595 F.2d 961 (5th Cir. 1979), 79-1026, Brown v. Braddick

Docket Nº:79-1026, 79-1407.
Citation:595 F.2d 961
Party Name:203 U.S.P.Q. 95 Joe R. BROWN et al., Plaintiffs-Appellees, v. Britt O. BRADDICK et al., Defendants-Appellants. Joe R. BROWN et al., Plaintiffs-Appellees, v. Britt O. BRADDICK et al., Defendants-Appellants.
Case Date:May 07, 1979
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 961

595 F.2d 961 (5th Cir. 1979)

203 U.S.P.Q. 95

Joe R. BROWN et al., Plaintiffs-Appellees,

v.

Britt O. BRADDICK et al., Defendants-Appellants.

Joe R. BROWN et al., Plaintiffs-Appellees,

v.

Britt O. BRADDICK et al., Defendants-Appellants.

Nos. 79-1026, 79-1407.

United States Court of Appeals, Fifth Circuit

May 7, 1979

Page 962

Jack W. Hayden, David B. Dickinson, Houston, Tex., William Monroe Kerr, Midland, Tex., for defendants-appellants.

E. Richard Zamecki, Houston, Tex., for plaintiffs-appellees.

Appeals from the United States District Courts for the Southern District of Texas and Western District of Texas.

Before AINSWORTH, GODBOLD and VANCE, Circuit Judges.

GODBOLD, Circuit Judge:

We deal here with motions for stays of two district court discovery proceedings, both related to a single patent interference case pending in the Patent Office. Braddick and Lindsey together are the senior party in the patent interference proceeding before the U.S. Patent and Trademark Office

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Board of Interferences; Brown, with Cochran and Montgomery, is the junior party in this proceeding. Brown allegedly is attempting to use 35 U.S.C. § 24 to discover evidence in possession of the senior party, through the use of compulsory process of U.S. district courts and without complying with Patent Office procedural rules. 1 We deal with the two proceedings separately.

No. 79-1026.

Junior party Brown, acting pursuant to Patent Office rule 287, 37 C.F.R. § 1.287, requested the Board of Interferences (BI) to order senior party Braddick to answer interrogatories and produce documents. BI denied this discovery request because it was made during presentation of the junior party's testimony in chief and Brown had made no showing that the requested discovery would be in the "interest of justice," as required by 37 C.F.R. § 1.287(c); See generally note 1 Supra.

After losing before BI, 2 Brown, relying on 35 U.S.C. § 24, 3 obtained from the clerk of the district court for the Southern

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District of Texas, where Braddick resides, a subpoena requiring Braddick to appear for deposition and to bring documents in his possession. 4 On November 30, 1978, the district court denied Braddick's motion to quash this subpoena. A hearing on a motion to reconsider was held December 1, but before the district court ruled on this motion Braddick filed notice of appeal on December 13. The next day the district court entered an order denying the motion for reconsideration and set the date of Braddick's deposition for December 18. Braddick failed to appear for this deposition. Afterwards, on December 21, he filed an "amended" notice of appeal from the district court's denial of reconsideration. On January 8, 1979, the district court found Braddick in contempt for failure to comply with its subpoena and set the date for hearing to determine "punishment" for January 11. On January 10 appellant Braddick requested a stay of further attempts to obtain discovery and of further contempt proceedings against him. 5 On January 10 this court stayed further district court proceedings "pending further consideration by the panel."

A threshold issue is whether the district court order requiring the deposition is final and appealable. Gladrow v. Weisz, 354 F.2d 464, 466 (CA5, 1965), holds such orders appealable because the discovery order is all that is before the district court and the case is completely ended as far as the district court is concerned when it grants or denies discovery. Accord Sheehan v. Doyle, 513 F.2d 895, 898 (CA1), Cert. denied, 423 U.S. 874, 96 S.Ct. 144, 46 L.Ed.2d 106 (1975); Frilette v. Kimberlin, 508 F.2d 205, 209-10 (CA3, 1974), Cert. denied, 421 U.S. 980, 95 S.Ct. 1983, 44 L.Ed.2d 472 (1975); Hogan v. Natta, 392 F.2d 686, 689 (CA10, 1968); Ochsner v. Millis,382 F.2d 618 (CA6, 1967); Natta v. Zletz, 379 F.2d 615 (CA7, 1967). The Second Circuit, however, has held that district court decisions on patent discovery orders are not appealable (unless the district court denies discovery of a non-party). See Shattuck v. Hoegl, 523 F.2d 509 (CA2, 1975), After further proceedings, 555 F.2d 1118 (CA2, 1977). The Second Circuit reasoned that even though the case before the district court was completed, the discovery order nevertheless lacked finality because an aggrieved party could have the evidence excluded before BI or raise the issue when the completed case was appealed to a district court or the Court of Customs and Patent Appeals under 35 U.S.C. § 141.

