The United States Court of Appeals for the Federal Circuit decided in Transclean v. Jiffy Lube that Transclean should be bound by its repeated statements proffered during the course of litigation and not be allowed to take a contrary position during a second phase of litigation. Transclean is the sole licensee of U.S. Patent No. 5,318,080 that is directed to an apparatus for changing automatic transmission fluid. In October of 1997, Transclean filed a patent infringement suit against Bridgewood. Transclean accused Bridgewood of manufacturing and distributing an infringing transmission service device. Transclean's suit resulted in them obtaining a $1.87 million dollar judgment against Bridgewood for infringement of several of the '080 patent claims. To date, Transclean has not collected the judgement against Bridgewood.
In an attempt to secure additional sources to collect money from, Transclean brought suit against more than thirty different fast lube businesses that use the infringing device. The multiple defendants filed various motions for summary judgment arguing that the judgment in the Bridgewood litigation had some preclusive effect. Transclean responded by arguing that issue preclusion applied as the defendants were in privity with Bridgewood. In response, the defendants argued that Transclean was barred from pressing the claim because claim preclusion principles barred Transclean's claim. Both the District court and the Federal Circuit agreed that Transclean was barred from brining suit against the defendants because of claim preclusion. In reaching their decision, the Federal Circuit applied the doctrine of judicial estoppel to prohibit Transclean from taking an inconsistent position than that argued in the original litigation.
Under the Doctrine of claim preclusion, an earlier suit bars a party from asserting a claim in a later suit if (1) the first suit resulted in a final judgment on the merits; (2) the prior judgment was rendered by a court of competent jurisdiction; (3) both suits involve the same cause of action; and (4) both suits involve the same parties or their privies. In an attempt to show that issue preclusion applied to the defendants, Transclean admitted and repeatedly argued that the defendants were in privity with Bridgewood. Because Transclean admitted this, the court found that the issue of privity was not in dispute. Because Transclean admitted that there was privity between Bridgewood and the additional defendants, and knew of the privity during the original proceedings, the court used claim preclusion to bar Transclean from brining additional suits against the quick lube business that used the infringing device. As such, Transclean is left only with the option of securing the original judgment against Bridgewood and not any additional third party defendants.
To read the full decision in Transclean Corp. v. Jiffy Lube Int'l, click here.
