Pitney Bowes, Inc. v. Mestre

Decision Date04 April 1983
Docket NumberNo. 81-5749,81-5749
Citation218 USPQ 987,701 F.2d 1365
CourtU.S. Court of Appeals — Eleventh Circuit
PartiesPITNEY BOWES, INC., Plaintiff-Appellant, Cross-Appellee, v. Celina MESTRE, Personal Representative of The Estate of Luis Mestre, deceased, Defendant-Appellee, Cross-Appellant.

William J. Dunaj, Miami, Fla., Lars I. Kulleseid, Jesse J. Jenner, Frank L. Politano, Fish & Neave, New York City, King & Spalding, John C. Staton, Jr., Atlanta, Ga., William D. Soltow, Jr., Stamford, Conn., for plaintiff-appellant, cross-appellee.

Robert L. Shevin, Jerome H. Shevin, Jeffrey M. Weissman, Miami, Fla., for defendant-appellee, cross-appellant.

Appeals from the United States District Court for the Southern District of Florida.

Before RONEY and JOHNSON, Circuit Judges, and DYER, Senior Circuit Judge.

JOHNSON, Circuit Judge:

Pitney Bowes, Inc. brought this action under 28 U.S.C.A. Secs. 2201, 2202, seeking a declaration as to its rights and obligations under royalty agreements entered into with Luis Mestre, 1 an inventor of paper collating machines. In its complaint, Pitney Bowes also sought an injunction against Mestre to prevent him from seeking arbitration under the agreements. The district court granted the injunction. Pitney Bowes, Inc. v. Mestre, 203 U.S.P.Q. 554 (S.D.Fla.1978). Following discovery, Mestre moved for summary judgment; Pitney Bowes responded with a cross-motion for summary judgment. The district court denied Mestre's motion and granted Pitney Bowes' motion in part. Pitney-Bowes, Inc. v. Mestre, 517 F.Supp. 52 (S.D.Fla.1981). 2 Both Pitney Bowes and Mestre appeal.

I.

The subject of this appeal concerns five agreements entered into on the following dates:

(1) Rotary Collator Agreement--October 3, 1958;

(2) Vertical Collator Agreement--October 16, 1959;

(3) A-10 Collator Agreement--September 1, 1962;

(4) Auto-Sorter Agreement--December 30, 1965; and (5) Amendment to the Agreements--December 30, 1965. 3

As their names suggest, each of the first four agreements licensed the right to manufacture and sell a different paper handling machine. In exchange, Mestre received the right to royalties on each machine manufactured and sold. Mestre had applied for patents on the machines prior to the execution of each agreement, and in each case patents were granted sometime after each agreement went into effect. In its complaint filed in district court, Pitney Bowes contended that each agreement licensed both patent rights and trade secrets 4 in the machines. Mestre disputed this as to the Rotary Collator Agreement, arguing that it licensed only trade secrets. In addition to this issue, the parties dispute: the expiration dates of the agreements; whether Mestre is entitled to payments from Pitney Bowes after the agreements expire; and the propriety of the district court's injunction against arbitration.

In its summary judgment opinion, in order to determine expiration dates, the district court analyzed each agreement separately. With regard to the Rotary Collator Agreement, the court agreed with Mestre that it licensed only trade secrets. 5 Accordingly, federal patent law did not apply and the question of expiration was solely a matter of state contract law. The agreement, as amended by the 1965 Amendment Agreement, provided for expiration after 17 years or after the last patent on the Rotary Collator expired, whichever was later. Because the court could not discern from the face of the agreement or the undisputed facts whether the 17-year period started in 1958, when the original agreement was signed, or in 1965, when the Amendment Agreement added the expiration provisions, the court denied summary judgment as to the Rotary Collator Agreement and reserved the question of its expiration date for trial.

The 1959 Vertical Collator Agreement provided for expiration on the date of Mestre's death, on the date of the last patent to expire, or after 17 years, whichever was latest. The district court held that the Vertical Collator Agreement, unlike the Rotary Collator Agreement, licensed both patent rights and trade secrets. The Court then applied federal patent law to determine the expiration date of the agreement on the ground that the presence of patent rights in the agreement implicates federal law. Relying on the federal patent case of Brulotte v. Thys Co., 379 U.S. 29, 85 S.Ct. 176, 13 L.Ed.2d 99 (1964), in which the Supreme Court held unenforceable a royalty agreement providing for payments for patent rights after the patents expired, the district judge held that the Vertical Collator Agreement necessarily expired when the last patent on the Vertical Collator expired. The effect of this holding was to cut short the life of the agreement as written, because Mestre died after the last patent expired. The expiration date having been determined as a matter of law, no issue of fact remained for trial on the claim under the Vertical Collator Agreement.

