Technicon Instruments Corp. v. Alpkem Corp.

• Decision Date: 23 January 1989
• Docket Number: No. 88-1396,88-1396
• Citation: 866 F.2d 417,9 USPQ2d 1540
• Parties: , 1989-1 Trade Cases 68,401, 9 U.S.P.Q.2d 1540 TECHNICON INSTRUMENTS CORP., Plaintiff-Appellant, v. ALPKEM CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 417

866 F.2d 417

57 USLW 2451, 1989-1 Trade Cases 68,401,

9 U.S.P.Q.2d 1540

TECHNICON INSTRUMENTS CORP., Plaintiff-Appellant, v. ALPKEM CORPORATION, Defendant-Appellee.

No. 88-1396.

United States Court of Appeals Federal Circuit.

Jan. 23, 1989.

As Amended March 13, 1989.

Kurt E. Richter, of Morgan & Finnegan, New York City, argued for plaintiff-appellant.

Of counsel were Eugene Moroz, William S. Feiler and Michael P. Dougherty, of Morgan & Finnegan, New York City.

Joseph D. Cohen and George K. Meier, III, of Stoel, Rives, Boley, Jones & Grey, Portland, Or., argued for defendant-appellee. Of counsel was Paul S. Angello, of Stoel, Rives, Boley, Jones & Grey, Portland, Or., and Hardy Myers, of Stoel, Rives, Boley, Jones & Grey, Washington, D.C.

Before FRIEDMAN, NIES, and ARCHER, Circuit Judges.

FRIEDMAN, Circuit Judge.

This case began as a patent infringement suit, and the defendant filed an antitrust counterclaim. The patent and antitrust issues were separated for trial, the patent issues being tried first. In the prior appeal in this case, we upheld the findings of the United States District Court for the District of Oregon that there had been no infringement of the patent. Technicon Instruments Corp. v. Alpkem Corp., 837 F.2d 1097 (Fed.Cir.1987) (unpub.). We therefore did not reach the district court's determination that the patent was invalid for lack of an enabling disclosure.

The parties then stipulated that if the patent were "invalid for lack of enablement," the defendant would be entitled to judgment on its antitrust counterclaim for $600,000. Based on its prior ruling that the patent was thus invalid, the district court entered a judgment on the counterclaim for that amount. Technicon Instruments Corp. v. Alpkem Corp., No. CV 85-1564 PA (D.Or. Apr. 6, 1988). In this appeal, the parties argue only the enablement issue.

We conclude that it would be inappropriate for us to decide that question, which relates only to the antitrust counterclaim, because of the lack of the necessary findings with respect to the merits of the antitrust issue. We therefore vacate the judgment of the district court and remand for further proceedings consistent with this opinion.

I

A. In 1985, Technicon Instruments Corporation (Technicon) filed a patent infringement suit, alleging that defendant Alpkem Corporation was infringing United States Patent No. 3,804,593 ('593). Alpkem filed a counterclaim that Technicon had violated section 2 of the Sherman Act (15 U.S.C. Sec. 2), and sections 2(a) and 3 of the Clayton Act (15 U.S.C. Sec. 13(a), 14). The antitrust counterclaims were separated pending the trial on patent infringement.

Following a bench trial, the district court dismissed the complaint. In an extensive and detailed opinion, the court held that the '593 patent was invalid for nonenablement (35 U.S.C. Sec. 112) and unenforceable for inequitable conduct, and that the defendant had not infringed it. Technicon Instruments Corp. v. Alpkem Corp., 664 F.Supp. 1558, 2 USPQ2d 1729 (D.Or.1986). In its appeal to us, Technicon challenged these three rulings.

We affirmed the dismissal of the complaint. We upheld the district court's finding of noninfringement and therefore found it unnecessary to consider the ruling that the patent was invalid for lack of enablement. We also reversed the determination that Technicon had engaged in inequitable conduct during the prosecution of the '593 patent.

B. Following our decision, the parties entered into an agreement, not included in the record presented to us, which narrowed the disputed issues relating to the antitrust counterclaim. The court then entered a counterclaim pretrial order, "filed in accordance with an agreement" and signed by both parties, which recited that "[u]nless otherwise noted, the parties agree on the statements in this pretrial order." In the pretrial order the court stated:

1.2 There remains only one triable claim--Alpkem's counterclaim for violation of Sec. 2 of the Sherman Act.

1.3 In the context of that claim, there remains only one controverted issue--whether the '593 patent is invalid for lack of enabling disclosure.

1.4 This issue has already been ruled on by this court in its Opinion dated September 11, 1986.

The parties also desire the court to make findings of fact and conclusions of law, and to enter judgment, based on the existing record, without further evidentiary proceedings or legal briefing or argument.

