USM Corp. v. SPS Technologies, Inc.

Decision Date12 August 1985
Docket NumberNo. 84-1397,84-1397
Parties, 1985-2 Trade Cases 66,748 USM CORPORATION, Appellant, v. SPS TECHNOLOGIES, INC., Appellee. Appeal
CourtU.S. Court of Appeals — Federal Circuit

Raymond P. Niro, Niro, Scavone, Haller and Niro, Ltd., Chicago, Ill., for appellant.

Timothy J. Haller, Niro, Scavone, Haller and Niro, Ltd., of Chicago, Ill., of counsel.

Leonard J. Santisi, Curtis, Morris & Safford, of New York City, for appellee.

ON MOTION

Before DAVIS, BALDWIN, and NEWMAN, Circuit Judges.

ORDER

SPS, Technologies, Inc., (SPS) has moved to transfer this appeal to the United States Court of Appeals for the Seventh Circuit. We grant the motion and transfer the appeal.

BACKGROUND

The underlying dispute between these parties commenced in 1969 when SPS filed a suit against USM Corporation alleging infringement of U.S. Patent No. 3,093,177, issued to Joseph Villo in 1963, of which SPS was the assignee. Following discovery, and trial on a limited aspect of the case, the parties entered into a consent decree in 1971. By the terms of that decree, SPS's patent was held valid and infringed by USM, which was granted a license to practice the invention by SPS.

In 1974, USM filed the instant action alleging misuse, invalidity and non-infringement of the Villo patent. In an amended and supplemental complaint filed in 1978, USM added anti-trust counterclaims pursuant to 15 U.S.C. Secs. 15, 16 and 26. These claims were severed for separate trial upon motion of USM.

Thereafter, SPS moved for summary judgment on those claims arising under 28 U.S.C. Sec. 1338, contending that res judicata based upon the consent decree barred USM's claim. The district court granted SPS's motion in part and thus dismissed the count alleging invalidity and noninfringement based upon res judicata, but left standing the count alleging fraudulent procurement. USM Corp. v. Standard Pressed Steel Co., 453 F.Supp. 743, 200 USPQ 788 (N.D.Ill.1978).

Following a bench trial, the district court held the patent invalid for fraud on the Patent Office. USM Corp. v. SPS Technologies, Inc., 514 F.Supp. 213, 211 USPQ 112 (N.D.Ill.1981). Final judgment was entered pursuant to Rule 54(b), Fed.R.Civ.P., and an appeal was taken to the Court of Appeals for the Seventh Circuit because the notice of appeal was filed prior to the creation of this court. This appeal was consolidated with USM's appeal from the district court's previous ruling which granted summary judgment to SPS.

The Seventh Circuit held, inter alia, that res judicata barred USM's claim of fraudulent procurement, and therefore vacated the district court's conclusion that the patent was void and unenforceable for this reason. Because of its finding on the res judicata issue, the Seventh Circuit found it unnecessary to review the district court's finding that SPS had committed fraud on the Patent Office. USM Corp. v. SPS Technologies, Inc., 694 F.2d 505, 510, 216 USPQ 959, 963 (7th Cir.1982), cert. denied, 462 U.S. 1107, 103 S.Ct. 2455, 77 L.Ed.2d 1334 (1983).

The parties then returned to district court for resolution of the remaining claims which at that point included USM's anti-trust claim based upon SPS's alleged fraud on the Patent Office, an accounting by USM of royalties due under the license agreement, and SPS's motion for costs pursuant to Rule 54(d), Fed.R.Civ.P.

The district court granted SPS's motion for summary judgment, finding that USM's anti-trust claim was a compulsory counterclaim to SPS's original infringement action and therefore was barred under Rule 13(a), Fed.R.Civ.P. The district court further found that the anti-trust claim, which was based upon the same factual situation which USM had previously sought to raise to challenge the Villo patent, was therefore barred by res judicata.

By order dated June 21, 1984, the district court directed that final judgment be entered, although the accounting was not completed, and USM filed the instant appeal in this court. SPS then filed a motion to transfer this appeal to the Seventh Circuit, alleging that this court lacks jurisdiction.

Issue

This appeal raises the question of our jurisdiction over an appeal where the Seventh Circuit has finally adjudicated all patent issues and only non-patent issues remain, in a case where the jurisdiction of the district court was originally based, in part, upon 28 U.S.C. Sec. 1338(a).

ANALYSIS

Pursuant to Sec. 1295(a)(1) of title 28, this court has exclusive jurisdiction of an appeal from a final district court decision where that court's jurisdiction was based, in whole or in part, on 28 U.S.C. Sec. 1338.

In Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 223 USPQ 1074 (Fed.Cir.1984), we held that this court's subject matter jurisdiction is determined at the time a complaint is filed, and therefore will not be affected by the separation of patent from non-patent issues (which there was for no purpose other than to direct the appeal). Thus, in Atari, this court exercised jurisdiction over an appeal from the grant of a preliminary injunction against contributory copyright infringement where that issue had been separated, but not severed from patent claims which had yet to be adjudicated. In Atari, however, the court specifically noted that it was not deciding issues not...

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    ...was filed, Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 223 USPQ 1974 (Fed.Cir.1984), cf. USM Corp. v. SPS Technologies, 770 F.2d 1035, 1036, 226 USPQ 1038, 1039 (Fed.Cir.1985), except that this court does not have jurisdiction of a case that relates to copyrights or trademarks and no ......
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    ...and Amended Complaint as barred by the statute of limitations. OPINION JURISDICTION In USM Corp. v. SPS Technologies, Inc., 770 F.2d 1035, 1037, 226 USPQ 1038, 1039-40 (Fed.Cir.1985), this court transferred an appeal on a separated antitrust phase of a patent-antitrust suit because: (1) tra......
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    ...by continued Federal Circuit jurisdiction over the case). The court distinguished its earlier opinion, USM Corp. v. SPS Technologies. , 770 F.2d 1035, 1037 (Fed. Cir. 1985), in which it transferred to the regional circuit an appeal on a separate antitrust phase of a patent-antitrust suit. U......
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    • 6 December 2015
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