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A Work of Art? Ninth Circuit Analyzes Foreign Judgments and Fair Use

by | Jul 21, 2022 |

The US Court of Appeals for the Ninth Circuit analyzed the fair use doctrine of US copyright law in a dispute for recognition of a 2001 French judgment relating to a finding of copyright infringement of certain photographic works featuring the art of Pablo Picasso. The Court’s analysis ultimately resulted in a reversal of the district court’s ruling for the defendants against whom the French judgment was sought. Vincent Sicre de Fontbrune et al; v. Alan Wofsy et al, Case Nos. 19-16913; -17024 (9th Cir. July 13, 2022) (Hurwitz, VanDyke, JJ.; Ericksen, Distr. J.) The Court remanded for further proceedings for an examination of the enforceability of the judgment under California’s Uniform Foreign-Country Money Judgment Recognition Act (California Recognition Act).

In 1979, Yves Sicre de Fontbrune acquired the business capital and intellectual property rights to Cashiers d’Art, a complete published catalog of the works of Pablo Picasso. The catalog was created in 1932 by photographer Christian Zervos and featured almost 16,000 photographs of Picasso’s works. In 1991, Alan Wofsy Fine Arts obtained permission from the estate of Pablo Picasso to publish The Picasso Project, a work illustrating and describing Picasso’s works. The Picasso Project contained reproductions of certain photos from Cashiers d’Art.

Sicre de Fontbrune sued Wofsy in France for copyright infringement after The Picasso Project was offered for sale at a book fair in Paris and French police seized two volumes of the work. A trial court in France first found the photographs to be documentary in nature and ineligible for copyright protection. In 2001, however, the French Court of Appeal determined that the photographs at issue were not mere copies of Picasso’s works but added creative elements through deliberate choices of lighting, lens filters and framing. The Court of Appeal reversed the trial court, found Wofsy “guilty of infringement of copyright” and entered judgment in favor of Sicre de Fontbrune.

A long and complex procedural process followed the Court of Appeal’s ruling, during which appeals and new lawsuits were filed. Wofsy failed to appear on several occasions while also filing a review proceeding in the French courts. Before Wofsy filed the French review proceeding, however, Sicre de Fontbrune brought an action in the Superior Court of California in Alameda County, seeking recognition of the original French judgment. Wofsy removed that action to district court, which dismissed the case with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). The Ninth Circuit reversed, finding the French judgment to be not a penalty but a sum of money cognizable under the California Recognition Act.

On remand, the parties submitted cross motions for summary judgment on eight defenses under the California Recognition Act. The district court granted summary judgment for Wofsy on only one of the defenses, finding that the French judgment was “repugnant to public policy.”

On appeal of the international diversity case, the Ninth Circuit explained that the enforceability of foreign judgments is governed by the law of the state in which enforcement is sought, making the California Recognition [...]

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Tableware Designer Gets Heavenly Results on Its Pearly Plates

by | Jul 21, 2022 | ,

The US Court of Appeals for the Fifth Circuit reversed a district court decision, reversing the dismissal of a copyright claim based on lack of standing and finding ownership of the copyright in the claimant based on an assignment of that claim. The Fifth Circuit also found that the plaintiff had a protectible trade dress under the Lanham Act based on secondary meaning. Beatriz Ball, LLC v. Barbagallo Co., LLC, Case No. 21-30029 (5th Cir. July 12, 2022) (Jones, Haynes, Costa, JJ.) (per curiam).

Beatriz Ball, the founder of Beatriz Ball, LLC, alleged that Pampa Bay was marketing and distributing products that infringed on Ms. Ball’s registered copyrights and unregistered trade dress for its “Organic Pearl” line of tableware. Ms. Ball brought suit against Pampa Bay in Louisiana federal court, asserting claims for copyright infringement under the Copyright Act and unfair competition under § 43 of the Lanham Act.

