# Appendix — Novicky v. Syntex Ophthalmics, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0126%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1985 - **Citation:** 470 U.S. 1047 ## Text 84-1089 No. (3) Office Supreme Court, US. is FILED In THE Supreme Court of the Bnited States Ocroser Term, 1984 NICK N. NOVICKY, Petitioner, V8. SYNTEX OPHTHALMICS, INC. and ARAPAHOE CHEMICALS, INC. (now SYNTEX CHEMICALS, INC.), Respondents. NICK N. NOVICKY, Petitioner, Vs. GEORGE F. TSUETAKI and FUSED KONTACTS OF CHICAGO, INC., Respondents. —_——_——— —_——— APPENDIX TO THE PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT KEITH V. ROCKEY 135 South LaSalle Street Chicago, Illinois 60603 (312) 346-0338 Attorney for Petitioner Midwest Law Printing Co., Chicago 60611, (312) 321-0220 INDEX TO APPENDIX Opinion of the United States Court of Appeals for the Federal Cir- cuit, filed October 3, 1984 ..... Opinion of the Appellate Court of Illinois, First District, Third Division, filed December 7, 1983 Page la 53a IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1984 No. NICK N. NOVICKY, Petitioner, vs. SYNTEX OPHTHALMICS, INC. and ARAPAHOE CHEMICALS, INC. (now SYNTEX CHEMICALS, INC.), Respondents. NICK N. NOVICKY, Petitioner, vs. GEORGE F. TSUETAKI and FUSED KONTACTS OF CHICAGO, INC., Respondents. APPENDIX TO THE PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT —la— UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT SYNTEX OPHTHALMICS, INC., et al., Appellees, V. Appeal No. 84-838* NICK N. NOVICKY, et al., dd i Appellants. GEORGE F. TSUETAKI, et al., Appellees, V. Appeal No. 84-857* NICK N. NOVICKY, et al., dl Appellants. DECIDED: October 3, 1984 Before DAVIS, Circuit Judge, NICHOLS, Senior Circuit Judge, and BALDWIN, Circuit Judge. DAVIS, Circuit Judge. *For some reason, two seperate appeals (identical in content) were noted by appellant; we treat the two appeals as, in reality, one appeal. Tsuetaki, et al., did not partici- pate in this appeal. ailitine Appellant Novicky seeks review of four related decisions of the United States Dis- trict Court for the Northern District of Illinois: (1) a grant of summary judgment for appellee Syntex, deciding that Syntex has title to all of the patents and patent appli- cations naming Novicky as inventor ;~’ (2) a decision holding that Novicky misappropriated Syntex's trade secrets; 2/ (3) a final in- junction, enjoining Novicky for a twenty-year period from using or disclosing Syntex's trade secrets;>’ and (4) a denial of Novicky's i/ Syntex Ophthalmics, Inc. v. Novicky, No. 80 C 6257 (N.D. Ill. June 13, 1983). 2/svntex Ophthalmics, Inc. v. Novicky, No. 80 C 6257 (N.D. Ill. Dec. 12, 1983). 3/syntex Ophthalmics, Inc. v. Novicky, 80 C 6257 (N.D. Ill. Feb. 9, 1984). —3a— motion to remand the proceedings back to state court. 4/ | We affirm the grant of summary judgment on the patent issue as to six of the eight patents and applications covered by that decision and remand to the District Court the question of Syntex's title as to the other two patents. On the issue of trade secret misappropriation, we affirm the District Court's holding that Novicky misappropriated Syntex's trade secrets, but reverse the court's twenty-year injunction and remand for reasons explainedinfra. Finally, we affirm the District Court's denial of Novicky's motion to remand the state action back to state court. 4/tsuetaki v. Novicky, No. 81 C 4050 (N.D. Ill. Feb. 13, 1984). Novicky does not seem to be appealing from the District Court's denial (in June 1983) of Novicky's motion to file a new counter- Claim alleging illegal dumping in count one and attacking the validity of the Gaylord patents in count two. Consequently, we do not address those issues directly, although the parties touch upon them in their briefs. —4da— I Background A. The Polycon project and Novicky's employment: The roots of this complex litiga- tion2/ go back to 1977. Early in that year, the appellees, Syntex Ophthalmics, Inc. and Arapahoe Chemicals, Inc. (collectively referred to as "Syntex") &/ embarked on a joint venture for research and commercial development of a contact lens material from which rigid gas- 3/ Counsel greatly added to the complexity of this case by failing to provide an adequate index for their seventeen-volume appendix. In particular, counsel's haphazard indexing