(3) involved identical parties or privies,” then claim 

preclusion bars MRT’s current claims. Mpoyo v. Litton 

Electro-Optical Sys., 430 F.3d 985, 987 (9th Cir. 2005) 

(quoting Sidhu v. Flecto Co., 279 F.3d 896, 900 (9th Cir. 

2002)).6 It is Microsoft’s burden to establish that preclusion 

applies. Taylor, 553 U.S at 906–07.

 6 Because the decision to be given preclusive effect was rendered by 

a federal court exercising federal-question jurisdiction, federal common 

law determines whether preclusion applies. Taylor, 553 U.S. at 891.
12 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

The parties do not dispute that MRT’s voluntary 

dismissal of MRT I with prejudice is a final judgment on the 

merits, nor do they dispute that both MRT and Microsoft 

were and are parties to MRT I and MRT II. The parties 

disagree (1) whether MRT could have raised its current 

claims in MRT I (on the theory they did not accrue until after 

commencement of that action) and (2) whether MRT I and 

MRT II involve “the same ‘claim’ or cause of action” for 

purposes of preclusion. Mpoyo, 430 F.3d at 987. We 

address each issue in turn.

IV

MRT contends that claim preclusion does not bar any of 

its current claims because each accrued after MRT filed the 

operative complaint in MRT I.

7 The rule in this circuit, and 

 7 Microsoft contends that MRT forfeited this argument by not 

raising it in the district court. We disagree. MRT raised a variation of 

the argument it now presses, and the district court considered and 

rejected that argument:

MRT also argues that the settlement and dismissal 

with prejudice of the first action cannot bar claims 

based on conduct that occurred after the settlement. 

However, the conduct underlying this instant action 

occurred before the first action was filed. Although 

MRT alleges that it did not discover the alleged 

copying of the Watermark until April 12, 2014, after 

the first action was filed, this was more than two years 

before the first action was dismissed on April 21, 

2016. (Dkt. 1, ¶ 95; Dkt. 16, Ex. B.) Additionally, 

based on the facts MRT alleged in the first action and 

in this action, it is not clear why MRT did not 

investigate, and, thus, actually discover, the alleged 

copyright infringement earlier.
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 13

others, is that “claim preclusion does not apply to claims that 

accrue after the filing of the operative complaint” in the first 

suit. Howard, 871 F.3d at 1039–40 (collecting cases).

Although Howard did not explain or define “accrue”—

and the parties disputed its meaning at oral argument—we 

read Howard to use “accrue” to mean to “come into 

existence” or “arise.” Accrue, Black’s Law Dictionary (10th 

ed. 2014). In other words, we read Howard to hold that 

claim preclusion does not apply to claims that were not in 

existence and could not have been sued upon—i.e., were not 

legally cognizable—when the allegedly preclusive action 

was initiated. See Howard, 871 F.3d at 1040 (“Howard’s 

retaliation claims in this suit arose from events that occurred 

after she filed her complaint in Howard I, and they are not 

barred by claim preclusion.”). That reading is consistent 

with our pre-Howard decisions. See, e.g., Frank v. United 

Airlines, Inc., 216 F.3d 845, 851 (9th Cir. 2000) (“A claim 

arising after the date of an earlier judgment is not barred, 

even if it arises out of a continuing course of conduct that 

provided the basis for the earlier claim.”). It is also 

consistent with Supreme Court authority and authority from 

our sister circuits. See Lawlor v. Nat’l Screen Serv. Corp., 

349 U.S. 322, 328 (1955) (a prior judgment “cannot be given 

the effect of extinguishing claims which did not even then 

exist and which could not possibly have been sued upon in 

the previous case”); TechnoMarine SA v. Giftports, Inc., 

758 F.3d 493, 502 (2d Cir. 2014) (“TechnoMarine’s 

trademark infringement claim is not barred by claim 

preclusion because Giftports allegedly committed new 

instances of trademark infringement after the settlement, so 

that the present claim, to the extent based on the new acts of 

 Media Rights Techs. v. Microsoft Corp., Case No. 17-cv-01925-SK, 

2017 WL 4685702, at *6 (N.D. Cal. July 20, 2017).
14 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

infringement, was not and could not have been litigated in 

the earlier proceeding.”); Aspex Eyewear, Inc. v. Marchon 

Eyewear, Inc., 672 F.3d 1335, 1342 (Fed. Cir. 2012) (“We 

hold that res judicata does not bar Aspex’s lawsuit with 

respect to accused products that were not in existence at the 

time of the California Actions for the simple reason that res 

judicata requires that in order for a particular claim to be 

barred, it is necessary that the claim either was asserted, or 

could have been asserted, in the prior action. If the claim did 

not exist at the time of the earlier action, it could not have 

been asserted in that action and is not barred by res 

judicata.”); Stanton v. D.C. Court of Appeals, 127 F.3d 72, 

78 (D.C. Cir. 1997) (“Federal law is clear that post-judgment 

events give rise to new claims, so that claim preclusion is no 

bar.” (emphasis omitted)); Alexander & Alexander, Inc. v. 

