Lead Opinion
Opinion for the court filed by Circuit Judge GAJARSA.
Dissenting opinion filed by Circuit Judge SCHALL.
Solo Cup Company appeals from a post-trial order of the district court that dismissed for lack of jurisdiction its counterclaim for a declaration of unenforceability of a patent owned by Fort James Corporation (“Fort James”). Fort James Corp. v. Solo Cup Co., No. 99-C-0827 (E.D.Wis. Jan.15, 2003) (order dismissing counterclaim as moot). Solo Cup also appeals the court’s pre-trial evidentiary decision holding that an invention disclosure form was protected by attorney-client privilege. Fort James Corp. v. Solo Cup Co., No. 99-C-0827 (E.D.Wis. Nov.6, 2002) (order denying motion to compel). Because the district court erred in concluding that a post-trial covenant not to sue filed by Fort James divested it of jurisdiction to hear Solo Cup’s counterclaim, we reverse for further proceedings consistent with this opinion. We also reverse the court’s determination that the contested disclosure form is protected by attorney-client privilege.
I. BACKGROUND
In 1999, Fort James brought suit against Solo Cup alleging infringement of three patents related to disposable pressed paperboard containers (e.g., paper plates) and their methods of manufacture: U.S.
Solo Cup’s allegations of invalidity and unenforceability were directed at the 140 patent and grounded in Fort James’s conduct during the time period in which the patented invention was developed. The 140 patent claims a high rigidity paper plate and its method of manufacture, which the inventors discovered “by accident” in the course of evaluating production processes used by Fort James between 1980 and 1981. In August and September 1980, commercial production studies were conducted at Fort James’s plants in Fort Smith, Arkansas and Dar-lington, South Carolina. Both subject plants used die A-87, which produced plates with more rigidity than those Fort James manufactured on other dies. The inventors studied die A-87 and determined that it exerted greater pressure on the rim portion of the plate than other die sets, a discovery that resulted in the 140 patent. While Fort James was studying its commercial production methods, plates manufactured using die A-87 were sold to the public along with other paper plates. Based on this chronology, Solo Cup alleged that commercial sales of the invention claimed in the 140 patent occurred more than one year prior to the patent’s application date of April 13, 1982. Accordingly, Solo Cup claimed that the 140 patent was invalid based on the on-sale bar to patentability found in 35 U.S.C. § 102(b).
Solo Cup also claimed that Fort James had knowingly failed to disclose to the Patent and Trademark Office (“PTO”) information regarding its pre-critical date commercial activities. During prosecution, Fort James submitted to the PTO a written declaration signed by Patrick Wnek, one of the inventors named on the 140 patent, that described the process by which Fort James discovered the claimed invention. The Wnek Declaration that was submitted to the PTO indicated that “paper plates produced on the presses used in the test runs starting in August 1980 were batched together with other paрer plates produced at the plant, warehoused, and ultimately sold to customers.” In contrast to this broad statement regarding the initial commercial sales of the invention, an early draft of the Wnek Declaration included a specific date on which the claimed plates were sent to consumers. According to Solo Cup, Fort James’s deliberate deletion of the specific dates of its initial commercial sales constituted inequitable conduct such that the 140 Patent should be declared unenforceable and Solo Cup should be entitled to attorney fees pursuant to 35 U.S.C. § 285.
In the course of conducting discovery on its counterclaims, Solo Cup identified a Fort James document referred to as JR0028487. It is a product development engineering report dated February 2, 1982, which includes the stаtement “[ljegal counsel has advised a bar was not established during experimental trials at Dar-lington and Fort Smith.” Solo Cup requested the underlying opinion of counsel referenced in JR0028487 and all related documents. Because Fort James had produced the same document during previous litigation concerning the patents in suit, it determined that it could not claim that the
On December 8, 2000, Solo Cup filed a motion to compel production of a document that it believed properly fell within the scope of the Fort James waiver. Specifically, Solo Cup sought the production of Document 99 identified on Fort James’s Schedule of Withheld Documents as an “[finvention disclosure statement discussing invention of pressed paperboard plates to maximize plate rigidity.” Document 99, which was dated March 20, 1981-, was authored by Patrick Wnek and sent to Fort James’s in-house counsel. Solo Cup argued that Document 99 concerned the same subject matter as the other previously privileged documents produced by Fort James, namely the conception and commercialization of the claimеd invention, and therefore Fort James could not continue to assert that the document was privileged.
