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Patentee Failed to Assert Compulsory Counterclaim of Infringement

October 20, 2003

Decision icon Decision

Last Month at the Federal Circuit - November 2003

Judges: Rader (author), Newman, and Michel

In Polymer Industrial Products Co. v. Bridgestone/Firestone, Inc., No. 03-1176 (Fed. Cir. Oct. 20, 2003), the Federal Circuit affirmed a decision by a district court ruling that the patentee waived a claim for infringement by not asserting it in a prior action as a compulsory counterclaim.

Polymer Industrial Products Company and Polymer Enterprises Corporation (collectively “PIPCO”) own U.S. Patent No. 4,381,331 (“the ‘331 patent”), which claims improvements in turn-over bladders used for manufacturing pneumatic vehicle tires. In 1995, PIPCO filed claims for infringement against Bridgestone/Firestone, Inc. (“Bridgestone”) alleging that Bridgestone’s Skim-1 turn-over bladder infringed the ‘331 patent. After Bridgestone began to make and use a new turn-over bladder (Skim-2), Bridgestone amended its answer to include a counterclaim for DJ that the Skim-2 turn-over bladders did not infringe the ‘331 patent. Although PIPCO denied the allegations of the counterclaim, it did not amend its complaint to assert an affirmative claim that the Skim-2 product infringed the ‘331 patent.

At the trial, the jury found that both the Skim-1 and Skim-2 products infringed the ‘331 patent and awarded damages. In a previous appeal, the Federal Circuit affirmed the judgment of the district court, but based its decision on an assumption that damages were not awarded for the Skim-2 product.

PIPCO then filed another action seeking damages for infringement of the ‘331 patent based on the Skim-2 product. Bridgestone filed a motion to dismiss, alleging that PIPCO waived its rights to damages with respect to the Skim-2 product in the prior litigation. The district court held that PIPCO’s present infringement claim was a compulsory counterclaim to Bridgestone’s DJ claim of noninfringement in the prior litigation, relying on Fed. R. Civ. P. 13(a) and Federal Circuit precedent holding that when the same patent is at issue in an action for declaration of noninfringement, a counterclaim for patent infringement is compulsory and, if not made, is deemed waived. Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795 (Fed. Cir. 1999).

The Federal Circuit confirmed on appeal that Rule 13(a) makes an infringement counterclaim into a DJ action for noninfringement compulsory. Therefore, a party that does not assert its compulsory counterclaim in the first proceeding has waived its right to bring the counterclaim and is forever barred from asserting that claim in future litigation. The Federal Circuit rejected PIPCO’s argument that § 2202 of the Declaratory Judgment Act constitutes an exception to this rule. In particular, PIPCO had argued that the Declaratory Judgment Act’s “further relief” section, which states that necessary or proper relief based on a DJ or decree may be granted, operates as an exception to Rule 13(a). But, the Court concluded that nothing in § 2202 authorizes a party to seek further relief based on a DJ without regard to other established rules of procedure.