Message: Granting motions to amend or correct judgement & stay actions pending Appeal !
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
IN RE: E.DIGITAL CASES Case nos.
12cv2698-DMS (WVG)
12cv2899-DMS (WVG)
13cv0023-DMS (WVG)
13cv0781-DMS (WVG)
13cv0782-DMS (WVG)
ORDER GRANTING MOTIONS
TO AMEND OR CORRECT
JUDGMENTS AND STAY
ACTIONS PENDING APPEAL
Pending before the Court are motions to amend or correct stipulated partial judgments under
Federal Rule of Civil Procedure 54(b) and stay actions pending appeal, filed by Apple, Inc. in
e.Digital
Corporation (“e.Digital”) v. Apple, Inc.,
case no. 13cv785 (“Apple”). Although Apple was dismissed
by stipulation of the parties on December 19, 2013, the motions remain pending because of joinders
filed in related
e.Digital cases. Defendants in e.Digital v. Woodman Labs, Inc. dba GoPro et al., case
no. 12cv2899 (“
GoPro”), and e.Digital v. Fujifilm Corporation et al., 13cv112 (“Fujifilm”), joined in
Apple’s motion to amend or correct judgment.
Fujifilm has since been dismissed, leaving GoPro to
pursue relief under Rule 54(b). GoPro and Defendants in
e.Digital v. SanDisk Corporation, case no.
12cv2698 (“
SanDisk”), e.Digital v. Philips Electronics North America Corporation, case no. 12cv2701
(“
Philips”), e.Digital v. MachSpeed Technologies, LLC et al., case no. 12cv2877 (“MachSpeed”),
e.Digital v. Pantech Wireless, Inc. et al.
, case no. 13cv23 (“Pantech”), e.Digital v. Research in Motion
Limited dba Blackberry et al.
, case no. 13cv781 (“Blackberry”), and e.Digital v. ZTE Corporation et
al.
, case no. 13cv782 (“ZTE”), also joined in Apple’s motion to stay.1 Plaintiff e.Digital filed an
opposition, and Defendants replied. Plaintiff filed an objection to Defendants’ reply in support of the
motion to amend or correct judgment, to which Defendants responded. On December 20, 2013, the
matter came on for a telephonic hearing. Anton Handal argued on behalf of Plaintiff and Michael
Sacksteder, counsel for GoPro, argued on behalf of all Defendants. For the reasons which follow, the
motions are granted.
In February 2010, Plaintiff e.Digital filed a patent infringement action in the United States
District Court for the District of Colorado against 28 defendants, including Pentax of America, Inc.
(
e.Digital v. Pentax of Am., case no. 09-cv-2578-MSK-MJW) (“Pentax”) for infringing three patents,
including U.S. Patent No. 5,491,774 (‘774 patent), which is at issue in the actions pending in this Court.
After the
Pentax court issued a claim construction order construing the phrase “flash memory module
which operates as sole memory of the received processed sound electrical signals,” e.Digital settled and
voluntarily dismissed its case against each defendant.
The same claim limitation is at issue in the cases pending in this Court. In June 2013, all
e.Digital
Defendants jointly filed a motion to collaterally estop Plaintiff from relitigating construction
of the same phrase in the ‘774 patent and in a related patent, U.S. Patent No. 5,839,108 (‘108 patent).
Defendants’ motion was granted on August 21, 2013. Thereafter, many of the parties in these cases
settled the claims and counterclaims at issue in the ‘774 and ‘108 patents by stipulating to a partial
judgment in favor of each Defendant on the infringement claims, while preserving Plaintiff’s right to
appeal the collateral estoppel order and re-litigate the ‘774 and ‘108 patent claims if the order is
reversed. The parties also stipulated that the partial judgments were not final, thus precluding appeal
until entry of final judgment. Notably, however, Plaintiff entered into a stipulated judgment in
e.Digital
v. Futurewei Technologies, Inc. dba Huawei Technologies (USA)
(“Huawei”), case no. 13cv783,
MachSpeed and Philips have been voluntarily dismissed
wherein the parties agreed the judgment was
final and disposed of all claims. Plaintiff also preserved
its right to appeal the collateral estoppel order in that case, and filed a notice of appeal the next day.