Pampa Bay has marketed and distributed products similar to the Organic Pearl collection but made with cheaper materials since 2016. Ms. Ball alleged that Pampa Bay infringed upon her copyright and its unregistered trade dress because the products are confusingly similar and look and feel like the Organic Pearl trade dress in every way. The district court ruled against Ms. Ball, finding that it had not established that its unregistered trade dress acquired “secondary meaning” as is required for protection of an unregistered trade dress under the Lanham Act. The district court further held that Ms. Ball lacked standing to bring the copyright claims as a result of a lack of legal interest because when “Beatriz Ball Collection” transferred ownership in the copyrights to “Beatriz Ball, LLC,” the language of the assignment did not specifically transfer the right to a cause of action for prior infringements predating the assignment. The assignment clause in issue read:

Assignment. Assignor [Beatriz Ball and Beatriz Ball Collection] hereby irrevocably conveys, transfers, and assigns to Assignee [Beatriz Ball, LLC], and Assignee hereby accepts, all of Assignor’s right, title and interest in and to any and all copyrights, whether registered or not and whether or not applications have been filed with the United States Copyright Office or any other governmental body. This assignment expressly includes any and all rights associated with those copyrights.

The district court found that because the assignment did not specifically transfer the assignor’s right to causes of action for prior infringements, the LLC lacked standing to challenge infringements pre-dating the assignment. The district court therefore never reached the merits of the copyright claim.

On appeal, the Fifth Circuit first reviewed the standing issue to determine if the LLC owned the copyrights at the time of the alleged infringement or if the right to vindicate prior infringements had been effectively assigned to Ms. Ball. Reversing the district court’s ruling, the Court concluded that the LLC had standing to bring the suit as the actual copyright holder. The Court reasoned that § 411(b)(1), which provides that a registration with “inaccurate information” can support an infringement action [...]

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Patent Infringement Verdict Nixed over Judge’s Stock Ownership

by | Jul 14, 2022 |

The US Court of Appeals for the Federal Circuit reversed a district court’s opinions and orders and remanded the case for further proceedings before a different district court judge because the original judge had failed to divest all financial interests in the case. Centripetal Networks, Inc. v. Cisco Systems, Inc., Case No. 21-1888 (Fed. Cir. June 23, 2022) (Dyk, Taranto, Cunningham, JJ.)

Centripetal sued Cisco for patent infringement. The original district court judge presided over a 22-day bench trial, which included a more than 3,500-page record, 26 witnesses and more than 300 exhibits. The court heard final arguments on June 25, 2020. While the case was still pending before the district court, the judge learned that his wife owned Cisco stock, valued at $4,687.99. The district court judge notified the parties on August 12, 2020, that he had discovered that his wife owned 100 shares of Cisco stock. He stated that his wife purchased the stock in October 2019 and had no independent recollection of the purchase. He explained that at the time he learned of the stock, he had already drafted a 130-page draft of his opinion on the bench trial, and virtually every issue had been decided. He further stated that the stock did not—and could not have—influenced his opinion on any of the issues in the case. Instead of selling the stock, which might have implied insider trading given his knowledge of the forthcoming order, the judge placed it in a blind trust. Under the terms of the trust, the judge was to be notified when the trust assets had been completely disposed of or when their value became less than $1,000.

Centripetal had no objections. Cisco, however, filed a motion for recusal under 28 U.S.C. § 455(a) and (b)(4). The judge ordered Centripetal to file a response. On October 2, 2020, the court denied Cisco’s motion for recusal. On October 5, 2020, the court issued a 167-page opinion and order containing the judge’s findings that Cisco willfully infringed the asserted claims of the patents-at-issue and awarded Centripetal damages of more than $755 million, pre-judgment interest of more than $13 million and a running royalty of 10%. Cisco moved for amended findings and judgment under Rule 52(b) or a new trial under Rule 59(a)(2). The court denied both motions. Cisco appealed the district court’s findings and asserted that the judge was required to recuse himself under 28 U.S.C. § 455(b) absent divestiture under § 455(f) (the only exception to the bright line rule that a federal judge is disqualified based on a known financial interest in a party).