Van Impe, 787 F.2d 163, 166 (3d Cir. 1986) (“Res judicata

applies, however, only to claims arising prior to the entry of 

judgment. It does not bar claims arising subsequent to the 

entry of judgment and which did not then exist or could not 

have been sued upon in the prior action.” (emphasis in 

original)), as amended (May 20, 1986); 18 Charles Alan 

Wright et al., Federal Practice & Procedure § 4409 (3d ed. 

2018 update) (“A substantially single course of activity may 

continue through the life of a first suit and beyond. The basic 

claim-preclusion result is clear: a new claim or cause of 

action is created as the conduct continues.”).8

 8 Although the language of some of these decisions could suggest 

that claim preclusion should bar claims that arose after the filing of the 

operative complaint in a prior action, but before the entry of judgment, 

to be clear, the rule in this circuit, and others, is that “claim preclusion 

does not apply to claims that accrue after the filing of the operative 

complaint” in the first suit. Howard, 871 F.3d at 1039–40 (collecting 

cases).
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 15

Thus, the question before us is whether MRT’s current 

claims accrued—i.e., “c[a]me into existence” or “ar[o]se,” 

Accrue, Black’s Law Dictionary (10th ed. 2014)—and could 

have been sued upon before MRT filed MRT I. If any of 

MRT’s claims had accrued in that sense, then so long as the 

other requirements of claim preclusion are met, MRT is 

barred from asserting those claims here. If any claims had 

not accrued, claim preclusion does not apply. We discuss 

MRT’s copyright infringement, DMCA, and breach of 

contract claims in turn.

A

Copyright infringement claims must be “commenced 

within three years after the claim accrued.” 17 U.S.C. 

§ 507(b). Under the “discovery rule,” a copyright 

infringement claim accrues—and the statute of limitations 

begins to run—when a party discovers, or reasonably should 

have discovered, the alleged infringement. Polar Bear 

Prods., Inc. v. Timex Corp., 384 F.3d 700, 706 (9th Cir. 

2004), as amended on denial of reh’g & reh’g en banc 

(Oct. 25, 2004); see also Psihoyos v. John Wiley & Sons, 

Inc., 748 F.3d 120, 124 (2d Cir. 2014); William A. Graham 

Co. v. Haughey, 568 F.3d 425, 433–37 (3d Cir. 2009); 

Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir. 2004). 

Under the discovery rule and Howard, claim preclusion 

cannot apply to copyright infringement claims that MRT did 

not know about, nor had reason to know about, when it filed 

MRT I. See Howard, 871 F.3d at 1039–40.

In addition to the discovery rule, the “separate-accrual 

rule” in copyright law provides that “when a defendant 

commits successive violations [of the Copyright Act], the 

statute of limitations runs separately from each violation. 

Each time an infringing work is reproduced or distributed, 

the infringer commits a new wrong. Each wrong gives rise 
16 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

to a discrete ‘claim’ that ‘accrue[s]’ at the time the wrong 

occurs.” Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 

663, 671 (2014) (footnotes omitted). For purposes of claim 

preclusion, the separate-accrual rule means that a new cause 

of action for copyright infringement accrued each time 

Microsoft sold an allegedly infringing product.

1

MRT’s claim for copyright infringement alleges that 

Microsoft “had distributed at least five billion 

(5,000,000,000) copies” of allegedly infringing products as 

of the filing of the complaint on April 6, 2017. Any sales 

before April 25, 2013—the date MRT filed its complaint in 

MRT I—gave rise to a cause of action for copyright 

infringement if MRT knew, or reasonably should have 

known, that Microsoft had copied the MRT Software and the 

sales therefore constituted copyright infringement. Polar 

Bear Prods., 384 F.3d at 706.

MRT alleges in its complaint that it did not discover 

Microsoft’s alleged copying until April 12, 2014, after MRT 

filed MRT I. Taking that allegation as true, see Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 556 (2007), MRT 

nonetheless could reasonably have discovered Microsoft’s 

alleged copying before filing MRT I. MRT alleges that it 

had shared its copyrighted software with Microsoft in 

August 2004. MRT further alleges that Microsoft had been 

unable to develop effective DRM technology up to that 

point. Despite its alleged struggles, Microsoft was able to 

begin testing new DRM technology—the PMP software—

roughly one year later, in September 2005. Microsoft then 

incorporated an effective version of the PMP software into 

various of its products beginning in January 2007. 