of the opinions of the various courts that have heard aspects of the case made this court's work considerably more difficult. &/ Syntex Ophthalmics, Inc. and Arapahoe Chemicals, Inc. are sister subsidiaries of Syntex (U.S.A.), Inc. Since the initiation of this litigation Arapahoe Chemicals has changed its name to Syntex Chemicals. —5a— permeable contact lenses could be made .2/ They called their venture the "Polycon project". Appellant Novicky, who had been employed by Arapahoe since 1973, was selected to be a chemist on the Polycon project. This litigation arises out of that employment relationship. When first employed by Arapahoe in 1973, Novicky signed a standard Syntex employment agreement, promising confidentiality and as- signing to Syntex all ideas and inventions conceived or developed by him while at Syntex. The agreement provided, in pertinent part: 3. Disclosure of Information and Assignment and Ownership of Ideas. The Employee agrees to fully disclose, deliver, trans- fer and assign to Employer, his i/ Prior to the development of rigid, gas-permeable lenses, contact lens wearers often wore "hard" contact lenses. These lenses blocked the transmission of oxygen to the wearer's cornea, a condition which can lead to corneal swelling. Gas permeable lenses allow oxygen to reach the cornea and, for that reason, can be worn for longer periods of time than "hard" lenses. in and to any and all ideas, methods, inventions, devices and improvements, whether patentable or not, originating with, con- ceived, acquired or developed by Employee, either solely or jointly : with others during any times, ) whether during working hours or not, when the Employee is employed by Employer, if the same be reason- ably related to Employer's actual operations. All such ideas, methods, inventions, devices, and improvements are hereafter jointly and severally referred to as "ideas". a entire right, title and interest The parties hereto agree that for purposes of Paragraphs (3) and (4) herein, the Employee shall be deemed as Employee of the Company twenty-four (24) hours a day for every day during the year notwithstanding any leaves of absence, vacations, or other leave. 4. Secrecy: The Employee recog- nizes and acknowledges that various secrets and/or facts as defined below, are valuable, special and unique assets of the Employer's business. The Employee agrees that during the term of his employ- ment he will use the aforementioned various secrets and/or. facts only in connection with his employ- ment with Employer, and that during and after the term of his employment he will not use or disclose any of the various afore- mentioned secrets and/or facts —7To— either on his own behalf or the behalf of any other person or entity. The phrase "secrets and/or facts" as used herein shall include, in addition to its usual meaning, any processes, ideas and other information pertaining to research, development, production, and other business or activities of Employer (and/or Employer's cus- tomers), and Employer's list of customers. At least in its initial phases, the Polycon project was based on two U.S. patents (the Gaylord patents) and some preliminary manufacturing batch sheet se’ which Syntex had purchased as part of its acquisition of Polymer Optics Corporation. The patents disclose processes for synthesizing certain silicone monomers and using them to create an oxygen- permeable plastic lens material. Novicky's role in the project was to develop processes 8/ The District Court described a batch sheet as: "a cross between a recipe from a cookbook and a laboratory notebook. The batch sheet contains instructions about how to carry out a procedure or reaction with spaces for the chemist to enter data about reaction con- ditions and results." a for the commercial development of this contact lens material which would optimize a combina- tion of properties such as high oxygen perme- ability, wettability, rigidity, and trans- parency .2/ The procedures Rovicky and others followed in the preparation of the Polycon material and its component ingredients were recorded on "Arapahoe batch sheets" which were used as a basis for further refining the Polycon process. Novicky was also involved in developing or revising analytical procedures to determine if the raw, intermediate, and finished materials would