Micro Motion Inc. v. Exac Corp., No. 89-1099

• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
• Writing for the Court: Before MARKEY, Chief Judge, and NIES and BISSELL; NIES
• Citation: 11 USPQ2d 1070,876 F.2d 1574
• Parties: MICRO MOTION INCORPORATED, Plaintiff-Appellee, v. EXAC CORPORATION, Defendant-Intervenor, v. SMITH METER, INCORPORATED, Appellant.
• Docket Number: No. 89-1099
• Decision Date: 01 June 1989

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876 F.2d 1574 11 U.S.P.Q.2d 1070 MICRO MOTION INCORPORATED, Plaintiff-Appellee,
v.
EXAC CORPORATION, Defendant-Intervenor,
v.
SMITH METER, INCORPORATED, Appellant. No. 89-1099. United States Court of Appeals,
Federal Circuit. June 1, 1989.

Jesse J. Jenner, Fish & Neave, New York City, argued, for plaintiff-appellee. With

Page 1575

him on the brief were David J. Lee, Christa Hildebrand and John O. Tramontine. Seymour Rothstein, Allegretti & Witcoff, Chicago, Ill., of counsel.

Andrew J. Cornelius, Alder Cohen & Grigsby, P.C., of Pittsburgh, Pa., argued, for appellant. With him on the brief, was Alan P. Kass.

ORDER

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

NIES, Circuit Judge.

Smith Meter, Incorporated, seeks reversal of an order issued by the United States District Court for the Western District of Pennsylvania, Erie Division, Misc. No. 732, denying its motion to quash a subpoena. ¹ We conclude that Smith Meter has not established that the district court's order is appealable. Accordingly, Smith Meter is ordered to show cause why the appeal should not be dismissed.

I

Micro Motion Incorporated sued Exac Corporation in the Northern District of California for infringement of its patents relating to Coriolis mass flowmeters. A jury returned a verdict of noninfringement; however, the district court set aside that verdict and granted Micro Motion a new trial. Micro Motion, Inc. v. Exac Corp., 686 F.Supp. 789, 5 USPQ2d 1957 (N.D.Cal.1987). Micro Motion then sought additional discovery. In particular, it sought information concerning the business of each of five other competitors in the Coriolis mass flowmeter market, one of which is Smith Meter, a company located in Erie, Pennsylvania. Micro Motion had Smith Meter subpoenaed by the District Court for the Western District of Pennsylvania to appear for deposition and to produce documents and physical things relating to the configuration and operation of each type or model of Smith Meter's flowmeters; the amount of its sales; the names of its customers; evidence of deficiencies or malfunctioning of its flowmeters, including customer complaints; comparisons of Smith Meter's flowmeters with those of Micro Motion or Exac; and other matters relating to Smith Meter's business.

Smith Meter moved the district court in Pennsylvania to quash the subpoena. It sought to prohibit the discovery of its confidential business information which it argued has no legal relevancy to the California litigation. Smith Meter is not a party to that suit or any other related litigation; has not been charged with infringement by Micro Motion; and apparently has no business dealings with either litigant. Micro Motion responded that, if it succeeds in its infringement suit against Exac Corporation, the information it seeks could be relevant to its recovery of lost profits as damages, whether or not Smith Meter is also an infringer. Smith Meter asks this court to reverse the district court's denial of its motion to quash.

The extent to which information on a non-party's competing product is relevant and discoverable on the issue of damages in a patent suit is a novel and important question. However, sua sponte, this court raises the following jurisdictional issue: Whether an order which denies a motion to quash a subpoena directed to a non-party, to obtain evidence for use in a pending action, is an appealable order where the order is entered by a court other than the court in which the action is pending.

II

As this court has stated, "the initial inquiry in any appeal is whether the court to which appeal is taken has jurisdiction to hear the appeal." Woodard v. Sage Products, Inc., 818 F.2d 841, 844, 2 USPQ2d 1649, 1651 (Fed.Cir.1987) (in banc). Thus, even though the parties urge us to take jurisdiction, it is incumbent on this court to determine if this court is acting within its jurisdictional mandate.

Congress has granted the United States appellate courts jurisdiction over only "final

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decisions" of federal district courts. See 28 U.S.C. Secs. 1291 and 1295(a)(1) (1982). The "finality" rule has a salutary effect. It lessens interruptions in the orderly progress of a suit by eliminating delays incident to fragmentary appeals, and it brings the matter as a whole before the appellate court. See United States v. Nixon, 418 U.S. 683, 690, 94 S.Ct. 3090, 3098, 41 L.Ed.2d 1039 (1974); see also 9 J. Moore, B. Ward & J. Lucas, Moore's Federal Practice p 110.07 (2d ed. 1989); R. Stern, Appellate Practice in the United States, ch. 4.1 at 77-79 (2d ed. 1989).

Smith Meter has asserted in its brief, and Micro Motion does not challenge, that this appeal falls within the scope of the decision of this court in Heat & Control, Inc. v. Hester Industries, Inc., 785 F.2d 1017, 228 USPQ 926 (Fed.Cir.1986). There, a discovery order in an ancillary proceeding was held final and, thus, appealable. Id. at 1021-22, 228 USPQ at 929. In Heat & Control, a party who was the plaintiff in patent litigation in a district court in California sought discovery by subpoenaing a non-party company located in West Virginia. The latter moved to quash the subpoena in the West Virginia district court, and the motion was granted. The granting of the motion to quash in an ancillary proceeding uniformly is held to be final and appealable, and this court so held. ² If an appeal from the order quashing the subpoena in such proceeding in a different court were not deemed final, there would be no effective means of review for the party seeking discovery. The matter is not reviewable in an appeal of the main proceeding, and there is nothing further the party seeking discovery can do to obtain an appealable order. See Truswal Sys. Corp. v. Hydro-Air Eng'g, Inc., 813 F.2d 1207, 1209, 2 USPQ2d 1034, 1036 (Fed.Cir.1987); accord Solarex Corp. v. Arco Solar...