A stay is not an appealable order when the patentee still may pursue its claims in federal court; the patentee is not seeking a preliminary injunction to avoid suffering irreparable harm; and the stay does not affirmatively prohibit litigation in any other court.

Spread Spectrum Screening LLC v. Eastman Kodak Co., No. 2011-1019 (Fed. Cir. Sept. 26, 2011).

The patentee initiated litigation against the manufacturer of the allegedly infringing products and four of its customers who used those products.  The district court severed the case against the manufacturer from the other defendants and stayed the case against these other defendants.  The patentee challenged the district court’s granting of the stay.  The Federal Circuit dismissed for lack of jurisdiction, as the stay was not a final judgment within in the meaning of 28 U.S.C. § 1295(a)(1) and did not otherwise qualify as an appealable order. 

The patentee first argued the stay was a final judgment because it put the patentee effectively out of federal court and was “practically final” under precedent.  The Federal Circuit disagreed, finding that the case against the manufacturer would still be pursued in federal court and that the precedent did not extend beyond its unique facts.

The patentee then argued that interlocutory review was warranted because the stay resulted from an erroneous application of the policy favoring manufacturer suits over those against customers.  The Federal Circuit found that this only applies when the patentee is seeking a preliminary injunction and will suffer irreparable harm, which was not the case.

The patentee lastly argued that the Federal Circuit had jurisdiction under 28 U.S.C. § 1292(a)(1) because the stay was essentially an injunction.  The Federal Circuit found that this was not an injunction because the district court was staying its own case, not affirmatively prohibiting litigation in any other court.

A copy of the opinion can be found here.

Intervening rights apply if the scope of a claim has been changed by arguments made in a post-grant proceeding before the Patent and Trademark Office.

Marine Polymer Techs., Inc. v. Hemcon, Inc., No. 2010-1548 (Fed. Cir. Sept. 26, 2011).

The defendant in an action for patent infringement requested that the Patent and Trademark Office (PTO) reexamine the patent that was being asserted against it. While the PTO reexamination was still on-going, the district court found that the patent was infringed, entered a final judgment of over $29 million in damages, and issued a permanent injunction against the defendant. On appeal, the Federal Circuit concluded that the defendant had absolute intervening rights with respect to its products manufactured before the conclusion of the reexamination proceeding, because the patentee’s arguments during reexamination had changed the scope of the claims. Based on this conclusion, the Federal Circuit reversed the district court’s judgment of infringement. The Federal Circuit vacated the damages award and the injunction, and remanded the case to the district court for a decision on whether or not equitable intervening rights applied with respect to the defendant’s products manufactured after the conclusion of the reexamination proceeding.

During the reexamination, the PTO examiner initially issued a preliminary rejection that all of the claims were invalid over the prior art. The examiner based this rejection on an assertion that the district court’s claim construction was too narrow in view of several dependent claims which were not directly at issue in the infringement action. The patentee responded by arguing that the district court’s interpretation of a disputed claim term should also be adopted in the reexamination. The patentee canceled the dependent claims that fell outside of this interpretation. In view of the canceled claims, the PTO agreed with the district court’s construction of the disputed term and confirmed the validity of the remaining claims in their original form. 

Intervening rights are available when the scope of at least one claim has been “substantively changed” during reexamination or reissue proceedings. Here, the Federal Circuit found that the district court’s claim construction of the reexamined claims was too narrow in view of the original dependent claims. The Federal Circuit concluded that, even though the wording of the claims at issue in the infringement action remained unchanged, the defendant’s arguments during the reexamination proceeding operated as a disavowal of broader claim scope. This decision clarifies that intervening rights will apply when the scope of a claim has been changed by either amendments or arguments made during a post-grant proceeding. To hold otherwise could allow patentees to use arguments to change otherwise invalid claims in a way that would manipulate the reexamination process.

A copy of the opinion can be found here.