satisfy the Food and Drug Administration's (FDA's) requirements. The details of the relevant specifications 2/ Contact lenses are made by reacting certain chemical compounds (monomers) into plastics (copolymers) by a process called polymerization. The plastic lens material is then formed in the shape of rods which are subsequently sliced into discs (buttons) which are then ground into lenses. Novicky's job was to optimize processes and procedures for making the polymer rods. —9IJa— and analytical methods were recorded on Specifica- tion and Analytical Method sheets and incorp- orated in an FDA master file. In addition to his regular duties, Novicky experimented with alternative silicone monomers, | trying to improve the permeability of the lens material to be used in manufacturing the contact lenses. Syntex had already designated a specific silicone monomer (T-2) to be used in the Polycon material for which it was seeking FDA approval. In December, 1977, Novicky prepared, signed, and had two Syntex empolyees witness a patent disclosure dealing with certain of the alternative silicone monomers he had developed. Those monomers and the processes related to them were apparently the basis for two patents ee EEEEEEeeeeeEeEeee_erti( it — Novicky obtained in 1980 and 1981, U.S. Patent Nos. 4,242,483 and 4,248,989 (the "'483 and ‘989 patents", or the so-called "private patents"). —10a— On May 12, 1978, Novicky's employment with Syntex was terminated. Four days later, on May 16, 1978, Novicky prepared a second patent disclosure statement regarding other monomers he claimed to have discovered for use in making gas-permeable lens materials (one of which was later designated the S-9 monomer and patented under U.S. Patent No. 4,216,303 (the "'303 patent")). According to Novicky, the discovery contained in the May 16th disclosure had been prompted by his "review" of a 1961 German article on silicone chemistry subsequent to leaving Syntex. In August 1978, Novicky began negoti- ating with Tsuetaki, a Chicago optometrist and the president and sole owner of a small optical company (Fused Kontacts of Chicago, 10/ Inc.) for the sale of the technology em- 10/ Tsuetaki and his company, Fused Kontacts of Chicago, Inc., are collectively referred to as Tsuetaki. —lla— bodied in the May 16th patent disclosure. Tsuetaki and Novicky agreed that Tsuetaki would hire Novicky as a chemist to develop a commercial operation for the manufacture of the new lens material. Novicky signed an employment agreement, promising, inter alia, to assign to Tsuetaki all patentable and un- patentable inventions, developments, or im- provements he produced, within or without the scope of his employment, for the life of the agreement (August 31, 1978 - August 31, 1982) plus six months. Novicky resigned his job with Tsuetaki in May 1980. B. The state and federal litigation: In July 1980, Tsuetaki sued Novicky in the Cook County Circuit Court (an Illinois trial court) for breach of his employment contract. After a sixteen-day bench trial, the state court issued its decision in January 1981. Tsuetaki v. Novicky, No. 80 CH 4724 (Ill. Cir. Ct. Jan. 13, 1981). It held, inter alia, that the employment agreement was binding and ordered Novicky to assign to Tsuetaki "any and all interest" he had in the patents he had obtained and the patent applications he had filed pertaining to contact lens tech- nology. The state court also enjoined Novicky from "disclosing to any person or entity the contents . . . Of any laboratory books and records dealing with the experiments, research, progress, and development of the technology involved in the manufacture of contact lenses --- "and from "disseminating matters conf iden- tial to George Tsuetaki and/or Fused Kontacts of Chicago, Inc." While the state proceedings were pend- ing, Syntex filed this suit (in November 1980) in the federal District Court below, against Tsuetaki and Novicky for misappropriation of trade secrets. Later, Syntex amended its complaint to add an additional count claiming title to certain patents and patent applica- —13a— tions naming Novicky as inventor, and seeking relief for patent infringement. The court's jurisdiction was invoked under 28 U.S.C. § 1332 and 28 U.S.C. § 1338. In May 1981, the court severed Syntex's patent infringement claims, pending resolution of