Amado v. Microsoft Corp.

• Citation: 517 F.3d 1353
• Decision Date: 26 February 2008
• Docket Number: No. 2007-1255.,No. 2007-1236.,2007-1236.,2007-1255.
• Parties: Carlos Armando AMADO, Plaintiff-Appellant, v. MICROSOFT CORPORATION, Defendant-Cross Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

517 F.3d 1353

Carlos Armando AMADO, Plaintiff-Appellant, v. MICROSOFT CORPORATION, Defendant-Cross Appellant.

No. 2007-1236.

No. 2007-1255.

United States Court of Appeals, Federal Circuit.

February 26, 2008.

Vincent J. Belusko, Morrison & Foerster LLP, of Los Angeles, CA, argued for plaintiff-appellant. With him on the brief were Hector G. Gallegos, Nicole M. Smith, Brian F. McMahon, and Scott C. Moore.

Joseph A. Micallef, Arnold & Porter LLP, of Washington, DC, argued for defendant-cross-appellant. Of counsel was James S. Blackburn, of Los Angeles, CA.

Before BRYSON, Circuit Judge, CLEVENGER, Senior Circuit Judge, and LINN, Circuit Judge.

LINN, Circuit Judge.

Carlos Armando Amado ("Amado") appeals from the March 13, 2007 final decision of the U.S. District Court for the Central District of California, Amado v. Microsoft Corp., No. 8:03-CV-242 (C.D.Cal. Mar. 13, 2007) ("Escrow/Injunction Order"), which dissolved a previously-issued permanent injunction and awarded Amado $0.12 per infringing unit sold by Microsoft Corporation ("Microsoft") during a period of the stay of the permanent injunction. Amado also appeals from two non-final orders of the district court, which extended the stay of the permanent injunction past the date set forth in the original order. See Amado v. Microsoft Corp., No. 8:03-CV-242 (C.D.Cal. Dec. 1, 2006) (ruling clarified in Amado v. Microsoft Corp., No. 8:03-CV-242 (C.D.Cal. Dec. 5, 2006)); Amado v. Microsoft Corp., No. 8:03-CV-242 (C.D.Cal. Sept. 15, 2006). Microsoft cross-appeals from the Escrow/Injunction Order, challenging the district court's award of $0.12 per infringing unit and the district court's denial of its motion for relief from judgment.

Because the district court did not abuse its discretion by extending the stay of the permanent injunction, by dissolving the permanent injunction, or by denying Microsoft's motion for relief from judgment, we affirm in part. Because the district court failed to adequately explain the basis for its award of $0.12 per infringing unit sold during the stay of the permanent injunction, however, and because recent Supreme Court action may affect post-verdict damages, we vacate in part and remand.

I. BACKGROUND

Amado is the inventor and owner of U.S. Patent 5,293,615 ("the '615 patent"), which is directed to a "point and shoot interface for linking database records to spreadsheets whereby data of a record is automatically reformatted and loaded upon issuance of a recalculation command." In general terms, the invention of the '615 patent relates to a software program that combines the functionalities of spreadsheet and database software. Claim 21, for example, recites "[a]n apparatus for carrying out spreadsheet calculations using data imported from a database via a point and shoot user interface to select a database record for loading into a specified range of the spreadsheet. . . ."

Amado filed suit against Microsoft on March 7, 2003, alleging that several versions of Microsoft's Office Suite infringed the '615 patent. In June 2005, a jury found the '615 patent valid and infringed and awarded Amado damages for infringing sales equivalent to a $0.04 reasonably royalty. The district court granted Amado's request for a permanent injunction, but then stayed the injunction until seven days after the resolution or abandonment of any appeal. As a condition of the stay, the district court required that Microsoft make escrow deposits of $2.00 per copy of the infringing software sold during the stay.

Microsoft and Amado appealed from the district court's final judgment. We "affirm[ed] in all respects" and remanded for disposition of the funds deposited in the escrow account. See Amado v. Microsoft, 185 Fed.Appx. 953 (Fed.Cir.2006) ("Amado I"). As relevant to this appeal, on remand the district court: (1) extended the stay of the permanent injunction in order to consider various motions, including Microsoft's motion to dissolve the injunction in light of eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006); (2) subsequently dissolved the injunction; (3) denied Microsoft's motion for relief from judgment based on alleged disclaimers made during post-trial reexamination; and (4) awarded Amado $0.12 per infringing unit from the escrow account for sales made during the period of the stay.