The Fifth Circuit position appears sound to us. Shattuck seems to us not consistent with Cobbledick v. U.S. 309 U.S. 323, 329-30, 60 S.Ct. 540, 543, 84 L.Ed. 783, 787-88 (1940), in which the Supreme Court said that a district court order directing a witness to testify before the ICC is final and appealable because "there remains nothing for it (the district court) to do." The Supreme

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Court reasoned, "The proceeding before the district court is not ancillary to any judicial proceeding. So far as the court is concerned, it is complete in itself." This reasoning is applicable here. Once the district court has granted or denied discovery, it is finished with the case. That further action in another forum is possible is irrelevant. The district court order granting Brown's discovery request should be treated as final and appealable. See Note, Discovery in Patent Interference Proceedings, 89 Harv.L.Rev. 573, 589-92 (1976).

A second threshold question is whether Braddick's notice of appeal deprived the district court of any further power to take action to enforce its order. Since Braddick failed to ask the district court for a stay pending appeal and to post supersedeas bond as required by F.R.C.P. 62(d), the district court retained power to enforce its order by civil contempt proceedings. See Sekaquaptewa v. MacDonald, 544 F.2d 396, 406 (CA9, 1976), Cert. denied, 430 U.S. 931, 97 S.Ct. 1550, 51 L.Ed.2d 774 (1977); Blackwelder v. Crooks, 151 F.Supp. 26 (D.D.C.1957), Rev'd on other grounds, 102 U.S.App.D.C. 290, 252 F.2d 854 (1958). Although U. S. v. Roundtree, 420 F.2d 845, 853 (CA5, 1969), seems to say broadly that contempt may not be imposed as a sanction for violating a court order after an appeal has been filed unless the party's failure to obtain a stay pending appeal was wilful, on close reading it appears that there the court was discussing criminal contempt. Roundtree should not be extended to civil contempt because "(t)he crucial issue in civil contempt proceedings, as distinguished from criminal contempt, is not . . . state of mind but simply whether the Court's order was in fact violated." NLRB v. Crown Laundry & Dry Cleaners, Inc., 437 F.2d 290, 293 (CA5, 1971).

There are four prerequisites to obtaining a stay pending appeal:

It is, of course, well settled that in order to obtain a stay pending appeal the applicants must demonstrate (1) a substantial likelihood that they will prevail on the merits; (2) that they will suffer irreparable harm if the stay is denied; (3) that issuance of a stay will not substantially harm other parties to the proceeding; and (4) that issuance of the stay will not interfere with the public interest.

Taylor Diving & Salvage v. U. S. Dept. of Labor, 537 F.2d 819, 821 n.8 (CA5, 1976). We do not foresee any interference with the public interest if the stay is denied, and Brown has pointed to none. If a stay is denied, Braddick will be irreparably harmed because he will be forced to choose between complying with the discovery order (and thus forfeiting the procedural advantages the senior party enjoys under Patent Office rules) and continuing his refusal to comply with exposure to possible sanctions for contempt. Although "harm" in some sense may be caused to Brown by issuance of a stay in that he will not be able under Patent Office rules to discover the senior party's evidence in time to present it during his own testimony-in-chief before BI, this "harm," even if legally cognizable, will not be substantial since he will have another opportunity to present evidence during rebuttal. Thus the critical issue is whether Braddick has shown substantial likelihood that he will prevail on the merits. We believe such a showing has been made. Since it appears clear that the district court's finding of contempt on the part of Braddick was a finding of civil, rather than criminal, contempt, 6 the district court contempt order will be invalid if the underlying subpoena was wrongly issued. ITT

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Community Dev. Corp. v. Barton, 569 F.2d 1351, 1357 (CA5, 1978). 7

The prevailing interpretation of 35 U.S.C. § 24 has been that it authorizes district courts to grant discovery beyond that permitted by BI discovery rules and rules of admissibility. 8 See, e. g., In re Natta,388 F.2d 215 (CA3, 1968); Babcock & Wilcox Co. v. Combustion Eng'r, Inc.,430 F.2d 1177 (CA2, 1968), Aff'g mem. 314 F.Supp. 235 (D.Conn.); Natta v. Hogan, 392 F.2d 686 (CA10, 1968); Natta v. Zletz, 379 F.2d 615 (CA7, 1967). Recently, however, the First and Third Circuits have rejected this interpretation of § 24 and have held that § 24 authorizes district courts to enforce subpoenas only for materials that are discoverable under Patent Office discovery rules. See Frilette v. Kimberlin, 508 F.2d 205 (CA3, 1974) (en banc), Cert. denied, 421 U.S. 980, 95 S.Ct. 1983, 44 L.Ed.2d 472 (1975) (overruling In re Natta, supra ); Sheehan v. Doyle, 513 F.2d 895 (CA1); Cert. denied, 423 U.S. 874, 96 S.Ct. 144, 46 L.Ed.2d 106 (1975), After further proceedings, 529 F.2d 38 (CA1), Cert. denied, 429 U.S. 870, 97 S.Ct. 182, 50 L.Ed.2d 150 (1976). There is no controlling Fifth Circuit precedent. 9 We find the Frilette reasoning persuasive.

In Frilette, the Third Circuit argued that if the Congress that enacted 35 U.S.C. § 24 had intended to change previous practice in favor of the unique system of allowing district courts to...

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