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Think You Won? You May Still Need to Appeal.

May 8, 2013

By: Brian T. Moriarty and Christopher K. Albert

Hamilton Brook Smith Reynolds Alert

  • Failing to cross-appeal a “not invalid” finding waives the issue on remand.
  • For these litigants, infringement is based on a broad claim construction, while validity is based on a narrow claim construction.

In Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., the Federal Circuit recently held that a district court may not re-open a final judgment as to patent validity that was not raised by either party in a prior appeal.  The “not invalid” judgment cannot be re-opened even when it is based on an incorrect claim construction and the case is remanded for reconsideration of infringement premised on the same claim construction.

Lazare Kaplan owned a patent claiming methods and systems for using lasers to make microinscriptions on gemstones.  In 2006, Lazare Kaplan sued Photoscribe for infringement.  Photoscribe counterclaimed seeking a declaration of invalidity, noninfringement, and unforceability.

After a summary judgment of no literal infringement, a jury returned a verdict that certain claims were not invalid and not infringed under the doctrine of equivalents, and the district court entered a final judgment.  The patent owner appealed the noninfringement judgment, but the accused infringer, apparently satisfied with the noninfringement judgment, did not cross-appeal the judgment that the patent was not invalid.  In other words, the accused infringer did not pursue validity issues on appeal.  The Federal Circuit held that the noninfringement judgment was premised on an unduly narrow claim construction, vacated the noninfringement judgment, and remanded for further consideration.

Back at the district court, the accused infringer argued that both infringement and validity were at issue since both were premised on the narrow claim construction that the Federal Circuit rejected.  The district court agreed and ultimately granted the accused infringer’s motions for summary judgment of invalidity based on the broader claim construction and for relief from the district court’s prior judgment that the patent was not invalid while simultaneously denying as moot the patentee’s motion for summary judgment of infringement.

Holding that Federal Circuit, not regional circuit, law controls, the Federal Circuit noted that the judgments of “not infringed” and “not invalid” are distinct, even though they are premised on the construction of the same claim term and the district court found that they are “closely interrelated.”  Even though infringement and validity are both predicated on the interpretation of the claims, the accused infringer’s failure to cross-appeal foreclosed any reconsideration of validity on remand, despite the fact that “claims are construed the same way for both invalidity and infringement.”
Concluding that the district court erred by addressing validity on remand, the Federal Circuit remanded the case to the district court to vacate the judgment of invalidity and reconsider infringement.

In a strong dissent, Judge Dyk recognized the incongruity of the majority’s holding: “allowing the patentee to assert infringement on a broad claim construction while permitting it to defend against invalidity using a different and far narrower claim construction.”  The dissent would have permitted the district court to re-open the invalidity judgment for reconsideration in view of the correct claim construction.

On appeal, a litigant must fully consider the significance of its actions and inactions, even where the overall outcome at the district court was favorable.  Failing to cross-appeal aspects of an overall successful outcome may waive your right to re-open those unappealed issues upon remand.

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