Federal Circuit Says PersonalWeb Cannot Sue Amazon Customers

The Federal Circuit ruled Wednesday that PersonalWeb’s suit against Amazon customers cannot proceed because a prior related lawsuit filed against Amazon had been dismissed with prejudice. The patent infringement suit concerns technologies which ensure data on computer networks have unique identifiers to avoid duplication.

PersonalWeb has pursued litigation against Amazon since 2011, when it sued over the allegedly infringing Amazon Simple Storage Service, a key component of Amazon’s web hosting infrastructure service. The Federal Circuit, recounting the case, said PersonalWeb’s infringement contentions “consist of mainly similar and sometimes identical material repeated several times.” A common allegation was “a reference to S3’s use of ETags to compare the identity of different objects in order to determine whether or not to perform certain operations.” The 2011 case was eventually dismissed with prejudice after the court issued a claim construction order.

In 2018, PersonalWeb sued dozens of website operators, including 53 in January alone, “many of which were Amazon’s customers.” They alleged infringement of the same patents at issue in the 2011 case. Amazon intervened in these cases and undertook their defense. The cases were consolidated and PersonalWeb’s litigation against Amazon subsidiary Twitch was used as the representative case.

Amazon also filed for a declaratory judgement, arguing that PersonalWeb’s claims were precluded by its prior lawsuit and that the Kessler doctrine, which prohibits patent lawsuits against the customer of a previously victorious seller, barred the claims. That declaratory judgment was partially granted. PersonalWeb appealed, arguing that the preclusion claim should not apply and that the dismissal with prejudice does not trigger the Kessler doctrine because it was not an adjudication of non-infringement.

The Federal Circuit rejected both of PersonalWeb’s arguments, arguing that the claim was not precluded even though PersonalWeb emphasized different facts and a different theory of infringement in its second case. While PersonalWeb argued that the dispute must be “actually litigated” to trigger Kessler, the Federal Circuit disagreed, finding the stipulated dismissal counted as an adjudication of the matter.

PersonalWeb was represented by Stubbs Alderton & Markiles and SethLaw. Amazon, arguing on behalf of its customers, was represented by Fenwick & West.