Princeton Digital Image Corp. v. Office Depot Inc. et al.

Docket No. 2017-2597 (many others)

January 22, 2019

Brief summary: FC panel concluded the DC’s judgment was not final and that it therefore lacked jurisdiction.

Summary: Princeton (PDIC) licensed US 4,813,056 to Adobe with the promise “not to sue Adobe or Adobe’s customer’s for claims arising ‘in whole or in part owing to an Adobe Licensed Product’” but later “sued numerous customers of Adobe, alleging that the encoding of JPEG images on customers’ websites infringed claims of the ‘056 patent.” The DC then granted Adobe’s motion “to intervene to defend nine of its customers”, arguing “that its customers were using Adobe products to display images on their websites, which was covered by PDIC’s license to Adobe.” Adobe also filed a complaint against PDIC for breaching the license agreement, and then PDIC dismissed each of the infringement actions against defendants for which Adobe intervened. Adobe’s motion for attorney’s fees under § 285 and sanctions under Rule 11 was denied by the DC as it “concluded that it ‘cannot determine at this time whether PDIC or Adobe is the prevailing party’” but denied its request under the assumption that Adobe was the prevailing party finding the case to be “exceptional” but not “so exceptional”. The DC also “held that Adobe could only collect ‘defense’ fees” (those it “incurred in defending [its customers]”), and was awarded some of these fees. Adobe appealed the DC’s decision, as did PDIC with respect to the monetary sanctions. Adobe argued the FC has “jurisdiction under 28 U.S.C. § 1295 because this is an appeal ‘from a final decision of a” DC (Pause Tech., FC 2005). But the FC panel found the DC’s “damages rulings were not dispositive, as is required under Microsoft” (US 2017, “a voluntary dismissal does not constitute a final judgment where the [DC’s] ruling has not foreclosed the plaintiff’s ability to prove the required elements of the cause of action”). The FC panel concluded that “Adobe could still have proceeded to trial on its breach claim, and was required to do so to obtain a final decision on the merits that could be appealed”, explaining “that the fact that continuing litigation could be economically imprudent does not create a ‘final decision’” (Coopers & Lybrand, US 1978) (“an interim order denying fees is generally not appealable” and “orders imposing or denying sanctions” are generally “separately appealable only if entered after a final judgment on the merits” (Sanders, FC 1993)). Thus, the FC panel concluded the DC’s judgment was not final and that it therefore lacked jurisdiction.

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