On appeal, the Federal Circuit addressed two issues: whether the district court judge was relieved of his duty to recuse under § 455(b)(4) because his wife had divested herself of her interest in Cisco under § 455(f), and, if the requirements of § 455(f) were not satisfied, a determination as to the proper remedy.

The Federal Circuit analyzed whether placement of the stock in a blind trust satisfied the [...]

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Split Federal Circuit Reverses Contempt Order, Sanctions Award in Protective Order Dispute

by | Jul 7, 2022 |

A split panel of the US Court of Appeals for the Federal Circuit reversed a district court’s contempt order and sanctions award, finding that there was a fair ground of doubt regarding whether the defendant’s counsel’s disclosure to a third party under a joint defense agreement constituted a violation of a protective order (PO). Static Media LLC v. Leader Accessories LLC, Case No. 21-2303 (Fed. Cir. June 28, 2022) (Dyk, Taranto, JJ.) (Reyna, J., dissenting).

Static Media sued Leader Accessories for infringement of a design patent relating to a stadium seat. The parties entered into a PO that restricted the disclosure of discovery documents designated as confidential. The PO restricted disclosure of confidential-designated documents to a limited group of people, including “outside independent persons” retained to provide consulting, technical or expert services or to give testimony (i.e., an independent consultant). The PO also required that an independent consultant execute a “written assurance.” The written assurance required that the independent consultant read and agree to be bound by the terms of the PO and prohibited the consultant from copying or using any confidential information except under the terms of the PO.

After the parties agreed to the PO, Static sent a cease-and-desist letter to another company, OJ Commerce, for infringement of the same patent. Counsel for OJ Commerce contacted Leader’s lawyer, and the parties entered into a joint defense group governed by a joint defense agreement. Static subsequently sued OJ Commerce in a different district, after which counsel for Leader shared a copy of the PO and written assurance, which counsel for OJ Commerce signed and returned. Counsel for Leader then shared with OJ Commerce two deposition transcripts containing “a few pages” of confidential-designated information relating to Static’s licensing and royalty agreements.

During settlement negotiations, counsel for OJ Commerce revealed to Static’s counsel (who was not involved in the Leader case and was not a signatory to the PO) that he was “fully aware” of the actual royalties Static had received in the past. Static moved for discovery sanctions and an order holding Leader in contempt for violation of the PO. The magistrate judge ordered Leader to pay Static’s attorneys’ fees and a $1,000 sanction. After the district court judge affirmed, Leader appealed.

Reviewing under an abuse of discretion standard, the Federal Circuit evaluated the legal theories used by the magistrate judge and the district court. The district court concluded that Leader’s counsel should be held in contempt because he was responsible for OJ Commerce’s counsel’s improper use of the confidential information. Separately, the magistrate judge based its finding on the fact that Leader’s counsel “knew or should have known” that OJ Commerce’s counsel would use the information to bolster its defense in its own case. The Federal Circuit disagreed with both of these views, finding that Static failed to prove by clear and convincing evidence that Leader violated the PO. The Court concluded that Leader’s counsel “did exactly what was required to ensure [OJ Commerce’s counsel] would abide by the [...]

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Lost and “Found”: Fourth Circuit Interpretation of Discovery in Support of Foreign Litigation Opens Circuit Split

by | Jun 23, 2022 |

The US Court of Appeals for the Fourth Circuit held that a corporation that is not physically present in a district is not “found” in the district for purposes of the federal statute that authorizes courts to order discovery for use in a foreign tribunal. In re Eli Lilly and Co., Case No. 22-1094 (4th Cir. 2022) (Niemeyer, Diaz, JJ.; Floyd, Sr. J.) The Court rejected the approach of the Second Circuit, which previously had held that a district court’s power to order discovery under 28 USC § 1782 was coextensive with the minimum contacts inquiry of specific jurisdiction.

