Joy Mfg. Co. v. National Mine Service Co., Inc.

• Decision Date: 29 January 1987
• Docket Number: No. 86-1029,86-1029
• Citation: 1 USPQ2d 1627,810 F.2d 1127
• Parties: , 1 U.S.P.Q.2d 1627 JOY MANUFACTURING CO., Appellant, v. NATIONAL MINE SERVICE COMPANY, INC., Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 1127

810 F.2d 1127

55 USLW 2439, 1 U.S.P.Q.2d 1627

JOY MANUFACTURING CO., Appellant, v. NATIONAL MINE SERVICE COMPANY, INC., Appellee.

Appeal No. 86-1029.

United States Court of Appeals Federal Circuit.

Jan. 29, 1987.

Raymond G. Hasley, of Rose, Schmidt, Chapman, Duff & Hasley, Pittsburgh, Pa., argued for appellant. With him on the brief was E. Wallace Breisch, of Pittsburgh, Pa. Of counsel were Edward L. Levine and Raymond W. Augustin, of Joy Mfg. Co., Pittsburgh, Pa.

Stanley J. Price, Jr., of Stanley J. Price, Jr., P.C., Pittsburgh, Pa., argued for appellee.

Before MARKEY, Chief Judge, and NIES and NEWMAN, Circuit Judges.

NIES, Circuit Judge.

Joy Manufacturing Co. appeals from the final order of the United States District Court for the Western District of Pennsylvania, Civil Action No. 80-461, denying Joy's motion to enjoin National Mine Service Company, Inc. from allegedly violating the terms of a settlement agreement. The district court (Cohill, Chief Judge) held that National's acts in filing a request to the Commissioner of Patents and Trademarks for reexamination of Joy's patent (U.S. Patent No. 4,042,864) did not violate the terms of a settlement agreement under which National agreed not to file a suit challenging the validity of the subject patent. We affirm.

I Background

In April, 1980, Joy brought an action against its competitor National for infringement of Joy's '864 patent which pertains to underground mining machinery. Settlement negotiations in 1983 between the parties, with the objective of making National a licensee under the patent, were unsuccessful. The principal point of disagreement arose from National's refusal to admit the validity and its infringement of the '864 patent. As a result of a suggestion for compromise of this stumbling block by the then trial judge (Mansmann, J.), a settlement agreement was entered in April, 1984. The settlement agreement was not, however, incorporated into the judgment of the court. The final judgment is simply a judgment of dismissal of the complaint without prejudice.

On August 23, 1985, having advised Joy in June that it intended to do so, National filed a request to the Commissioner of Patents and Trademarks to reexamine the patentability of the subject invention in accordance with 35 U.S.C. Sec. 302. ¹ As a result of National's request, which included citation of art not previously considered by the PTO, on October 17, 1985, ² the Commissioner determined that a substantial new question of patentability had been raised, and a reexamination of the patentability of the subject matter of the '864 patent is under way at this time.

On February 19, 1986, Joy filed a motion in the terminated infringement suit entitled "Motion to Enforce Settlement" by which Joy sought to reinstate the case and charged therein that National had breached the settlement agreement by requesting reexamination. Joy sought to enjoin National "from further proceeding in the reexamination procedures in the PTO"; "to withdraw" its reexamination request; and "to retrieve" all documents from the PTO. Joy also requested sanctions against National for its asserted misconduct. The district court denied the motion, and this appeal followed.

II Jurisdiction

This court has jurisdiction over this appeal only if the jurisdiction of the district court is based in whole or in part on 28 U.S.C. Sec. 1338(a) (1982). The circuits are split on the question whether, after a final judgment is entered, a district court retains jurisdiction from the original action (in this case an action originally under 28 U.S.C. Sec. 1338(a)) or must have an independent basis for jurisdiction (e.g., diversity) to enforce a settlement agreement which was not incorporated into the final judgment of the court. ³ Compare Aro Corp. v. Allied Witan Co., 531 F.2d 1368 (6th Cir.) (motion to enforce settlement deemed a motion under Rule 60(b)(6) Fed.R.Civ.P. in original suit), cert. denied, 429 U.S. 862, 97 S.Ct. 165, 50 L.Ed.2d 140 (1976), with Fairfax Countywide Citizens Assoc. v. Fairfax County, 571 F.2d 1299 (4th Cir.), cert. denied, 439 U.S. 1047, 99 S.Ct. 722, 58 L.Ed.2d 706 (1978); Musifilm, B.V. v. Spector, 568 F.Supp. 578 (S.D.N.Y.1983); Backers v. Bit-She, 549 F.Supp. 388 (N.D.Cal.1982) (enforcement is independent action). The Third Circuit apparently has not considered the issue, and it is unclear which view that court would take. See Fox v. Consolidated Rail Corp., 739 F.2d 929, 932 (3d Cir.1984). Under these circumstances we see no reason to disturb the district court's implicit adoption of the Aro rationale which would make 28 U.S.C. Sec. 1338(a) the basis for its jurisdiction over the motion, from which it follows that the district court's judgment is appealable to this court. ⁴

