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Appeal Dismissed for Lack of Jurisdiction

January 28, 2005

Decision icon Decision

Last Month at the Federal Circuit - February 2005

Judges: Gajarsa (author), Michel, and Linn

In Silicon Image, Inc. v. Genesis Microchip Inc., No. 04-1207 (Fed. Cir. Jan. 28, 2005), the Federal Circuit dismissed the appeal because there was no final judgment.

Silicon Image, Inc. (“Silicon”) is a promoter of the Digital Visual Interface, Revision 1.0 Specification (“DVI Specification”). The promoter had agreed to grant royalty-free licenses to claims in its patents that would necessarily be infringed by anyone practicing the standards set forth in the DVI Specification. Genesis Microchip Inc. and Genesis Microchip Delaware, Inc.(collectively “Genesis”) signed a DVI Adopters Agreement that allowed them to develop DVI receiver technology. Silicon then filed a patent-infringement action against Genesis alleging infringement of the nonnecessary claims of U.S. Patent Nos. 5,974,464 (“the ‘464 patent”) and 5,905,769 (“the ‘769 patent”).

In December 2002, the parties represented to the district court that they had reached an agreement to settle the action. The parties memorialized their agreement in a Memorandum of Understanding (“MOU”), which required the parties to prepare definitive agreements by the end of that month. However, the parties were not able to come to an agreement as to which product would be subject to royalties and failed to draft a definitive agreement. Consequently, pursuant to a clause in the MOU, the MOU became the binding settlement agreement.

The Federal Circuit ruled that even in a settled case, a final judgment must be obtained for the Court to have jurisdiction. The trial court must dismiss, with or without prejudice, all of the claims as a predicate to a final judgment before appellate jurisdiction may lie to change any matter relating to the settlement. The terms of the MOU, which were incorporated into the final order, required Genesis’s payment and Silicon’s stipulation to the Court that it had received such payment as conditions precedent to dismissal of the underlying infringement claims. Since these conditions precedent were never satisfied, the underlying claims were never dismissed. The Court noted that however unfortunate the parties’ choices were in designing their settlement agreement, those choices could not be unilaterally undone by the district court. Accordingly, the Federal Circuit dismissed the appeal.