By Jason Rantanen
Robert Bosch, LLC v. Pylon Manufacturing Corp. (Fed. Cir. 2013) (en banc) Download Bosch v Pylon
Majority opinion written by Judge Prost, joined by judges Rader, Newman, Lourie, and Dyk. Judges Moore and Reyna concurred and dissented-in-part in separate opinions. Judges O'Malley and Wallach dissented.
This case deals with the question of whether the Federal Circuit has jurisdiction to entertain appeals from patent infringement liability determinations when damages and willfulness issues remain outstanding. The court held that 28 U.S.C. § 1292(c)(2) confers jurisdiction in both situations.
Background on the case is available here. The Federal Circuit requested that the parties brief the following issues:
- Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred?
- Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on this Court to entertain appeals from patent infringement liability determinations when willfulness issues are outstanding and remain undecided.
Section 1292(c) states that "The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction— (2) 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." At issue was whether a trial on damages and willfulness is an "accounting" for purposes of this section.
An "accounting" includes the determination of a patentee's damages (7-2): The majority, joined by Judge Moore (and in its conclusion by Judge Reyna), first held that an accounting includes the determination of a patentee's damages. This approach was consistent with both the historical meaning of an "accounting" and the legislative history for the predecessor statute to § 1292. "The statute’s interpretation through history is clear. An “accounting” in the context of § 1292(c)(2) includes the determination of damages and cannot be limited to a traditional equitable accounting of an infringer’s profits." Slip Op. at 13.
Nor does the a request for a jury trial to establish damages change this result: "While we agree with Bosch that an accounting was historically available in equity, we do not agree that a trial on damages falls outside the scope of the accounting described in § 1292(c)(2)." Id. The court's summary of its rationale:
We base our conclusion on four points. First, in 1948, Congress expanded jurisdiction over interlocutory appeals from cases in equity to “civil actions for patent infringement which are final except for accounting.” Second, the issues which were historically decided in accountings are the same as those decided during damages trials today. Third, the reasons articulated by Congress for allowing interlocutory appellate jurisdiction over patent cases that are final except for an accounting apply with equal force to a modern damages trial. Finally, stare decisis militates in favor of allowing interlocutory appeals where liability has been established and a damages trial remains.
Slip Op. at 12-13. The last point in particular caught my eye. The majority's argument is that the principle of stare decisis should be given weight by the court sitting en banc even when the precedent consists of panel decisions, particularly when dealing with issues of statutory interpretation.
Nonetheless, “because [our precedent] represents the established law of the circuit, a due regard for the value of stability in the law requires that we have good and sufficient reason to reject it at this late date.” Bailey, 36 F.3d at 110. [D.C. Cir sitting en banc] Indeed, panel opinions, like en banc opinions, invoke the principle of stare decisis. Panel opinions are, of course, opinions of the court and may only be changed by the court sitting en banc. It has been the law of this court for at least twenty-five years that an “accounting” under § 1292 includes a trial for the determination of damages under § 284.
Slip Op. at 20.
An "accounting" includes willfulness determinations (5-4): The majority, this time without Judges Moore or Reyna, also concluded that Section 1292(c)(2) confers jurisdiction on the Federal Circuit to hear appeals from patent infringement liability determinations while willfulness issues are still outstanding. As with damages, the court held that an "accounting" includes willful infringement determinations. This, the majority wrote, was also consistent with the historical understanding of an "accounting." "Long before the enactment of § 1292(c)(2)’s predecessor statute in 1927, accounting proceedings included the determination of willfulness by a special master." Slip Op. at 23. Post-1927 cases confirmed this view. "Indeed, after the enactment of § 1292(c)(2)’s predecessor statute in 1927, courts continued to determine willfulness as part of an accounting, which occurred after the finding of liability." Id. at 24.
Bifurcation is a decision within the district court's discretion: A common refrain in the court's opinion is its comment that it is deciding only the appellate jurisdictional issue; it is not issuing a broader decision on bifurcation of damages and willfulness. For example, near the end of the opinion the court notes:
Finally, we wish to make clear that district courts, in their discretion, may bifurcate willfulness and damages issues from liability issues in any given case. District courts have the authority to try these issues together or separately just as they have the authority to try all issues together at the liability stage. They may decide, for example, for reasons of efficiency due to the commonality of witnesses or issues in any particular case, that bifurcation is not warranted. District court judges, of course, are best positioned to make that determination on a case-by-case basis. Today, we answer only the question of whether § 1292(c)(2) grants this court jurisdiction over appeals where the district court has exercised its discretion to bifurcate the issues of damages and willfulness from those of liability.
Judge O'Malley's Dissent: Writing in dissent, and joined by Judge Reyna, Judge O'Malley disagreed with the broad interpretation of Section 1292(c)(2) adopted by the majority. "As an exception to the final judgment rule, § 1292(c)(2) is to be interpreted narrowly...Because I believe the term “accounting” only applies to a limited class of proceedings before special masters or to those instances in which the trier of fact has decided all matters relevant to a damages determination save the application of those decisions to an undisputed set of numbers, I do not believe § 1292(c)(2) justifies the exercise of jurisdiction over this appeal." Slip Op. at 54-55.
In the dissent's view, the majority erred by asking the wrong historical question. "What we should ask is not what questions may be considered during the course of an “accounting” but whether the procedure that was an “accounting” as of 1927—the one contemplated in § 1292(c)(2)—is the same as or encompasses a jury trial on any of those same questions." Id. at 56. This distinction matters because the historical meaning of an "accounting" was tied to the determination by a special master not by a jury. With regard to the majority's historical argument, the dissent wrote:
The majority’s only attempt at a statutory analysis to support its holding is its claim that, by substituting the phrase “civil actions” for “suit[s] in equity” in the jurisdictional grant of § 1292, Congress somehow intended to expand the concept of an accounting to include jury trials on damages. The disregard for the importance of the right to a jury trial and misunderstanding of what a jury trial entails which is evident in this proposition is stunning.
Id. at 57. Even less defensible, in the dissent's opinion, was the majority's conclusion as to willfulness. Indeed, even requiring infringement and willfulness determinations to take place before separate juries may be impermissible in itself. "A bifurcation order which requires that two different juries visit the interwoven issues and overlapping facts involving infringement and validity on the one hand and willfulness on the other would violate the defendant’s Seventh Amendment right to a jury trial." Id. at 79.
Judges Moore and Reyna: Judges Moore and Reyna wrote separate opinions expressing their views that an "accounting" does not include a willfulness determination but can include the damages enhancement step that occurs following a willfulness determination. The result is a court in relative agreement on the question of whether Section 1292(c)(2) confers jurisdiction while damages issues remain pending but sharply decided on the question of whether it confers jurisdiction when a willful infringement determination has yet to be made.