Judges: Gajarsa, Linn, Dyk (author)

[Appealed from C.D. Cal., Judge Phillips]

In Jang v. Boston Scientific Corp., No. 07-1385 (Fed. Cir. July 15, 2008), the Federal Circuit vacated the district court’s judgment and remanded for clarification of an ambiguous stipulated consent judgment.

Jang brought a breach of contract action against Boston Scientific Corporation and Scimed Life Systems, Inc. (collectively “the manufacturers”) for failure to make payments as required by a contract assigning U.S. Patent Nos. 5,922,021 and 5,954,743 (“the ’021 patent” and “the ’743 patent,” respectively) from Jang to the manufacturers. The right to these payments depends on whether the sale of certain devices by the manufacturers were “covered by” the ’021 or ’743 patents.

After the district court issued a claim construction order construing the contested claim terms, the parties entered a stipulation, agreeing that, under the district court’s claim construction, Jang could not prove the accused products were “covered by” (i.e., infringed) the ’021 or ’743 patents. Accordingly, the parties agreed on entry of partial SJ denying Jang’s breach of contract claim. The stipulation did not explain why the district court’s claim construction resulted in nonliability. And the district court’s judgment did not explain how any of the disputed claim construction rulings related to the accused devices. After reaching judgment on Jang’s remaining claims and the manufacturers’ counterclaims, the district court entered the parties’ proposed consent judgment that preserved Jang’s right to appeal.

Jang timely appealed from the final consent judgment, challenging the district court’s claim constructions with respect to the ’021 and ’743 patents. At oral argument on appeal, both parties admitted that resolution of at least one of the claim construction disputes would not affect the issue of infringement.

The Federal Circuit held that consent judgments must satisfy the same standards of appellate jurisdiction as any other judgment entered by a district court. And, “[a] judgment is reviewable only if it is possible for the appellate court to ascertain the basis for the judgment challenged on appeal.” Slip op. at 7. Here, the Federal Circuit remanded to the district court for clarification of two ambiguities in the consent judgment.

First, the Court found that it was impossible to discern from the stipulated judgment which of the district court’s claim construction rulings would actually affect the issue of infringement. Jang challenged seven aspects of the district court’s claim construction, but at oral argument, counsel for plaintiff conceded that at least one of the construction disputes has no effect on infringement. Thus, the Federal Circuit reasoned that if it did not require clarification of the stipulated judgment in this case, it risked rendering an advisory opinion as to claim construction issues that do not actually affect the infringement controversy between the parties. Second, the Federal Circuit found that the stipulated judgment provides no factual context for the claim construction issues presented by the parties. In particular, nothing in the stipulated judgment provides any context with respect to how the disputed claim construction ruling related to the accused products. “Indeed, a better understanding of the context of the claim construction as a case proceeds through an infringement determination can appropriately lead a district court to change its initial claim construction.” Id. at 12. Because it was not possible to infer why the accused products would not infringe under the district court’s claim construction or why they would infringe under Jang’s constructions, the Court held it lacked proper context for an accurate claim construction. Under these circumstances, the Court concluded that a remand for clarification was necessary and appropriate.