Microsoft’s PMP software contained the Watermark, which 

MRT specifically meant to be detectable. When MRT filed 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 17

MRT I six years later, MRT claimed that Microsoft used 

“information it learned from MRT, including information 

relating to the Controlled Data Pathway technology,” to 

design its PMP software.

Given (1) the temporal proximity between MRT’s and 

Microsoft’s interactions and Microsoft’s development of its 

first effective DRM technology; (2) MRT’s apparent belief 

at the time it filed MRT I that Microsoft used information 

learned from MRT to create software that did the same thing 

as the MRT Software; and (3) MRT’s insertion of the 

Watermark, which it specifically inserted to detect copying, 

MRT was on notice—at least by the time it filed MRT I—

that Microsoft may have copied the MRT Software. MRT 

could have investigated and detected the copying.9

Because MRT could reasonably have discovered 

Microsoft’s alleged copying before filing MRT I, copyright 

infringement claims based on the sale of Microsoft products 

before that filing had accrued and MRT could have pursued 

them (if timely). See Polar Bear Prods., 384 F.3d at 706; 

see also Pincay v. Andrews, 238 F.3d 1106, 1109–10 (9th 

Cir. 2001) (“The plaintiff is deemed to have had constructive 

knowledge if it had enough information to warrant an 

investigation which, if reasonably diligent, would have led 

to discovery of the [claim].” (citation omitted)). Those 

claims (the “pre-filing copyright infringement claims”) are 

precluded if the other requirements of claim preclusion are 

 9 MRT contends that “[d]etection of copying of the MRT Software 

is extraordinarily difficult because Microsoft, like virtually every 

software vendor, protects the source code for its products as a trade 

secret.” This contention ignores that MRT discovered the alleged 

copying when it finally looked at the object code (which is publicly 

available) because the Watermark was designed to be detectable in 

object code.
18 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

met, Howard, 871 F.3d at 1039–40, a point we discuss below 

in Section V.A.

2

By contrast, under the separate-accrual rule, any sales of 

allegedly infringing Microsoft products after April 25, 2013, 

gave rise to a cause of action (the “post-filing copyright 

infringement claims”) as of the date of the sale—i.e., at some 

point after April 25, 2013. See Petrella, 572 U.S. at 671. 

Because those claims arose after MRT filed the operative 

complaint in MRT I and MRT could not have sued on them 

when it filed MRT I, they are not precluded here. See 

Howard, 871 F.3d at 1039–40. The leading treatise on civil 

procedure agrees: “Events that are related in origin and 

nature may nonetheless involve such clear separations or 

discontinuities as to create separate causes of action without 

room for dispute. The easiest circumstances occur when the 

second action draws on facts or seeks remedies that simply 

could not have been asserted in the first action.” 18 Wright 

et al., Federal Practice and Procedure § 4409 (footnotes 

omitted).

Microsoft advances two main theories as to why the 

post-filing copyright infringement claims should be 

precluded. First, Microsoft—relying on Turtle Island 

Restoration Network v. U.S. Department of State, 673 F.3d 

914 (9th Cir. 2012)—contends that claim preclusion bars 

such claims because “one cannot evade claim preclusion by 

relying on events that occurred after judgment when the 

plaintiff knew of nearly identical events that occurred before

judgment and did nothing.” Turtle Island is inapposite. We 

held in Turtle Island that claim preclusion applied—despite 

the plaintiff citing evidence in a successive suit that was 

unavailable in the prior suit—because that evidence was 

merely an “example” used to bolster claims that the plaintiff 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 19

raised in the first action. Id. at 918–19. Unlike here, where 

the separate-accrual rule applies, the new events in Turtle 

Island did not establish an independent cause of action. Cf. 

Frank, 216 F.3d at 851 (“A claim arising after the date of an 

earlier judgment is not barred, even if it arises out of a 

continuing course of conduct that provided the basis for the 

earlier claim.”).

Taken to its logical conclusion, Microsoft’s proposed 

rule “violates basic claim preclusion principles.” 