After acquiring a patent portfolio related to the psoriasis drug Taltz, Novartis AG sued Eli Lilly for patent infringement in several European courts. Eli Lilly requested discovery from Novartis in the Eastern District of Virginia under § 1782, which authorizes a district court “of the district in which a person resides or is found” to “order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.” Novartis is based in Switzerland and has no offices or employees in the Eastern District of Virginia.

Following a magistrate judge’s grant of Eli Lilly’s ex parte application for a discovery subpoena, the district court vacated that order. The Fourth Circuit affirmed, substantially echoing the district court’s reasoning.

There was no dispute that Novartis did not “reside” in the district; the only issue was whether Novartis could be “found” there. The Fourth Circuit considered the plain meaning of “found,” Supreme Court precedent interpreting similar statutory language, and the legislative history of the statute, and held “that a corporation is found where it is physically present by its officers and agents carrying on the corporation’s business.”

The Fourth Circuit rejected Eli Lilly’s counterargument that the satisfaction of specific jurisdiction requirements was sufficient for a corporation to be “found” in a district, including Eli Lilly’s reliance on the 2019 Second Circuit decision in In re del Valle Ruiz, which held that a corporation was “found” wherever it could be subject to specific jurisdiction. The Fourth Circuit concluded that In re del Valle Ruiz failed to give “found” its plain meaning, incorrectly ignored Supreme Court precedent and did not give appropriate weight to the legislative history of § 1782.

Even if the Fourth Circuit had disagreed with the district court’s interpretation of § 1782, the Court would still have affirmed based on the deferential abuse-of-discretion standard. Because § 1782 permits, but does not require, an order of discovery, the Court found that the district court’s determination that to “request[ ] [ ] a substantial volume of data and materials located abroad [to] be brought into the United States for subsequent use in proceedings abroad, [would be] a nonsensical result” was well reasoned.

With this decision, the Fourth Circuit broke with the Second Circuit and created a circuit split in the interpretation of § 1782.

Ian Howard, a summer associate in the Washington, DC, office, also contributed [...]

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Oh Snap: Sufficient Reasoning Must Support Declaratory Judgment Dismissal

by | Jun 2, 2022 |

The US Court of Appeals for the Federal Circuit vacated and remanded the dismissal of a declaratory judgment action because the district court failed to sufficiently support its decision. Mitek Systems, Inc. v. United Services Automobile Association, Case No. 21-1989 (Fed. Cir. May 20, 2022) (Dyk, Taranto, Cunningham, JJ.)

United Services Automobile Association (USAA) owns four patents directed to using a mobile device to capture and transmit an image of a bank check for deposit. Mitek created software for mobile check capture called MiSnap™, which it licenses in the form of a software development kit to financial institutions. In 2017, USAA sent letters to Mitek’s customers, some with claim charts and patent lists. The customers subsequently demanded indemnification by Mitek. In 2018, USAA sued Wells Fargo, a Mitek customer, in the Eastern District of Texas. As the case progressed, USAA served a subpoena on Mitek seeking documents, source code and testimony about MiSnap™. The case went to trial on two of the four patents, and Mitek and its products were frequently mentioned.

Shortly thereafter, Mitek filed a complaint in California seeking declaratory judgment of no infringement as to all four USAA patents. To support jurisdiction for its declaratory judgment claim, Mitek alleged that there was real and substantial apprehension of imminent litigation between Mitek and USAA for infringement of the patents-in-suit. In response, USAA argued that there was no case or controversy as required by Article III of the Constitution, and thus the case should be dismissed under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. USAA also argued that the California court should exercise discretion to decline to hear claims for declaratory relief. USAA requested alternatively that the action be transferred to the Eastern District of Texas.

The California court transferred the case to the Eastern District of Texas. The Texas court then dismissed the action for lack of a case or controversy and stated that the court would exercise discretion to decline to entertain the declaratory judgment action. Mitek appealed.

