Modern Font Applications LLC v. Alaska Airlines, Inc.
| Decision Date | 29 December 2022 |
| Docket Number | 2021-1838 |
| Parties | MODERN FONT APPLICATIONS LLC, Plaintiff-Appellant v. ALASKA AIRLINES, INC., Defendant-Appellee |
| Court | U.S. Court of Appeals — Federal Circuit |
Perry S. Clegg, Johnson & Martin, P.A., Salt Lake City, UT, argued for plaintiff-appellant.
Shawn G. Hansen, Nixon Peabody LLP, Los Angeles, CA, argued for defendant-appellee. Also represented by Sarah Andre, Seth D. Levy ; Erin Huntington, Albany, NY.
Before Newman, Reyna, and Cunningham, Circuit Judges.
Opinion for the court filed by Circuit Judge Cunningham.
Modern Font Applications LLC seeks an interlocutory appeal to challenge an order of the United States District Court for the District of Utah, which affirmed a magistrate judge's decision deeming MFA's in-house counsel a "competitive decisionmaker" and maintaining Alaska Airlines, Inc.’s Attorneys’ Eyes Only designations as to its source code. Mod. Font Applications v. Alaska Airlines , No. 19-cv-00561, 2021 WL 364189, at *1 (D. Utah Feb. 3, 2021) (" Magistrate Decision "), aff'd sub nom. Mod. Font Applications LLC v. Alaska Airlines Inc. , 2021 WL 3729382 (D. Utah Mar. 2, 2021) (" District Court Order "). Because we lack jurisdiction over MFA's interlocutory appeal under the collateral order doctrine, we dismiss.
To avoid unnecessary delay from parties arguing or litigating the form of a protective order, the District of Utah found good cause exists to adopt a "Standard Protective Order"1 in every case. D.U. Civ. R. 26-2(a).2 Pursuant to that protective order, Alaska designated certain source code files as "CONFIDENTIAL INFORMATION – ATTORNEYS’ EYES ONLY," which precluded MFA's in-house counsel from accessing those materials under the Standard Protective Order. J.A. 74, 79; Standard Protective Order at 9–11. When MFA challenged Alaska's designations, Alaska filed two motions to maintain its protective order designations. J.A. 73–76, 98–100. Before the court could resolve those motions, MFA filed Short Form Discovery Motion #4 to Amend the Standard Protective Order, seeking to permit its in-house counsel to access "all disclosed information," including documents designated Attorneys’ Eyes Only and to add additional designations to the Standard Protective Order specific to source code. J.A. 109–11, 115–37. At the magistrate judge's direction, the parties filed supplemental briefing to address the burden of proof required to maintain an Attorneys’ Eyes Only designation and the standards for evaluating competitive decisionmaking. J.A. 21–22, 191–93 (MFA briefing), 241–47 (Alaska briefing).
The magistrate judge granted Alaska's motions to maintain its protective order designations and denied MFA's motion to amend the protective order. Magistrate Decision , at *4–6. The magistrate judge found that Alaska had established that its source code contained trade secrets and merited "heightened protection." Id. at *4. The magistrate judge also declined to modify the protective order and permit MFA's in-house counsel to access Attorneys’ Eyes Only documents because "the risk of inadvertent disclosure [of Alaska's confidential information] outweighs the risk of prejudice to Plaintiff." Id. at *6. In doing so, the magistrate judge concluded that MFA's in-house counsel was a "competitive decisionmaker" because of his licensing activities and because MFA's "entire business model revolves around the licensing of patents through litigation with the assistance of its in-house counsel." Id. at *5.
The district court issued an order affirming the magistrate judge's decision. District Court Order , at *1–3. The district court explained that it would only modify or set aside the magistrate judge's non-dispositive order "if it is contrary to law or clearly erroneous." Id. at *1. The district court affirmed the magistrate judge's decision to maintain Alaska's protective order designations, explaining case law supported that "district courts regularly provide for additional restrictions on discovery to account for the unique characteristics of source code" and that MFA had "not identified any authority demonstrating otherwise." Id. at *3. The district court also affirmed the magistrate judge's decision declining to amend the protective order, explaining that MFA had failed to cite case law supporting its argument that it should not bear the burden of proof to modify the Standard Protective Order. Id. at *2. The district court stated that the magistrate judge properly evaluated MFA's counsel's activities, including his competitive decision-making, as required by our decision in U.S. Steel Corp. v. United States , 730 F.2d 1465 (Fed. Cir. 1984). District Court Order , at *2. The district court further explained that the magistrate judge had appropriately cited cases "for their relevance to in-house counsel's involvement in licensing making it a competitive decisionmaker." Id. at *3. In summary, the district court agreed that the magistrate judge's decision "is not contrary to law" or "clearly erroneous." Id.
