Intellectual Ventures II LLC v. JPMorgan Chase & Co.

• Citation: 114 U.S.P.Q.2d 1387,781 F.3d 1372
• Decision Date: 01 April 2015
• Docket Number: No. 2014–1724.,2014–1724.
• Parties: INTELLECTUAL VENTURES II LLC, Plaintiff–Appellee v. JPMORGAN CHASE & CO., JPMorgan Chase Bank, National Association, Chase Bank USA, National Association, Chase Paymentech Solutions, LLC, Paymentech LLC, Defendants–Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

781 F.3d 1372

114 U.S.P.Q.2d 1387

INTELLECTUAL VENTURES II LLC, Plaintiff–Appellee

v.JPMORGAN CHASE & CO., JPMorgan Chase Bank, National Association, Chase Bank USA, National Association, Chase Paymentech Solutions, LLC, Paymentech LLC, Defendants–Appellants.

No. 2014–1724.

United States Court of Appeals, Federal Circuit.

April 1, 2015.

Eric F. Citron, Goldstein & Russell, P.C., Bethesda, MD, argued for plaintiff-appellee. Also represented by Thomas Richard Burns, Jr., Adduci, Mastriani & Schaumberg, LLP, Washington, DC; Marc Belloli, Ian Neville Feinberg, Elizabeth Day, Nickolas Bohl, Feinberg Day Alberti & Thompson LLP, Menlo Park, CA.Mark A. Lemley, Durie Tangri LLP, San Francisco, CA, argued for defendants-appellants. Also represented by Clement Roberts; Kenneth R. Adamo, Kirkland & Ellis LLP, New York, NY; Brent P. Ray, Eugene Goryunov, Chicago, IL; John C. O'Quinn, William H. Burgess, Washington, DC.

James Quarles, III, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for amicus curiae Askeladden, L.L.C. Also represented by Robert Anthony Arcamona, Gregory H. Lantier ; Richard Wells O'neill, Boston, MA.

Before O'MALLEY, BRYSON, and HUGHES, Circuit Judges.

Opinion

Opinion for the court filed by Circuit Judge O'MALLEY.

Dissenting opinion filed by Circuit Judge HUGHES.

O'MALLEY, Circuit Judge.

Intellectual Ventures II LLC (“IV”) brought suit against JPMorgan Chase & Co.; JPMorgan Chase Bank, National Association; Chase Bank USA, National Association; Chase Paymentech Solutions, LLC; and Paymentech LLC (collectively, “JPMC”) in the United States District Court for the Southern District of New York, alleging infringement of five patents. JPMC moved to stay the action on grounds that it intended to file petitions seeking covered business method reviews (“CBMR”) with respect to some of the patents in suit. After two CBMR petitions were filed by JPMC, but before the Patent Trial and Appeal Board (“PTAB”) acted on them, the district court denied JPMC's motion to stay. JPMC then sought interlocutory review of that ruling. Because we do not have jurisdiction to review the district court's denial of JPMC's motion to stay, we dismiss.

I. Background

IV alleged infringement of five patents: U.S. Patent Nos. 6,715,084 (“the '084 patent”) ; 6,314,409 (“the '409 patent”) ; 5,745,574 (“the ' 574 patent”) ; 6,826,694 (“the '694 patent”) ; and 7,634,666 (“the '666 patent”).¹ Approximately one year later, on June 27, 2014, JPMC moved to stay the case pending the result of, inter alia, four CBMR petitions JPMC said it was planning to file.² Joint Appendix (“J.A.”) 166 (“JPMC itself shortly will be filing requests asking the PTAB to institute a [CBMR] of four of the Patents–in–Suit.” (emphasis added)). Shortly after filing the motion to stay, JPMC did, in fact, file two CBMR petitions for the '409 and ' 574 patents —on July 11 and 18, respectively. It has never filed the other two promised petitions.

On August 11, 2014, the district court denied JPMC's motion to stay. The court applied the four-factor test set forth in § 18(b)(1) of the America Invents Act (“AIA”), Pub.L. No. 112–29, 125 Stat. 284, 329–31 (2011), expressly stating that it was assuming without deciding that § 18(b)(1) governed its consideration of the motion. The district court first noted that, because there are multiple patents and claims in suit, it would be inappropriate to stay the entire litigation while waiting to see if the PTAB would choose to initiate review of only two of the patents at issue. The district court also concluded that it expected the litigation to be resolved in less than a year. Since the PTAB is authorized to take twelve months to complete a CBMR, the PTAB could extend that time by another six months, and those time periods would not begin to run until a CBMR petition was actually granted, the court concluded that the litigation would likely be resolved more quickly than any extended CBM review. Ultimately, the district court concluded that JPMC's argument that the PTAB's resolutions of the CBMR petitions would reduce the court's workload was largely speculative, and was offset by IV's right to a speedy trial.

