Industrial Wire Products v. Costco Wholesale Corp., 08-3189.

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Writing for the Court: Shepherd
• Citation: 576 F.3d 516
• Parties: INDUSTRIAL WIRE PRODUCTS, INC., a Missouri corporation, Appellee, v. COSTCO WHOLESALE CORPORATION, a Washington corporation, Appellant.
• Docket Number: No. 08-3189.,08-3189.
• Decision Date: 06 August 2009

576 F.3d 516 INDUSTRIAL WIRE PRODUCTS, INC., a Missouri corporation, Appellee,
v.
COSTCO WHOLESALE CORPORATION, a Washington corporation, Appellant. No. 08-3189. United States Court of Appeals, Eighth Circuit. Submitted: April 15, 2009. Filed: August 6, 2009.

[576 F.3d 517]

Carl John Geraci, argued, David B.B. Helfrey and Paul M. Denk, on the brief, St. Louis, MO, for appellee.

Laurence D. Graham, argued, Douglas A. Grady, on the brief, Seattle, WA, for appellant.

Before RILEY, BENTON, and SHEPHERD, Circuit Judges.

SHEPHERD, Circuit Judge.

Costco Wholesale Corp. ("Costco") appeals from the district court's order denying its motion to compel arbitration and stay proceedings involving claims of patent and trade dress infringement brought against it by Industrial Wire Products, Inc. ("IWP"). For the reasons set forth below, we reverse.

I.

In 2006 and 2007, IWP and Costco entered into vendor agreements in which IWP agreed to supply Costco with IWP's patented "Configurable Bins," which are interlocking plastic storage containers. The 2007 vendor agreement¹ contains the following arbitration clause:

[¶]27.1 All claims and disputes that (1) are between Vendor [IWP] and Costco Wholesale . . . and (2) arise out of or

576 F.3d 518

relate to the Agreement Documents or any agreement or transaction or occurrence between Vendor [IWP] and Costco Wholesale or to their performance or breach (including any tort or statutory claim) . . . shall be arbitrated under the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), in English in Seattle, Washington. . . .

[¶]27.2 Vendor [IWP] acknowledges and agrees that . . . this agreement to arbitrate covers, without limitation, any claims with respect to matters relating to the distribution rights of any of the parties arising under this Import Agreement or any applicable law.

(J.A. 68-69.)

After entering into these vendor agreements with IWP, Costco began selling a product called an "Interlocking Shoe Organizer" that it obtained from a different vendor. The Interlocking Shoe Organizer is a storage device that is assembled by joining a series of panels with interlocking connectors to produce bins of various shapes and configurations. In January 2008, IWP filed the present action against Costco contending that Costco's sale of the Interlocking Shoe Organizer infringed IWP's patent and trade dress rights and violated Missouri unfair competition laws. Costco moved to compel arbitration.

The district court denied Costco's motion to compel arbitration. The court analyzed paragraph 27.1 of the 2007 vendor agreement and held that IWP's claims were not arbitrable because they did not arise from the vendor agreement or any agreement, transaction, or occurrence between the parties:

The claims are that Costco infringed on plaintiff's patent by selling the Interlocking Shoe Organizer. These infringement claims exist separate from any agreement, transaction, or occurrence between the parties. Although it happens that at some point in the past plaintiff sold products using its patented design to Costco, and signed a vendor agreement with an arbitration clause related to this sale, this fact is irrelevant to the present suit. Plaintiff's claims would exist regardless of whether the plaintiff had ever entered into any vendor agreement with Costco.

Indus. Wire Prods., Inc. v. Costco Wholesale Corp., No. 4:08-cv-00070, slip op. at 5 (E.D. Mo. June 9, 2008). However, the court did not analyze whether IWP's claims were arbitrable under paragraph 27.2. Costco brings this appeal.

II.

Both IWP and Costco agree that we have jurisdiction over this interlocutory appeal. Still, we must examine our appellate jurisdiction sua sponte, even if the parties concede the issue. Dieser v. Cont'l Cas. Co., 440 F.3d 920, 923 (8th Cir.2006). An order denying a motion to compel arbitration is immediately appealable under the Federal Arbitration Act ("FAA"). See 9 U.S.C. § 16(a)(1). However, the FAA does not specify which court(s) possess jurisdiction over such appeals. This court has previously exercised jurisdiction in a patent infringement case over an interlocutory appeal from a district court's denial of a motion to stay pending arbitration. See Medtronic, Inc. v. Advanced Cardiovascular Sys., Inc., Nos. 99-3188, 00-1566, 2000 WL 637045, at *1 (8th Cir. May 18, 2000) (unpublished) (per curiam). However, this circuit has not squarely addressed the issue of whether, in a patent infringement action, an interlocutory appeal concerning arbitrability falls within the exclusive appellate jurisdiction of the Federal Circuit. The Third and Federal Circuits have addressed this issue and reached opposite conclusions. See Microchip Tech. Inc. v.

576 F.3d 519

U.S. Philips Corp., 367 F.3d 1350, 1354-55 (Fed.Cir.2004) (the Federal Circuit has exclusive jurisdiction); Medtronic AVE, Inc. v. Advanced Cardiovascular Sys., Inc., 247 F.3d 44, 51-53 (3d Cir.2001) (the Federal Circuit does not have exclusive jurisdiction).

The district court has original jurisdiction in this case because it is a "civil action arising under [an] Act of Congress relating to patents[.]" 28 U.S.C. § 1338(a). The Federal Circuit would have exclusive jurisdiction over an appeal from a final decision in this case. See 28 U.S.C. § 1295(a)(1) (giving Federal Circuit exclusive jurisdiction "of an appeal from a final decision of a district court . . . if the jurisdiction of that court was based . . . on section 1338"). However, the district court's denial of Costco's motion to compel arbitration was not a "final decision." See Microchip Tech., 367 F.3d at 1354 ("The district court's decision [denying defendants' motion to compel arbitration] was not final[,][and] we do not have jurisdiction under 28 U.S.C. § 1295(a)(1)."); Medtronic AVE, 247 F.3d at 52 ("[T]his appeal [from the denial of a motion to stay pending arbitration] is not from a `final decision.'"). Thus, the Federal Circuit does not have jurisdiction over this appeal under section 1295.

The Federal Circuit would also have exclusive appellate jurisdiction over "an appeal from an interlocutory order or decree described in subsection [1292](a) or [1292](b) of this section."² 28 U.S.C. § 1292(c). Section 1292(a) describes, inter alia, orders granting and refusing injunctions. See id. §...