There Is No Jurisdiction over an Appeal of a Civil Contempt Order That Did Not Modify or Continue a Preliminary Injunction
June 13, 2007
Last Month at the Federal Circuit - July 2007
Judges: Gajarsa, Linn, Moore (author)
[Appealed from: D. Mass., Judge O’Toole, Jr.]
In Entegris, Inc. v. Pall Corp., Nos. 04-1440, 05-1265, -1266, 06-1374 (Fed. Cir. June 13, 2007), the Federal Circuit dismissed for lack of jurisdiction Pall Corporation’s (“Pall”) appeal of the district court’s contempt order, and affirmed the district court’s dissolution of a preliminary injunction that the district court had granted to Entegris, Inc. (“Entegris”).
The subject patents, directed to filtration systems used in semiconductor manufacture, are assigned to Entegris. Entegris sued Pall for infringement of these patents and obtained a preliminary injunction enjoining Pall from making, using, selling, or offering to sell its filter assembly. In response, Pall ceased sales of the enjoined filters, began selling a modified product, and sought a DJ that its modified product did not infringe Entegris’s patents. Entegris in turn moved the district court to hold Pall in contempt for violating the injunction by selling the modified product. Pall also sought to dissolve the injunction on the basis that newly discovered prior art raised a substantial question regarding the validity of the asserted patents. The district court held Pall in contempt for violating the injunction and granted Pall’s motion to dissolve the injunction. Both parties appealed.
On appeal, the Federal Circuit first addressed the issue of whether it had jurisdiction over Pall’s appeal of the contempt order. Pall argued that the Court had jurisdiction over its appeal because it is an interlocutory appeal under 28 U.S.C. § 1292(c)(1), which provides jurisdiction over “interlocutory orders of the district courts . . . continuing, modifying, . . . or dissolving injunctions, . . . .” According to Pall, the Federal Circuit had jurisdiction because the district court “continued or modified” the injunction to include Pall’s modified product. The Federal Circuit rejected this argument, finding that the contempt order did not amount to either a modification or continuation of the injunction. Characterizing the difference between modifying and interpreting an injunction as a “distinction [that] defines a boundary of appellate jurisdiction under section 1292,” the Federal Circuit found that the district court was interpreting, not modifying, the injunction when it found that Pall’s modified product was expressly covered by the original injunction. Slip op. at 7-8.
Neither did the contempt order “continue” the injunction within the meaning of 28 U.S.C. § 1292(a), held the Court. Citing previous rulings of the First and Ninth Circuits, the Federal Circuit adopted as its own standard that “continuing” an injunction requires an order to “effectively prolong or extend an existing injunction.” Id. at 8. Applying this standard to this case, the Court held that the contempt order did not prolong, extend, or in any other way impact the duration of the preliminary injunction, and thus could not be interpreted as “continuing” the injunction.
The Federal Circuit also rejected Pall’s alternative argument that there was jurisdiction over Pall’s appeal under the final judgment rule, codified as 28 U.S.C. § 1295(a). Pall argued that the contempt order was final within the meaning of § 1295(a) because a fine had been assessed against Pall. The Federal Circuit observed that § 1295(a) grants the Court exclusive jurisdiction over an appeal from a final decision of a district court. Citing Supreme Court precedent that civil contempt orders are not final judgments, regardless of whether a fine is assessed, the Federal Circuit rejected Pall’s argument and considered the district court litigation to be ongoing and not final.
Finally, Pall asserted that the Federal Circuit could exercise pendent jurisdiction over its appeal because it had jurisdiction over Entegris’s cross-appeal of the dissolution of the preliminary injunction. While acknowledging that an appellate court may appropriately exercise pendent jurisdiction over an appeal, which is “inextricably intertwined” with another over which it does have jurisdiction, the Federal Circuit found that the two questions in this case were not “inextricably intertwined.” The Court explained that the question of whether the district court properly dissolved the injunction in view of invalidity concerns raised by newly cited prior art does not overlap with or impact, let alone resolve, the question of whether Pall’s modified product was a colorable imitation of the enjoined product. Accordingly, finding no basis for jurisdiction, the Court dismissed Pall’s appeal of the district court’s contempt order.
With respect to Entegris’s cross-appeal of the district court’s decision to dissolve the preliminary injunction, the Federal Circuit first addressed Pall’s jurisdictional challenge to Entegris’s cross-appeal. Pall contended that the district court dissolved the injunction on two independent grounds and that the Court lacked jurisdiction because Entegris failed to challenge one of those two grounds. The Federal Circuit disagreed, concluding that Entegris had properly challenged the district court’s dissolution of the injunction. The Federal Circuit, however, affirmed, holding that the district court had not abused its discretion in granting Pall’s motion to dissolve the injunction based upon the substantial question of invalidity raised by the prior art. The references appeared to present analogous prior art and contained all of the elements of one of the relevant claims. Accordingly, the Federal Circuit concluded that Pall had asserted an invalidity defense that Entegris had not proved lacked substantial merit.