818 F.2d 841 (Fed. Cir. 1987), 87-1016, Woodard v. Sage Products, Inc.

Docket Nº:Appeal No. 87-1016.
Citation:818 F.2d 841
Party Name:2 U.S.P.Q.2d 1649 Elizabeth Nye WOODARD, Miles Cogley Nye, Jr., and the Kendall Company, Appellants, v. SAGE PRODUCTS, INC., Appellee.
Case Date:May 04, 1987
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 841

818 F.2d 841 (Fed. Cir. 1987)

2 U.S.P.Q.2d 1649

Elizabeth Nye WOODARD, Miles Cogley Nye, Jr., and the

Kendall Company, Appellants,

v.

SAGE PRODUCTS, INC., Appellee.

Appeal No. 87-1016.

United States Court of Appeals, Federal Circuit

May 4, 1987

Page 842

Melvin F. Jager, Willian, Brinks, Olds, Hofer, Gilson & Lione, Chicago, Ill., argued, for appellee. Gerson E. Meyers, Dressler, Goldsmith, Shore, Sutke & Milnamow, Ltd., Chicago, Ill., of counsel and Richard A. Kaplan, Willian, Brinks, Olds, Hofer, Gilson & Lione, Chicago, Ill., of counsel.

Jack C. Goldstein, Arnold, White & Durkee, Houston, Tex., argued, for appellants. John D. Norris and Patricia N. Brantley, Arnold, White & Durkee, Houston, Tex., of counsel.

Before MARKEY, Chief Judge, FRIEDMAN, RICH, DAVIS, SMITH, NIES, NEWMAN, BISSELL, and ARCHER, Circuit Judges.

NIES, Circuit Judge.

This appeal raises the legal issue of whether the order of a federal district court granting summary judgment of noninfringement in favor of one of several defendants in a pending patent infringement suit is immediately appealable. The order is not a final judgment from which appeal may be taken under 28 U.S.C. Secs. 1291 or 1295(a)(1) (1982), and the district court neither certified the issue under 28 U.S.C. Sec. 1292(b) (Supp. III 1985) nor entered a separate final judgment under Fed.R.Civ.P. 54(b). Appellants argue, however, that this court has appellate jurisdiction under 28 U.S.C. Secs. 1292(a)(1) and (c)(1) (1982 & Supp. III 1985) because the order granting summary judgment effectively denied appellants' prayer set forth in their complaint for permanent injunctive relief against the dismissed defendant. Having considered the matter in banc, we conclude that, under Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981), an interlocutory order that, in effect, denies an injunction is appealable under section 1292(a)(1) only if such order causes serious, if not irreparable, consequence and can be effectually challenged only by immediate appeal. Appellants failed to satisfy those requirements. Accordingly, we grant appellee's motion to dismiss for lack of appellate jurisdiction. We deny appellee's motion for attorney fees for a frivolous appeal.

I

Elizabeth Nye Woodard and Miles Cogley Nye, Jr., owners of U.S. Patent No. 3,654,638 (the Nye patent) and Kendall Company, licensee thereunder, (hereinafter collectively "Woodard") filed a notice of appeal from an order of the United States District Court, Northern District of Illinois, Eastern Division, granting partial summary judgment in favor of Sage Products, Inc., one of several defendants in a pending patent infringement suit.

The following procedural history of the subject controversy is set out by Woodard and, being generally uncontroverted, is accepted as correct for purposes of this motion to dismiss.

  1. The Nye Patent and the Parties

    The Nye patent relates to a commode pan invented by Alice Nye, who owned the patent until her death.

    Plaintiffs Elizabeth Nye Woodard and Miles Cogley Nye, Jr., children of the deceased Alice Nye, have been the owners of the Nye patent since Alice Nye's death. Plaintiff The Kendall Company

    Page 843

    ("Kendall") has been the exclusive licensee under the Nye patent since 1972.

    Defendants Sage Products, Inc. ("Sage"), Plastipan Industries, Inc. ("Plastipan"), and BHC, Inc. ("BHC") are un related corporations, each of which makes and sells separate and distinct allegedly infringing commode pans.

  2. The Litigation Below

    On September 4, 1981, Alice Nye--then an elderly lady who resided in Houston, Texas, and who, because of failing health, had difficulty traveling--and Kendall commenced a patent infringement action in the Southern District of Texas against distributors of Sage, Plastipan, and BHC. Subsequently, Sage, Plastipan, and BHC, bought [sic] individual declaratory judgment actions against Kendall in the Northern District of Illinois. Although she clearly was a necessary and indispensable party, Alice Nye was not named as a defendant in those three actions because she was not subject to venue in Illinois.