The district court reviewed Document 99 in camera to resolve Solo Cup’s motion to compel. On November 6, 2002, the court issued an order denying Solo Cup’s motion to compel reasoning that the scope of Fort James’s waiver should be construed narrowly by reference only to JR0028487, the document that constituted the initial waiver. In so holding, the district court rejected Solo Cup’s argument that the scope of Fort James’s waiver should .be defined by reference to all the previously privileged documents Fort James produced in ac-knowledgement of JR0028487. Accordingly, the court determined that the subject matter of Fort James’s waiver was “whether the work carried out by Fort James research personnel prior to June 1, 1981, specifically the sale of plates produced during test runs of die A-87 constituted a ‘public use’ or a ‘commercial offer of sale’ under 35 U.S.C. § 102(b).” After examining Document 99, the court found that it “does not contain any information concerning” the bars to patentability found in § 102(b). The court expressly found that “[t]he document contains dates surrounding the conception of the invention and a description of it,” but that “[t]he spaces on the form that specifically ask for information concerning the dates on which the invention was ‘first offered for sale in commerce’ have been left blank.” Based on its narrow definition of the scope of Fort James’s waiver, the court refused to compel Fort James to produce Document 99.
Approximately one month before trial, Fort James filed a motion in limine to preclude Solo Cup from presenting evidence to the jury on inequitable conduct and unclean hands, the issues underlying Solo Cup’s unenforceability counterclaim and its request for attorney fees pursuant to 35 U.S.C. § 285. Because the issues were to be tried to the bench and out of concern that Fort James would be prejudiced by Solo Cup’s “parade of horribles” before the jury, the district court granted Fort James’s motion and effectively bifurcated the trial.
A ten-day jury trial was held in November 2002. . After the close of evidence, but before the case was submitted to the jury, Solo Cup filed several written motions for judgment as. a matter of law, including a motion for judgment as a matter of law on patent invalidity. The district court deferred ruling on Solo Cup’s JMOL motions
Immediately after the jury was dismissed, Solo Cup asked the court to schedule a hearing on the issues bifurcated from the jury trial. Fort James opposed Solo Cup’s request on the ground that the jury verdict negated the controversy underlying the counterclaim of unenforceability. The parties submitted briefs regarding whether the district court had jurisdiction to hear Solo Cup’s counterclaim and claim for attorney fees. As an exhibit to its post-trial brief, Fort James attached a declaration of its general counsel stating that Fort James covenanted not to sue Solo Cup on the three patents originally at issue and that it would not seek to overturn the jury’s verdict (the “Post-Verdict Covenant”). On January 16, 2003, the district court dismissed as moot Solo Cup’s unenforceability counterclaim on the ground that therе was no outstanding case or controversy between the parties in light of the Post-Verdict Covenant.
On June 26, 2003, Solo Cup filed a pleading entitled “Motion to Withdraw Certain Pending Motions for Judgment as a Matter of Law” (“Motion to Withdraw”). The Motion to Withdraw referenced by name and docket number the five JMOL motions filed by Solo Cup on November 25, 2002, none of which had been resolved by the district court. Solo Cup specifically withdrew four of its motions, but maintained and requested consideration of its motion for judgment as a matter of law regarding the invalidity of the ’140 patent. Fort James responded by arguing that the Motion to Withdraw was untimely because it was not filed within ten days of the entry of judgment as required by Federal Rule of Civil Procedure (“FRCP”) 50(b). Fort James argued in the alternative that the Motion to Withdraw was moot and the court lacked jurisdiction to heаr it because there was no longer a justiciable controversy between the parties. On March 26, 2004, the district court reiterated the reasoning of its January 2003 Order and denied as moot the Motion to Withdraw. Fort James Corp. v. Solo Cup Co., No. 99-C-0827 (E.D.Wis. Mar.26, 2004) (order dismissing motion for JMOL). Final judgment in the case was entered on March 30, 2004.
