Shooting from the Hip and Curing a Premature Appeal

by Dennis Crouch

When I first wrote about Amgen v. Amneal, I focused on the patent law issue regarding Markush groups in the patent claims.  Here, I want to circle back to the question appellate jurisdiction. I’ll be teaching the 2nd semester of Civil Procedure at Mizzou this spring and appellate jurisdiction is the the first topic up for grabs.

Most patent infringement litigation reaches the Federal Circuit under the “final judgment rule” which creates appellate jurisdiction over cases “appealed from a final decision of a district court.” 28 U.S.C. 1295(a)(1).  Final decisions “are decisions that end litigation on the merits and leave nothing for the court to do but execute the judgment.” Slip op.; Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978).  Thus, in a patent case involving infringement claims and invalidity defenses, both must be resolved before appeal.  (Note here, that there are some, albeit limited, options for interlocutory appeals prior to final judgment).

In Amgen, the district court issued an infringement decision (against Zydus) but did not resolve questions of whether the asserted patent is valid and enforceable — explaining that:

The Court has not yet held trial on Zydus’ bifurcated invalidity counterclaims and defenses. . . . An invalidity trial will be scheduled by this Court if necessary following disposition of appeal proceedings.

Amgen Inc. v. Amneal Pharm. LLC., No. 1:16-cv-00853-MSG (Oct. 9, 2018), ECF No. 405.  Because the invalidity issues were still unresolved, the decision was not final.  Still, Zydus appealed and included only a conclusory jurisdictional statement that jurisdiction is proper under  28 U.S.C. § 1295(a)(1) since the district court issued its final judgment:

The district court then issued a final judgment on October 9, 2018, in favor of Amgen against Zydus. . . . This Court has jurisdiction over the cross-appeal under 28 U.S.C. § 1295(a)(1).

Zydus brief.   Amgen also did not challenge jurisdiction in its briefing.  However, the appellate court is obligated to ensure itself of jurisdiction before moving forward.

At oral arguments, the appellate panel recognized the problem and questioned Zydus’s attorney during oral arguments who – after consulting with his client in the courtroom – agreed to “give up” its invalidity defense. [Oral arguments beginning at min 18].   In its decision, the Federal Circuit found that concession sufficient to cure jurisdiction. “Zydus’s representation effectively cures the jurisdictional defect in its notice of appeal because the contingency identified by the district court—Zydus’s potential invalidity defense and claim—is nullified.”

Too Short Analysis: The Federal Circuit did not cite any precedent or statute to support its conclusion that the oral-argument waiver can cure the lack of final judgment.  The procedure principles here fall within the umbrella of “cumulative finality.”  Most courts have accepted the notion that a premature appeal can be cured by a subsequent entry of final judgment by the district court.  However, some courts have taken an alternative approach. Here is how Prof. Lammon explained the situation in his recent article:

[The cumulative finality] rule of appellate jurisdiction allows certain subsequent events to save a premature notice of appeal filed after certain district court decisions.

The general rule cannot be stated any more precisely, however, because the cumulative finality doctrine is currently a mess.

Bryan Lammon, Cumulative Finality, 52 Ga. L. Rev. 767 (2018).   In his article, Lammon explains that the Eighth Circuit along with the Federal Circuit have traditionally held the narrowest views of cumulative jurisdiction and has previously required appellants to re-file their case after a proper final judgment rather than curing appellate jurisdiction on the fly.  Lammon does not address whether the Federal Circuit should be following its own law on this issue or instead be applying the law of the regional circuit court of appeals.  In a separate paper on finality, Lammon also explains that the meaning of “final decision” is not quite the simple definition that I used above.

The federal courts have given the term “final decision” a variety of meanings. Those meanings often deviate from–and are occasionally inconsistent with–the standard definition…

Bryan Lammon, Finality, Appealability, and the Scope of Interlocutory Review, 93 Wash. L. Rev. 1809 (2018).

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Let me note one failure of lawyering in the case: Although district court’s purported final judgment was not actually a final judgment as to Zydus, it did include a permanent injunction against Zydus as shown in the image below. The injunction is relevant because it fits within one of the exceptions to the final judgment rule. In particular, a district court’s decisions involving injunctive relief are directly appealable even if not part of a final judgment. “[T]he courts of appeals shall have jurisdiction of appeals from: (1) interloctutory orders of the district courts . . . granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions…” 28 U.S.C. 1293(a).

