In a patent infringement lawsuit, prior to trial on the merits, the federal district court typically conducts a hearing in which the court examines evidence concerning the meaning of the patent’s claims. The court then issues a claim construction opinion that provides the context for trial of the infringement claims.
In BRK Brands, Inc. v. Nest Labs, Inc., No. 13 C 7900, 2014 WL 2854493 (N.D. Ill. June 24, 2014), Judge Richard A. Posner of the United States Court of Appeals for the Seventh Circuit, sitting as a district court judge, issued a claim construction opinion that undermined the basis for much or all of the plaintiffs’ patent infringement claims. Rather than continue to litigate in the district court, the parties entered into a stipulation for the entry of judgment against the plaintiffs. Pursuant to the stipulation, the parties then requested the court to enter judgment, which the plaintiffs intended to appeal to the Federal Circuit.
Posner observed that, unless his claim construction ruling was reversed, the infringement claims were doomed, and that the plaintiffs did not want to spend money continuing to litigate in the district court. He further noted the high rate of reversal of claim construction rulings by the Federal Circuit, and the fact that the Federal Circuit entertained appeals from cases in this procedural posture.
He expressed concern, however, that no basis existed for appealing from a stipulated judgment of non-infringement under the federal civil rules. He referred to such an appeal as a “back-door method of interlocutory appeal.” By contrast, said Posner, a federal criminal rule, Rule 11(a)(2), allows a criminal defendant to enter a conditional plea of guilty, while reserving the right to have an appellate court review an adverse pretrial determination, and then withdraw the guilty plea if successful. No such procedure for appealing a “death knell” interlocutory order applied on the civil side. Allowing the appeal, moreover, could leave the final judgment rule provided in 28 U.S.C. § 1291 “in tatters.”
Here, the parties agreed that the stipulated judgment was equivalent to the grant of summary judgment in favor of the defendant. Posner took that concept a step further and cited authority for the proposition that a court can grant summary judgment even though neither party has moved for it, so long as the party against whom judgment is entered has had an opportunity to be heard.
Ultimately, Posner said that he preferred the summary judgment approach over a stipulated judgment. Since the plaintiffs conceded that they had no basis for opposing summary judgment, he therefore denied the motion for a stipulated judgment and granted summary judgment in favor of the defendants.
Recommended Citation: Don R. Sampen, As a Means to Appeal, District Court Grants Summary Judgment Over Stipulated Judgment,The Brief, (Nov. 13, 2014), http://applawyers-thebrief.blogspot.com/2014/11/as-means-to-appeal-district-court.html#more.