TechnoMarine, 758 F.3d at 503. Suppose that MRT had 

asserted a claim for copyright infringement in MRT I, 

contending (as it does here) that Microsoft copied the MRT 

Software, after interactions between the parties, to create 

Microsoft’s PMP software. Suppose further that MRT 

sought damages based on sales of Microsoft products with 

the PMP software, but that MRT either did not request

injunctive relief or the court did not grant it. Finally, 

suppose that a jury found that Microsoft infringed one of 

MRT’s copyrights and awarded MRT damages. Under 

Microsoft’s logic, if Microsoft sold a product with the 

infringing PMP software two years later and MRT then 

brought an infringement action, claim preclusion would bar 

that action because “nearly identical events” gave rise to the 

two suits: Microsoft copied the MRT Software to create its 

PMP software and then sold products containing that 

software. “The earlier judgment against [Microsoft] . . .

would in effect immunize [Microsoft] against all suits 

concerning infringements of the same [copyright] in a 

similar way. This is not the law of claim preclusion.” Id.; 

see also Smith v. Potter, 513 F.3d 781, 783 (7th Cir. 2008) 

(“The filing of a suit does not entitle the defendant to 

continue or repeat the unlawful conduct with immunity from 

further suit.”).
20 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

Second, Microsoft contends that claim preclusion bars 

the post-filing copyright infringement claims because MRT 

sought prospective relief in MRT I (either an injunction or 

ongoing royalties) and therefore brought “future-sold 

products into” MRT I. The Supreme Court’s decision in

Lawlor forecloses that argument. 349 U.S. at 328–29 (claim 

preclusion did not apply, notwithstanding “that the [first] 

complaint sought, in addition to treble damages, injunctive 

relief which, if granted, would have prevented the illegal acts 

now complained of. A combination of facts constituting two 

or more causes of action on the law side of a court does not 

congeal into a single cause of action merely because 

equitable relief is also sought.”); see also Marcel Fashions 

Grp. Inc. v. Luck Brand Dungarees, Inc., 779 F.3d 102, 109–

10 (2d Cir. 2015) (declining to apply preclusion where a 

party requested injunctive relief in an earlier suit);

TechnoMarine, 758 F.3d at 504 (declining to apply claim 

preclusion where the plaintiff had unsuccessfully sought an 

injunction in the prior action); Smith, 513 F.3d at 784 (“Nor 

is the government right to argue that the plaintiff’s second 

suit should be barred because she sought injunctive relief in 

her first suit and had it been granted the additional 

misconduct alleged in the second suit would have been 

prevented.”).

We stress that our analysis does not mean that courts will 

be forced to continually relitigate copyright infringement 

claims. Issue preclusion “bars successive litigation of an 

issue of fact or law”—such as copyright infringement—

“actually litigated and resolved in a valid court 

determination essential to the prior judgment . . . .” Taylor,

553 U.S. at 892 (quotation omitted); see also 18 Wright et 

al., Federal Practice and Procedure § 4409 (“[C]laim 

preclusion often cannot apply in settings of continuing or 

interrupted and renewed conduct, and that the result may be 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 21

burdensome repetitive litigation. To the extent that greater 

protection is needed, it is better to rely on issue preclusion 

than on efforts to draw into claim preclusion matters that 

could not reasonably be advanced in the first litigation.”). 

Here we do not deal with an issue that was decided, but 

rather with claims that could have been brought.

B

MRT’s DMCA claim arises under Title 17 of the United 

States Code and therefore is subject to the same statute of 

limitations as MRT’s copyright infringement claims. See 

17 U.S.C. §§ 507(b), 1201(a)(1)(A). The statute of 

limitations began to run when MRT learned, or reasonably 

should have learned, of Microsoft’s alleged violation of the 

DMCA. See Kling v. Hallmark Cards, Inc., 225 F.3d 1030, 

1038 (9th Cir. 2000) (Copyright Act statute of limitations 

begins to run “when one has knowledge of a violation or is 

chargeable with such knowledge” (quoting Roley v. New 

World Pictures, Ltd., 19 F.3d 479, 481 (9th Cir. 1994))).

MRT’s DMCA claim alleges that Microsoft copied the 

MRT Software by circumventing measures in the MRT 

Software designed to prevent copying. Because MRT’s 

DMCA claim is predicated on the same events as MRT’s 

pre-filing copyright infringement claims—Microsoft’s 

alleged copying of the MRT Software—we hold, for the 

reasons given in Section IV.A, that MRT’s DMCA claim 

accrued before MRT filed MRT I. Unlike MRT’s copyright 

claims, there is no parallel separate-accrual rule that applies 

to MRT’s DMCA claim. MRT’s DMCA claim is therefore 

entirely precluded if the other requirements of claim 

preclusion are met, Howard, 871 F.3d at 1039–40, a point 

we discuss below in Section V.B.
22 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

C

California law determines when MRT’s breach of 

contract claims accrued. See United Mine Workers v. Gibbs, 

383 U.S. 715, 726 (1966) (a federal court when exercising 

supplemental jurisdiction over a state law claim applies state 

law in the same manner it would if sitting in diversity); Nw. 

Airlines, Inc. v. Camacho, 296 F.3d 787, 789 n.1 (9th Cir. 

