Wang Laboratories, Inc. v. Applied Computer Sciences, Inc.
| Decision Date | 06 December 1990 |
| Docket Number | Nos. 90-1747,90-2083,s. 90-1747 |
| Parties | , 17 U.S.P.Q.2d 1935 WANG LABORATORIES, INC., Plaintiff, Appellee, v. APPLIED COMPUTER SCIENCES, INC., James Abbenhaus and Rodger D. Noel, Defendants, Appellants. WANG LABORATORIES, INC., Plaintiff, Appellee, v. APPLIED COMPUTER SCIENCES, INC., James Abbenhaus and Rodger D. Noel, Defendants, Appellants. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Jack R. Pirozzolo, with whom Judith S. Ziss, Todd A. Richardson and Willcox, Pirozzolo & McCarthy, Boston, Mass., were on brief, for defendants, appellants.
Michael J. Tuteur, with whom Paul F. Ware and Goodwin, Procter & Hoar, Boston, Mass., were on brief, for plaintiff, appellee.
Before SELYA and CYR, Circuit Judges, and BOWNES, Senior Circuit Judge.
Appellant, Applied Computer Sciences, Inc. ("ACS"), seeks review of a summary judgment enforcing a settlement agreement between ACS and appellee, Wang Laboratories, Inc. ("Wang"). We find that the United States Court of Appeals for the Federal Circuit has exclusive jurisdiction to hear this appeal. Before the case is transferred to the Federal Circuit, however, it must be remanded to the district court for compliance with Rule 58 of the Federal Rules of Civil Procedure.
Wang and ACS manufacture and market data processing systems. In 1983 Wang filed two suits for patent infringement against ACS in the District Court of Massachusetts. The following year ACS filed a counterclaim against Wang in the Western District of Washington, seeking a declaratory judgment on the patent claims and alleging illegal tying arrangements, tortious interference and commercial disparagement. The three patent cases were consolidated in the District Court of Massachusetts.
In early 1986 the district court entered a consent judgment, holding that ACS had infringed a Wang patent and permanently enjoining ACS from further infringement of it. As part of the settlement negotiations, Wang granted ACS several licenses covering: software; trade secrets; the manufacture, sale, and export of printers; and the sale of infringing work stations.
Less than a year after the district court's entry of the consent judgment, Wang received information leading it to believe that ACS was violating the terms of the consent judgment by continuing to manufacture infringing devices and exporting them to an ACS affiliate in Ireland. Wang moved for an order to show cause why ACS should not be held in contempt for violating the court's permanent injunction. Wang also filed a separate action against ACS and two ACS officers, alleging breach of the license agreements. The court consolidated the contempt action with the action for breach of contract.
On April 19, 1988, the Friday before trial, the parties notified the court that they had settled the case. The district court dismissed the case "without prejudice to the right upon good cause to reopen the action [within 30 days] if settlement is not consummated."
It is arguable whether ACS and Wang agreed on the terms of the settlement. 1 On February 9, 1989, Wang moved to vacate the dismissal, alleging that ACS had refused to sign the settlement agreement. On April 17, 1989, Wang moved for summary judgment to enforce the settlement agreement. In an order dated July 2, 1990, 741 F.Supp. 992, the district court granted summary judgment in favor of Wang, ruling:
[T]he April agreement is a valid settlement agreement between [ACS] and Wang. The parties have sixty days mutually to agree to a modification of the April agreement. If the parties cannot reach agreement on changes to the April agreement within those sixty days, then the April agreement as it now stands may be enforced on the sixtieth day, it having become effective as between the parties on April 22, 1988.
ACS appeals from the summary judgment. Wang argues that this court lacks jurisdiction to hear the appeal because the Federal Circuit has exclusive jurisdiction to hear appeals grounded in patent law. Wang further contends that the appeal is premature for two reasons: (1) the order granting summary judgment was not an appealable final judgment because it contemplated additional proceedings; and (2) no separate judgment was entered on the docket, as required by Federal Rule of Civil Procedure 58.
Under 28 U.S.C. Sec. 1295(a) the Federal Circuit has exclusive jurisdiction of an appeal if the jurisdiction of the district court was based, in whole or in part, on 28 U.S.C. Sec. 1338. Section 1338(a) provides:
The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents....
The jurisdictional scope of the statute has been defined in case law. Section 1338 jurisdiction
extend[s] only to those cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.
Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 808-09, 108 S.Ct. 2166, 2173, 100 L.Ed.2d 811 (1988). "The district court's 'arising under' jurisdiction in patent cases is properly measured at the complaint stage of the proceedings." Xeta, Inc. v. Atex, Inc., 825 F.2d 604, 606 (1st Cir.1987); see also Air Products and Chemicals, Inc. v. Reichhold Chemicals, Inc., 755 F.2d 1559, 1562 (Fed.Cir.), cert. dismissed, 473 U.S. 929, 106 S.Ct. 22, 87 L.Ed.2d 700 (1985).