JPMC filed a notice of appeal, arguing that the Federal Circuit has jurisdiction to hear an interlocutory appeal of a denial of a motion to stay relating to CBMR proceedings under § 18 of the AIA.³ As of the date of oral arguments, the PTAB had not acted on the CBMR petitions at issue.⁴

II. Discussion

Consistent with the final judgment rule, this court normally only has jurisdiction to review “a final decision of the district court.” 28 U.S.C. § 1295(a)(1) (2012) (emphasis added). The Supreme Court has consistently reiterated the importance of the final judgment rule. E.g., Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981) (“[The final judgment rule] emphasizes the deference that appellate courts owe to the trial judge as the individual initially called upon to decide the many questions of law and fact that occur in the course of a trial. Permitting piecemeal appeals would undermine the independence of the district judge as well as the special role that individual plays in our judicial system.”); United States v. Nixon, 418 U.S. 683, 690, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974) (“The finality requirement ... embodies a strong congressional policy against piecemeal reviews, and against obstructing or impeding an ongoing judicial proceeding by interlocutory appeals.”). Exceptions to the final judgment rule, whether statutory or arising from common law, are to be narrowly construed. See Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867–68, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994) ( “[W]e have also repeatedly stressed that the ‘narrow’ exception should stay that way and never be allowed to swallow the general rule ... that a party is entitled to a single appeal, to be deferred until final judgment has been entered.” (internal citation omitted)); Coopers & Lybrand v. Livesay, 437 U.S. 463, 474, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (stating that “Congress carefully confined” the availability of immediate review of non-final orders).

The parties agree that decisions on motions to stay ordinarily are not immediately appealable under the final judgment rule. See Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 277–78, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988) (explaining that a denial of a motion to stay is not appealable because it is always subject to reconsideration and, thus, never truly final). And, more specifically, the parties agree that rulings on motions to stay premised on the institution of inter partes review proceedings are not appealable under this rule. See Appellant's Br. 1–2. There is no doubt, accordingly, that the AIA's authorization for immediate appellate review of stay rulings relating to CBMR proceedings is a statutory grant of jurisdiction to this court which must be construed narrowly. See Digital Equip., 511 U.S. at 867–68, 114 S.Ct. 1992.

Section 18 of the AIA states in relevant part:

(b) REQUEST FOR STAY.—

(1) IN GENERAL.—If a party seeks a stay of a civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a [CBMR]⁵ proceeding for that patent, the court shall decide whether to enter a stay....

(2) REVIEW.—A party may take an immediate interlocutory appeal from a district court's decision under paragraph (1). The United States Court of Appeals for the Federal Circuit shall review the district court's decision to ensure consistent application of established precedent, and such review may be de novo.

AIA § 18(b) (emphases added). In other words, we have jurisdiction over an immediate interlocutory appeal from a district court's decision on a motion to stay “relating to a [CBMR] proceeding for that patent.” Id. § 18(b)(1). Because the district court's order on JPMC's motion to stay considered two CBMR petitions pending before the PTAB, we must decide whether the proper interpretation of CBMR “proceeding” in § 18(b)(2) encompasses pending CBMR petitions on which the PTAB has not yet acted.⁶ IV contends that a CBMR proceeding does not begin until the PTAB institutes a review in response to a CBMR petition. JPMC, on the other hand, argues that a CBMR proceeding begins as soon a party files a CBMR petition. In previous appeals where this court exercised jurisdiction over an interlocutory appeal under § 18(b)(2) of the AIA, the PTAB already had granted CBMR petitions and instituted CBM reviews. See, e.g., VirtualAgility, 759 F.3d 1307. This is, therefore, an issue of first impression.

Our first step in construing the statute is to look to the language of the AIA. Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997) (“Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.”). The AIA differentiates between a petition for a CBMR proceeding (which a party files) and the act of instituting such a proceeding (which the Director is authorized to do). For instance, AIA § 18(a)(1)(B) refers to when a person may file a “petition for a [CBMR] proceeding,” which suggests that a petition is a request for a CBMR proceeding, not that the petition itself is part of the proceeding. Section 18(a)(3)(B) uses similar language—referring to “any petition for a [CBMR] proceeding”—again suggesting that the petition is a request that a proceeding be instituted, not that the petition itself institutes a proceeding. Comparing this language with that in § 18(a)(1)(E), which states that “[t]he Director may institute a [CBMR] proceeding only for a patent that is a covered business method patent,” is telling. Because the Director decides whether to “institute,” or begin, a CBMR proceeding, and necessarily bases that decision on the strength of the petition, the petition itself cannot...