the patent title and the trade secret questions.22/ One consequence of the federal proceedings was that Tsuetaki initiated contempt proceedings (in February 1981) aainst Novicky and Syntex in state court. Tsuetaki claimed that Novicky had disobeyed the court's January 1981 order against "disseminating matters confidential to George Tsuetaki" by improperly conferring with Syntex's attorney about patent rights, disclosures, and other matters in the context of the federal court litigation. il/ Before the trial on Syntex's trade secret claim, Syntex, pursuant to an agreement with Novicky, filed a Stipulation of Dismissal, dismissing without prejudice its patent infringe- ment claims. —l4a— Both Syntex and Novicky opposed Tsuetaki's petition in the state court. Syntex also ei cross-petitioned for a stay of certain paragraphs of that court's January 1981 order until the federal District Court (in the present litiga- tion) decided the respective rights of the three parties in the property the state court had held Tsuetaki owned. Subsequently Tsuetaki requested permission from the state court to add Syntex as a defendant ina supplemental complaint. That court granted Tsuetaki's motion on July 10, 1981, saying that Syntex, by filing its cross-petition and responding to Tsuetaki's petition, had made a general appearance, thereby submitting itself to the jurisdiction of the state court. Tsuetaki added a fifth count to its original complaint, seeking declaratory relief as to both Syntex and Novicky. In essence, Tsuetaki sought a declaration that the property which it had purchased from Novicky no longer belonged to —15a— either Syntex or Novicky. On July 14, 1981 Novicky filed a notice of appeal seeking review of both the trial court's original judgment and its order of July 10th which had denied Novicky's prayer for post-trial relief. Three days later, Syntex filed a petition in the District Court to remove the "action . . . pending in the Circuit Court [the state trial court]" to federal court. That petition as granted by the District Court in September 1981. In March 1982, the District Court denied Tsuetaki's motion for remand. In the meantime, Novicky filed with the state trial court (in September 1981) a petition under a special provision of Illinois law, asking that the judgment of the trial court be vacated on the basis of newly discovered evidence arising from the federal proceedings. The state trial court dismissed that petition. Novicky's appeal from that decision was con- —16a— solidated in the state system with his earlier appeal, supra. The Illinos appellate court agreed with Novicky that the evidence given by Tsuetaki in the federal case (1) directly contradicted testimony relied upon by the state trial court in its resolution of the case and that (2) it established that Syntex was an indispensable party that should be joined in the state court action. It also held that the trial court had abused its discretion in dismissing Novicky's post-trial petition, vacated the trial court's judgment, and remanded the case for a new trial, directing that Syntex be joined. On December 28, 1983, Tsuetaki filed a petition for rehearing, asking the Illinois appellate court to vacate its decision and dismiss Novicky's appeal on the theory that Syntex's petition for removal to federal court, filed in July 1981, had divested the appellate —17a— court of jurisdiction. That petition for rehearing is still pending. The litigation in federal District Court had continued throughout these post-trial events in state court. On May 6, 1982, the District Court granted Syntex a preliminary injunction (Syntex Ophthalmics, Inc. v. Novicky, 214 USPQ 272 (N.D. Ill. 1982), which was affirmed by the Seventh Circuit. Syntex Ophthalmics, Inc. v. Tsuetaki, 701 F.2d 677, 219 USPQ 962 (7th Cir. 1983). The preliminary injunction enjoined Novicky and Tsuetaki from using the monomers and the processes in dispute. Later, In October 1982, Novicky filed an amended answer and counterclaim against Syntex. The counterclaim charged Syntex with fraud, misrepresentation, and unjust enrichment for breaching its alleged agreement with Novicky to waive all interest in Novicky's December 1977 inventions (the '483 and '989 "private patents"). The District Court dismissed ~~ Novicky's counterclaim in November 1982, saying that