2002) (federal courts exercising diversity jurisdiction apply 

the statute of limitations of the forum jurisdiction). Under 

California law, a cause of action sounding in contract does 

not accrue “until the plaintiff discovers, or has reason to 

discover, the cause of action.” Wind Dancer Prod. Grp. v. 

Walt Disney Pictures, 10 Cal. App. 5th 56, 73 (2017) 

(quoting Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797, 

807 (2005)).

MRT’s breach of contract claims allege that Microsoft 

breached anti-reverse-engineering provisions in the 2004 

NDA and MRT’s EULA when it allegedly copied the MRT 

Software. Because MRT’s breach of contract claims are 

predicated on the same events as its pre-filing copyright 

infringement and DMCA claims, we hold again, for the 

reasons given in Section IV.A, that MRT’s breach of 

contract claims accrued before MRT filed MRT I. MRT’s 

breach of contract claims are precluded if the other 

requirements of claim preclusion are met, Howard, 871 F.3d 

at 1039–40, a point we discuss below in Section V.C.

V

Having concluded that MRT’s post-filing copyright 

infringement claims are not precluded, we turn now to 

address the second point of contention between the parties: 

whether the pre-filing copyright infringement, DMCA, and 

breach of contract claims involve “the same ‘claim’ or cause 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 23

of action” as the patent infringement claims in MRT I. 

Mpoyo, 430 F.3d at 987 (quoting Sidhu, 279 F.3d at 900). 

We consider “(1) whether the two suits arise out of the same 

transactional nucleus of facts; (2) whether rights or interests 

established in the prior judgment would be destroyed or 

impaired by prosecution of the second action; (3) whether 

the two suits involve infringement of the same right; and 

(4) whether substantially the same evidence is presented in 

the two actions.” Id. at 987 (citing Chao v. A-One Med. 

Servs., Inc., 346 F.3d 908, 921 (9th Cir. 2003)). We do not 

apply these criteria “mechanistically.” Id.10

A

We first hold that claim preclusion bars MRT’s pre-filing 

copyright infringement claims.

With respect to the common-nucleus criterion, we use a 

“transaction test to determine whether . . . two suits share a 

common nucleus of operative fact.” Mpoyo, 430 F.3d at 987 

(citing Int’l Union of Operating Eng’rs-Empl’rs Constr. 

Indus. Pension, Welfare & Training Tr. Funds v. Karr, 

994 F.2d 1426, 1429–30 (9th Cir. 1993)). “Whether two 

events are part of the same transaction or series depends on 

whether they are related to the same set of facts and whether 

they could conveniently be tried together.” Id. (quoting 

Western Sys., Inc. v. Ulloa, 958 F.2d 864, 871 (9th Cir. 

 10 MRT cites Hells Canyon Preservation Council v. U.S. Forest 

Service, 403 F.3d 683, 686 n.2 (9th Cir. 2005), for the proposition that 

claim preclusion cannot apply to claims that were not but “could have 

been brought in a prior proceeding.” MRT is incorrect. In Hells Canyon 

we emphasized that claim preclusion does not apply to any and all 

“cause[s] of action that could have been joined in the original action”; it 

applies to claims and legal theories “arising out of the same transactional 

nucleus of facts.” Id.
24 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

1992)); see also Restatement (Second) of Judgments § 24 

(1982) (“What factual grouping constitutes a ‘transaction’, 

and what groupings constitute a ‘series’, are to be 

determined pragmatically, giving weight to such 

considerations as whether the facts are related in time, space, 

origin, or motivation, whether they form a convenient trial 

unit, and whether their treatment as a unit conforms to the 

parties’ expectations or business understanding or usage.”).

We are most concerned with the facts or events from 

which the alleged harms arose. See, e.g., United States v. 

Liquidators of Eur. Fed. Credit Bank, 630 F.3d 1139, 1151 

(9th Cir. 2011) (common nucleus of facts between civil and 

criminal forfeiture actions because both arose from 

“Defendant’s criminal conduct”); Mpoyo, 430 F.3d at 987 

(common nucleus of facts between Title VII, FLSA, and 

FMLA claims because those “claims ar[o]se from Litton’s 

conduct while Mpoyo was an employee and specifically 

from the events leading to his termination . . . . Furthermore, 

the Title VII, FLSA and FMLA claims form a convenient 

trial unit that discloses a cohesive narrative of an employeeemployer relationship and a controversial termination.”); 

Owens, 244 F.3d at 714 (common nucleus of facts between 

breach of contract and Title VII claims because they were 

“predicated on racial discrimination and allege the same 

circumstances regarding Appellants’ terminations”); see 

also 18 Wright et al., Federal Practice and Procedure

§ 4407 (“Matters with a common historic origin ordinarily 

form a convenient package for joint litigation.”); 

