Abbott Laboratories v. Brennan, s. 90-1268

• Decision Date: 27 December 1991
• Docket Number: 90-1424,Nos. 90-1268,s. 90-1268
• Citation: 21 USPQ2d 1192,952 F.2d 1346
• Parties: 1991-2 Trade Cases P 69,664, 21 U.S.P.Q.2d 1192 ABBOTT LABORATORIES, Andrew J. Muetterties and Joseph N. Genese, Plaintiffs/Cross-Appellants, v. John F. BRENNAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1346

952 F.2d 1346

1991-2 Trade Cases P 69,664, 21 U.S.P.Q.2d 1192

ABBOTT LABORATORIES, Andrew J. Muetterties and Joseph N.

Genese, Plaintiffs/Cross-Appellants, v. John F. BRENNAN, Defendant-Appellant.

Nos. 90-1268, 90-1424.

United States Court of Appeals, Federal Circuit.

Dec. 27, 1991.

Suggestion for Rehearing In Banc Declined Feb. 7, 1992.

Michael Dockterman, of Wildman, Harrold, Allen & Dixon, Chicago, Ill., argued for plaintiffs/cross-appellants. With him on the brief was Joan M. Fencik.

Michelle A. Thomas, of Sullivan, Ward, Bone, Tyler, Fiott & Asher, Southfield, Mich., argued for defendant-appellant. With her on the brief was Ronald S. Lederman, of counsel.

Before NEWMAN, MAYER and LOURIE, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Appellant John F. Brennan, and cross-appellants Abbott Laboratories, Andrew J. Muetterties and Joseph N. Genese (collectively "Abbott"), ask our review of various aspects of the judgment of the United States District Court for the Eastern District of Michigan, including rulings on certain pre- and post-trial motions. ¹

Background

This case arose upon interference proceedings in the United States Patent and Trademark Office (the "PTO"), involving a patent application of which Mr. Brennan is the inventor, a patent owned by Abbott Laboratories of which Andrew J. Muetterties and Joseph N. Genese are joint inventors, and a reissue application owned by Abbott and naming only Muetterties as inventor. The invention of the counts of the interference is an intravenous delivery device for sequentially administering two medical liquids to a patient, each at a different flow rate.

The Board of Patent Appeals and Interferences awarded priority of invention to Brennan. The Board held that the Muetterties/Genese dates of conception and reduction to practice were prior to those of Brennan, but that because an attorney for Abbott had backdated a request for extension of time and falsely averred that the request had been timely made, this activity constituted inequitable conduct, with the result that Abbott was not awarded priority. Brennan v. Muetterties, 230 USPQ 145 (Bd.Pat.App. & Int.1986).

Abbott brought a civil action in the district court pursuant to 35 U.S.C. § 146, ² seeking to set aside the award of priority to Brennan. Brennan counterclaimed for fraudulent misrepresentation, abuse of process, tortious interference with economic relations, antitrust violations under the Sherman and Clayton Acts, violation of the Racketeer Influenced and Corrupt Organizations Act, and intentional infliction of emotional distress. The district court dismissed Brennan's claims for antitrust and RICO violations, intentional infliction of emotional distress, and fraudulent misrepresentation. The court declined to dismiss the claims for tortious interference and abuse of process.

Abbott then moved for summary judgment on the issue of priority of inventorship, arguing that the Board erred as a matter of law in awarding priority to Brennan based on Abbott's inequitable conduct. Abbott's position was that priority must be awarded to the first inventor, and that enforceability due to inequitable conduct is a separate issue, not determinative of priority. The district court granted summary judgment of priority of invention to Abbott, and remanded to the Board with instructions to refer the matter to the Commissioner of Patents and Trademarks "for the purpose of considering the allegations of inequitable conduct". On Brennan's motion the district court stayed trial of Brennan's remaining counterclaims pending the Commissioner's decision.

Upon remand the Board issued another decision awarding priority to Brennan due to Abbott's inequitable conduct, apparently ignoring the district court's contrary judgment. Brennan v. Muetterties, Interf. Nos. 100,817 and 101,078 (Bd.Pat.App. & Int. May 27, 1988). The Board explained that under "controlling law" the Board was "precluded from awarding priority against both parties." Id. at 4. The Board then referred the case to the Commissioner as the district court had ordered; the Commissioner deferred review on his part until after judicial review of the Board's award of priority to Brennan. Upon return of the case to the district court, the parties filed cross motions for summary judgment on the issue of priority of invention. After a hearing, now before a different judge, the district court granted Brennan's motion and denied Abbott's; that is, the court awarded priority to Brennan because of Abbott's inequitable conduct. The prior judgment in favor of Abbott was vacated and judgment was entered in favor of Brennan. Abbott has not appealed this decision, and we do not consider its merits, or the correctness of the Board's view of the law.

