Robert Bosch, LLC v. Pylon Mfg. Corp.

• Decision Date: 14 June 2013
• Docket Number: 2011–1364.,Nos. 2011–1363,s. 2011–1363
• Citation: 719 F.3d 1305
• Parties: ROBERT BOSCH, LLC, Plaintiff–Appellant, v. PYLON MANUFACTURING CORP., Defendant Cross–Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

719 F.3d 1305

ROBERT BOSCH, LLC, Plaintiff–Appellant,

v.PYLON MANUFACTURING CORP., Defendant Cross–Appellant.

Nos. 2011–1363, 2011–1364.

United States Court of Appeals,Federal Circuit.

June 14, 2013.

Mark A. Hannemann, Kenyon & Kenyon, LLP, of New York, NY, argued for plaintiff-appellant on rehearing en banc. With him on the brief was Jeffrey S. Ginsberg. Of counsel on the brief was Susan A. Smith, of Washington, DC. Of counsel was Ryan J. Sheehan of New York, NY.

Garret A. Leach, Kirkland & Ellis, LLP, of Chicago, IL, argued for defendant-cross appellant on rehearing en banc. With him on the brief were Mark A. Pals and Dennis J. Abdelnour. Of counsel were Gregory L. Hillyer, Feldman Gale, P.A., of Miami, FL, Javier Sobrado, of Bethesda, MD and Christopher R. Liro, Andrus, Sceales, Starke & Sawall, of Milwaukee, WI.

Edward R. Reines, Weil Gotshal & Manges LLP, of Redwood Shores, CA, for amicus curiae American Intellectual Property Law Association, on rehearing en banc. With him on the brief was Andrew L. Perito. Of counsel on the brief was William G. Barber, President, American Intellectual Property Law Association, of Arlington, VA.

Robert P. Taylor, Arnold & Porter LLP, of San Francisco, CA, for amicus curiae Intellectual Property Owners Association on rehearing en banc. With him on the brief were Monty M. Agarwal and James A. Fox. Of counsel on the brief were Richard F. Phillips, President, and Kevin H. Rhodes, Chair, Intellectual Property Owners Association. Of counsel was Herbert C. Wamsley, JR., of Washington, DC.

Charles W. Shifley, Banner & Witcoff, Ltd., of Chicago, IL, for amicus curiae. The Intellectual Property Law Association of Chicago on rehearing en banc.

Robert M. Evans, Jr., Senniger Powers LLP, of St. Louis, MO, for amicus curiae MEMC Electronic Materials, Inc. on rehearing en banc. With him on the brief was Marc W. Vander Tuig.

Raymond T. Chen, Solicitor, United States Patent & Trademark Office, of Alexandria, VA, for amicus curiae United States of America on rehearing en banc. With him on the brief were Michael S. Forman and Thomas W. Krause, Associate Solicitors. Of counsel on the brief were Stuart F. Delery, Acting Assistant Attorney General, and Mark R. Freeman, Attorney, Appellate Staff, Civil Division, United States Department of Justice, of Washington, DC.

Before RADER, Chief Judge, NEWMAN, LOURIE, DYK, PROST, MOORE, O'MALLEY, REYNA, and WALLACH, Circuit Judges.^*

Opinion for the court filed by Circuit Judge PROST, in which RADER, Chief Judge, NEWMAN, LOURIE, and DYK, Circuit Judges join. MOORE, Circuit Judge joins Part I of the opinion.

Opinion concurring-in-part and dissenting-in-part filed by MOORE, Circuit Judge.

Opinion concurring-in-part and dissenting-in-part filed by REYNA, Circuit Judge.

Dissenting opinion filed by O'MALLEY, Circuit Judge, in which WALLACH, Circuit Judge joins.

PROST, Circuit Judge.

We sua sponte took this case en banc to answer two questions. First, does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this court to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred? Second, does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this court to entertain appeals from patent infringement liability determinations when willfulness issues are outstanding and remain undecided? We answer both questions in the affirmative and return the case to the panel for disposition on the merits.

Background

In August 2008, Robert Bosch, LLC (“Bosch”) sued Pylon Manufacturing Corp. (“Pylon”) for patent infringement. Pylon later asserted patent infringement counterclaims against Bosch. During the pretrial period, Pylon filed a motion requesting that the district court bifurcate the issues of liability and damages. In ruling on the motion, the district court stated that “bifurcation is appropriate, if not necessary, in all but exceptional patent cases,” and issues related to a damages trial are “a drain on scarce judicial resources.” Robert Bosch LLC v. Pylon Mfg. Corp., 1:08–CV–542, slip op. at 1 (D.Del. Aug. 26, 2009) (“Memorandum Opinion”). With respect to willfulness, the court determined that “willfulness is a damages issue, not a liability issue,” and willfulness “requires qualitatively and quantitatively different proof than does infringement.” Memorandum Opinion at 3. Accordingly, the district court granted the motion and stayed discovery on damages issues including willfulness. As of this writing, proceedings on damages issues remain stayed in the district court.