2
GoPro, and the other Defendants, now wish to participate in the appeal of the collateral estoppel
order in
Huawei. While GoPro is the sole remaining moving party on this issue, all Defendants are
aligned and maintained a uniform stance on the issue at the hearing. They argue the appeal in
Huawei
may well affect other
e.Digital cases and should not be left to Huawei alone.3 Accordingly, GoPro
moves to amend its stipulated partial judgment to include a Rule 54(b) certification, making it final for
purposes of appeal.
Originally, Apple’s motion was styled as a motion to alter or amend judgment under Rule 59(e),
but Rule 59(e) applies only to final judgments.
See United States v. Martin, 226 F.3d 1042, 1048 (9th
Cir. 2000).
4 The stipulated judgments here are expressly not final judgments. Thus, to the extent the
motion is based on Rule 59(e), it is denied.
However, GoPro’s notice of joinder is alternatively based on Rule 54(b), which states in
pertinent part:
any order or other decision, however designated, that adjudicates fewer than all the
claims or the rights and liabilities of fewer than all the parties does not end the action as
to any of the claims or parties and may be revised at any time before the entry of a
judgment adjudicating all the claims and parties' rights and liabilities.
2
With the notice of appeal, this Court was divested of jurisdiction over Huawei. See, e.g.,
Griggs v. Provident Consumer Discount Co.
, 459 U.S. 56, 58 (1982) (“The filing of a notice of appeal
is an event of jurisdictional significance -- it confers jurisdiction on the court of appeals and divests the
district court of its control over those aspects of the case involved in the appeal.”).
3
Defendants point to Allflex USA, Inc. v. Avid Identification Sys., Inc., 704 F.3d 1362
(Fed. Cir. 2013), and note the
Huawei settlement and appeal may present “the highly unsatisfactory
situation in which the court [of appeals] finds itself with a one-party appeal, where there is no
adversarial presentation,”
id. at 1369, but any resulting decision may have consequences for the related
cases pending in the lower court. Although
Allflex addressed mootness in the context of appellate
jurisdiction, and not Rule 54(b) certification, it nevertheless underscores Defendants’ concern. As in
Huawei
, the parties in Allflex entered into a stipulated judgment of disputed claims and dismissed the
remaining claims with prejudice. The defendant made a settlement payment to the plaintiff, with a small
portion being refundable, if the defendant prevailed on appeal. The defendant appealed, but the plaintiff
did not make an appearance because it no longer had a sufficient interest in defending the district court’s
orders. Although the precise terms of the
Huawei settlement are unknown, Defendants argue the terms
may be such that Huawei may be unmotivated to defend the collateral estoppel order on appeal.
4
Regional circuit law applies to procedural matters not within the Federal Circuit's
exclusive jurisdiction.
Ajinmoto Co., Inc. v. Archer-Daniels-Midland Co., 228 F.3d 1338, 1350 (Fed.
Cir. 2000) (Rule 59(e) motion).
nder this provision, “the court ha[s] inherent jurisdiction to modify, alter, or revoke” non-final orders.
Martin
, 226 F.3d at 1049. “The authority of district courts to reconsider their own orders before they
become final, absent some applicable rule or statute to the contrary, allows them to correct not only
simple mistakes, but also decisions based on shifting precedent, rather than waiting for the
time-consuming, costly process of appeal.”
Id.
The court’s exercise of discretion under Rule 54(b) is generally guided by the law-of-the case
doctrine.
See 18B C.A. Wright et al., Fed. Practice and Procedure, Jurisdiction and Related Matters §
4478.1 (2nd ed).
5 The relevant factors in the exercise of such discretion include whether: “(1) the first
decision was clearly erroneous; (2) an intervening change in the law occurred; (3) the evidence on
remand was substantially different; (4) other changed circumstances exist; or (5) a manifest injustice
would otherwise result.”
See United States v. Lummi Indian Tribe, 235 F.3d 443, 452-53 (9th Cir.
2000). As discussed more fully below in the context of Rule 54(b) certification, the circumstances in
the
e.Digital cases changed with the appeal in Huawei, which substantially affected all Defendants in
the related cases, as well as the efficiency of the proceedings in this Court and the Court of Appeals.
