Ultra-Precision Mfg. Ltd. v. Ford Motor Co., 02-1622.

• Decision Date: 28 July 2003
• Docket Number: No. 02-1622.,02-1622.
• Citation: 338 F.3d 1353
• Parties: ULTRA-PRECISION MANUFACTURING LIMITED, Plaintiff-Appellant, v. FORD MOTOR COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

338 F.3d 1353

ULTRA-PRECISION MANUFACTURING LIMITED, Plaintiff-Appellant, v. FORD MOTOR COMPANY, Defendant-Appellee.

No. 02-1622.

United States Court of Appeals, Federal Circuit.

Decided July 28, 2003.

Andrew Kochanowski, Sommers, Schwartz, Silver & Schwartz, P.C., of Southfield, Michigan, argued for plaintiff-appellant. With him on the brief was James J. Vlasic. Of counsel on the brief was Michael H. Baniak, Baniak Pine & Gannon, of Chicago, Illinois.

Ernie L. Brooks, Brooks & Kushman P.C., of Southfield, Michigan, argued for defendant-appellee. With him on the brief were Frank A. Angileri and Mark Lorelli.

Before NEWMAN, GAJARSA and PROST, Circuit Judges.

GAJARSA, Circuit Judge.

Ultra-Precision Manufacturing Limited ("UPM") appeals the district court's grant of two separate motions in limine, certified under Fed.R.Civ.P. 54(b), excluding damages evidence relating to UPM's unjust enrichment claims as preempted by the federal patent laws of the United States. Ultra-Precision Mfg. Ltd. v. Ford Motor Co., No. 01-CV-70302 (E.D.Mich. Sept. 5, 2001). Because this court lacks jurisdiction to hear this interlocutory appeal, we dismiss UPM's appeal pending final resolution of all claims in this case.

I. BACKGROUND

In 1988, Ford Motor Company ("Ford") approached UPM principals, Ross Herron and Garry Beard, to help design a solution to long-standing noise, vibration, and harshness ("NVH") problems associated with Ford's FX-15 air conditioning compressors. After two months of investigation, Herron and Beard designed an effective retrofit solution which included a series of pulse damper ("PD") tubes placed in the pistons of the existing compressor that redirected the flow of gas from the front to the rear of the compressor heads. The PD tubes were designed to make the gas flow within the pistons equidistant, thereby minimizing the peak-to-peak pressure pulsations created by the pistons in the compressor. Herron and Beard applied for and received two patents, United States Patents Nos. 4,934,482 ("the '482 patent") and 5,133,647 ("the '647 patent"), for the retrofit PD tubes. The claims of the patents were limited to the retrofit PD tubes used in the FX-15 compressor. UPM shared these results and initiated meetings with Ford, hoping that Ford would compensate UPM for its solution to Ford's problem. UPM never entered into a written contract with Ford.

On October 18, 1990, while UPM was in ongoing discussions with Ford, Thomas Finn, an engineer in Ford's Climate Control Division, sent a letter to UPM stating: "I am well aware of the merits of the PD tube and I am currently investigating its performance with other design changes to eliminate our need for in-line mufflers." The letter also stated that UPM's technology "does not work well alone in our system due to other concerns such as slugging." Slugging results from liquid buildup inside the compressor. This was the last communication between Ford and UPM.

In early 1991, Finn began work on a new prototype compressor with integral PD tubes which ultimately became known as the FS-10 compressor. On December 23, 1991, Finn and two other Ford employees filed a patent application seeking protection for the integral head design of the FS-10 compressor. This application issued as United States Patent No. 5,236,312 ("the '312 patent"). Ford began use of the FS-10 in 1992.

Sometime in 2000, UPM learned that Ford was using a compressor without an in-line muffler. Upon further investigation, UPM determined that the compressor utilized an integral PD tube compressor. Shortly thereafter, UPM filed this action alleging unjust enrichment, breach of contract, and commercial misappropriation under Michigan state law and seeking, inter alia, substitution of inventorship in the '312 patent under 35 U.S.C. § 262. UPM initially alleged that Herron and Beard were the sole inventors of the '312 patent.

