Transclean Corp. v. Jiffy Lube International, Inc.

Transclean Corporation, James Viken, Jon Lang, and Donald Johnson (collectively, Transclean) (plaintiffs) sued Bridgewood Services, Inc. (Bridgewood) in federal court for infringement of United States Patent No. 5,318,080 (the 080 patent). Transclean alleged that machines sold by Bridgewood (T-Tech machines) infringed the 080 patent. Transclean won the lawsuit and was awarded $1.87 million in damages. Bridgewood’s successor business obtained a license for the T-Tech machines that went into effect on May 1, 1998, so any machines sold on or after that date were not subject to the infringement suit. Transclean then filed an infringement suit against over 30 fast-lube businesses (defendants) in federal court in the Eighth Circuit, alleging each business used an infringing T-Tech machine purchased from Bridgewood prior to May 1, 1998. These machines were also the subject of litigation in the Bridgewood suit. A subset of defendants including Jiffy Lube International, Inc. (collectively, Jiffy Lube) filed a motion for summary judgment, arguing that claim preclusion barred Transclean from suing Jiffy Lube for infringement. Transclean filed a motion for summary judgment, arguing that issue preclusion applied and stating that Jiffy Lube was in privity with Bridgewood. The district court granted Jiffy Lube’s motion because the elements of claim preclusion, including privity, were satisfied and denied Transclean’s motion. Transclean asserted that Jiffy Lube was in privity with Bridgewood in discovery documents, in its amended complaint, and during the summary-judgment motion. Transclean also explicitly conceded that privity existed for claim-preclusion purposes. Transclean appealed the summary judgment of claim preclusion and only began denying the existence of privity between Bridgewood and Jiffy Lube late in the appeals process. Jiffy Lube argued on appeal that privity was a question of fact, and Transclean argued that privity was a question of law.