Robert Bosch LLC v. Pylon Manufacturing Corp., Case No. 2011-1363 (Fed. Cir. June 14, 2013)

http://docs.justia.com/cases/federal/appellate-courts/cafc/11-1363/11-1363-2013-06-14.pdf

This case examines a single question. Does 28 U.S.C. §1292(c)(2) confer jurisdiction on the Federal Circuit to entertain appeals from patent infringement liability determinations when the district court has exercised its discretion to bifurcate issues of damages and willfulness, and a trial on damages and willfulness has not yet occurred. In a divided en banc opinion, five of the nine judges agreed that it did, two the judges agreed that jurisdiction applied to damages but not willfulness, and two of the judges disagreed on both jurisdictional issues.

Robert Bosch, LLC sued Pylon Manufacturing for patent infringement and Pylon later asserted patent infringement claims against Bosch. Before trial, Pylon moved to bifurcate the issues of liability and damages, which the court noted was “appropriate in all but exceptional patent cases.” Finding that “willfulness is a damages issue, not a liability issue,” the court granted the motion and stayed discovery on damages and willfulness.

Following a jury trial on liability, the court entered judgment on the liability issue. Bosch appealed, and Pylon cross-appealed, then Bosch filed a motion to dismiss both appeals on the grounds that the Federal Circuit lacked jurisdiction. The substantive and jurisdictional issues were heard by a Federal Circuit panel, and after oral argument, the court granted an en banc rehearing to determine whether it has jurisdiction over the appeal under 28 U.S.C. §1292(c)(2).

28 U.S.C. §1292(c)(2) grants the Federal Circuit jurisdiction “of an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the United States Court of Appeals for the Federal Circuit and is final except for an accounting.” After reviewing the statute’s interpretation through history, the court concluded that in 1927, when Congress first employed the term “accounting” in the context of patent infringement, an accounting was well known to include both infringer’s profits and patentee’s lost profits. Judge Proust, writing for a five-judge majority, had no trouble in finding that §1292(c)(2) confers jurisdiction on the Federal Circuit to hear appeals from patent infringement liability determinations when a trial on damages has not yet occurred.

The question of whether §1292(c)(2) confers jurisdiction on appeals from patent liability determinations when willfulness issues are outstanding is less clear from the language of the statute. The court first noted that as a general matter, a district court has the authority to bifurcate willfulness and infringement issues. After reviewing the legislative history of the statute, the court concluded there was no basis for believing that “when Congress first gave the courts of appeals interlocutory jurisdiction over cases that are final except for an accounting, it intended to disturb the practice of determining willfulness as a part of an accounting.” Accordingly, §1292(c)(2) gives the Federal Circuit jurisdiction over patent infringement liability determinations when willfulness issues are outstanding and remain undecided.

The ruling may make it easier for district court judges to justify bifurcating both damages and willfulness issues from the issue of infringement liability.