Ford moved for summary judgment seeking dismissal of all claims. The district court granted summary judgment to Ford on the breach of contract and commercial misappropriation claims. The district court found that disputed issues of material fact existed with regard to UPM's claims of substitution of inventorship and unjust enrichment and therefore denied Ford's motion for summary judgment on those claims. In making its ruling, the district court, relying on this court's holding in University of Colorado Foundation v. American Cyanamid, 196 F.3d 1366 (Fed.Cir.1999), ruled that UPM's state law unjust enrichment claims were not preempted by federal patent law.¹ During the summary judgment proceedings, UPM conceded that it was only seeking co-inventorship of the '312 patent, as opposed to sole inventorship as initially pled. Shortly before trial, Ford filed two motions in limine requesting (1) exclusion of evidence of damages for any uses of technology disclosed in UPM's '482 and '647 patents but not claimed; and (2) exclusion of evidence of damages for any use of the '312 patent because, as co-inventors, Ford could not be liable for any damages pursuant to 35 U.S.C. § 262.

Despite its earlier summary judgment determination concerning preemption, the district court granted both motions in limine. The district court determined that: (1) any damages stemming from use of the '312 patent were preempted by 35 U.S.C. § 262, which specifically states that co-inventors of a patent are not required to account for revenues received from a patent; and (2) any damages stemming from technology disclosed but not claimed in a patent were also preempted by the federal patent laws. The district court further invited UPM to amend its complaint to specifically allege unjust enrichment for conduct separate from inventorship. In an August 19, 2002 letter addressed to the court, UPM specifically declined to do so. UPM also moved for a Rule 54(b) certification with respect to its unjust enrichment claims arguing that the grant of the motions in limine effectively disposed of UPM's unjust enrichment claims.

In a subsequent telephone conference between the district court and the parties, there was significant discussion about whether the motions in limine actually disposed of the unjust enrichment claims. The district court again made clear that UPM was free to amend its complaint to allege unjust enrichment based on the circumstances arising prior to issuance of UPM's patents and issuance of the '312 patent UPM again refused to amend its complaint. Instead, UPM stated that it believed the district court improperly granted the motions in limine and that it was satisfied with its unjust enrichment claim as pled. After lengthy discussions, between the parties and the district court, UPM elected to proceed under its unjust enrichment theory as pled and forego any additional unjust enrichment claim should the Federal Circuit affirm the district court's ruling. As a result, the district court certified its ruling pursuant to Rule 54(b). UPM subsequently filed the present appeal.

II. DISCUSSION

This case presents the issue of whether an in limine evidentiary ruling, excluding damages evidence and certified by the district court pursuant to Rule 54(b), constitutes an appealable resolution of a single claim in a multiple claim action for purposes of our jurisdiction.

The first question we must consider, although not raised by the parties, is whether we have jurisdiction to hear this appeal. "[E]very federal appellate court has a special obligation to satisfy itself ... of its own jurisdiction ... even though the parties are prepared to concede it." Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986) (internal quotation marks and citations omitted). "Jurisdiction is a threshold issue and a court must satisfy itself that it has jurisdiction to hear and decide a case before proceeding to the merits." PIN/NIP, Inc. v. Platte Chem. Co., 304 F.3d 1235, 1241 (Fed.Cir.2002) (citations omitted). We apply our own law and not the law of the regional circuit to issues concerning our jurisdiction. Spraytex, Inc. v. DJS&T, Homax Corp., 96 F.3d 1377, 1379 (Fed.Cir.1996). But see, Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 793 (Fed.Cir.2000) (applying regional circuit law to issue of the finality of a Rule 12(b)(6) dismissal of a complaint for failure to state a claim upon which relief could be granted).

When an appeal is certified pursuant to Rule 54(b), we review the finality of the judgment de novo in order to ensure we have jurisdiction to hear this appeal. W.L. Gore & Assocs. v. Int'l Med. Prosthetics Research Assocs., Inc., 975 F.2d 858, 862 (Fed.Cir.1992).

While the district court's determination that there was no just reason for delay is reviewed under an abuse of discretion standard, the Supreme Court has emphasized that the District Court cannot, in the exercise of its discretion, treat as final that which is not final within the meaning of § 1291.

Id. (internal quotation marks omitted).

In a case arising in whole or in part under the patent statute, this court has jurisdiction "of an appeal from a final decision of a district court of the United States." 28 U.S.C. § 1295(a)(1) (2000). A district court's judgment is final where "it ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945). Generally, in a case involving more than one claim, there is no final decision until a judgment is entered adjudicating all of the claims. Spraytex, 96 F.3d at 1379. "The requirement of finality is a statutory mandate and not a matter of discretion." W.L. Gore, 975 F.2d at 862.

There are, however, exceptions to this rule of finality. For example, Rule 54(b) provides for appeal of a single adjudicated claim while other claims remain unadjudicated and pending. Additionally, 28 U.S.C. § 1292(b) and (c)(1) provide for interlocutory appeal of...