Restatement (Second) of Judgments § 24 cmt. b (“Among 

the factors relevant to a determination whether the facts are 

so woven together as to constitute a single claim are their 

relatedness in time, space, origin, or motivation, and 

whether, taken together, they form a convenient unit for trial 

purposes.”). “If the harm[s] arose at the same time, then 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 25

there was no reason why the plaintiff could not have brought 

[both] claim[s] in the first action. The plaintiff simply could 

have added a claim to the complaint.” Howard, 871 F.3d at 

1039 (quoting Liquidators of Eur. Fed. Credit Bank, 

630 F.3d at 1151). In contrast, “[i]f the harm[s] arose from 

different facts,” then a party is not obligated to bring both 

claims on pain of preclusion. Id.11

The common-nucleus criterion favors preclusion here. 

In MRT I, MRT alleged that it “had detailed discussions with 

Microsoft about its technology” in 2004 and made its 

“technology available to Microsoft for review and analysis.” 

MRT alleged that “Microsoft used the information it learned 

from MRT, including information relating to the Controlled 

Data Pathway technology, to build what Microsoft refers to 

as the ‘Protected Media Path’ technology and architecture,” 

which Microsoft then incorporated into various products. 

MRT concluded that Microsoft products with the PMP 

software infringed four CDP Patents.

Here, MRT alleges that, sometime in 2003 or 2004, 

“Microsoft learned that MRT was looking for investors and 

became interested in acquiring a majority interest in MRT in 

order to get control over the X1RC software so that it would 

have an effective Digital Rights Management system that 

would protect against Content Piracy and streamripping in 

particular.” In connection with a possible investment, MRT 

 11 Our discussion to this point disposes of MRT’s contention that 

what matters “is whether or not the ‘evidentiary facts underlying the 

claim’ are the same, not whether certain historical facts in the case are 

the same.” MRT relies on Harris v. Jacobs, 621 F.2d 341, 344 (9th Cir. 

1980), for that proposition, but Harris did not make the distinction MRT 

now draws. Nor do our other decisions draw a distinction between 

“evidentiary facts” and “historical facts.” What matters is the sequence 

of events from which the claims arose.
26 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

gave information concerning its CDP technology to 

Microsoft, including the CDP Patents, and provided 

Microsoft access to MRT technology. The parties also 

entered an NDA prohibiting, among other things, reverseengineering. Microsoft began testing its PMP software in 

September 2005. That software allegedly “contains a copy 

and/or derivative work of the MRT software,” as evidenced 

by the presence of the Watermark. Because MRT never 

provided Microsoft access to the source code for its 

software, MRT alleges that Microsoft must have reverse 

engineered the MRT Software’s source code. Microsoft 

incorporated its PMP software into various products over the 

years. MRT concludes that Microsoft products with the 

PMP software infringe MRT’s copyrights.

Comparing the two complaints, although the legal 

theories differ and the complaint here is more detailed, the 

factual basis for MRT’s patent infringement claims in MRT 

I and its pre-filing copyright infringement claims here is the 

same: after discussions between MRT and Microsoft in 

2004, Microsoft wrongfully took what it learned from MRT 

and created its PMP software. Microsoft then incorporated 

that software into various products, giving rise to claims of 

patent and copyright infringement. That the two actions 

“relate to the same set of facts” favors preclusion. Mpoyo, 

430 F.3d at 987.

Moreover, MRT’s patent infringement and copyright 

infringement claims “form a convenient trial unit that 

discloses a cohesive narrative” of how Microsoft allegedly 

misappropriated MRT’s technology. Mpoyo, 430 F.3d 

at 987. Indeed, patent infringement and copyright 

infringement claims are often tried together, including in 

large, complex cases. See, e.g., Oracle Am., Inc. v. Google 

Inc., 750 F.3d 1339, 1347–48 (Fed. Cir. 2014); Bowers v. 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 27

Baystate Techs., Inc., 320 F.3d 1317, 1320–22 (Fed. Cir. 

2003). But see, e.g., Conceivex, Inc. v. Rinovum Women’s 

Health, Inc., No. 16-11810, 2017 WL 3484499, at *6–8 

(E.D. Mich. Aug. 15, 2017). That the two suits “could 

conveniently be tried together” likewise favors preclusion. 

Mpoyo, 430 F.3d at 987.