Novicky was collaterally estopped by the state court's judgment (ordering Novicky to assign the '483 and '989 patents to Tsuetaki) from claiming unjust enrichment (on the basis of those patents) against Syntex. In March 1983, before Syntex's case against Novicky and Tsuetaki went to trial, Syntex and Tsuetaki settled the controversy between them. Pursuant to that settlement, Syntex dropped its claims against Tsuetaki,22/ and Tsuetaki assigned to Syntex "all of ... [its] rights in the Novicky patents and patent applications relating to the. . . [federal District Court action] and the State Court action between Tsuetaki/Fused [Kontacts] and Nick Novicky ... ." On the basis of that assignment, combined with the "collateral 12/ As indicated in note *, supra, Tsuetaki has not participated at all in the current appeal. So Rar ey oe —19a-- estoppel effect of the state trial court judg- ment," the District Court granted summary judgment on the patent title issue for Syntex. The District Court said that Tsuetaki owned all Novicky's patents and patent applications by virtue of the state court judgment; the settlement agreement then transferred Tsuetaki’s rights in the patents and applica-~ tions to Syntex. The District Court con- cluded, "[wlhatever Tsuetaki formerly owned, Syntex now owns." In June 1983, the District Court held a bench trial on the trade secret misappropri- ation issue. Following that trial, the court held that Novicky had misappropriated Syntex's trade secrets and entered a final injunction enjoining Novicky for a twenty-year period from using Syntex's trade secrets. II Removal We consider first the threshold issue of the removal of the state action to federal —P0a— court pursuant to 28 U.S.C. § 1441 (the removal statute). We emphasize that, in our view, the only claim the District Court could remove from the state trial court was Count V of Tsuetaki's supplemental complaint, adding Syntex (post-judgment) as a party and seeking a declaratory judgment regarding the respective rights of Syntex, Tsuetaki, and Novicky in the property the state trial court had held belonged to Tsuetaki. The state trial court had already entered a finel judgment on the other four counts, and Novicky filed a notice of appeal from that judgment three days before Syntex filed its petition to remove. Under Illinois law, the jurisdiction of the reviewing court attaches instanter upon the timely filing of a notice of appeal. From then on, the lower court has no jurisdic- tion to modify its judgment or rule on matters of substance which are the subject of the —2la— appeal .43/ City of Chicago v. Myers, 227 N.E.2d 760 (Ill. 1967). Montgomery Ward & Co. v. Wetzel, 423 N.F.2d 1170, 1176 (Ill. App. 1981). "(T]he cause is beyond the jurisdiction of the trial court." City of Chicago v. Myers, 227 N.E.2d at 761. Accordingly, at the time Syntex filed its petition to remove the action pending in the state trial court, the only claim still pending in that court was Tsuetaki's post-judgment addition to his complaint, Count V. Because the state trial court no longer had jurisdiction over Tsuetaki's original four 13/ 4 trial court May retain jurisdiction after a notice of appeal is filed for the limited purpose of ordering the repayment of attorney's fees and costs because that is a matter not affected by the appeal or dependent upon the outcome of the suit. Chicago Title & Trust Co. v. Czubak, 384 N.E.2d 765 (Ill. App. 1978). The lower court may also have jurisdiction to dismiss, under certain circum- stances, the appeal of a party in the interim period between the filing of a notice of appeal and the docketing of the case by the reviewing court. See Rickard v. Pozdal, 334 N.E.2d 288, 291 (Ill. App. 1975). Also, a trial court may amend the record to correct "matters of inadvertence or mistake." Arnold v. Leahy Home Building Co., 420 N.E.2d 699, 707 (Ill. App. 1981). —22a— Claims, the federal court, which has only derivative jurisdiction on removal, also had no jurisdiction over those particular claims. See Minnesota v. United States, 305 U.S. 382, 389 (1939). The District Court's opinion (March 1982) denying Tsuetaki's motion for remand of the action to state court is consistent with this view that only Count V against Syntex to be seperate and independent, and it also noted that the state trial