Federal Circuit to Hear En Banc Appeal on Its Jurisdiction over All-But-Accounting Patent Decisions

By Dennis Crouch

Robert Bosch LLC v. Pylon Mfg. Corp. (Fed. Cir. 2012)

In a sua sponte order, the Federal Circuit has announced that case to be heard en banc to determine whether the appellate court has jurisdiction over a judgment on patent infringement liability in a bifurcated case even before issues of damages and willfulness have been adjudged. The en banc order highlights 28 U.S.C. § 1292(c)(2) as likely governing the case. That statute provides the Federal Circuit with:

exclusive jurisdiction … (2) of an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the United States Court of Appeals for the Federal Circuit and is final except for an accounting.

The question on appeal is thus, whether the district court case is “final except for an accounting.”

Current precedent is somewhat confused. In Majorette Toys (U.S.) Inc. v. Darda, Inc. U.S.A., 798 F.2d 1390 (Fed. Cir. 1996), the court arguably classified the calculation of attorney fees and court costs as “accounting” but did not place the principle damages award in that category. In a recent order, the Federal Circuit took a narrow interpretation of Majorette by refusing to hear an appeal of an attorney-sanction before the dollar value of the sanction had been set. Orenshteyn v. Citrix Systems, Inc., — F.3d —-, 2012 WL 3101666 (Fed. Cir. 2012). Judge Newman dissented in Orenshteyn – arguing that the sanction dollar value constituted “accounting” under the law. In Falana v. Kent State University, 669 F.3d 1349 (Fed. Cir. 2012), the court ruled that “the district court’s exceptional case finding and award of attorney fees” were not properly before the court because the dollar values had not been calculated and those values were more than “accounting” under the statute. Falana was decided by Judges Linn, Reyna and Prost.

The en banc order raises two particular questions:

  1. Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred?
  2. Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when willfulness issues are outstanding and remain undecided.

Briefs of amici curae may be filed without consent of the parties or leave of the court.

 

9 thoughts on “Federal Circuit to Hear En Banc Appeal on Its Jurisdiction over All-But-Accounting Patent Decisions

  1. Note the invitation for amici to chime in.

    IT IS ORDERED THAT:
    (1) The court by its own action grants a hearing en banc.
    (2) The parties are requested to file new en banc briefs limited to the following questions:
    a) Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred?
    b) Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when willfulness issues are outstanding and remain undecided?
    * * *
    (4) Briefs of amici curiae will be entertained. Any such amici briefs may be filed without consent and leave of court, and shall not exceed 7,000 words, but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29. Any such briefs shall be limited to the questions above.

  2. Good point, the predecessor statute language “when in any suit in equity for the infringement of letters patent for inventions…” seems relevant.

  3. Except that the law was passed in 1927, before law and equity were merged, and back when an accounting for profit was the remedy in an equitable patent infringement suit. The one and only Supreme Court case about this statute talks about that and some of the legislative history. McCullough v Kammerer Corp.

  4. Yeah, interestingly though the term accounting in 1292(c)(2) means a determination of legal money damages, not the equitable remedy of accounting. Another source to check is SRI v. Advanced Tech. Here are a few quotes: “The purpose and rationale of Sec. 1292(c)(2)–to permit a district court to stay a damages trial pending the outcome of an appeal on the merits–has been clearly stated by both Congress and the Supreme Court. This court has heard those clear statements.”

    And SRI speaks to willfulness as well, “The district court’s failure to make a willfulness determination does not render its judgment respecting liability non-appealable. Willfulness is a finding related only to the amount of damages, not to the existence of liability.”

    But maybe the CAFC is ready to roll back decades (or more) of precedent?

  5. The problem is the language – “except for an accounting.” I don’t think a damages trial is like an accounting (the sort of remedy for a breach of fiduciary duty).

  6. Dennis, the tone of your post seems to be that you are skeptical that that the answer to either question could be yes. 1292(c)(2) is an old statute that for a very long time has allowed interlocutory appeal of the liability phase of a patent case. Check in re Calmar. No other than Judge Markey said: ” Further, the policy underlying Sec. 1292(c)(2) was to allow a district court to stay a damages trial pending appeal.” Now, willfulness, not sure where that fits in.

  7. Considering how much more stringent the Fed. Cir. has been lately about proper infringement damage calculations, and witnesses, allowing an appeal of an already bifurcated trial before its damages trial would seem to present potential cost saving for both parties?
    But would it encourage a lot more bifurcations, and thus more litigation expenses overall?

Comments are closed.