Addressing subject matter jurisdiction, the Federal Circuit explained that the question was “whether the facts alleged, under all the circumstances, show that there is substantial controversy, between parties having adverse legal interest, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Along these lines, a plaintiff must plead facts sufficient to establish jurisdiction at the time of the complaint, and a case or controversy must remain present throughout the course of the suit. The Court found that the Texas court’s decision provided insufficient reasoning for dismissal because it failed to identify first whether to treat the Rule 12(b)(1) motion as a facial or factual challenge, as required under Fifth Circuit precedent. The Federal Circuit instructed the district court on remand to explore any post-filing events that may have impacted jurisdiction, as well as similarities between Mitek’s relationships with Wells Fargo and other customers.

The Federal Circuit found that the district court’s case or controversy analysis was similarly inadequate. The Court explained [...]

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Except Where Futile, Litigant Must Preserve Issue at Jury Instruction Phase to Preserve Claim Construction Dispute

by | Jun 2, 2022 |

The US Court of Appeals for the Federal Circuit affirmed the denial of a defendant’s post-judgment motion for a new trial based on a failure to preserve an O2 Micro challenge. The Court also reversed the denial of a prejudgment interest award to the plaintiff. Kaufman v. Microsoft, Case Nos. 21-1634; -1691 (Fed. Cir. May 20, 2022) (Dyk, Reyna, Taranto, JJ.)

Michael Philip Kaufman brought a patent infringement suit against Microsoft asserting his now-expired patent that covered a method for operating a computer to automatically generate an end-user interface that permit users to interact with data in relational databases (which store data in multiple tables that are related to each other in defined ways). Kaufman alleged infringement by Microsoft’s development tools for the .NET framework software platform, specifically Microsoft’s Dynamic Data product that allegedly automatically generated a web application for viewing and editing data. A jury found Microsoft liable for infringement and awarded $7 million in damages. Post-trial, Microsoft moved for judgment as a matter of law and a new trial, arguing that the district court failed to resolve claim construction disputes before trial and that Microsoft was therefore entitled to a new trial under 02 Micro. Kaufman moved for prejudgment interest. Both motions were denied, and both sides appealed.

Microsoft argued that the district court erred by not clarifying the claim term “automatically” and that a new trial was warranted under O2 Micro because the clarification reasonably could have led the jury to a different verdict. The Federal Circuit disagreed, explaining that Microsoft failed to preserve its O2 Micro challenge by not pursuing the matter at the jury instruction phase. The Court reasoned that the parties did not request a construction of “automatically” during the original Markman proceeding, nor did Microsoft propose a definition of “automatically” in its proposed jury instructions defining the term. Further, in its summary judgment briefing, Microsoft only said that there was a “fundamental legal dispute” as to the definition of “automatic.” Microsoft never clearly stated that a construction was needed on the term or offered the district court a formulation of such a claim construction. Microsoft also never defined a proposed construction for the term that would accommodate its action after trial. While the Court allowed that a claim construction issue does not always need to be re-raised in the specific setting of making proposals for, or airing objections to, jury instructions, that exception is limited to situations where the issue was sufficiently raised and settled earlier. The Court explained that application of that principle was settled in O2 Micro, “referring to circumstances in which the claim-construction position of the appellant was ‘made clear to the district court,’ a further objection would have been ‘not only futile but unnecessary,’ and the issue was ‘fully litigated and decided at the Markman stage of the litigation.’”

Turing to Kauffman’s appeal, the Federal Circuit reversed the denial of prejudgment interest. The district court had reasoned that the jury verdict “subsumed interest” and that Microsoft was prejudiced by [...]

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Counterfeit Dealer Gets Smoked in Trademark Preliminary Injunction Proceeding

by | Jun 2, 2022 | ,

The US Court of Appeals for the Ninth Circuit affirmed a preliminary injunction barring the defendant from selling counterfeit e-cigarette and vaping products bearing the plaintiff’s logo because the plaintiff’s psychoactive products were legal and could support a valid trademark. AK Futures LLC v. Boyd St. Distro, LLC, Case No. 21-56133 (9th Cir. May 19, 2022) (Kleinfeld, Fisher, Bennett, JJ.)