court's decision on Tsuetaki's original four counts was a final judgment and that Novicky had taken an appeal from it. It said (in discussing whether the joinder of Novicky in Count V was "fraudu- lent"): Tsuetaki has suggested .. . that its claim against Novicky represents an actual controversy because Novicky is'- presently appealing the [state trial court's] ruling. The court does not agree 14/ Syntex's removal petition, though not absolutely precise, is likewise consistent with this view. —23a— “a ay ar [The] ruling [of the state trial court] amounts to an absolute declaration of Tsuetaki's and Novicky's rights with respect to the technology at issue in this case. Under Illinois law, the ruling is res judicata as to any further litigation of that claim between the two notwith- standing the pendency of the appeal [citation omitted]. These comments support the view that only Count V was removed from the state court. If all the claims had been removed, including the four claims already decided, the Distrit Court could not anticipate that the state appellate court wouid hear Novicky's appeal. Once a case is removed, the state court may proceed no further "unless and until the case is remanded." 28 U.S.C. § 1446(e). Any further proceedings in the state court subsequent to removal are coram non judice and will be vacated. -14 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure: Jurisdiction § 3737 (1976); see Steamship Co. v. Tugman, 106 U.S. 118, 122 (1882); Kern v. Huidekoper, 103 U.S. —24a— 485, 493 (1880). In short, the only conclusion that harmonizes with all the circumstances is that Count V alone was removed. MThat count was indisputably removable at the time Syntex filed its removal petition (see 28 U.S.C. § 1441(c)) and Tsuetaki's early motion to remand was properly denied. The District Court consolidated the removed claim with Syntex's original federal suit "for all purposes” in March 1983. Follow- ing the trial on Syntex's trade secret claim and the District Court's entry of the resulting order, Novicky filed a motion to remand the state action back to state court. We agree with the District Court that Novicky's motion to remand was filed too late. The section of the removal statute that gives the court the authority to remand, 28 U.S.C. § 1447(c), provides: If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case .... —25a— (Emphasis added.) Pursuant to that statute, the District Court could properly consider Novicky's motion to remand only if it were filed before final judgment. Novicky's motion, however, was filed after the court's entry of Syntex's voluntary dismissal of its claims against Tsuetaki and the court's entry of Summary judgment on the patent claims. We agree with the District Court that these orders constituted a final judgment on the removed state court action. Novicky's motion to remand was correctly denied. III Patent Title In its settlement agreement with Syntex, Tsuetaki assigned to Syntex "all of [its] ... right, title, and interest in and to United States Patent Nos. 4,216,303, 4,242,483, 4,248,989, 4,303,772, 4,314,068 [a division —26a— of the '‘'303 patent supra,], and 4,365,074 [another division of the '‘'303 patent] i5/ Unites States patent applications Serial Nos. 81,682, filed October 4, 1979, and 103,408, filed December 19, 1979, and any patent(s) maturing therefrom .. . ." These patents and applications (except for the two divisionals of the '303 patent) are the ones which the state trial court ordered Novicky to assign 15/ U.S. Patent Nos. 4,314,068 and 4,365,074 resulted from "divisional applica- tions" filed by Novicky. A divisional applica- tion is defined in Section 201.06 of the Manual of Patent Examining Procedure as: A later application for a distinct or independent invention, carved out of a pending application and disclosing and claiming only subject matter disclosed in the earlier parent application .... Both must be by the same appli- cant. While a divisional application may depart from the phraseology used in the parent case there may be no departure therefrom in substance or variation in the disclosure that would amount to "new matter" if introduced by amendment into the parent case . —?7a— to Tsuetaki in its January 1981 decision: (1) Novicky is ordered to forth- with assign any and all interest he may have or