Brennan then moved for sanctions against Abbott under Fed.R.Civ.P. 11, requesting award of costs and attorneys fees incurred in defending the 35 U.S.C. § 146 action in the district court. Abbott cross-moved for sanctions, stating that Brennan's counterclaims were not well-grounded in fact or law, and that Brennan's Rule 11 motion was frivolous. Both sides' motions were denied.

Trial was held to a jury on Brennan's counterclaims for tortious interference with economic relations and tortious abuse of process during the prosecution of the interference proceeding before the PTO. The jury returned a verdict in favor of Abbott on the tortious interference claim, and for Brennan on the abuse of process claim. The jury awarded Brennan damages of $1,350,000 for abuse of process, designated as $1,070,000 for emotional injuries, $250,000 for attorney fees, and $30,000 for out-of-pocket costs; all for the interference proceeding. The district court denied both sides' requests for judgment n.o.v. and a new trial, and denied renewed requests for Rule 11 sanctions. The court granted Abbott's motion to clarify the judgment, to the extent that prejudgment interest was disallowed for the period during which the 35 U.S.C. § 146 action was stayed because of the referral to the PTO, and for two shorter periods of stay. The court denied Abbott's motion for remittitur of the award of emotional damages, but remitted the award of attorney fees to $89,439.75 and costs to $11,951.38, the actual sums incurred.

Brennan appeals the denial of his motions for sanctions under Rule 11 and for a new trial on his counterclaim of tortious interference with economic relations. Brennan also appeals the dismissal of his antitrust counterclaim and the grant of Abbott's motion that affected the amount of prejudgment interest. Abbott cross-appeals the denial of its motion for judgment n.o.v. or a new trial on the issue of abuse of process, and the partial denial of its alternative motion for remittitur.

Jurisdiction

Upon Abbott's omission of appeal of the issue of priority of invention, the remaining issues are either matters of state law based on pendent jurisdiction, or issues of federal law that are not within the exclusive assignment of the Federal Circuit, but that were properly included at trial of the case. See Fed.R.Civ.P. 13(a); see generally 3 Moore's Federal Practice, p 13.13 (2d ed. 1983). No issues arising under the patent law remain, and none is referred to in the notice of appeal. We thus have reviewed sua sponte our jurisdiction over this appeal.

Abbott's civil action was brought under 35 U.S.C. § 146. The district court's jurisdiction arose in part under Title 35, the codification of the patent law, and thus satisfies the requirement of:

28 U.S.C. § 1338(a). The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents....

All appeals in such circumstances are assigned exclusively to the Federal Circuit:

28 U.S.C. § 1295(a)(1). The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction--

(1) of an appeal from a final decision of a district court of the United States ... if the jurisdiction of that court was based, in whole or in part, on section 1338 of this title....

The path of appeal is determined by the basis of jurisdiction in the district court and is not controlled by the district court's decision or the substance of the issues that are appealed. The reasons are pragmatic: to avoid creating fresh opportunities for forum shopping; to avoid bifurcation of issues and cases at trial and on appeal; to remove uncertainty and the abuses of procedural maneuvering; and, ultimately, to facilitate resolution of disputes.

Thus, the direction of appeal to the Federal Circuit does not change during or after trial, even when the only issues remaining are not within our exclusive assignment. See, e.g., Technicon Instruments Corp. v. Alpkem Corp., 866 F.2d 417, 419-20, 9 USPQ2d 1540, 1541-42 (Fed.Cir.1989) (antitrust counterclaim sole issue on appeal); Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1427, 223 USPQ 1074, 1077 (Fed.Cir.1984) (en banc ) (copyright issue appealed separately). See generally Aerojet-General Corp. v. Machine Tool Works, Oerlikon-Buehrle Ltd., 895 F.2d 736, 741-45, 13 USPQ2d 1670, 1675-77 (Fed.Cir.1990) (en banc ) (discussing the well-pleaded complaint rule in the context of Federal Circuit jurisdiction). Appellate jurisdiction is not with the Federal Circuit when no well-pleaded claim arising under the patent law is stated in the pleadings before the district court, Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 807-10, 108 S.Ct. 2166, 2172-74, 100 L.Ed.2d 811, 7 USPQ2d 1109, 1113-14 (1988), or when the patent claim is merely "transient," Schwarzkopf Development Corp. v. Ti-Coating, Inc., 800 F.2d 240, 245, 231 USPQ 47, 51 (Fed.Cir.1986) (patent counterclaim dismissed without opposition during pleading stage). Accord, Unique Concepts, Inc. v. Manuel, 930 F.2d 573, 575, 18 USPQ2d 1654, 1656 (7th Cir.1991) (jurisdiction of district court to enter judgment dismissing patent claim "came, in part, from...