AK Futures manufactures e-cigarettes and vaping products, including delta-8 THC goods marketed under its “Cake” brand. Delta-8 THC is a psychoactive compound found in the Cannabis sativa plant, which encompasses both hemp and marijuana. The compound is similar in effect to delta-9 THC, the primary psychoactive agent in marijuana, but delta-8 THC is typically manufactured from hemp-derived cannabidiol (CBD). The cultivation and possession of hemp was legalized by the Farm Act in 2018.

AK Futures sued Boyd Street Distro, a Los Angeles purveyor of smoke products, for trademark and copyright infringement. Boyd Street sold virtually identical counterfeit Cake-branded e-cigarettes and vaping products containing delta-8 THC. At the time of suit, AK Futures had a registered copyright protecting its Cake logo—a stylized “C” overlaying a two-tier cake—and pending trademark applications for six marks incorporating the word “Cake” or the Cake logo for use in connection with e-cigarette products. The district court granted AK Futures’ motion for preliminary injunction. Boyd Street appealed.

On appeal, Boyd Street conceded the copyright claim, but argued that AK Futures could not own a valid trademark in connection with its e-cigarettes and vaping products because the sale of delta-8 THC was prohibited under federal law. In response, AK Futures argued that the 2018 Farm Act legalized delta-8 THC and products containing the compound.

The Ninth Circuit agreed that AK Futures’ use of the marks in commerce was lawful and could give rise to trademark priority. The Court found that the “plain and unambiguous” text of the Farm Act indicated that delta-8 THC products were lawful. The Farm Act removed “hemp” and “tetrahydrocannabinols in hemp” from Schedule I in the Controlled Substances Act, where “hemp” is defined as “the plant Cannabis sativa L. and any part of that plant, including . . . all derivatives, extracts, [and] cannabinoids . . . with a delta-9 concentration of not more than .3 percent.” The Court noted that the delta-9 THC concentration level was the only statutory metric for distinguishing marijuana from hemp, and that the terms “derivative, extract, or cannabinoid” were substantially broad. The Court thus concluded that “hemp” encompasses delta-8 THC products that contain no more than 0.3% delta-9 THC.

Boyd Street argued that the US Drug Enforcement Agency had interpreted the Farm Act as not applicable to delta-8 THC because it is “synthetically derived” and argued that US Congress never intended the Farm Act to legalize psychoactive substances. The Ninth Circuit perfunctorily dismissed these arguments based on the clear and unambiguous statutory language. Since the Cake-branded products allegedly contained less than 0.3% delta-9 THC, the Court held that AK Futures was likely to succeed in demonstrating that its [...]

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Déjà vu Decision on Likelihood of Confusion

by | May 19, 2022 |

The US Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of a trademark suit that was essentially identical to a previous lawsuit that was dismissed based on a finding of lack of confusion. Springboards to Education, Inc. v. Pharr San Juan Alamo Independent School District, Case No. 21-40336 (5th Cir. May 10, 2022) (Willett, Engelhardt, Wilson, JJ.)

Springboards sells products to school districts in connection with its “Read a Million Words Campaign.” The campaign builds excitement around reading by incentivizing school children to read books through promises of induction into the Millionaire’s Reading Club and access to rewards, such as t-shirts, backpacks and fake money. Springboards’ goods may typically bear any combination of trademarks that it registered with the US Patent & Trademark Office (PTO), including “Read a Million Words,” “Million Dollar Reader,” “Millionaire Reader” and “Millionaire’s Reading Club.”

Pharr San Juan Alamo (PSJA) is a public school district in Hidalgo County, Texas. Springboards sued PSJA in 2016 in federal court, alleging trademark infringement based on the school district’s use of “millionaire”-themed reading incentive programs allegedly “using products and services bearing marks and branding identical to or confusingly similar to Springboards’ marks.” While the case was pending, the Fifth Circuit issued its decision in Springboards to Education, Inc. v. Houston Independent School District, where it found that another public school district’s summer reading program did not infringe Springboards’ trademarks. Observing the parallels between the Houston case and the PSJA case, the district court granted PSJA’s motion for summary judgment that it did not infringe any of Springboards’ trademarks. Springboards appealed.

