Procter & Gamble Co. v. Kraft Foods Global, Inc.

• Decision Date: 05 December 2008
• Docket Number: No. 2008-1105.,2008-1105.
• Parties: The PROCTER & GAMBLE COMPANY, Plaintiff-Appellant, v. KRAFT FOODS GLOBAL, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

549 F.3d 842

The PROCTER & GAMBLE COMPANY, Plaintiff-Appellant, v. KRAFT FOODS GLOBAL, INC., Defendant-Appellee.

No. 2008-1105.

United States Court of Appeals, Federal Circuit.

December 5, 2008.

William C. Rooklidge, Howrey LLP, of Irvine, CA, argued for plaintiff-appellant. With him on the brief was Henry A. Petri, Jr., of Houston, TX.

Claude M. Stern, Quinn Emanuel Urquhart Oliver & Hedges, LLP, of Redwood Shores, CA, argued for defendant-appellee. With him on the brief was Evette D. Pennypacker.

Before BRYSON, GAJARSA, and DYK, Circuit Judges.

GAJARSA, Circuit Judge.

Although this is a patent infringement case, this appeal turns on a procedural issue regarding the issuance of a stay and the denial of a preliminary injunction. The Procter & Gamble Company ("P & G") appeals from the trial court's interlocutory order granting Kraft Foods Global, Inc.'s ("Kraft's") motion for a stay pending inter partes reexamination before the United States Patent and Trademark Office ("PTO") of P & G's U.S. Patent No. 7,169,418 ("the '418 patent"). In particular, P & G argues that the stay order either directly denied its motion for a preliminary injunction or had the effect of denying the motion. This case therefore presents the issue of whether we have jurisdiction to hear this interlocutory appeal, and if so, whether the district court abused its discretion with respect to Kraft's motion to stay and/or P & G's motion for a preliminary injunction. Because the stay order effectively denied P & G's motion, jurisdiction is proper. Further, we hold that the district court abused its discretion by effectively denying P & G's motion without proper consideration of the merits. Therefore, we vacate the stay and remand for consideration of the merits of P & G's motion for a preliminary injunction.

BACKGROUND

P & G owns the Folgers brand of ground, roast coffee; Kraft owns the competing Maxwell House brand. P & G's '418 patent is directed to a plastic container, intended to replace conventional metal cans for marketing and storing ground, roast coffee. The '418 patent issued on January 30, 2007. Kraft filed a request for inter partes reexamination of that patent on March 8, 2007. On June 7, 2007, the PTO granted Kraft's request for reexamination but simultaneously confirmed the patentability of every claim of the '418 patent.

In July 2007, Kraft introduced a plastic coffee container for the Maxwell House brand ground, roast coffee. P & G filed this action on August 8, 2007. On September 14, 2007, P & G filed a motion seeking a preliminary injunction against Kraft's continued use of its plastic containers. Kraft, in turn, filed a motion for a stay pending its appeal to the Board of Patent Appeals and Interferences ("BPAI") of the examiner's decision on reexamination confirming the patentability of the claims of the '418 patent. Procter & Gamble v. Kraft Foods Global, No. 3:07-CV-04413, 2007 WL 2990152, **1-2 (N.D.Cal. Oct. 11, 2007) (hereinafter "Stay Order"). At a hearing on October 3, 2007, the trial court removed from its calendar the scheduled hearing for P & G's preliminary injunction motion, reasoning that it could not determine P & G's likelihood of success on the merits without construing the claims. Stay Hr'g Tr. 33-35 (Oct. 3, 2007). The court further stated that it would reschedule the hearing (1) if it did not grant Kraft's motion to stay; and (2) after any claim construction disputes had been resolved. Id. On October 11, 2007, the district court granted Kraft's motion to stay the case and concluded without any analysis that "plaintiff's pending motion for preliminary injunction is moot." Stay Order at **1-2.

P & G filed a notice of appeal, and Kraft filed a motion for this court to dismiss the appeal for lack of jurisdiction. Kraft argued that (1) the appeal is premature because the district court's stay order is not a final judgment on the merits and does not expressly deny an injunction; and (2) P & G cannot demonstrate that it will suffer irreparable harm without an immediate appeal. A motions panel of the court denied Kraft's motion to dismiss, reasoning that (1) the district court's statement characterizing P & G's preliminary injunction motion as moot might be an express denial; and (2) "an order argued to have the effect of denying a request for a preliminary injunction `readily satisfies' the requirement to show irreparable harm." Procter & Gamble Co. v. Kraft Food Global, Inc., No.2008-1150, slip op. at 2 (Fed. Cir. Feb. 28, 2008) (quoting Woodard v. Sage Products, Inc., 818 F.2d 841, 851 (Fed.Cir.1987) (en banc)). The court also noted that the parties remained free to present jurisdictional arguments to a merits panel for an ultimate disposition. Id. at 2. As set forth below, we conclude that we have jurisdiction over this appeal pursuant to 28 U.S.C. § 1292(c)(1).