III Merits

The order of the district court dismissing Joy's motion reads:

AND NOW, to-wit, this 10th day of March, 1986, having carefully considered the briefs and exhibits filed on behalf of both parties, it is hereby ORDERED, ADJUDGED AND DECREED THAT Plaintiff, Joy Manufacturing Company's Motion to Enforce Settlement be and hereby is DENIED. We do not equate a request for administrative reexamination by the United States Patent and Trademark Office with filing a suit in a United States Court. See In re Etter, 756 F.2d 852 (Fed.Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 88, 88 L.Ed.2d 72 (1985). Therefore, National Mine Service Company Inc.'s request for reexamination does not violate the terms of the settlement agreement date April 2, 1984, between the above parties.

Joy has not persuaded us of legal error in the district court's interpretation of the settlement agreement. The pertinent parts of the agreement are the following:

ARTICLE VII--FUTURE PROCEEDINGS

(a) During the term of this Agreement, NATIONAL will not file any suit in any United States Court or any Court in any foreign country challenging or contesting the validity of the Licensed Patents or contesting that the shuttle cars, continuous miners and other mobile mining machinery as defined in Article I, subparagraph (c) are not Licensed Products. However, if JOY should bring suit against NATIONAL for any shuttle car, continuous miner, or mobile mining machine product hereinafter designed by NATIONAL or on NATIONAL'S behalf having an AC/DC traction drive substantially different than utilized by the shuttle cars, continuous miners or other mobile mining machines identified in Article III, subparagraph (e), then NATIONAL shall have the right to contest the validity of the patents and the issue of infringement as to such accused newly designed products.

ARTICLE XI--GOVERNING LAW

This Agreement shall be governed by and interpreted in accordance with the internal laws of the Commonwealth of Pennsylvania and the patent laws of the United States....

ARTICLE XIV--MISCELLANEOUS

(a) No rights or licenses of any nature are granted to JOY or NATIONAL pertaining to the subject matter of this Agreement except as specifically stated herein.

(Emphasis added.)

The settlement agreement by its literal terms does not proscribe the conduct of which Joy complains. National agreed not to bring suit in any United States court challenging the validity of Joy's patent. National's filing of a request for reexamination in the PTO is not a suit in any United States court. The language of the agreement is unambiguous. Under general principles of Pennsylvania contract law, no further inquiry is appropriate. See Amoco Oil Co. v. Snyder, 505 Pa. 214, 220, 478 A.2d 795, 798 (1984) ("it is not the function of this Court to re-write [the contract], or to give it a construction in conflict with ... the accepted and plain meaning of the language used"); Steuart v. McChesney, 498 Pa. 45, 49, 444 A.2d 659, 661 (1982) ("when the words are clear and unambiguous the intent is to be discovered only from the express language of the agreement"). ⁵ Further, the contract itself provides that the parties have no rights unless specifically stated therein. Moreover, the district court's conclusion that the settlement should not be given an expansive interpretation is reasonable in light of National's specific refusal to agree to a provision by which it would recognize the validity of the subject patent and the parties' subsequent negotiations which led the court itself to suggest the provision on which Joy relies. The agreement was a limited settlement, which by its own terms (Article VII) does not purport to resolve all potential conflict between the parties over the validity of the '864 patent.

Turning to "patent law," the district court correctly refused to equate "a request for administrative reexamination ... with filing a suit in a United States Court." Its reliance on Etter as support for this legal conclusion was entirely appropriate. The Etter decision turned on the precise issue here, namely, that reexamination and civil litigation were distinctly different proceedings. As stated therein:

The intent that reexamination proceedings and court actions involving challenges to validity be distinct and independent is reflected in the legislative history of Sec. 303....

756 F.2d at 857, 225 USPQ at 4. The result in Etter is inseparable from the above-quoted premise. ⁶

In this connection, we also note that the principal relief which Joy seeks--namely, stopping the reexamination of its patent--is not available in these proceedings. Accord Manual of Patent Examining Procedure Sec. 2210 (5th ed. 1983); Houston Atlas, Inc. v. Del Mar Scientific, Inc., 217 USPQ 1032, 1034 (N.D.Tex.1982), aff'd, 703 F.2d 555 (5th Cir.1983). The decision by the Commissioner to institute reexamination is not subject to review, Etter, 756 F.2d at 857, 225 USPQ at 4; and the injunction sought against National would have no effect on reexamination since National, as the requestor, has no future role to play in that ex parte proceeding.

In view of the new reexamination procedure, parties would be well...