Accordingly, the stipulated partial judgments can be amended if Rule 54(b) certification is appropriate.
The Court thus considers whether GoPro has met its burden for the substantive relief it seeks,
i.e.
, certification of the partial judgments for appeal under Rule 54(b). The pertinent portion of Rule
54(b) upon which GoPro relies, provides as follows:
When an action presents more than one claim for relief ... or when multiple parties are
involved, the court may direct entry of a final judgment as to one or more, but fewer than
all, claims or parties only if the court expressly determines that there is no just reason for
delay.
Because fewer than all claims were adjudicated in
GoPro, an appeal cannot be taken in the
absence of certification under Rule 54(b). Additionally, because
GoPro was consolidated with all the
other
e.Digital cases, Rule 54(b) certification may be required as to all of the cases which are still
pending in this Court before an appeal can be taken from any one of the cases.
See Spraytex, Inc. v.
5
This case does not present a typical law-of-the-case scenario, as there have been no
intervening appeals. Nevertheless, the doctrine is relevant to the exercise of discretion here. Although
“[t]he balance that must be struck between stability and reaching the right decision is different than the
balance to be struck when successive appeals are taken in the same case, ... [d]iscretion is built into lawof-
the case doctrine, [with] the measure of discretion [being] different in these different settings.”
Id.
DJS&T & Homax Corporation
, 96 F.3d 1377 (Fed. Cir. 1996).6 These issues – whether certification
is appropriate, and, if so, whether certification of all cases still pending is required – are addressed in
turn.
The power to enter a partial final judgment under Rule 54(b) is "to be exercised in light of
judicial administrative interests as well as the equities involved, and giving due weight to the historic
federal policy against piecemeal appeals."
Reiter v. Cooper, 507 U.S. 258, 265 (1993)(citations and
quotation marks omitted). Rule 54(b) applies when the partial judgment is final with at least one of the
claims, and the Court makes a finding that there is no just reason for delay.
Curtiss-Wright Corp. v.
Gen. Elec. Co.
, 446 U.S. 1, 7 (1980).
"A judgment is not final for Rule 54(b) purposes unless it is ‘
an ultimate disposition of an
individual claim entered in the course of a multiple claims action.'"
W.L. Gore & Assoc., Inc. v. Int'l
Med. Prosthetics Research Assoc., Inc.
, 975 F.2d 858, 861-62 (Fed. Cir. 1992), quoting Sears, Roebuck
& Co. v. Mackey
, 351 U.S. 427, 436 (1956) (emphasis in original). Upon review of the stipulated partial
judgments in the cases still pending before the Court, it appears the cases are substantively alike for
purposes of determining finality. In each instance, the parties agreed: (1) to enter a partial judgment in
favor of each Defendant on Plaintiff’s infringement claims regarding the ‘774 and ‘108 patents; and (2)
the Defendant in each of these cases either dismissed the counterclaims regarding the patent(s) at issue,
or a partial judgment was entered on such counterclaims in favor of the Defendant. Accordingly, the
stipulated partial judgments fully resolved all claims regarding the ‘774 and ‘108 patents, thus meeting
the finality requirement of Rule 54(b).
In deciding whether there is no just reason for delay, courts consider "such factors as whether
the claims under review were separable from the others remaining to be adjudicated and whether the
nature of the claims already determined was such that no appellate court would have to decide the same
issues more than once even if there were subsequent appeals."
Curtiss-Wright, 446 U.S. at 8. Here,
6
The Spraytex case was raised for the first time in Defendants’ reply, thus depriving
Plaintiff of an opportunity to file a responsive brief. While new issues should not be raised for the first
time in reply briefs,
see Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007), Plaintiff addressed the
issue at oral argument and declined to file a supplemental brief. Given the relevance of the issue and
Plaintiff’s opportunity to address the matter at the hearing, the Court considers the argument at this time.