Amado and Microsoft timely appealed these rulings. Both parties contend that the district court erred in assessing a $0.12 royalty for the infringing units sold during the stay. Amado contends the proper award is $2.00 per unit, the amount escrowed, while Microsoft contends the proper amount is $0.04, the amount found by the jury to be a reasonable royalty. Amado also argues that the district court's original injunction order, which granted but stayed the injunction, was incorporated into the mandate in Amado I, thus depriving the district court of authority either to extend the stay or dissolve the injunction. Microsoft contends that the district court erred in denying its motion for relief from judgment. It also asks us to adjust the damages award in light of the recently decided case of Microsoft Corp. v. AT & T Corp., ___ U.S. ___, 127 S.Ct. 1746, 167 L.Ed.2d 737 (2007).

We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

II. DISCUSSION

A. Standard of Review

A district court's decision granting, denying, or modifying an injunction in a patent case is reviewed for abuse of discretion. Lab. Corp. of Am. Holdings v. Chiron Corp., 384 F.3d 1326, 1331 (Fed.Cir. 2004).

"In order to prevail on appeal on an issue of damages, an appellant must convince us that the determination was based on an erroneous conclusion of law, clearly erroneous factual findings, or a clear error of judgment amounting to an abuse of discretion." Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1543 (Fed.Cir. 1995).

The denial of a motion under Rule 60(b) is a procedural question not unique to patent law and thus is reviewed under the law of the regional circuit. Univ. of W. Va. Bd. of Trustees v. VanVoorhies, 342 F.3d 1290, 1294 (Fed.Cir.2003). In the Ninth Circuit, denials of Rule 60(b) motions are reviewed for abuse of discretion. Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1223 (9th Cir.2000).

B. Analysis

1. Extensions of the Stay of the Permanent Injunction

The district court's original order staying the permanent injunction stated that the injunction would go into effect "[s]even days after the resolution or abandonment of any appeal." Amado v. Microsoft Corp., 8:03-CV-242, slip op. at 28 (C.D.Cal. Aug. 2, 2005). Following remand from this court in Amado I, Amado moved to enforce the injunction as having become effective on August 30, 2006 — seven days after the mandate issued. The district court denied Amado's motion, interpreting its order staying the injunction through any pending appeal to include a petition for certiorari to the Supreme Court. Amado v. Microsoft Corp., No. 8:03-CV-242, slip op. at 2 (C.D.Cal. Sept. 15, 2006).

The Supreme Court denied certiorari on November 27, 2006. On November 30, Microsoft moved to extend the stay of the injunction. On December 1, the district court granted the request, and on December 5, clarified its ruling as follows:

[A]s to the stay, the Court has reconsidered the August 5, 2005 order lifting the stay seven days after the resolution or abandonment of any appeal. The Court believes that the more prudent course is to leave the stay in place, pending resolution of the motions that will be heard on February 5, 2006[, regarding the stay-related escrow, the injunction, or any remaining issues]. Therefore, the stay of the permanent injunction will remain in place until 7 days after the Court rules on the February 5, 2006 motions.

Amado v. Microsoft Corp., No. 8:03-CV-242, slip op. at 2 (C.D.Cal. Dec. 5, 2006); see also Amado v. Microsoft Corp., No. 8:03-CV-242 (C.D.Cal. Dec. 1, 2006).

Amado contends that the district court abused its discretion by staying the injunction more than seven days following the mandate in Amado I because the district court did not possess authority to deviate from the original order staying the injunction once it was incorporated into the Amado I mandate. Microsoft counters that the district court did not abuse its discretion because the propriety of the stay was not appealed and therefore was not within the scope of the mandate in Amado I.

Amado's first assignment of error relates to the district court's interpretation of "appeal" in its order staying the injunction as including a petition for certiorari. A district court's interpretation of its order is entitled to deference unless the interpretation is unreasonable or is otherwise an abuse of discretion. See Cave v. Singletary, 84 F.3d 1350, 1354-55 (11th Cir. 1996) ("The district court's interpretation of its own order is properly accorded deference on appeal when its interpretation is reasonable."); In re Chi., Rock Island & Pac. R.R. Co., 865 F.2d 807, 810 (7th Cir.1988) ("We shall not reverse a district court's interpretation of its own order `unless the record clearly shows an abuse of discretion.' The district court is in the best position to interpret its own orders.") (citations omitted). We have little difficulty concluding that the district court's interpretation of "appeal" as including a petition for certiorari was reasonable, and thus worthy of deference. Consequently, we move to Amado's central argument — that the district court was without authority to extend the stay following the Supreme Court's denial of certiorari.

District courts manage hundreds of civil and criminal cases at any given time. For this reason, they are afforded broad discretion to control and manage their dockets, including the authority to decide the order in which they hear and decide issues pending before them. E.g., Univ. of W. Va. Bd. of Trustees v. Vanvoorhies, 278 F.3d 1288, 1295 (Fed.Cir.2002) ("This court defers to the...