Jurisdiction for Appeal
| September 4, 2014
Arlington Industries, Inc. v. Bridgeport Fittings, Inc.
July 17, 2014
Panel: Chen, Clevenger and Hughes. Opinion by Hughes.
Summary
Arlington Industries, Inc. is the owner of U. S. Patent No. 6,335,488. The ‘488 patent is directed to a method for connecting electrical cables to a junction box using electrical fittings. Arlington and Bridgeport Fittings, Inc. compete in the same industry.
Arlington sued Bridgeport in 2004 for patent infringement of the ‘488 patent. As a result, the two parties entered a settlement agreement in which Bridgeport agreed to be enjoined from making, using, or selling certain products or their “colorable imitations”.
Bridgeport redesigned its connectors in 2005 to have a frustoconical leading edge. The redesigned connectors were sold by Bridgeport as the following models: 38ASP and 38OSP.
In 2012 Arlington sought a contempt order holding that Bridgeport’s redesigned connectors violated the original agreement and the court’s order. The district court held Bridgeport in contempt in 2013, because it found the redesigned connectors were not more than “colorable imitations” of the original connectors. Furthermore, the district court also found that the redesigned connectors of Bridgeport met claim 1 of the ‘488 patent by clear and convincing evidence.
Bridgeport appealed the contempt order of the district court and the determination that the redesigned connectors were not more than “colorable limitations” of Bridgeport’s original connectors.
Discussion
The CAFC reviews a district court’s injunctions on the basis of abuse of discretion.
The CAFC obtains exclusive jurisdiction in patent cases over “interlocutory orders” of U. S. district courts . . .” granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions . . .” by way of 28 U.S.C.§§ 1292(a)(1) and (c)(1). Also, § 1292 (c)(2) gives the CAFC jurisdiction over “an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable . . . and is final except for an accounting.” Bridgeport argues that the CAFC has jurisdiction based on §§ 1292(c)(1) and (c)(2) over the Bridgeport appeal.
Under 28 U.S.C. § 1292 (c)(1)
Under this section it must be decided whether or not the court’s order has been modified or has simply been interpreted. A not dissimilar issue was dealt with by the CAFC in Entegris, Inc. v. Pall Corp., 490 F.3d at 1340 (Fed. Cir. 2007), in which an injunction prohibited sales of a specified product or any “colorable imitation.” In Entegris the CAFC was required to determine the difference between an order that “modifies” an injunction and one that merely “clarifies or interprets” an injunction. The CAFC found that the district court’s order interpreted the injunction and was not a modification of the injunction. In that wise, it was not immediately appealable.
Because the facts of this case are parallel to Entegris, the CAFC states that it lacks jurisdiction to consider the Bridgeport appeal, because the order of the district court was merely considered to be a clarification or interpretation, and was not considered to be a modification of the original 2004 injunction.
The 2004 injunction and the 2013 injunction were very similar, for example, they are for the same length of time, apply to the same activities, are considered for the same parties and are even for similar products. Because the 2004 and 2013 injunctions cover essentially the same subject matter, the differences in wording do not change the legal relations of Arlington and Bridgeport.
In view of the above, the 2013 injunction is not a modification but a clarification or interpretation of the 2004 injunction. The CAFC concluded that it does not have jurisdiction over Bridgeport’s appeal under § 1292(c)(1).
Under 28 U.S.C. § 1292 (c)(2)
It is still necessary to consider the issues under § 1292 (c)(2) under which the appeal must be “final except for an accounting.” The CAFC has in this case declined to apply this statute, (c)(2), to contempt orders. The CAFC states that “Extending § 1292 (c)(2) to contempt orders would impermissibly broaden the jurisdiction that the statute confers.” Thus the CAFC has maintained the narrow exception of (c)(2) for patents. Congress made § 1292 (c)(2) as an exception to the final judgment rule in patent cases. This statute does not explicitly include contempt orders, and therefore contempt orders are not covered by it.
Since there was no final judgment here, a contempt order enforcing it is not yet final when sanctions have not been imposed, as in this case. Thus, the CAFC has not found jurisdiction
Takeaways
- The most important takeaway is for the defendant to engage competent patent counsel to give the defendant proper advice when redesigning its infringing product, in order to avoid an improper design around and risk contempt of court.
- Contempt orders are not covered by § 1292 (c)(2).