Solo Cup filed its Notice of Appeal on April 29, 2004, challenging the district court’s dismissal of its unenforceability counterclaim and its request for attorney fees as well as the court’s failure to compel production of Document 99. Fort James then filed a motion to dismiss Solo Cup’s appeal on the ground that it was untimely filed. In support of its motion, Fort James argued that final judgment in this case was entered on June 16, 2003, pursuant to FRCP 58(b)(2). FRCP 58(b)(2) provides that judgment is entered upon the earlier of the filing of a separate document in the docket or “150 days frоm entry in the civil docket.” According to Fort James, the court’s January 16, 2003 Order dismissing Solo Cup’s counterclaim finally resolved all issues in the case and therefore acted as a judgment. Because no separate document was entered on the docket, Fort James asserted that final judgment was entered by operation of law on June 16, 2003, 150 days from the entry of the January 16, 2003 Order. Under this theory, Solo Cup was required to file its notice of appeal by July 15, 2003, which it failed to do.
On July 15, 2004, Fort James’s motion to dismiss was denied by a single judge of this court. Fort James’s argument was rejected on the ground that Solo Cup had timely renewed its motion for judgment as
II. DISCUSSION
A. Standard of Review
[1,2] A district court’s determination of whether an actual controversy exists to support jurisdiction is a question of law subject to plenary appellate review. BP Chems. Ltd. v. Union Carbide Corp.,
This court applies the law of the regional circuit, here the Seventh Circuit, with respect to questions of attorney-client privilege and waiver of attorney-client privilege. GFI, Inc. v. Franklin Corp.,
B. Jurisdiction of Solo Cup’s Appeal
Fort James reasserts its claim previously resolved by the order of a single judge of this court, namely that Solo Cup’s notice of appeal was not timely filed. As an initial matter, we note that Fort James should properly have renewed its jurisdictional challenge by filing a motion to reconsider the single judge’s order within fourteen days of its issuance as required by Federal Circuit Rule 21(1). Fort James’s failure to comply with Rule 27(l) is not fatal, however, because this court has held that the merits panel is not bound by the action of a single judge. TypeRight Keyboard Corp. v. Microsoft Corp.,
Fort James argues that its motion to dismiss was improperly denied because Solo Cup’s purported Rule 50(b) motion was legally inadequate to toll the appeal deadline. Fort James claims that the Mo
Because the sufficiency of post-judgment motions is a procedural matter not unique to patent law, the law of the Seventh Circuit sets the standard by which we judge the adequacy of Solo Cup’s Motion to Withdraw. Registration Control Sys., Inc. v. Compusystems, Inc., 922 F.2d 805, 807 (Fed.Cir.1990). FRCP 7(b)(1) requires that motions “shall state with particularity the grounds therefor.” The Seventh Circuit has determined that the rule’s standard for particularity means “reasonable specification.” Martinez v. Trainor,
Here, there is no question that Solo Cup’s Motion to Withdraw&emdash;by itself—did not explain the grounds for its renewed motion for JMOL. Instead, Solo Cup specifically referenced its pending “Motion for Judgment As a Matter of Law That Claim 1 of U.S. Patent No. 4,609,140 is Invalid Under 35 U.S.C. § 102(b)” and requested “consideration of the foregoing pending motion (Court’s Docket No. 374).” The motion that Solo Cup cited by name and docket number included five pages of factual and legal arguments in support of Solo Cup’s claim for JMOL. When the Motion to Withdraw is read in conjunction with the document specifically referenced therein, there is no question regarding the grounds for the relief demanded. In such circumstances, it is appropriate to consider previously filed documents outside the four corners of the motion in determining whether the particularity requirement of FRCP 7 has been satisfied. Lac du Flambeau Band of Lake Superior Chippewa Indians v. Wis.,
C. Jurisdiction of the District Court to Hear Solo Cup’s Counterclaim
The district court dismissed Solo Cup’s counterclaim for a declaration that the T40 patent is unenforceable on the ground that the Post-Verdict Covenant mooted the controversy between the par
In Super Sack, this court stated that “a patentee defending against an action for a declaratory judgment of invalidity can divest the trial court of jurisdiction over the case by filing a covenant not to assert the patent at issue against the putative in-fringer with respect to any of its past, • present, or future acts.” Id. at 1058. The rationale applied by the court in Super Sack was that the patentee’s covenant not to sue resolved the actual controversy between the parties, ie., the question of infringement of the subject patent, such that the court no longer had Article III jurisdiction to hear a declaratory judgment action regarding the validity or enforceability of that patent. Id.; Spectronics Corp. v. H.B. Fuller Co.,
The district court’s literal application of the holding of Super Sack fails to comprehend the unique procedural posture of the instant case. In Super Sack and its progeny, the patentee’s covenant not to sue was filed prior to consideration or resolution of the underlying infringement claim. In such circumstances, the promise not to sue obviated any reasonable apprehension that the declaratory judgment plaintiff might have of being held liable for its acts of infringement. Super Sack,
As the Supreme Court has explained, a case or controversy adequate to support jurisdiction of a declaratory judgment counterclaim necessarily exists if a party has actually been charged with infringement of a patent. Cardinal Chem. Co. v. Morton Int’l, Inc.,
D. Scope of Fort James’s Privilege Waiver
Solo Cup argues that the district court committed clear error in determining that Document 99, an invention disclosure statement, was not within the ambit of the privilege waiver created by Fort James’s production of JR0028487. Solo Cup ascribes error to the district court’s description of the subject matter of the waiver by reference only to JR0028487. Solo Cup also asserts that even applying the district court’s limited definition of Fort James’s waiver, Document 99 properly falls within that scope and must be produced.