    By agreement, on December 16, 1981, Alice Nye and Kendall filed the underlying patent infringement action against Sage, Plastipan, and BHC in the Northern District of Illinois, and the Texas action and the three Illinois declaratory judgment actions were dismissed. Alice Nye and Kendall's original complaint sought "a preliminary and final injunction against continued infringement" by Sage, Plastipan, and BHC. Each of the defendants counterclaimed for a declaratory judgment of invalidity and non-infringement.

    After a substantial period of discovery, Sage cited three allegedly anticipatory prior art references. Based on Sage's contentions respecting those three references, Alice Nye filed a request for reexamination, in the Patent and Trademark Office ("PTO") on January 14, 1983.

    During the reexamination, Alice Nye's health worsened, and the district court sua sponte dismissed the civil action without prejudice and with express leave to reinstate upon resolution of both the issue of the reexamination and the issue of Alice Nye's health. Later during the reexamination, Alice Nye died. On April 16, 1985, the PTO issued a reexamination certificate, confirming the patentability of the original four claims and adding six new claims over Sage's allegedly anticipatory prior art.

    On June 4, 1985, the district court granted plaintiffs' motion to reinstate the civil action and granted leave to file an amended complaint which also sought "a preliminary and final injunction against continued infringement" by Sage, Plastipan, and BHC.

    On September 25, 1985, Sage filed a motion for summary judgment that Sage's Model 2500 commode pan--the only Sage product in issue--did not infringe the Nye patent. Since Sage's other product had previously been eliminated from the litigation by stipulation, Sage's motion sought summary judgment effectively dismissing plaintiff's complaint insofar as Sage was concerned--and inherently denying plaintiffs all relief against Sage.

    On August 27, 1986, the district court entered a memorandum opinion and order granting Sage's motion for summary judgment on grounds of non-infringement....

    Brief for Woodard at 6-9 (footnote omitted).

    In connection with a motion for reconsideration, Woodard advised the district court that it intended to take an immediate appeal pursuant to 28 U.S.C. Sec. 1292(a)(1) on the theory that the district court's grant of partial summary judgment was effectively the denial of an injunction in this case. The district court expressed its disagreement that the order was appealable but suspended proceedings in the case pending resolution of the appeal.

    Woodard promptly filed a notice of appeal and Sage countered with a motion to dismiss for lack of appellate jurisdiction. Per Sage, the order does not fall within the narrow category of interlocutory orders which are immediately appealable under 28 U.S.C. Sec. 1292(a)(1). In support of its interpretation of that section, Sage relied principally

    Page 844

    on the Supreme Court decision in Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981). In essence, Sage argued that Woodard had no right to appeal an interlocutory order which effectively denied a permanent injunction unless Woodard showed that the order had a serious, if not irreparable, consequence that could not be effectually challenged on appeal of a final judgment. Per Sage, Woodard did not show that an immediate appeal of the subject order was necessary to prevent such harmful effects. In addition, Sage relied on the decisions of this court in Chaparral Communications, Inc. v. Boman Industries, Inc., 798 F.2d 456, 230 USPQ 535 (Fed.Cir.1986); Holmes v. Bendix Corp., 713 F.2d 792, 219 USPQ 6 (Fed.Cir.1983), and Veach v. Vinyl Improvement Products Co., 700 F.2d 1390, 217 USPQ 97 (Fed.Cir.1983), in which interlocutory appeals under section 1292(a)(1) in purportedly similar instances were dismissed. (See discussion, Part VI, infra.)

    Woodard responded in opposition to the motion for dismissal with the argument that, because the district court's interlocutory order was a final disposition of its claim for injunctive relief against Sage, it was immediately appealable as of right under section 1292(a)(1). Woodard relied principally on General Electric Co. v. Marvel Rare Metals Co., 287 U.S. 430, 53 S.Ct. 202, 77 L.Ed. 408, 15 USPQ 266 (1932), and a number of circuit court decisions, almost all of which were rendered before Carson, to support its position that an order effectively denying a permanent injunction on the merits is immediately appealable as of right, that is, without any additional showing of harm pendente lite. Woodard urged that the statements in Carson on which Sage's interpretation of section 1292(a)(1) rests are dicta and that Carson did not overrule the venerable General Electric case. Further, while Woodard maintained that, in any event, it met the standard of Carson and was distinguishable from Veach, Holmes, and Chaparral, it urged the court to consider the matter initially in banc to clarify or overrule our cases to the extent that they conflict with General Electric and the substantial body of existing case law of other circuits. This court accepted the suggestion for in banc consideration.

    II

    It is axiomatic that the initial inquiry in any appeal is whether the court to which appeal is taken has jurisdiction to hear the appeal. While in some matters of procedural or substantive law this circuit has concluded that we will follow the law as interpreted by the circuit in which the district court is located, see, e.g., Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1439-40, 223 USPQ 1074, 1087 (Fed.Cir.1984), such deference is inappropriate on issues of our own appellate jurisdiction. This court...

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