- 5 -
Plaintiff’s infringement claims with respect to two other patents, U.S. Patent Nos. 5,742,737 and
5,842,170 (‘737 patent and ‘170 patent, respectively) remain pending, as do the counterclaims regarding
those patents. In addition, any related motions for attorneys’ fees have been reserved until the end of
the litigation. But, as discussed below, these claims and reservation of rights regarding attorneys’ fees
do not preclude certification.
While the ‘737 patent purports to be a continuation of the ‘774 patent and the ‘170 patent
purports to trace its origins to the ‘774 patent, and thus the ‘737 and ‘170 patents may be related to the
‘774 patent for claim construction purposes, the potential overlap does not preclude certification. This
is because the issue of collateral estoppel – the sole issue to be addressed on the requested certified
appeal – is not relevant to construing the claims of the ‘737 and ‘170 patents, and thus the same issue
will not be appealed more than once. Furthermore, the applicability of collateral estoppel will not be
considered in ruling on the attorneys’ fee motions. Accordingly, the issue on any certified appeal will
be distinct from those remaining in this Court.
Next, the Court considers whether Rule 54(b) certification is required as to all cases still pending
in this Court. When final judgment is entered in fewer than all consolidated cases, Rule 54(b)
certification is required before any finally adjudicated case can be appealed, because consolidation
merges all consolidated cases into one.
Spraytex, 96 F.3d 1377. The same rule applies when, as here,
cases are consolidated for limited purposes.
Boston Edison Co. v. United States, 299 Fed. Appx. 956
(Fed. Cir. 2008). As noted by Plaintiff at oral argument,
Spraytex and Boston Edison predate the
America Invents Act ("AIA"), 35 U.S.C. § 299, which limits consolidation of patent infringement cases
for
trial. But the cases here were consolidated pursuant to section 299 for the limited purpose of
conducting discovery and claim construction, not trial. (
See May 30, 2013 Order After Case
Management Conference at 2.) Neither side cited, and the Court is not aware of, any binding authority
discussing
Spraytex or Boston Edison after passage of the AIA.7 However, applying Spraytex to cases
consolidated for limited purposes, as was done in
Boston Edison, is consistent with the AIA and the
7
Spraytex has recently been applied by a district court in a multi-district patent case
without discussion of the AIA.
See In re Papst Licensing GmbH & Co. KG Litig., __ F. Supp. 2d __,
2013 WL 6017788 (D. D.C. Nov. 14, 2013).
policy of Rule 54(b) to avoid piecemeal review.
See Spraytex, 93 F.3d at 1382; see also Reiter, 507
U.S. at 265. Thus, to the extent cases are consolidated, this Court finds that
Spraytex requires Rule
54(b) certification unless a final judgment has been entered in each case. Only then can a consolidated
case be appealed on the matters for which it was consolidated.
Here, not all Defendants whose cases are still pending in this Court and who entered into partial
judgments, have joined the motion to amend the partial judgments to certify them as final.
8 These
Defendants are referred to herein as “Other Potential Appellees.” As mentioned, GoPro is the only
remaining Defendant that has joined in the motion to amend judgment. Certification of that case alone
would allow for its immediate appeal but leave open the possibility of appeal against the Other Potential
Appellees at a later time, thus permitting multiple appeals of the same issue -- an outcome Rule 54(b)
is intended to prevent.
This defect could have been avoided if the Other Potential Appellees had joined in the motion
to amend the partial judgments, but they did not. In the absence of their joinder, the Court considers
sua sponte
the issue whether certification should apply to them. See 10 C.A. Wright et al., Federal
Practice and Procedure, Federal Rules of Civil Procedure § 2660 (3d ed. 2013) (“In an appropriate case,
the district court may consider the question [of Rule 54(b) certification]
sua sponte.”). No party has
presented any reason why appeal of the collateral estoppel order in the cases against the Other Potential
Appellees should be treated differently or proceed at a later time than the cases filed against GoPro or
Huawei. Accordingly, to the extent certification is appropriate with respect to GoPro, it is also
appropriate with respect to the Other Potential Appellees.