MFA seeks an interlocutory appeal of this order.
MFA argues that we should hear its interlocutory appeal under the collateral order doctrine. Appellant's Br. 16–26. We disagree and conclude that we lack jurisdiction.
Congress limited our jurisdiction to any appeal from a "final" decision of a district court "arising under[ ] any Act of Congress relating to patents," with only limited exceptions. 28 U.S.C. § 1295(a)(1) ; see Bd. of Regents of the Univ. of Tex. Sys. v. Bos. Sci. Corp. , 936 F.3d 1365, 1370 (Fed. Cir. 2019). Under the "final judgment rule," "a party may not appeal ‘until there has been a decision by the district court that ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’ " Bd. of Regents , 936 F.3d at 1370 (quoting Robert Bosch, LLC v. Pylon Mfg. Corp. , 719 F.3d 1305, 1308 (Fed. Cir. 2013) (en banc)).
The collateral order doctrine is a practical construction of the final judgment rule that permits review of not only judgments that "terminate an action," but also the "small class" of collateral rulings that are appropriately deemed "final." Mohawk Indus., Inc. v. Carpenter , 558 U.S. 100, 106, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009) (citing Cohen v. Beneficial Indus. Loan Corp. , 337 U.S. 541, 545–46, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949) ). Courts of appeals may allow interlocutory appeals of decisions that (1) are "conclusive;" (2) "resolve important questions separate from the merits;" and (3) are "effectively unreviewable on appeal from the final judgment in the underlying action." Swint v. Chambers Cnty. Comm'n , 514 U.S. 35, 42, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995) (citing Cohen , 337 U.S. at 546, 69 S.Ct. 1221 ).
The Supreme Court has repeatedly emphasized the limited scope of the collateral order doctrine, explaining that it should "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." Mohawk , 558 U.S. at 106, 130 S.Ct. 599 ; see also Will v. Hallock , 546 U.S. 345, 350, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006) (). The limited application of the collateral order doctrine reflects the important policy concerns that "piecemeal appeals would undermine the independence of the district judge" and hinder judicial efficiency. Firestone Tire & Rubber Co. v. Risjord , 449 U.S. 368, 374, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981) ; see also 15B C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3914.23 (2d ed. Apr. 2022 update) ().
Generally, pretrial discovery orders are not "final"—and therefore, not reviewable—under the collateral order doctrine. Firestone Tire , 449 U.S. at 377, 101 S.Ct. 669 (); see also 15B C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3914.23 (2d ed. Apr. 2022 update) (). Such discovery orders are generally unreviewable under the third requirement of the collateral order doctrine because they can be adequately reviewed after a final judgment.
When faced with similar pretrial discovery orders, we have held that they are not appealable under the collateral order doctrine. For example, in Quantum Corp. v. Tandon Corp. , we granted Quantum's motion to dismiss an interlocutory appeal to review an order granting a motion to compel disclosure of attorney opinion letters. 940 F.2d 642, 643–44 (Fed. Cir. 1991). In doing so, we noted that:
[I]t is settled that discovery orders issued within the context of a primary proceeding are generally not appealable orders. In addition to not complying with the third requirement of the Cohen doctrine, such discovery orders may present issues not completely separate from the merits and thus the orders are not truly collateral under the second requirement of the Cohen doctrine.
Id. at 644 n.2 (citation omitted). And in Amgen Inc. v. Hospira, Inc. , we held that we lacked jurisdiction to review an order denying a motion to compel disclosure of cell-culture information. 866 F.3d 1355, 1358–60 (Fed. Cir. 2017). There, we again stated that "[s]uch orders are not reviewable at the interlocutory stage because they are reviewable from a final judgment." Id. at 1359.
MFA's appeal does not satisfy the third requirement of the collateral order doctrine because it is reviewable after a final judgment. See Swi...
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