800 F.2d 1077 (Fed. Cir. 1986), 111, In re Innotron Diagnostics

Docket Nº:Misc. No. 111.
Citation:800 F.2d 1077
Party Name:1986-2 Trade Cases 67,273, 5 Fed.R.Serv.3d 1156 In re INNOTRON DIAGNOSTICS, Petitioner.
Case Date:August 27, 1986
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1077

800 F.2d 1077 (Fed. Cir. 1986)

1986-2

Trade Cases 67,273,

5 Fed.R.Serv.3d 1156

In re INNOTRON DIAGNOSTICS, Petitioner.

Misc. No. 111.

United States Court of Appeals, Federal Circuit

August 27, 1986

Page 1078

Alicia Rosenberg of Blecher, Collins & Weinstein, Los Angeles, Cal., for petitioner. With her on brief were Maxwell M. Blecher and Donald R. Pepperman of Blecher, Collins & Weinstein, Los Angeles, Cal. Also on brief was Harold L. Jackson of Jackson & Jones, Tustin, Cal.

Jeffrey I. Weinberger of Munger, Tolles & Olson, Los Angeles, Cal., for respondent Abbott Laboratories. With him on brief were Gregory P. Stone and Steven M. Perry of Munger, Tolles & Olson, Los Angeles, Cal.

Before MARKEY, Chief Judge, FRIEDMAN and RICH, Circuit Judges.

ORDER

MARKEY, Chief Judge.

This petition for mandamus seeks to overturn an order of the district court separating issues for trial. We deny the petition.

On April 1, 1985, Innotron Diagnostics (Innotron) sued Abbott Laboratories (Abbott) in the U.S. District Court for the Central District of California, No. 85-2207, alleging that Abbott's marketing activities (contracts tying its reagents to its analyzer, bundling its reagents with other products, and manipulating its analyzer software to exclude Innotron's reagents) violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1, 2 (1982). Jurisdiction was based on 28 U.S.C. Secs. 1331, 1332, and 1337.

On April 19, 1985, Abbott sued Innotron in the same court, No. 85-2614, alleging infringement of its U.S. Patent No. 4,492,762 ('762), issued by the Patent and Trademark Office (PTO) January 8, 1985, for a method of testing for substances in a patient's blood. Jurisdiction was based on 28 U.S.C. Sec. 1338(a).

Innotron moved to dismiss Abbott's complaint as stating a compulsory counterclaim to its antitrust action. Without ruling specifically on the motion, the district court ordered consolidation of the cases pursuant to Fed.R.Civ.P. 42(a).

Abbott moved to stay Innotron's antitrust claims and for a separate, early trial of its patent infringement claim. Over Innotron's objection, the district court ordered that the patent issues "will be severed and tried first before the antitrust issues," but did not stay discovery in the antitrust case. The court set discovery to close in the patent case in June 1986, and in the antitrust case on August 31, 1987.

Innotron answered Abbott's complaint on July 17, 1985, acknowledging district court jurisdiction based on 28 U.S.C. Sec. 1338(a), denying infringement, and asserting as affirmative defenses that the '762 patent was invalid under 35 U.S.C. Secs. 102(b) and 103, and that the '762 patent was unenforceable because of inequitable conduct in the PTO (concealment of adverse tests and misrepresentation of prior art), and because the patent had been misused in an illegal tie-in. Innotron accompanied its answer with an antitrust counterclaim in which it repeated verbatim all those affirmative defenses, adding allegations of relevant market, predatory intent, and that Abbott knew its patent was invalid under Sec. 103 when it sued for infringement.

On September 20, 1985, Innotron amended its original antitrust complaint, by adding the same allegations as those in its counterclaim, and demanded a jury trial.

When Innotron refused Abbott's suggestion that the antitrust counterclaim and the patent issues be separately tried, Abbott moved under Fed.R.Civ.P. 42(b) to "sever" and "separately try" the patent issues.

Page 1079

On November 25, 1985, a hearing was held at which the court's "tentative ruling" to "sever" was fully briefed by the parties. 1 Innotron argued that: (1) its affirmative defenses of patent invalidity and unenforceability were so factually interwoven with its antitrust counterclaim as to preclude effective separation; (2) separation of interwoven issues would be a denial of a fair trial; and (3) separation would be burdensome because this litigation has placed it in straitened financial circumstances.

Abbott responded that denying separation would: (1) require extended delay of the patent trial, because discovery on the increasingly broad and complex antitrust issues was not even scheduled to be complete for well over a year; (2) unduly complicate presentation of the patent issues; and (3) reverse the court's earlier rulings. Abbott also argued that trial of the patent issues would render it unnecessary to try many of Innotron's antitrust claims.