claim to have in the following identified patent applications and patents to GEORGE TSUETAKI: 081682 072449 [U.S. Patent No. 4,303,772] 103408 06725 [U.S. Patent No. 4,216,303] 66054 [U.S. Patent No. 4,242,483] 74427 [U.S. Patent No. 4,248,989] On the basis of collateral estoppel, the District Court granted summary judgment for Syntex on its title to the patents and applications which Tsuetaki had assigned to it. Sometime after the District Court's grant of summary judgment, the state appellate court ordered that the state trial court's decision (on which the District Court had relied) should be set aside. However, as we show infra, the appellate court did not disturb the trial court's findings that Tsuetaki was the owner of U.S. Patent Nos. 4,216,303 and 4,303,772 and applications Serial Nos. 81,682 —28a— and 103,408. Accordingly, we hold that Novicky is still precluded from raising his claim to the two divisionals of the '303 patent (U.S. Patent Nos. 4,314,068 and 4,365,074). We remand to the District Court the question of Syntex's title to the '483 and '989 patents (the "private patents"), because the appellate court did not accept the trial court's conclusion as to Tsuetaki's rights to those patents. As already indicated in our discussion of removal in Part II, supra, the Illinois appellate court's jurisdiction over the trial court's decision was unaffected by the removal to District Court of the fifth count of Tsuetaki's complaint which added Syntex (post-judgment) as a party to the state litigation. The trial court's decision (and the trial which preceded it) was based on the original four counts to Tsuetaki's complaint and it was that decision which the Illinois appellate court reviewed. itaaiaeaaiiaiaaiiaimaeaiiaiiii —29a— The only real patent title dispute between Novicky and Tsuetaki in the original state court litigation concerned the two "private patents” --the ‘483 and '989 patents. With regard to the other four patents and the applica- tions at issue, +0/ the trial court said that Novicky had "conceded that .. . [the four patents and the applications] were duly assigned to GEORGE [Tsuetaki] in accordance with the employment agreement of August, 1978." The state appellate court accepted the trial court's conclusions with regard to those patents and applications. It observed that (1) when Novicky filed his first application, the 6,725 applica- tion (for the '303 patent), he had been paid $10,000 and was paid another $10,000 when the patent issued, in accordance with his agree- ment with Tsuetaki; (2) after the 6,725 applica- tion, Novicky filed two more applications, 16/ Two divisionals of the ‘303 patent were not explicitly mentioned in the state court opinion. DO eo —i0a— "which Novicky agrees belong to Tsuetaki" and; (3) that the three additional applications filed, Novicky contends that only two of those three ("which he referstoas 'private patents'") belong to him. These conclusions of the state appellate court, in effect affirming the state trial court on Tsuetaki's title, are entitled to preclusive effect. They meet all the require- ments for application of the doctrine of claim preclusion of res judicata.2// i7/ The doctrine of claim preclusion is more appropriate here than the doctrine of issue preclusion or collateral estoppel, cited by the District Court. The doctrine of issue preclusion normally comes into play to bar a party from retrying an issue that was actually litigated in a prior suit and was essential to the final judgment. See Mother's Restaurant, Inc. v. Mama's Pizza, Inc., 723 F.2d 1566, 1569-70 (Fed. Cir. 1983); International Order of Job's Daughters v. Lindeburg & Co., 727 F.2d 1087, 1090. 220 USPQ 1017, 1019 (Fed. Cir. 1984). Here it is the state trial court's final judgment itself and the appellate court's partial affirmance of it that are entitled to preclusive effect. The fact that a petition for rehearing is pending in the state appellate court does (continued) —3la— Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Parklane Hosiery Co. v. Shore, 439 U.S. 332, 326 n.5 (1979). See also 1B Moore's Federal Practice q 0.405[1] (2d ed. 1983). In our case, the state trial court had held that Tsuetaki was the rightful owner of all of the patents and applications covered in the settle- ment agreement between Tsuetaki and Syntex.28/ ~