Following a jury trial on liability and motions for judgment as a matter of law, the district court entered judgment on the liability issues. Bosch appealed and Pylon cross-appealed. Bosch filed a motion to dismiss both its appeal and Pylon's cross-appeal on the grounds that we lack jurisdiction, which this court denied. Bosch sought reconsideration of its motion, which was also denied. On July 9, 2012, the parties argued the substantive as well as jurisdictional issues before a panel of this court. After oral argument, we sua sponte granted a rehearing en banc to determine whether we have jurisdiction over this appeal under 28 U.S.C. § 1292(c)(2).

Discussion

This court's jurisdiction is governed by the final judgment rule. See, e.g.,28 U.S.C. § 1295(a)(1) (granting this court jurisdiction over any “appeal from a final decision of a district court of the United States ... in any civil action arising under ... any Act of Congress relating to patents”). Under the final judgment rule, a party may not take an appeal “until there has been a decision by the district court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981) (citations omitted). There are, however, exceptions to the final judgment rule. For instance, § 1292(c)(2) provides one such exception, which is unique to patent cases. Under § 1292(c)(2), an appeal to this court may be made “from a judgment in a civil action for patent infringement which would otherwise be appealable to the United States Court of Appeals for the Federal Circuit and is final except for an accounting.” The disposition of this case turns on the meaning of “accounting,” specifically, whether a trial on damages and willfulness is an accounting for the purposes of § 1292(c)(2).

I

In addressing the question of whether we have jurisdiction to entertain an appeal when a trial on damages has not yet occurred, we first consider the issue of whether an accounting includes the determination of a patentee's damages. We then consider whether an accounting may include a trial on damages or whether it is limited to proceedings before a special master. With respect to the first issue, Bosch presses the argument that an accounting under § 1292(c)(2) is limited to an accounting of an infringer's profits and cannot include a determination of damages. We cannot agree with Bosch. It is clear from the case law and the history of the statute that an accounting includes both the determination of an infringer's profits as well as a patentee's damages. Bosch also argues that whatever an accounting is, it cannot be a trial on damages. Again, we disagree. We find that neither the text nor the history of the statute supports this narrow interpretation. Rather, an “accounting” within the meaning of § 1292(c)(2) may include a trial on damages.

A

In accordance with established precedent, we begin our inquiry by ascertaining the historical meaning of an “accounting.”

It is a well-established rule of construction that “ ‘[w]here Congress uses terms that have accumulated settled meaning under ... the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.’ ” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992) (quoting Community for Creative Non–Violence v. Reid, 490 U.S. 730, 739, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989)); see Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 59, 31 S.Ct. 502, 55 L.Ed. 619 (1911) (“[W]here words are employed in a statute which had at the time a well-known meaning at common law or in the law of this country, they are presumed to have been used in that sense”).

Neder v. United States, 527 U.S. 1, 21–22, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999); see also Microsoft Corp. v. i4i Ltd. P'ship, ––– U.S. ––––, 131 S.Ct. 2238, 2246, 180 L.Ed.2d 131 (2011) (reiterating this principle of statutory construction). Bosch argues that historically an accounting included only the ascertainment of an infringer's profits, while Pylon argues that an accounting included a trial on damages, including the determination of willfulness.

It is true, as Bosch contends, that the meaning of accounting in patent cases once referred only to the equitable accounting of an adjudged infringer's profits.¹ In 1853, the Supreme Court in Livingston v. Woodworth examined the traditional accounting proceeding and held that damages could not be awarded in an equitable accounting. 56 U.S. 546, 560, 15 How. 546, 14 L.Ed. 809 (1853). The special master in Livingston admitted “that the account [was] not constructed upon the basis of actual gains and profits acquired by the defendants by the use of the inhibited machine, but upon the theory of awarding damages to the complainants for an infringementof their monopoly.” Id. at 559. The special master found that the defendants were “trespassers and wrongdoers, in the legal sense” and “double[d] the amount which he had stated to be a compensation to the plaintiffs.” Id. The Livingston Court found this improper, stating, “[w]e are aware of no rule which converts a court of equity into an instrument for the punishment of simple torts.” Id. The Court questioned whether “the infliction of damages, by way of penalty, [was] ever consistent with the...