On November 27, 1985, the district court ordered the issues in Innotron's counterclaim separated for trial, Fed.R.Civ.P. 42(b), from the patent issues. It further ordered Innotron's counterclaim consolidated with Innotron's original antitrust complaint for trial following trial of the patent issues.

On January 2, 1986, Innotron filed a petition for writ of mandamus, 28 U.S.C. Sec. 1651, in the U.S. Court of Appeals for the Ninth Circuit, asking that the district court be ordered to reconsolidate the antitrust counterclaim for trial with the patent issues. Saying the Ninth Circuit had exclusive jurisdiction over its petition, Innotron argued that the separation order was issued under the district court's inherent authority to govern the order of claims and evidence presented, and was therefore within the Ninth Circuit's "supervisory authority" over the district courts within its region. On January 17, 1986, Abbott filed a motion to dismiss the petition, saying this court had exclusive jurisdiction.

On March 11, 1986, the Ninth Circuit issued this order:

This request for mandamus relief should be considered by the United States Court of Appeals for the Federal Circuit. The petition is denied without prejudice to renewal if the Federal Circuit determines that it has no jurisdiction. See 28 U.S.C. Sec. 1295; In re Precision Screen Machines, Inc., 729 F.2d 1429 [sic, 1428, 221 USPQ 1034] (Fed.Cir.1984).

Issues Presented

(1) Whether this court has appellate jurisdiction over the case.

(2) Whether this court will entertain the present petition. 2

(3) Whether the petition must be granted because the district court abused its discretion in ordering a separate trial of the patent issues and those raised in Innotron's antitrust counterclaim.

ANALYSIS

(1) Appellate Jurisdiction Over the Case

The district court's jurisdiction over Abbott's patent infringement complaint,

Page 1080

No. 85-2614, was based "in whole" on 28 U.S.C. Sec. 1338(a). The district court's order consolidating that complaint with Innotron's earlier filed antitrust complaint, No. 85-2207, was entirely procedural, see Cole v. Schenley Industries, Inc., 563 F.2d 35, 38 (2d Cir.1977), and in no way ousted the district court of jurisdiction over that complaint under Sec. 1338(a). At the time the district court issued the separation order, therefore, jurisdiction of the entire consolidated case was based "in part" on 28 U.S.C. Sec. 1338(a). Hence this court has exclusive jurisdiction of an appeal from the final judgment in the case. 28 U.S.C. Sec. 1295(a)(1); see Interpart Corp. v. Imos Italia, 777 F.2d 678, 680-81, 228 U.S.P.Q. 124, 125-26 (Fed.Cir.1985); see also Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1430, 223 U.S.P.Q. 1074, 1080 (Fed.Cir.1984) (in banc).

The briefs contain substantial discussion about who-filed-what-first and about labels attachable to particular filings. When the smoke is cleared, however, three facts stand forth: (1) this is one lawsuit; (2) its outcome will be substantially governed by considerations unique to the field of patent law; and (3) the decision on this petition is governed by patent law considerations.

In Atari, this court left open, because it was not before us, the question of whether the filing and presence of a non-frivolous complaint for patent infringement, and its consolidation with a suit based on a non-patent claim, would create appellate jurisdiction in this court over an appeal from the final judgment in the case. In Interpart, we closed that door, answering in the affirmative. 3

Abbott elected to assert patent infringement in a separate complaint, but, as Innotron argued, that claim may also have been filed as a counterclaim. The district court's consolidation of the cases produced the same status as that which would have obtained if Abbott had filed its patent claim as a counterclaim. As Innotron now argues before us, the resulting position is the same, and the district court, in consolidating the cases, characterized Abbott's suit as a "counterclaim." It would, of course, be incongruous to hold that consolidation of a separate suit, as in Interpart, is distinct, in relation to this court's jurisdiction, from the presence of a counterclaim raising the same allegations of patent infringement that are not "immaterial, inferential, [or] frivolous," or a "mere joinder." S.Rep. No. 275, 97th Cong., 1st Sess. 20 (1981), reprinted in 1982 U.S.Code Cong. & Ad.News at 11, 30.

Thus, whether allegations of patent infringement be filed and maintained as a viable, non-frivolous counterclaim in a non-patent case, or as a separate complaint which is then consolidated with the non-patent case, the district court's jurisdiction is based "in part" on Sec. 1338(a) and this court must exercise its exclusive appellate jurisdiction over the entire case. 28 U.S.C. Sec. 1295(a)(1).

Thus the mere labeling and sequencing of pleadings in the trial tribunal cannot be allowed to control every exercise of this court's appellate jurisdiction. Nor can the mere presence in a case of "issues" other than those within a substantive field within this court's exclusive appellate jurisdiction serve to oust this court of the jurisdiction it must and would otherwise...

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