Del Mar Avionics, Inc. v. Quinton Instrument Co.

• Citation: 836 F.2d 1320,5 USPQ2d 1255
• Decision Date: 18 December 1987
• Docket Number: Nos. 85-2443,85-2465,s. 85-2443
• Parties: DEL MAR AVIONICS, INC., Appellee/Cross-Appellant, v. QUINTON INSTRUMENT CO., Appellant/Cross-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1320

836 F.2d 1320

5 U.S.P.Q.2d 1255

DEL MAR AVIONICS, INC., Appellee/Cross-Appellant, v. QUINTON INSTRUMENT CO., Appellant/Cross-Appellee.

Nos. 85-2443, 85-2465.

United States Court of Appeals Federal Circuit.

Dec. 18, 1987.

Mario A. Martella, Beehler, Pavitt, Siegemund, Jagger, Martella and Dawes, Los Angeles, Cal., argued for appellee/cross-appellant. With him on the brief was Maurice B. Pilosof.

Edward W. Bulchis, Seed and Berry, Seattle, Wash., argued for appellant/cross-appellee.

Before FRIEDMAN, NEWMAN and ARCHER, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Quinton Instrument Company ("Quinton") appeals the judgment of the United States District Court for the Western District of Washington. Del Mar Avionics, Inc. v. Quinton Instrument Co., No. C78-466V (W.D.Wa. April 6, 1985). In its Findings of Fact and Conclusions of Law (Oct. 15, 1984) (hereinafter "Findings") the court held that Quinton had infringed U.S. Patent No. 3,267,934 entitled "Electrocardiac Computer", invented by William Thornton (the " '934 patent") and owned by Del Mar Avionics ("Del Mar"). A 5% royalty, which was doubled based on the court's finding of willful infringement, was awarded to Del Mar as damages. Prejudgment interest and attorney fees were also awarded.

Del Mar cross-appeals on the measure of damages.

We affirm the judgment in all respects except for the measure of damages. The damage award is vacated, and remanded for reassessment.

Background

The Thornton invention relates to the electronic detection of heart abnormalities. The human cardiac muscle produces electrical signals, called "ECG" signals, that may be detected by electrodes on the patient's skin. The ECG signals include a group of pulses, known as the "QRS complex", that result from depolarization of the ventricles of the heart prior to contraction. Preceding the QRS complex is a small electrical pulse referred to as the "P wave", caused by the initiation of muscular activity. Following the QRS complex is another pulse called the "T wave", which is separated from the QRS complex by the "ST segment". The Thornton invention provides automatic processing of ECG signals to detect ST segment depressions and elevations in ECG signals taken from a patient over an extended period of time. Deviation from the signal that is considered normal for the patient is an indication of certain types of heart problem.

These parties and their privies have been in litigation since 1974. The first district court decision on the '934 patent, reported at Del Mar Engineering Laboratories v. Physio-Tronics, Inc., 202 USPQ 242 (C.D.Cal.1978), contains an extensive discussion of human heart function in relation to the Thornton invention. That action was brought by Del Mar against Physio-Tronics, Inc., a Quinton distributor. The California district court held the '934 patent to be valid and infringed, and enjoined Physio-Tronics from further infringement. The Ninth Circuit affirmed. Del Mar Engineering Laboratories v. Physio-Tronics, Inc., 642 F.2d 1167, 209 USPQ 977 (9th Cir.1981).

A few months thereafter Quinton, the manufacturer and seller of the equipment, was included in the California district court's order of injunction, based on its "substantial involvement" in and control of the litigation. Quinton did not appeal that order.

Following its favorable decision against Physio-Tronics in the California district court Del Mar brought suit against Quinton in the District Court for the Western District of Washington, alleging infringement by the identical device adjudicated in California and requesting summary relief. Del Mar's motion for summary judgment, invoking the doctrines of res judicata and collateral estoppel, was granted. The court held that Del Mar was "entitled to recover ... those damages which plaintiff has sustained by reason of defendant's infringing acts". The accounting was "reserved for later disposition". Del Mar Avionics v. Quinton Instrument Co., No. C78-466V, Slip op. at 2 (W.D.Wash. May 17, 1979). That decision was also upheld by the Ninth Circuit. Del Mar Avionics v. Quinton Instrument Co., 645 F.2d 832, 213 USPQ 988 (9th Cir.1981). The appeal at bar arises from the reserved accounting proceeding in the Washington action.

