## Facts

- Transclean owned U.S. Patent No. 5,318,080 covering an apparatus for changing automatic transmission fluid.
- Transclean previously sued the machine manufacturer (Bridgewood) for infringement based on Bridgewood’s T-Tech transmission fluid exchange machines and obtained a final judgment of infringement and damages that was affirmed on appeal.
- Bridgewood’s successor later took a license effective May 1, 1998; machines sold on or after that date were licensed, while pre-license machines remained within the earlier infringement judgment.
- After the manufacturer case, Transclean sued Jiffy Lube and numerous “fast lube” businesses that purchased and used pre–May 1, 1998 T-Tech machines.
- Some defendants actively litigated (Participating Defendants); others failed to appear or defaulted (Defaulting Defendants).
- In the district court, Transclean repeatedly alleged and conceded that the defendants were in privity with Bridgewood, seeking to use the earlier findings offensively through issue preclusion.
- The district court granted summary judgment to the Participating Defendants on claim preclusion, relying in part on Transclean’s privity admissions, and later treated the Defaulting Defendants similarly while addressing damages.
- On appeal, Transclean attempted to deny privity; defendants argued Transclean’s earlier position foreclosed that change.

## Issues

1. Whether Transclean’s infringement claims against the Participating Defendants were barred by claim preclusion based on the prior final judgment against the manufacturer and Transclean’s admissions of privity.
2. Whether Transclean was judicially estopped from denying privity after having asserted privity to seek offensive preclusion benefits.
3. Whether the same preclusion analysis barred claims against the Defaulting Defendants and rendered further damages proceedings unnecessary.

## Decision

- The Federal Circuit applied Eighth Circuit law to claim preclusion and judicial estoppel.
- The court affirmed summary judgment for the Participating Defendants, holding Transclean’s claims were barred by claim preclusion.
- The court held Transclean was judicially estopped from repudiating its prior position that the defendants were in privity with the manufacturer.
- As to the Defaulting Defendants, the court reversed in part and remanded, directing entry of judgment consistent with the claim-preclusion ruling and eliminating the need for separate damages determinations.

## Legal Principles

- Under Eighth Circuit law, claim preclusion applies when there is (1) a final judgment on the merits by a court of competent jurisdiction, (2) the same cause of action, and (3) the same parties or their privies.
- The “same cause of action” inquiry focuses on whether the suits arise from the same transactional nucleus of operative facts.
- Judicial estoppel bars a party from taking a position inconsistent with one it previously asserted and relied upon to gain an advantage, to protect the integrity of the judicial process.
- Privity for preclusion purposes may be found where there is a sufficiently close relationship such that interests were adequately represented, and a party’s own affirmative privity assertions can be treated as binding when later positions conflict.
- In patent cases, the general allowance for separate suits against manufacturers and users does not prevent application of ordinary preclusion doctrines where the elements of claim preclusion are satisfied and the patentee is estopped from denying privity it asserted.

## Conclusion

The Federal Circuit held that Transclean’s second infringement suit against businesses using the same pre-license machines was barred by claim preclusion, and that Transclean could not avoid that result by denying privity after previously asserting it to pursue offensive preclusion; the court required consistent application of this bar to both participating and defaulting defendants.


Transclean Corp. v. Jiffy Lube Int'l, Inc., 474 F.3d 1298 (Fed. Cir. 2007)