The widely applied standard for determining the scope of a waiver of attorney-client privilege is that the waiver applies to all other communications relating to the same subject matter. Genentech, Inc. v. U.S. Int’l Trade Comm’n,
The district court here determined that the scope of Fort James’s waiver should be defined by reference only to its initial disclosure of JR0028487. Because the extent of the privileged material contained in JR0028487 was a two-line reference to counsel’s conclusion that Fort James’s pre-filing activities did not raise a bar to pat-entability, the court concluded that only communications specifically referencing commercial sales or public disclosures of the invention were within the subject matter of the waiver. In reaching this conclusion, the court expressly refused to consider the content of the material Fort James voluntarily produced in acknowledgment of its initial waiver. The court excluded the additional doсuments from its definition in order to avoid exponentially expanding the scope of the waiver through a never-ending “snowball effect.” The formerly withheld documents produced by Fort James directly addressed the conception and reduction to practice of the claimed invention as well as Fort James’s pre-critical date activities.
The district court committed two errors in denying Solo Cup’s motion to compel production of Document 99. First, it failed to recognize the import of Fort James’s knowing disclosure of privileged documents to a third party, conduct which acts as a surrender of the privilege protection. Burden-Meeks v. Welch,
The impact of this initial error is minimal because the court properly defined the subject matter of the waiver as the application of the bars to patentability found in 35 U.S.C. § 102(b). Reversible error occurred, however, when the court determined that only documents containing information on Fort James’s cоmmercial activities were within the scope of that waiver.
The Supreme Court has articulated a two-prong test for determining whether § 102(b) bars patentability: 1) the product must be the subject of a commercial offer for sale; and 2) the invention must be ready for patenting. Pfaff v. Wells Elec. Inc.,
III. CONCLUSION
For the foregoing reasons, we reverse the district court’s determination that it did not have jurisdiction to hear Solo Cup’s counterclaim and its holding that Document 99 was not encompassed within Fort James’s waiver of the attorney-client privilege. We remand for further proceedings consistent with this opinion.
IV. COSTS
No costs.
REVERSED and REMANDED
Notes
. The '496 patent was dropped from the lawsuit prior to trial.
. Paragon Podiatry Lab., Inc. v. KLM Labs., Inc.,
. Fort James argues that Solo Cup failed to preserve its claim for attorney fees under § 285 by not raising the issue properly before the district court. This argument ignores the fact that Solo Cup expressly requested attorney fees as a remedy for its counterclaim and that the parties' pre-trial briefings identified as an issue for trial the question of whether Solo Cup was entitled to such an award pursuant to § 285. Section 285 grants the district court the power to award attorney fees in exceptional cases, but it places no procedural limitations on the court's ability to make such an award provided that it has jurisdiction over the case. Sun-Tek Indus., Inc. v. Kennedy Sky Lites, Inc.,
Dissenting Opinion
dissenting.
The court holds that the district court erred in ruling that Fort James’s covenant not to sue Solo Cup for patent infringement divested the court of subject matter jurisdiction over Solo Cup’s counterclaim for a declaration that the ’140 patent was unenforceable. In my view, however, Fort James’s covenant not to sue eliminated any live case or controversy between the parties and thereby rendered Solo Cup’s un-enforceability counterclaim moot. I thus would affirm the judgment of the district court. I therefore respectfully dissent.
I.