Meanwhile, Quinton was selling a similar device in California, and Del Mar brought a contempt proceeding. At an evidentiary hearing the equipment at issue was found to contain modified circuitry. The device that was initially before the California court was later denominated a "type A" S-T segment computer, and the modified circuitry was called "type C". The California district court held that the type C circuitry did not infringe the '934 patent. Del Mar Engineering Laboratories v. Physio-Tronics, Inc., No. CV74-3008-JWC (C.D.Cal. March 24, 1980). That ruling was affirmed on appeal. Del Mar Engineering Laboratories v. Physio-Tronics, Inc., 222 USPQ 793, 673 F.2d 1337 (9th Cir.1982).

During discovery pertinent to the accounting for the type A device in the Washington action, Del Mar learned that Quinton was also selling a third form of the device, having circuitry called "type B". Del Mar charged that this circuitry also infringed the Thornton patent. In August 1983 an evidentiary hearing was held by the Washington district court on the issues of (1) infringement by the type B circuitry, and (2) damages as to type A and, if appropriate, type B. The district court found that type B infringed the Thornton claims, determined which Quinton models embodied the types A and B infringing circuitry, in distinction from the excluded type C models, and assessed damages.

Effect of Prior Litigation

The prior determination of certain issues, including the issues of claim construction and of infringement by the type A and non-infringement by the type C models, bars judicial redetermination of those issues as between the parties to the prior actions. As described by the doctrine of "issue preclusion", the relitigation of issues previously decided is barred on principles of finality and repose. 18 C. Wright, A. Miller, & E. Cooper, Federal Practice & Procedure Sec. 4402 at 10 (1981 ed.). See Commissioner v. Sunnen, 333 U.S. 591, 601, 68 S.Ct. 715, 721, 92 L.Ed. 898 (1948):

Of course, where a question of fact essential to the judgment is actually litigated and determined in the first ... proceeding, the parties are bound by that determination in a subsequent proceeding even though the cause of action is different.

See also Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912); Stewart-Warner v. City of Pontiac, Michigan, 767 F.2d 1563, 1568, 226 USPQ 676, 679 (Fed.Cir.1985).

Res judicata is of the same effect with respect to a final decision between the parties as to the identical dispute. As the Court stated in Cromwell v. County of Sac, 94 U.S. (4 Otto) 351, 353, 24 L.Ed. 195 (1876):

But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.

Quinton argues that the Washington district court clearly erred in finding infringement by type B. Quinton states that even if type B is "not exactly" the same as type C and thus not a beneficiary of the principles of res judicata, the B and C circuits have sufficient similarity to bar Del Mar's claim of infringement by type B. Del Mar asserts the contrary conclusion, based on the district court's finding of the similarity between types A and B. Thus each side asserts that there are benefits, available only to it, of the prior adjudications on types A and C.

The district court found that type B was not identical to either type A or type C. On this basis the district court correctly held that absent a prior determination of infringement with respect to type B, neither res judicata nor issue preclusion applied. A device not previously before the court, and shown to differ from those structures previously litigated, requires determination on its own facts.

Quinton argues that type B "could have been litigated in the California contempt proceeding", implying that failure to have done so insulates type B from further scrutiny. However, Quinton does not also allege that the existence of the type B model was known to Del Mar or was brought to the California court's attention; indeed, Del Mar asserts that type B was within the scope of its discovery request but was not produced. The Court stated in Cromwell, 94 U.S. (4 otto) at 356:

On principle, a point not in litigation in one action cannot be received as conclusively settled in any subsequent action upon a different cause, because it might have been determined in the first action.

On this basis, infringement by type B was properly before the Washington district court.

In determining whether the type B device infringed the '934 patent claims, the district court applied the law of the case to the issues of claim interpretation and construction, as developed in connection with types A and C and as affirmed by the Ninth Circuit.

Claim construction is a question of law that may require determination of underlying facts. Mannesmann Demag Corp. v. Engineered Metal Products Co., 793 F.2d 1279, 1282, 230 USPQ 45, 46 (Fed.Cir.1986). To the extent that the underlying facts are based on identical premises, as is here the case, the prior findings and the claim construction based thereon are the law of the case. They are not available for redetermination.

Quinton's argument that the district court failed to construe the '934 claims in a manner consistent with the specification and as comprehended by one of ordinary skill in the art must be viewed in relation to the prior claim construction. We have reviewed the arguments, but we have been shown no error in the Washington district court's construction of the '934...