## Facts

- Carl A. Miler obtained U.S. Patent No. 2,674,957 covering a wheel-and-axle assembly used on roller-coaster-type amusement cars to help keep the car on the track at relatively high speeds while negotiating sharp, banked curves.
- The infringement suit focused on **Claim 6**, which described a combination of front and rear wheel-axle “truck” assemblies using multiple wheels arranged so the track rail is held between wheels set at right angles (a configuration intended to resist lifting or lateral forces).
- The claimed assemblies included mounting features that permitted limited rocking or shifting movement intended to maintain wheel contact through curves and track variations.
- Before the infringement action, **Boutell** filed a separate federal action in the **Eastern District of Wisconsin** against **Miler**, seeking a declaratory judgment that the same patent was invalid.
- The Wisconsin case ended by **settlement** and entry of a **stipulated (consent) judgment** treating the patent as valid; after that settlement, Boutell became a **licensee** of Miler.
- Boutell and Miler later sued **Warren Volk** and **Wilson-Volk, Inc.** in federal district court for infringement of Claim 6.
- Volk had not been a party to the Wisconsin case, though he had been an employee of Boutell at that time and had assisted Boutell by retaining an attorney in connection with the Wisconsin litigation.
- In the infringement case, Volk and Wilson-Volk counterclaimed for declaratory relief of invalidity and noninfringement.
- The district court held **Claim 6 invalid for obviousness** under **35 U.S.C. § 103**, and added that **if** the claim were valid it would be infringed.
- Boutell and Miler appealed, arguing (1) the Wisconsin consent judgment should bind Volk on validity, and (2) the district court’s obviousness determination was wrong.

## Issues

1. Whether a prior consent judgment declaring the patent valid in litigation between Boutell and Miler estopped Volk, a nonparty to that action, from asserting invalidity in a later infringement suit.
2. Whether the district court clearly erred in holding Claim 6 invalid as obvious under 35 U.S.C. § 103.

## Decision

- The Tenth Circuit **affirmed**.
- The court held the earlier **Wisconsin consent judgment** did **not** bind Volk and did **not** prevent him from litigating validity in the infringement case.
- The court further held the district court’s conclusion that Claim 6 was **obvious** under **§ 103** was supported by the record and was **not clearly erroneous**, so the invalidity judgment stood.
- Because invalidity defeated the infringement claim, the district court’s statement that the claim would have been infringed if valid did not alter the result.

## Legal Principles

- A **consent (stipulated) judgment** resolving prior patent litigation does not automatically preclude a later accused infringer—who was not a party to the earlier case—from contesting validity.
- **Collateral estoppel/res judicata** requires, at minimum, a sufficient identity of parties (or privity) and an adequate basis to treat an issue as actually resolved in a way that fairly binds the later litigant; a settlement-based validity decree generally provides a weak basis for binding a nonparty.
- A relationship such as **employment** or limited assistance connected to prior litigation does not, without more, establish **privity** that would justify binding a later defendant to a prior consent decree on patent validity.
- **Blonder-Tongue** principles relaxing mutuality in certain patent cases do not require giving “reverse” preclusive effect to a prior **validity** determination reached by consent so as to bar new defendants from raising invalidity.
- **Obviousness under 35 U.S.C. § 103** turns on the state of the prior art and what would have been obvious to a person of ordinary skill at the time; a claimed combination of known mechanical elements is unpatentable when it yields only expected results from their known functions.
- On appeal, the reviewing court defers to the trial court’s supported factual determinations underlying the § 103 analysis and will not disturb the judgment where the finding of obviousness is not clearly erroneous.

## Conclusion

Boutell and Miler could not use a Wisconsin consent judgment of validity—entered after settlement in earlier litigation between themselves—to bar Volk, a nonparty, from challenging the patent. The Tenth Circuit also upheld the district court’s determination that Claim 6 of Miler’s roller-coaster wheel-assembly patent was an obvious combination under § 103, and therefore invalid, ending the infringement claim.


Boutell v. Volk, 449 F.2d 673, 171 U.S.P.Q. 668 (1971)