As we have explained in prior decisions, the commonnucleus criterion is the “most important” of the criteria we 

consider. Harris, 682 F.3d at 1132; see also Sidney v. Zah, 

718 F.2d 1453, 1459 (9th Cir. 1983) (explaining that whether 

claims “arise out of the same transactional nucleus of facts 

[is] the criteria most stressed in our decisions” (quotation 

omitted)). We have repeatedly found it to be outcome 

determinative. See, e.g., Liquidators of Eur. Fed. Credit 

Bank, 630 F.3d at 1151–53 (applying claim preclusion based 

on the common-nucleus criterion only); Mpoyo, 430 F.3d 

at 988 (“While examination of the latter three criteria does 

not yield a clear outcome, Mpoyo I and Mpoyo II clearly 

share a common nucleus of operative fact under the first 

criterion. The first criterion controls and assures the two 

suits involve the same claim or cause of action.”); Owens, 

244 F.3d at 714 (applying claim preclusion without 

considering criteria other than the common-nucleus 

criterion); In re Imperial Corp. of Am., 92 F.3d 1503, 1508–

09 (9th Cir. 1996) (same); C.D. Anderson & Co. v. Lemos, 

832 F.2d 1097, 1100 (9th Cir. 1987) (same).12

 12 We are not alone in this regard. A number of our sister circuits 

analyze whether two claims are the “same cause of action” for purposes 

of claim preclusion using analyses similar to our common-nucleus 

criterion and without considering the other criteria we consider. See, 

e.g., City of Eudora, Kan. v. Rural Water Dist. No. 4, Douglas Cty., Kan., 

875 F.3d 1030, 1035 (10th Cir. 2017); Duckett v. Fuller, 819 F.3d 740, 

744 (4th Cir. 2016); Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 
28 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

We find the common-nucleus criterion to be outcome 

determinative here as well. For that reason, we do not 

consider the other criteria, with one exception. We reject 

MRT’s categorical contention that patent and copyright suits 

cannot “involve infringement of the same right,” Mpoyo, 

430 F.3d at 987 (quoting Sidhu, 279 F.3d at 900), because 

patents and copyrights protect “distinct rights that give rise 

to distinct claims.”

MRT’s CDP Patents provide it the right, among other 

rights, to determine who, if anyone, can use and sell its 

patented methods—i.e., its CDP technology. 35 U.S.C. 

§ 154(a)(1). MRT sought to protect that right in MRT I.

One way to implement MRT’s patented methods, as 

MRT has done and Microsoft has allegedly done, is through 

software. The MRT Software at issue here is an allegedly 

expressive implementation of MRT’s CDP technology. 

Because the MRT Software is allegedly expressive, it is 

allegedly copyrightable. 17 U.S.C. § 102(a). MRT’s 

copyrights, in turn, provide MRT the exclusive right to 

reproduce, prepare derivative works of, and distribute copies 

of the MRT Software. 17 U.S.C. § 106.

The MRT copyrights at issue, then, are protecting a right 

that was at issue in MRT I: MRT’s exclusive right to use and 

sell a particular implementation of its CDP technology. In 

other words, MRT I concerned whether Microsoft was 

improperly using and selling MRT’s patented processes, its 

CDP technology. This case concerns whether Microsoft is 

 401–02 (5th Cir. 2009); Pike v. Freeman, 266 F.3d 78, 90–91 (2d Cir. 

2001) (Sotomayor, J.); Doe v. Allied-Signal, Inc., 985 F.2d 908, 913 (7th 

Cir. 1993).
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 29

improperly using a particular, allegedly expressive, 

implementation of those processes. Because this action 

concerns a right that was already at issue in MRT I, 

preclusion is favored.13

We also reject MRT’s contention that we will create an 

inter-circuit and intra-circuit split by applying claim 

preclusion here. This is not so.

In Superior Industries, LLC v. Thor Global Enterprises 

Ltd., a divided panel of the Federal Circuit—applying Eighth 

Circuit law—held that a prior suit concerning trademark 

infringement did not preclude a subsequent suit concerning 

patent infringement. 700 F.3d 1287, 1293–95 (Fed. Cir. 

2012). It reasoned that the two suits arose from “clearly 

separate transactions.” Id. at 1293. “Superior’s trademark 

claims arose from Thor’s use of the FB mark in 

advertising—not from actual sales or offers for sale of the 

Thor Undercarriage Technology in the United States,” while 

“Superior’s patent infringement claim arises from sales, 

offers to sell, or importation of goods that allegedly infringe 

the ‘101 Patent—not from the advertising or use of the FB 

mark at issue in the 2009 Trademark Action.” Id. at 1294. 