The three consolidated cases which resulted in the consent judgment were grounded on the district court's patent jurisdiction. The consent judgment permanently enjoined ACS from infringing the Wang patent. Enforcement of the court's injunction through a contempt 2 proceeding was within the district court's patent jurisdiction arising under 28 U.S.C. Sec. 1338. Leman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 452, 52 S.Ct. 238, 76 L.Ed. 389 (1932); KSM Fastening Systems, Inc. v. H.A. Jones Co., 776 F.2d 1522, 1524 (Fed.Cir.1985); H.A. Jones Co. v. KSM Fastening Systems, Inc., 745 F.2d 630, 631-32 (Fed.Cir.1984). 3
The Federal Circuit has jurisdiction to hear an appeal from the enforcement of a patent settlement agreement when the "jurisdiction of the district court over the [original] complaint was based in whole or in part on 28 U.S.C. Sec. 1338(a) (1982)." S and T Mfg. Co. v. County of Hillsborough, 815 F.2d 676, 678 (Fed.Cir.1987). Furthermore, an appeal from the grant or denial of an adjudication of contempt of a consent decree in a patent infringement case lies in the Federal Circuit. See KSM Fastening Systems, Inc. v. H.A. Jones Co., 776 F.2d 1522; MAC Corp. of America v. Williams Patent Crusher & Pulverizer Co., 767 F.2d 882 (Fed.Cir.1985); H.A. Jones Co. v. KSM Fastening Systems, Inc., 745 F.2d 630.
ACS argues that the First Circuit rather than the Federal Circuit has jurisdiction to hear this appeal. ACS claims that the contract suit somehow subsumed the contempt proceeding; therefore, the Federal Circuit's patent jurisdiction does not apply to this case. This claim contradicts the record. When Wang filed the breach of contract claim, it did not drop the contempt proceeding. The district court consolidated the two actions for all purposes, including trial. Its ensuing decision granting summary judgment, quoted supra, was indivisible, blanketing all of the consolidated cases.
We conclude that the Federal Circuit has jurisdiction to hear this appeal. Normally a transfer to the Federal Circuit pursuant to 28 U.S.C. Sec. 1631 4 would be made. Because Wang has challenged the finality and propriety of the order from which the appeal was taken, we find that prudence requires a remand to the district court before the transfer to the Federal Circuit is made.
Wang argues that the summary judgment order did not finally resolve all the disputes between the parties. The district court gave the parties sixty days to modify the settlement agreement; failing that, the April agreement would be enforced. We think that Wang's lack of finality argument is strained.
A judgment is final and appealable if the court has "resolv[ed] the contested matter, leaving nothing to be done except execution of the judgment." United States v. Metropolitan Dist. Comm'n, 847 F.2d 12, 14 (1st Cir.1988) (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978); Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945)). For example, an order granting attorney's fees which "explicitly contemplated the future entry of another order" to allocate payment between the two respondents was not a final judgment. Metropolitan District Comm'n, 847 F.2d at 14 (emphasis original).
In the present case, the district court found that the consent agreement was binding and enforceable unless the parties mutually agreed to modify it within sixty days, in which case the modified agreement would be binding and enforceable. The court did not instruct the parties to report back for further proceedings. Far from "contemplat[ing] the...
To continue reading
Request your trial
-
Horney v. Westfield Gage Co.
...Wang Labs., Inc. v. Applied Computer Sciences, Inc., 741 F.Supp. 992, 1001-01 (D.Mass.1990) (similar), rev'd on other grounds, 926 F.2d 92 (1st Cir.1991). Nonetheless, Woodis argues that the agreement ought to be voidable because of his "unilateral mistake" that Westfield Gage would pay the......
-
Hiob v. Progressive Am. Ins. Co.
...not clearly a judgment, as opposed to a memorandum, when it contained a recitation of the facts); Wang Laboratories, Inc. v. Applied Computer Sciences, Inc., 926 F.2d 92, 96 (1st Cir.1991) (appeal was timely under a mechanical application of Rule 58 because party is not required to appeal f......
-
Petition of Mal de Mer Fisheries, Inc., Civ. A. No. 94-10211-PBS.
...999-1001 (D.Mass.1990), (noting statute of frauds does not bar enforcement of oral settlement agreement), rev'd on other grounds, 926 F.2d 92 (1st Cir.1991); Correia v. DeSimone, 34 Mass.App.Ct. 601, 614 N.E.2d 1014 (1993) ("There is a strong judicial interest in the prompt reporting of set......
-
Hiob v. Progressive Am. Ins. Co.
...not clearly a judgment, as opposed to a memorandum, when it contained a recitation of the facts); Wang Laboratories, Inc. v. Applied Computer Sciences, Inc., 926 F.2d 92, 96 (1st Cir. 1991) (appeal was timely under a mechanical application of Rule 58 because party is not required to appeal ......