Heat Technologies, Inc. v. Papierfabrik August Koehler SE (Fed. Cir. 2019)
This case involves an unusual bit of appellate procedure regarding certifying questions for appeal under 28 U.S.C. 1292(b).
Back in 2018, Heat Tech sued Koehler Paper in N.D. Georgia federal court requesting correction of inventorship under 35 U.S.C. § 256 as well as damages for unjust enrichment and conversion under Georgia state law. U.S. Patent No. 9,851,146. The basic background of the lawsuit was that Heat Tech’s president (Plavnik) invented the paper-drying mechanism that was then disclosed to Koehler as part of a collaboration evaluation. In addition, Heat Tech argued that almost all of the information disclosed in Koehler’s patent was included in a prior Heat Tech patent application.
At the district court, Koehler filed a motion to dismiss the case — arguing that Heat Tech’s actual claim is for invalidity and that an inventorship-correction lawsuit is not appropriate when the same alleged facts would invalidate the patent for lack of novelty or obviousness. The district court denied the motion to dismiss, but agreed to certify the question for appeal to the Federal Circuit — noting some disagreement among the courts on the state of the law.
Question certified by the district court:
Can a claimant obtain relief under 35 U.S.C. § 256 when its inventorship allegations, if taken or proven as true, would necessarily invalidate the subject patent under other provisions of the Patent Act?
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The usual rule is that appellate jurisdiction follows final judgment by a district court. In a motion-to-dismiss situation, the case can be appealed if dismissal is granted — but not if dismissal is denied (because the case will still be pending at the district court). There are several exceptions, including mandamus actions and appeals of preliminary injunction decisions another exception involves certification of an appeal under Section 1292:
(b) When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.
The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order.
In reviewing the statute, the Federal Circuit identifies three key requirements for hearing an interlocutory appeal under 1292(b):
- The appeal must involve “a controlling question of law.”
- There must be “substantial ground for difference of opinion.”
- An immediate appeal “may materially advance the ultimate termination of the litigation.”
Further, even when all three elements are met, the appellate court still has discretion to decide whether to permit the appeal.
On appeal now, the Federal Circuit HeatTechDecisionhas denied the 1292(b) petition and effectively indicated that the district court’s decision was correct. In particular, the appellate panel found no “substantial ground for disagreement” because Section 256 jurisdiction “does not depend on whether the patent may be shown to be invalid.” Slip op. The appellate panel noted its lack of prior precedent directly and expressly on-point, but concluded that prior cases compel the answer. For example, in Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1377 (Fed. Cir. 2002), the court wrote that an inventorship action could be maintained for an unenforceable patent.