Calling it “déjà vu all over again,” the Fifth Circuit affirmed the district court’s finding that PSJA’s use of Springboards’ marks was not likely to cause confusion. The Court explained that distinguishing between Springboards’ catalog of “millionaire”-themed goods and unaffiliated “millionaire”-themed goods that other educational entities have elected to deploy is not difficult, and unique imprints on “millionaire”-themed reading challenges are widespread in the educational field. The Court noted that as in Houston, Springboards did not allege that PSJA itself is in the business of competing with Springboards by selling its own “millionaire”-themed products to the school districts that make up Springboards’ customer base. The Court thus concluded that PSJA’s use of a million-word reaching challenge did not confuse and was not intended to confuse the sophisticated school districts that Springboards targets with its marks.

Springboards tried to distinguish the Houston case by arguing that the Houston school district had one summer reading program whereas PSJA has had several year-long reading programs and that the requirements of PSJA’s reading program are identical—and not merely similar to—Springboards’ model program. Springboards also noted that its founder worked his entire career in Hildago County (where PSJA is located) and visited schools, teachers and administrators in the district—unlike Houston, which was over 300 miles away. The Court found that these facts did not move the needle, in light of its finding that sophisticated school district customers can [...]

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The Halo Effect Won’t Cure Lack of Final Judgment

by | May 19, 2022 |

The US Court of Appeals for the Federal Circuit dismissed the appeal of a disappointed movant seeking prejudgment interest and a new damages trial after concluding that the district court did not enter an appealable final order despite closing the case nearly three years before the appeal was filed. Halo Electronics, Inc. v. Bel Fuse Inc., Case No. 2021-1861 (Fed. Cir. May 6, 2022) (per curiam) (nonprecedential).

The Halo v. Bel Fuse litigation has been percolating in the federal courts for over a decade, with multiple significant decisions that continue to reshape patent litigation practice (the most well-known of which restructured the legal framework for willful patent infringement and the recovery of enhanced damages).

Halo first sued Pulse for patent infringement in 2007. The jury found that Pulse willfully infringed Halo’s patents, however, the district court denied Halo’s motion for enhanced damages. On Halo’s appeal, the Supreme Court of the United States articulated a new test for enhanced damages.

While that appeal was pending in 2015, Halo moved the district court for award of prejudgment interest. The district court held that Halo was entitled to prejudgment interest at the state’s statutory rate and directed the parties to either agree to the amount owed or submit briefing that outlined proposed calculations. The parties submitted briefing but before the district court determined what calculation to use, Pulse filed a notice of appeal challenging the district court’s order stating prejudgment interest would be awarded and directing the briefing. The Federal Circuit held that the district court’s prejudgment interest order was not final “because the district court had not determined, or specified the means for determining, the amount of prejudgment interest.”

While Pulse’s appeal was pending in 2017, Halo renewed its motion in the district court for enhanced damages. The district court denied that motion and directed the clerk to enter judgment and close the case, but neither the court’s order nor the ensuing “judgment” addressed prejudgment interest. At the time, Halo did not move for relief from the September 2017 order and judgment.

Then, after nearly three years of inactivity, Halo filed a “Motion for Pre-Judgment Interest Award and Damages Trial” in the district court in July 2020. The district court denied Halo’s motion as untimely under Federal Rules of Civil Procedure 59(e) and 60(b), reasoning that “if Halo believed an issue remained unresolved, it should have brought that to the court’s attention then, not three years later,” adding, “the parties are entitled to rely on court judgments and move on with their affairs” and reopening the case “would be unfair to Pulse and contrary to the goal of finality of judgments.”

On appeal, the Federal Circuit held that the district court’s September 2017 judgment was not a final, appealable one because, “with respect to a final judgment for money damages, finality does not exist if the district court does not determine, or specify the means for determining, the amount of the judgment.” Because the district court never resolved the [...]

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