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Procedural Problems Prevent Appeal

July 28, 2003

Decision icon Decision

Last Month at the Federal Circuit - August 2003

Judges: Gajarsa (author), Newman, and Prost

In Ultra-Precision Manufacturing Ltd. v. Ford Motor Co., No. 02-1622 (Fed. Cir. July 28, 2003), the Federal Circuit held that the grant of an in limine motion with respect to damages evidence is not a final disposition of a claim that can be certified pursuant to Fed. R. Civ. P. 54(b). Instead, any such appeal must follow the provisions of 28 U.S.C. § 1292(b), which not only requires
district court certification, but also requires the Federal Circuit’s consent.

This case involves air-conditioning compressor technology. In 1988, Ford Motor Company (“Ford”) approached Ultra- Precision Manufacturing Ltd. (“UPM”) in an effort to design a solution to noise, vibration, and harshness problems associated with Ford’s FX-15 air-conditioning compressors. In response, UPM designed retrofit pulse damper (“PD”) tubes and obtained two patents on the technology, which listed UPM employees as the sole inventors. Ford evaluated the UPM technology, but informed UPM that it was not interested because the retrofit PD tubes did not work well alone in Ford’s system due to concerns such as slugging. In 1991, however, Ford began working on and completed the design of integral PD tubes, for which it obtained U.S. Patent No. 5,236,312 (“the ’312 patent”), which listed Ford employees as the sole inventors. Ford began using these PD tubes in its compressors in 1992.

In 2000, UPM determined that Ford was using these integral PD tubes in its compressors and filed an action alleging unjust enrichment, breach of contract, and commercial misappropriation under Michigan state law, and also sought substitution of inventorship in the ‘312 patent, alleging that UPM’s employees were the sole inventors of the ‘312 patent. The district court granted Ford’s motions for SJ on all the claims except unjust enrichment and substitution of inventorship. During the proceedings, however, UPM conceded that it was only seeking co-ownership of the ‘312 patent, instead of sole ownership, as originally pled. Accordingly, Ford filed two motions in limine requesting (1) exclusion of evidence of damages for subject matter disclosed but not claimed in UPM’s patents; and (2) exclusion of evidence for any use of the ‘312 patent, because, as a co-owner, Ford was not liable for damages under 35 U.S.C. § 262. The district court granted both motions and certified them for interlocutory appeal at UPM’s request pursuant to Fed. R. Civ. P. 54(b).

The Federal Circuit held that because the motions in limine did not enter final judgment as to the unjust-enrichment claim, the Court did not have jurisdiction to hear the interlocutory appeal under Fed. R. Civ. P. 54(b). Instead, the exclusion of evidence only related to the quantum of relief UPM sought and did nothing to dispose of the issue of liability on the unjustenrichment claim. Accordingly, because no claims were final within the meaning of Fed. R. Civ. P. 54(b), the only option for UPM at this juncture was to appeal under 28 U.S.C. § 1292(b), which, in addition to the district court’s certification, requires a discretionary ruling by the Federal Circuit that grants the appealing party’s petition for permission to appeal the order. Because no such petition was filed in this case, however, the Federal Circuit did not have jurisdiction to hear this appeal.