The Declaratory Judgment Act states that “any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration,” provided there exists “a case of actual controversy within its jurisdiction.” 28 U.S.C. § 2201(a) (2000). The statute requires a court to determine whether “there is a substantial controversy, between parties having adverse legal inter
[tjhere must be both (1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity-
BP Chems. Ltd. v. Union Carbide Corp.,
A party seeking a declaratory judgment bears the burden of establishing the existence of an actual controversy. Sierra Applied Scis. v. Advanced Energy Indus., Inc.,
In Super Sack, for example, Super Sack Manufacturing Corporation (“Super Sack”) sued Chase Packaging Corporation (“Chase”) for infringement of two of its patents.
On appeal, we affirmed the district court’s decision to dismiss the case for lack of jurisdiction. We reasoned that, in view of Super Sack’s covenant not to sue, “Chase can have no reasonable apprehension that it will face an infringement suit on the ’796 and ’652 patents with respect to past and present products,” and that Chase’s counterclaims therefore “fail[] to sаtisfy the first part of our two-part test of justiciability [of claims for declaratory
II.
In this case, I understand the court to recognize that, under the holding of Super Sack, “a patentee defending against an action for a declaratory judgment of invalidity can divest the trial court of jurisdiction over the case by filing a covenant not to assert the patent at issue against the putative infringer with respect to any of its past, present, or future acts.”
The court states that the Supreme Court decided in Cardinal Chemical Co. v. Morton International, Inc.,
III.
I agree with the court that “a case or controversy adequate to support jurisdiction of a declaratory judgment counterclaim necessarily exists if a party has actually been charged with infringement of a patent.” Cardinal Chem.,
The covenant was submitted by James F. Kelley, Executive Vice President and General Counsel of Georgia-Pacific Corporation (the entity that owns Fort James). Mr. Kelley stated:
I hereby deсlare that Fort James unconditionally covenants not to assert any claim of patent infringement against Solo Cup Company (“Solo”) under any claim of United States Patent Nos. 4,609,140 (“the 140 patent”), 4,606,496*1354 (“the ’496 patent”), and 4,721,499 (“the ’499 patent”) with respect to any product currently advertised, manufactured, marketed or sold by Solo, or any product which was advertised, manufactured or sold by Solo prior to December 13, 2002.
It is not disputed that Mr. Kelley had authority to speak for Fort James. Therefore, once Fort James issued the covenant, Solo Cup no longer faced the risk of liability for infringement of the ’140 patent based on past or present acts. That is to say, Solo Cup no longer faced the prospect of Fort James pursuing its original infringement claim' — through, say, an appeal to this court — or the risk of being sued for other present or past acts of perceived infringement. Under these circumstances, I do not see how Solo Cup’s counterclaim continues to satisfy the first prong of our jurisdictional test.
It is true that this ease differs from Super Sack in that Fort James did not issue its covenant until after the jury’s finding of non-infringement, but I do not think that fact creates or, rather, sustains, the controversy between the parties. That is because, while the timing of the covenant may seem unfair to Solo Cup, the fact remains that Solo Cup is no longer at risk of liability for infringement of the ’140 patent. Indeed, the situation in Super Sack actually presented more of a controversy than this case because, there, the defendant still faced the risk of infringement based on future activity, see Super Sack,
My view that there is no longer a live controversy in this case is also unaffected by the faсt that it was Fort James that requested the trial court bifurcate the un-enforceability claim from the infringement and invalidity claims. I acknowledge that it may seem unfair to allow a patentee to
In short, although an actual controversy may have existed at the time the jury issued its verdict of non-infringement, that controversy became moot when Fort James issued its covenant not to sue. Accordingly, I would affirm the judgment of the district court dismissing Solo Cup’s counterclaim seeking a declaratory judgment that the ’140 patent is unenforceable. I therefore respectfully dissent.
. As discussed, the actual holding of Super Sack was that a covenant not to sue for past or present acts of infringement is sufficient to divest the court of subject-matter jurisdiction.
. Claims for attorney’s fees are collateral to the underlying lawsuit for which the fees are sought. Budinich v. Becton Dickinson & Co.,
. This is not to say that Fort James’s overall litigation conduct could not be used by Solo Cup in trying to establish the existence of an "exceptional case” in a timely motion for attorney’s fees under 35 U.S.C. § 285. See Zucker,