Federal Circuit: Prior Dismissal Bars Customer Lawsuits

• Published date: 23 June 2020
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Law Firm: Pearl Cohen Zedek Latzer Baratz
• Author: Mr Clyde Shuman

The U.S. Court of Appeals for the Federal Circuit, in a precedential opinion, has ruled that dismissal with prejudice of a patent infringement lawsuit against a manufacturer or supplier can bar subsequent infringement suits against the manufacturer/supplier's customers. In In re: PersonalWeb Techs., LLC, No. 2019-1918, the Court affirmed a district court ruling that eight infringement lawsuits brought by PersonalWeb Technologies LLC against customers of Amazon.com, Inc., and Amazon Web Services, Inc., (collectively "Amazon") were barred as a result of a prior lawsuit brought by PersonalWeb against Amazon, which was dismissed with prejudice.

By way of background, PersonalWeb was the owner by assignment of five patents directed to methods and systems for identifying data and naming files in computer systems.

PersonalWeb originally sued Amazon and one customer for patent infringement in the Eastern District of Texas, based on Amazon's manufacture, sale, use, importation and/or offer for sale of the Amazon Simple Storage Service (S3). Briefly, Amazon S3 provides web-based storage to certain customers, typically companies with websites. The customers can use S3 to store static content, such as images, for their websites. Information is stored in the form of "objects" organized into customer-created containers called "buckets." Once an object is stored in S3, it can be made available over the entire Internet. S3 automatically generates an "ETag" for every object stored in S3. ETags provide useful identifying information about an object.

Where a user requests a file for a second time, S3 compares the ETag for the file stored in the user's cache to the file stored on S3. If the ETags are identical, S3 responds with a status code indicating that the user's computer already has a copy of the file, and further download is not needed. If S3 does not contain a file with the same ETag, that indicates that the contents of the file have been changed. In that event, S3 sends the user's browser the file containing the updated version of the file. This is referred to as a "conditional get request" and helps avoid unnecessary downloads, saving time and network bandwidth.

In the Texas action, PersonalWeb's infringement contentions specifically referenced S3's use of conditional get requests. PersonalWeb also represented in discovery that S3's use of ETags to perform conditional operations infringed the asserted patents.

Following the district court's claim construction order...