The court further stated:

2.4 The remaining portion of the case to be tried, pursuant to the parties' agreements narrowing issues, is a portion of Alpkem's counterclaim, under its Third Amended Counterclaim, for monopoly in violation of Sec. 2 of the Sherman Act. That portion of the counterclaim is a claim for patent misuse. The issue which is determinative of that claim is whether the '593 Patent is invalid for nonenablement.

In a section of the pretrial order captioned Agreed Statements of Fact and Law, the court stated:

4.2 If the '593 Patent is invalid for lack of enablement, then Alpkem is entitled to a judgment on its counterclaim.

* * *

* * *

4.4 The only evidence offered by the parties is the prior trial and appellate record in this case. The parties desire the court to render a judgment based on that evidence.

4.5 The amount of damages on such a judgment have been liquidated in the total amount of $600,000 inclusive of all trebling, costs, and attorney fees.

Finally, the pretrial order stated that the "Controverted Issues" were whether "the '593 Patent is invalid for lack of enablement," as Alpkem contended, or whether it "is valid and enabled," as Technicon urged.

The district court then "reaffirmed and adopted by reference" its prior holding that "the patent is invalid for lack of enabling disclosure" and "its underlying findings and conclusions" on that holding, and entered judgment on Alpkem's counterclaim against Technicon for $600,000.

II

There is a preliminary question, which the parties did not address, whether we have jurisdiction over this appeal. Under 28 U.S.C. Sec. 1295(a)(1) (1982), our jurisdiction depends upon whether the jurisdiction of the district court "was based, in whole or in part, on" 28 U.S.C. Sec. 1338(a), which gives the district courts jurisdiction "of any civil action arising under any Act of Congress relating to patents[.]" The jurisdiction of the district court originally was invoked under section 1338 by the filing of the complaint of patent infringement. The patent complaint was finally adjudicated and disposed of when we affirmed the district court's dismissal of the complaint.

When the case was returned to the district court after that ruling, the only remaining issue related to the antitrust counterclaim, over which the district court had jurisdiction under 28 U.S.C. Sec. 1337. The question is whether we have jurisdiction to review the final determination of the antitrust counterclaim, when the court made that determination after the patent phase of the case had been finally determined.

Our decision in Korody-Colyer Corp. v. General Motors Corp., 828 F.2d 1572, 4 USPQ2d 1203 (Fed.Cir.1987), leads us to conclude that we have jurisdiction. In that case, a complaint for a declaratory judgment that a patent was invalid was joined with an antitrust claim; the defendant counterclaimed for patent infringement. The district court first held the patent invalid, and this court affirmed. The district court then dismissed the antitrust claim as barred by the statute of limitations, and the plaintiff appealed that dismissal to this court.

We held that we had jurisdiction of the appeal. We stated: "The district court's jurisdiction was indisputably based on 28 U.S.C. Sec. 1338. This court, having exercised its jurisdiction in the prior appeal, is best situated to and will continue to exercise its jurisdiction in this follow-on appeal." 828 F.2d at 1574, 4 USPQ2d at 1204.

We distinguished our prior decision in USM Corp. v. SPS Technologies, Inc., 770 F.2d 1035, 226 USPQ 1038 (Fed.Cir.1985), in which the district court had separated patent and antitrust issues for trial and in which two prior appeals in the patent phases of the case had been decided by the Court of Appeals for the Seventh Circuit prior to the creation of this court. There we transferred the appeal in the antitrust phase of the case to the Seventh Circuit

because: (1) transfer advanced judicial economy, the Seventh Circuit having heard two prior appeals in the case in which underlying issues had been briefed; and (2) the separation occurred before this court existed and could not have been designed to manipulate our jurisdiction. We there cautioned that the decision to transfer "must not be viewed as indicating how we will rule in future cases, for the circumstances that here prevail may well not recur." Id., 770 F.2d at 1037, 226 USPQ at 1040.

Korody-Colyer, 828 F.2d at 1574, 4 USPQ2d at 1204. In Korody-Colyer, we pointed out that

[h]ere, however, considerations of judicial economy cut the other way. The circumstance in which a regional circuit had decided the patent phase in an earlier appeal has not recurred. The present appeal, though it turns on application of the statute of limitations, implicates antitrust considerations, with respect to which this court will apply discernible Ninth Circuit law.

Id.

The same considerations exist in the present case, and they dictate the same conclusion. Here, as in Korody-Colyer, "[t]he district court's jurisdiction was indisputably based on 28 U.S.C. Sec. 1338," and we previously have decided the appeal in the patent phase of the case. The fact that in Korody-Colyer the antitrust claim was part of the declaratory judgment complaint, whereas here it was a separate counterclaim, is immaterial in determining our jurisdiction.

If the district court had decided the antitrust question before deciding the patent question, we would have had jurisdiction of an appeal challenging the...