Thus, it looks to me like Zydus’ attorney had a proper grounds for jurisdiction without giving-up its invalidity defense.

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Opening a Closed Markush Group

If you want it, Claim it

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Prof. Lammon has also briefly written about the case on his blog “FinalDecisions.org“.

 

14 thoughts on “Shooting from the Hip and Curing a Premature Appeal

  1. 4

    What are the dynamics of ‘bifurcation’ in general, and should ‘bifurcation’ ever be an option in patent cases (given the apparent link between items so bifurcated, as evidenced here)?

    1. 4.1

      I am out of comments on the other post, but I am aware of the foreign filing license problem and not sure how the corporations are dealing with that.

      It is a good question. And we too decided it wasn’t worth it about 15 years ago, but the corporations have continued to push this.

      1. 4.1.1

        Thanks.

      2. 4.1.2

        I noticed that Paul Morgan ‘chipped’ in with a rather unhelpful anecdotal ‘people are doing it’ type of comment.

        Considering the source, I don’t put a lot of value in such a statement.

        Perhaps AAA JJ will decide to be more helpful (although I think that his comment is geared less to attorneys sending work drafting original applications overseas, and appears to be corporations (which may or may not be directly on point).

      3. 4.1.3

        Not just Paul (whose Efficient Infringer leanings have long been known), but the other thread really provides a litmus test as seen in the failings of the likes of NS II and Ben.

  2. 3

    Does anyone here see a parallel between this issue and the ultimate status of PTAB Judges?

    link to washingtonpost.com?

    ITSM that both immigration judges and PTAB judges should not be part of the executive branch, but rather a creation of Congress as those judges are representatives of the judicial power. Aside from that major likely misclassification, does anyone think PTAB Judges are actually serving as managers at the PTO?

    1. 3.1

      does anyone think PTAB Judges are actually serving as managers at the PTO?

      Why would you think otherwise?

      You are aware that the “fourth branch” (administrative agencies) most often do have a ‘judicial function’ (albeit, there is a spectrum of separateness of that judicial function and the executive control, with the USPTO having — by originating charter — one of the lowest such separations).

  3. 2

    Wouldn’t gaining appellate jurisdiction on the injunction limit the arguments to the merits of the injunction rather than the particulars of the infringement contentions and defenses?

    1. 2.1

      But note that this was not a interlocutory appeal from a preliminary injunction. It was a purportedly a permanent injunction accompanying an alleged final decision.

    2. 2.2

      [L]imit the arguments to the merits of the injunction rather than the particulars of the infringement contentions and defenses…

      This is a distinction without a difference. One of the prongs of the analysis for a preliminary injunction is “likelihood of success on the merits,” so the judge below will have already made an assessment of the infringement and validity arguments as part of the preliminary injunction analysis. If you think that the judge below got either of those analyses wrong, that is a perfectly fine basis on which to attack the preliminary injunction.

      Meanwhile, a permanent injunction is a remedy attached to a finding of infringement and holding of validity. Once again, if you think that the judge below got either of those analyses wrong, that is a perfectly sound basis on which to attack the granting of a permanent injunction (if either the infringement or validity determinations fall, the remedy predicated on those determinations falls too).

      Admittedly, there is more to an injunction than just the merits of infringement or validity, so you can attack the injunction grant without attacking either the validity or infringement determination. Still and all, nothing about being “limit[ed]… to the merits of the injunction” precludes attacking the infringement or validity determinations below, because those determinations are part of the injunction decision.

      1. 2.2.1

        Nice post, Greg.

      2. 2.2.2

        Greg I get that likelihood of success is core to an appeal of a preliminary injunction, but if the validity arguments are not yet developed in the record, isn’t the likelihood of success still essentially a prospective inquiry? Can there be a final injunction if half the case is still open? Are the validity and infringement cases entirely separate judicial proceedings from top to bottom? Some potentially odd effects if so…

  4. 1

    But compare Ironworks v. Samsung, argued this week, in which a premature appeal (19-1308) was dismissed, and then a new one filed (after final judgment was entered) under a different docket number (20-1191).

    1. 1.1

      Is finality something the Court’s Clerk checks for in docketing appeals? Is Amgen v. Amneal [going all the way to oral argument before the absence of a validity decision was challenged and mooted] distinguishable from normal dismissals for non-finality because the Clerk did note the injunction grant?

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