As the
Huawei case is already on appeal, certifying the balance of cases ensures that the
collateral estoppel order will be appealed only once. Furthermore, there is no apparent reason why
appeal of the collateral estoppel order should not be taken before claim construction of the ‘737 and
‘170 patents. The appellate decision may narrow claim construction issues in light of the alleged
relationship between the ‘774 patent on one hand, and the ‘737 and ‘170 patents on the other hand. If
8
The cases include Pantech, Blackberry and ZTE. SanDisk also did not join, but
apparently this was because the sole claims at issue pertaining to the ‘774 patent were voluntarily
dismissed after entry of the stipulated partial judgment. SanDisk would therefore not be a party to any
appeal of the collateral estoppel order.
- 7
the collateral estoppel order is reversed, the ‘774 and ‘108 patents can be efficiently construed together
with the ‘737 and ‘170 patents. Accordingly, the Court finds there is no just reason to delay entering
a partial final judgment as to all of the cases at issue.
Finally, the Court turns to the motion to stay further proceedings pending appeal.
[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for
itself, for counsel, and for litigants. How this can best be done calls for the exercise of
judgment, which must weigh competing interests and maintain an even balance.
Landis v. N. Am. Co.
, 299 U.S. 248, 254-55 (1936) (Cardozo, J.). A “stay is immoderate and hence
unlawful unless so framed at its inception that its force will be spent within reasonable limits, so far at
least as they are susceptible to prevision and description.”
Id. at 257; see also Cherokee Nation of Okla.
v. United States
, 124 F.3d 1413, 1416 (Fed. Cir. 1997) (quoting Landis).
Defendants request a stay in light of the
Huawei appeal. The request is based primarily on the
contention that the ‘737 and ‘170 patents are related to the ‘774 patent. They argue that staying further
proceedings with respect to the ‘737 and ‘170 patents would avoid having to undergo two cycles of
claim construction discovery, briefing and hearing, should the collateral estoppel order be reversed. As
is apparent from the May 30, 2013 Order After Case Management Conference, the Court initially
envisioned that all four patents would be construed together as a means of efficient case management.
A decision on appeal with respect to two of the patents likely will define the scope of claim
construction. As Plaintiff has not presented any persuasive argument demonstrating it would be
prejudiced by a stay of the proceedings, the motion is granted with respect to all
e.Digital cases pending
in this Court.
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For the foregoing reasons, Defendants’ motions to amend or correct stipulated partial judgments
and for stay pending appeal are granted as follows:
1. The Court finds there is no just reason for delay to enter final judgment in case nos.
12cv2899 (
GoPro), 13cv23 (Pantech), 13cv781 (Blackberry) and 13cv782 (ZTE) with respect to the
claims adjudicated in their respective stipulated partial judgments.
9
The stay includes SanDisk because an infringement claim and related counterclaims
remain pending with respect to the ‘737 patent.
- 8
2. The stipulated partial judgments in case nos. 12cv2899 (
GoPro), 13cv23 (Pantech),
13cv781 (
Blackberry) and 13cv782 (ZTE) are hereby amended by replacing the language that “this
Stipulated Partial Judgment of Non-Infringement is not final judgment pursuant to Federal Rule of Civil
Procedure 54(b),” or language to the same effect, with the following sentence, “For the reasons stated
in the Order Granting Motions to Amend or Correct Judgment and Staying Actions Pending Appeal, the
Court finds no just reason for delaying entry of final judgment. Accordingly, this Stipulated Partial
Judgment of Non-Infringement is final pursuant to Federal Rule of Civil Procedure 54(b).”
3. The Clerk is directed to enter final judgments in accordance with the stipulated partial
judgments entered in case nos. 12cv2899 (
GoPro), 13cv23 (Pantech), 13cv781 (Blackberry) and
13cv782 (
ZTE), and as provided herein.
4. All further proceedings in case nos. 12cv2698 (
SanDisk), 12cv2899 (GoPro), 13cv23
(
Pantech), 13cv781 (Blackberry) and 13cv782 (ZTE) are stayed pending appeal of case no. 13cv783
(
Huawei). If appeal is dismissed and if no other appeals from the partial final judgments are filed, the
parties shall jointly notify the Court no later than February 27, 2014.
IT IS SO ORDERED.
DATED: January 7, 2014
HON. DANA M. SABRAW
United States District Judge
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23 Recommendations
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