The district court held that the A-10 Collator Agreement and the Auto-Sorter Agreement also licensed both patent rights and trade secrets and thus were hybrid agreements. These two agreements provided for expiration when the last patent expired or after 17 years, whichever was later. Because they licensed patent rights, federal patent law again was relevant to the determination of the expiration dates of the agreements. This time, however, the Brulotte case did not shorten the life of the agreements because the last patent on each machine expired after the 17-year periods expired. No questions of fact remained for trial as to either of these agreements and neither party questions the court's judgment as to them on appeal.

The final issue addressed in the district court's summary judgment opinion concerned the rights of the parties after the agreements expired. The court concluded that Pitney Bowes had a right to continue manufacturing and selling the machines after the agreements expired, but it also held that there remained a question of disputed fact as to whether, under state trade secret law, Mestre owned a reversionary right to ongoing payments from Pitney Bowes. Accordingly, the court denied summary judgment on the claim concerning Mestre's post-expiration rights, reserving it for trial.

Following the court's decision, Mestre moved for reconsideration of the denial of his summary judgment motion and moved to vacate the court's earlier order enjoining arbitration. Pitney Bowes also moved for reconsideration insofar as its summary judgment motion had been denied in part. On June 17, 1981, the district court denied all three motions, entered partial final judgment in accordance with its earlier summary judgment decision, and certified its judgment for appeal in accordance with Rule 54(b) of the Federal Rules of Civil Procedure. 6 Pitney Bowes then filed a notice of appeal, citing as reversible error the failure of the district court to grant summary judgment in its favor that 1) the Rotary Collator Agreement included a patent license and therefore was subject to federal patent law; and 2) after expiration of the agreements, Pitney Bowes is entitled to continue manufacturing and selling the collating machines without making payments to Mestre. Mestre also filed a notice of appeal, citing as error, inter alia, the district court's summary judgment in favor of Pitney Bowes on the claim under the Vertical Collator Agreement. Mestre's notice does not specifically mention the district court's denial of his motion to dissolve the injunction against arbitration, but in his briefs to this Court he attempts to raise it as another issue on appeal. 7

II.

Although neither party raises the issue in its briefs, we find a substantial question as to whether we may entertain Pitney Bowes' appeal at this point in the litigation. Because the issues raised by Pitney Bowes--concerning the expiration date of the Rotary Collator Agreement and the post-expiration right of Mestre to trade secret payments--were not disposed of by final judgment below, we hold that we lack jurisdiction to consider them.

It is well established that the denial of a motion for summary judgment is not a final decision under 28 U.S.C.A. Sec. 1291. A final decision is "one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). An order denying summary judgment amounts to a decision that the claim remains pending for trial and is therefore interlocutory. See, e.g., Jones v. St. Paul Fire & Marine Insurance Co., 108 F.2d 123, 125 (5th Cir.1939); 6 J. Moore & J. Wicker, Moore's Federal Practice p 56.21 (2d ed. 1982).

A court presented with several claims may under Rule 54(b) of the Federal Rules of Civil Procedure direct the entry of final judgment as to fewer than all of the claims "upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." However, a certification of final judgment cannot for purposes of appeal render final a judgment which is interlocutory. The requirement of finality still applies, with the question of appealability turning on whether the entry of judgment completely disposes of one of the claims. See, e.g., Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 435, 76 S.Ct. 895, 899-900, 100 L.Ed. 1297 (1956); National Corn Growers Ass'n v. Bergland, 611 F.2d 730, 732 (8th Cir.1980); Spencer, White & Prentis, Inc. v. Pfizer, Inc., 498 F.2d 358, 362-63 (2d Cir.1974); J. Moore & J. Wicker, supra, p 56.20. An order only partially disposing of a single claim does not finally determine the claim and thus is interlocutory. Id.; New Amsterdam Casualty Co. v. B.L. Jones & Co., 254 F.2d 917, 919 (5th Cir.1958).

In its summary judgment decision, the district court reserved for trial substantial questions of fact which precluded...

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