Here, in contrast, MRT’s pre-filing copyright infringement 

claims arise from the same transaction as its patent 

infringement claims: Microsoft’s alleged misappropriation 

 13 Of course, one issue that may be present in a patent suit that is not 

in a copyright suit is the validity of a patent. However, this difference 

does not mean that patent and copyright suits necessarily involve 

different “rights” for preclusion purposes. That is because patent 

invalidity is an affirmative defense that must be proven by the party 

asserting invalidity. See 35 U.S.C. § 282(a); Commil USA, LLC v. Cisco 

Sys., Inc., 135 S. Ct. 1920, 1929 (2015). It therefore does not define the 

claims that a claimant brought or could have brought, which is the focus 

of the preclusion inquiry.
30 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

of MRT’s CDP technology. Superior Industries is 

inapposite.

In Harris v. Jacobs, an Oregon-state prisoner brought 

suit in federal court alleging that Oregon denied him 

constitutionally adequate medical care—in violation of the 

Eighth Amendment—and that the state denied him a statelaw right to obtain nonprison medical care at his own 

expense, in violation of the Due Process Clause of the 

Fourteenth Amendment. 621 F.2d 341, 342 (9th Cir. 1980) 

(per curiam). While his federal suit was pending, the 

plaintiff also sought a writ of habeas corpus in state court, 

asserting his Eighth Amendment claim. Id. The state court 

held that the prison provided constitutionally adequate 

medical care and denied plaintiff’s petition. Id. We held 

that claim preclusion barred the plaintiff’s Eighth 

Amendment claim but not his Fourteenth Amendment claim 

in his federal suit. Id. at 342–44. We reasoned that the 

claims arose from different facts: the Eighth Amendment 

claim derived from medical care actually provided to the 

plaintiff while the Fourteenth Amendment claim derived 

from the state’s separate decision not to allow the plaintiff to 

obtain nonprison care. Id. Here, in contrast, the same events 

gave rise to MRT’s patent infringement and pre-filing 

copyright infringement claims.

In Hells Canyon Preservation Council v. U.S. Forest 

Service, the first suit alleged that the Forest Service violated 

the National Environment Policy Act by deciding to relocate 

a vehicular trail without first filing an environmental impact 

statement. 403 F.3d 683, 690 (9th Cir. 2005). That is, the 

first suit arose from events that predated the Forest Service 

moving the trail. The second suit arose “out of [the 

plaintiff’s] assertion that parts of the trail” remained in a 

prohibited area “after the relocation.” Id. at 690–91. 
MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT 31

Because the two suits arose from temporally distinct 

transactions, we held that claim preclusion did not apply. Id. 

But here, again, the patent infringement and pre-filing 

copyright infringement claims arise out of the same 

transaction: Microsoft allegedly misappropriated MRT’s 

CDP technology, giving rise to claims of patent and 

copyright infringement. This case is distinct from Hells 

Canyon, just as it is from Superior Industries and Harris. 

Our holding that claim preclusion bars the pre-filing 

copyright infringement claims creates neither an inter-circuit 

nor an intra-circuit split.

Finally, we note that we do not hold that copyright 

infringement and patent infringement claims will always be 

preclusive as to one another. Courts must analyze each case 

on the particular facts to determine if claim preclusion 

applies.

B

Turning to MRT’s DMCA claim, that claim alleges that 

Microsoft circumvented measures in the MRT Software 

designed to protect it from unlawful copying, violating 

17 U.S.C. § 1201(a)(1)(A), when it reverse engineered and 

copied the MRT Software. We hold that claim preclusion 

bars MRT’s DMCA claim because the patent infringement 

claims in MRT I and the DMCA claim “share a common 

nucleus of operative fact.” Mpoyo, 430 F.3d at 987.14 Both 

allege that Microsoft used information gleaned from MRT 

to create its PMP software. The DMCA claim specifies that 

 14 As before, we need not, and do not, consider the other criteria. 

See, e.g., Liquidators of Eur. Fed. Credit Bank, 630 F.3d at 1151–53; 

Mpoyo, 430 F.3d at 988; Owens, 244 F.3d at 714.
32 MEDIA RIGHTS TECHNOLOGIES V. MICROSOFT

Microsoft did so by reverse engineering the MRT Software’s 

source code, in violation of the DMCA.

C

Finally, we hold that claim preclusion also bars MRT’s 

breach of contract claims. Those claims allege that 

Microsoft breached anti-reverse-engineering provisions in 

the 2004 NDA and MRT’s EULA when it reverse 

engineered and copied the MRT Software. Because those 

claims are based on the same facts as MRT’s DMCA claim, 

which we hold is precluded, we likewise hold that MRT’s 

breach of contract claims are precluded.

VI

In summary, we hold that MRT’s pre-filing copyright 

infringement, DMCA, and breach of contract claims are 

precluded, but MRT’s post-filing copyright infringement 

claims are not. We accordingly AFFIRM in part and 

REVERSE and REMAND in part the district court’s 

decision dismissing all of MRT’s claims.

Each side shall bear its own costs on appeal.