Should patent litigants be able to appeal an infringement liability ruling before a damages trial? Before willfulness is decided? Those are the questions the U.S. Court of Appeals for the Federal Circuit wants to consider in a case about windshield wiper blades.

On Aug. 7, in Robert Bosch v. Pylon Manufacturing, the court on its own initiative ordered en banc briefing and arguments on the two questions. Specifically, the court asked the parties to address whether a federal statute governing the Federal Circuit’s jurisdiction allows it to hear infringement liability appeals (1) “when a trial on damages has not yet occurred” and (2) “when willfulness issues are outstanding and remain undecided.”

The per curiam order was issued by Chief Judge Randall Rader, along with Judges William Bryson, Timothy Dyk, Richard Linn, Alan Lourie, Kimberly Moore, Pauline Newman, Kathleen O’Malley, Sharon Prost, Jimmie Reyna and Evan Wallach. The order followed a July 9 panel argument of the underlying case.

Bosch’s lawyer, Mark Hannemann, a partner at Kenyon & Kenyon, and Mark Pals, of counsel to Kirkland & Ellis who argued for Pylon, could not be immediately reached for comment.

Intellectual property lawyers say the order for an en banc hearing likely stems from the Federal Circuit’s desire for clarity on jurisdiction or because no prior case cleanly presented the questions.

These questions have never been directly teed up before a panel, said John Dragseth, a partner in Fish & Richardson’s Minneapolis office, who isn’t involved in the case. Dragseth said the panel may have been concerned about prior Federal Circuit rulings that only touched on these issues: “It’s hard to say what is a holding and what is dicta.”

Like all courts, the Federal Circuit carefully protects its jurisdiction, said Ed Reines, a partner in the Redwood Shores office of Weil, Gotshal & Manges, who likewise isn’t involved in the case. “When legal issues touch on serious questions about whether the court has the power to adjudicate matters, that gains closer scrutiny from the court.”

It’s good that the Federal Circuit is taking up the questions because Judge Sue Robinson of the District of Delaware has been holding off on damages proceedings until after appeals “for some time,” Dragseth said. “Regardless of how many people are already doing it, the practice [of bifurcating this issues] would have spread. It’s good that the Federal Circuit is going to get out in front of it.”

Bifurcating liability and damages is fairly rare, but bifurcating liability and willfulness is fairly common, said Michael Sacksteder, a patent litigation partner in the San Francisco office of Fenwick & West, who similarly isn’t involved. “The theory is that if you try willful infringement at the same time as you try infringement, you’re getting a lot of very prejudicial evidence before the jury concerning allegations of reckless behavior or intentional copying,” Sacksteder said.

Sacksteder also said that although the Federal Circuit “historically likes to have as many issues before it as possible to resolve as opposed to having it come up piecemeal,” there are negatives for a defendant. Defendants who lose on liability “do not want to wait for a damages ruling, particularly if there are weaknesses in the liability determination that can be attacked on appeal,” he said.

Also, if the accused has to wait for another phase of the case while the patent owner seeks an injunction, “that’s a significant prejudice to the defendant and a strong practical argument for permitting appeal while damages issues are being decided at the court below,” Sacksteder said.

Bosch sued Pylon in August 2008, alleging infringement of patents for its beam-type automobile wiper blades. The district court granted Pylon’s motion to bifurcate the issues of damages and willfulness in August 2009.

In March 2010, Robinson granted Bosch’s summary judgment motion, finding that Pylon infringed two claims of the patent. She also granted Pylon’s summary judgment motion for noninfringement of claims related to the other two patents. A jury then found that Pylon infringed claims in two of the four Bosch wiper blades at issue in the case.

In November 2010, Robinson denied Bosch’s permanent injunction motion on the ground that Bosch would not suffer irreparable harm without it.

In October 2011, in an earlier appeal in the case, a First Circuit panel ruled that the District of Delaware abused its discretion by denying the permanent injunction. In an opinion by O’Malley, the panel held, “even though a successful patent infringement plaintiff can no longer rely on presumptions or other short-cuts to support a request for a permanent injunction, it does not follow that courts should entirely ignore the fundamental nature of patents as property rights granting the owner the right to exclude.”

 

Sheri Qualters is a reporter with The National Law Journal, a Recorder affiliate.