DISCUSSION

When jurisdiction is proper, a district court's decision to issue a stay is reviewed for an abuse of discretion. See Gould v. Control Laser Corp., 705 F.2d 1340, 1341 (Fed.Cir.1983); cf. Am. Life Ins. Co. v. Stewart, 300 U.S. 203, 215, 57 S.Ct. 377, 81 L.Ed. 605 (1937) ("In the exercise of a sound discretion [the district court] may hold one lawsuit in abeyance to abide the outcome of another, especially where the parties and the issues are the same."). We also review the denial of a preliminary injunction for an abuse of discretion. See Chamberlain Group, Inc. v. Lear Corp., 516 F.3d 1331, 1339 (Fed.Cir. 2008); Novo Nordisk of N. Am., Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed. Cir. 1996). "An abuse of discretion in granting or denying a preliminary injunction may be found `by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based on an error of law or clearly erroneous factual findings.'" Abbott Labs. v. Andrx Pharms., Inc., 452 F.3d 1331, 1335 (Fed.Cir.2006) (quoting Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 973 (Fed.Cir.1996)).

I. JURISDICTION

Our jurisdiction over an interlocutory appeal such as that brought by P & G in this case is governed by 28 U.S.C. § 1292(a)(1) and (c)(1). Taken together, these subsections provide that this court has exclusive jurisdiction over appeals from interlocutory orders "granting, continuing, modifying, refusing or dissolving injunctions," 28 U.S.C. § 1292(a)(1), in any case over which this court would have jurisdiction of an appeal under § 1295. 28 U.S.C. § 1292(c)(1). The Supreme Court has interpreted § 1292(a)(1) as providing a limited exception to the final judgment rule that is only available when "a litigant can show that an interlocutory order of the district court might have a `serious, perhaps irreparable, consequence,' and that the order can be `effectually challenged' only by immediate appeal." Carson v. Am. Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981) (quoting Balt. Contractors, Inc. v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 99 L.Ed. 233 (1955)); see also Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 287-88, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988) ("Section 1292(a)(1) will, of course, continue to provide appellate jurisdiction over orders that grant or deny injunctions and orders that have the practical effect of granting or denying injunctions and have serious, perhaps irreparable, consequence." (internal quotation marks omitted)). In Woodard, this court stated that "[a]n order which is deemed to deny a preliminary injunction readily satisfies the Carson requirements." 818 F.2d at 851; see also id. at 853. Accordingly, we have jurisdiction over P & G's appeal if the trial court's stay order had the practical effect of denying P & G's motion for a preliminary injunction.

Under this standard, we conclude that jurisdiction is proper. The trial court explicitly refused to consider the merits of P & G's motion for a preliminary injunction. Indeed, the judge concluded it was moot. Even if this statement is merely a refusal to consider the merits of P & G's motion until after the stay is lifted, such a decision "cannot effectually be reviewed after the trial." Woodard, 818 F.2d at 851 ("By that time the question of relief or of maintaining the status quo during trial will have become moot."). Accordingly, we conclude that the stay order, as implemented in this case, can be deemed to have denied P & G's motion for a preliminary injunction, meets the Carson requirements, and is therefore reviewable under § 1292(a)(1) and (c)(1).

Because we have jurisdiction to review the effective denial of P & G's motion for a preliminary injunction, we also have jurisdiction over the trial court's decision to stay this case pending reexamination proceedings before the PTO. When this court reviews a properly appealable interlocutory order, "other interlocutory orders, which ordinarily would be nonappealable standing alone, may be reviewed." Intermedics Infusaid, Inc. v. Regents of Univ. of Minn., 804 F.2d 129, 134 (Fed. Cir.1986). "Whether an appellate court exercises this `doctrine of pendent jurisdiction at the appellate level' is a matter of discretion." Id. "[T]he major factor in determining whether to exercise this jurisdiction is the extent that review of the appealable order will involve consideration of factors relevant to the otherwise nonappealable order." Id.

In this case, our consideration of the denial of P & G's preliminary injunction motion necessarily implicates the district court's imposition of the stay. As the Ninth Circuit reasoned in Privitera v. California Board of Medical Quality Assurance, Under the unique circumstances of this case, we conclude that the portion of the order staying the action is appealable under 28 U.S.C. § 1292(a)(1). To hold otherwise would mean that the denial of the preliminary injunction would be effectively unappealable because a reversal on that issue would have no effect. Our mandate would return to a black hole. A stay should not...