02/05/14

August Tech. v. Camtek: No Jurisdiction Over Appeal of Contempt and Willfulness Findings After Remand and Before Final Judgment

Category: Civil Procedure 
 
 
 
By: Samuel Dillon, Contributor 
 
TitleAugust Tech. Corp. v. Camtek, LTD., No. 2012-1681, 2013-1023 (Fed. Cir. Nov. 18, 2013) (non-precedential).
Issues"On appeal, Camtek argues that the district court erred when it: (1) awarded $645,946 in sanctions for civil contempt; and (2) found that a post-trial sale constituted willful infringement." August Tech. at *8. "The threshold issue before us is whether we have jurisdiction over this appeal." Id.
Holdings
[1] Because the district court’s civil contempt order is not a final appealable order, we lack jurisdiction to consider this appeal.
August Tech. at *8.
[2] Likewise, we do not have jurisdiction to consider the court’s willfulness finding because: (1) as the prevailing party, Camtek lacks standing to appeal the court’s decision denying enhanced damages; and (2) there is no final judgment on willfulness.
Id.
 
Procedural History
First Appeal"August Technology Corporation and Rudolph Technologies, Inc. (collectively, “August Tech”) filed suit against Camtek, Ltd. (“Camtek”) in the United States District Court for the District of Minnesota, alleging that Camtek infringed U.S. Patent No. 6,826,298 (“the ’298 patent”). . . . A jury found that Camtek’s Falcon device literally infringed the asserted claims of the ’298 patent. The district court entered judgment and a permanent injunction preventing Camtek from selling the Falcon machines in the United States. Camtek appealed the district court’s final judgment to this court. On appeal, we vacated the judgment of infringement and the permanent injunction, and remanded for further proceedings. August Tech. Corp. v. Camtek, Ltd., 655 F.3d 1278, 1282-86 (Fed. Cir. 2011) (“Original Appeal”)." August Tech. at *2. This "litigation between the parties is ongoing." Id. at *7.
Second AppealAfter the jury’s verdict, but before the injunction was in place, Camtek sold an infringing Falcon machine. August Tech moved for enhanced damages on grounds that Camtek’s post-verdict infringement was willful. Although the district court [(2)] found willfulness, it denied August Tech’s request for enhanced damages. . . . While the original appeal was pending, Camtek entered into negotiations that led to two additional sales of Falcon machines. The district court [(1)] held Camtek in contempt for violating the injunction and ordered it to pay [sanctions that were later reduced by half] . . . Camtek appeals from the district court’s judgment: (1) granting-in-part and denying-in-part Camtek’s Rule 60 motion for relief from the contempt order and sanctions award; and (2) denying Camtek’s Rule 59 and 60 motion for relief from the order finding willfulness.
Id. at *2-3.
 
 
Legal Reasoning (Moore, Linn, O'Malley)
[1] Contempt Order is not a Final Appealable Order
Background 28 U.S.C. § 1291 . . . grants courts of appeals jurisdiction over appeals from “final decisions of the district courts” and provides that this court “shall be limited to the jurisdiction described in sections 1292(c) and (d) and 1295 of this title.” Under § 1295(a)(1), we have exclusive jurisdiction over appeals “from a final decision of the district courts” in patent disputes. § 1295(a)(1) (emphasis added).
August Tech. at *8-9.
The Contempt Order is Civil, Not Criminal
"[A] civil contempt order issued during 'the progress of the case . . . is regarded as interlocutory and to be reviewed only upon appeal from a final decree in the case.' In contrast, 'an adjudication of criminal contempt is a final order appealable prior to final judgment.'" Id. at *9-10 (citations omitted). "[A] contempt sanction is considered civil if it 'is remedial, and for the benefit of the complainant. But if it is for criminal contempt the sentence is punitive, to vindicate the authority of the court.'" Id. at *10 (citation omitted).
"On this record, we conclude that the contempt order here is civil . . . [because the] court ordered Camtek to pay $645,946 'to compensate [August Tech] for the profits they lost due to Camtek’s violation of the Court’s injunction.'" Id. at *11 (citation omitted). "The sanctions awarded are payable directly to August Tech—not the court—and are calibrated to August Tech’s actual lost profits for the sales that violated the injunction. Both of these facts support our conclusion that the fine imposed is civil, not criminal. . . . Accordingly, the district court's contempt order is not subject to an immediate appeal." Id. at *11-12.
There is No Final Judgment on the Merits
"As noted, § 1295(a)(1) provides that we have jurisdiction only over appeals from 'final decision[s] of the district courts.'" Id. at *12. "A district court’s 'judgment' or 'decision' is final where 'it ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'” Id. at *13.
Although the district court’s August 2009 judgment was final, that judgment was vacated on appeal and the case was remanded for further proceedings. There is thus no final judgment in this case as to which an appeal under § 1295 could be filed. . . . And, because this litigation is ongoing in the district court, Camtek’s reliance on the fact that the district court’s August 30, 2012 order is entitled “Judgment in a Civil Case” is misplaced. The mere fact that it is captioned as a “judgment” does not transform an otherwise interlocutory order into a final judgment for purposes of appeal.
Id. at *14 (footnote omitted).
Rule 54(b) is Inapplicable"Rule 54(b) states that a district court may 'direct entry of final judgment as to one or more but fewer than all the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.'" Id. at *15-16. "First, there is no evidence that either party asked the district court to certify its August 30, 2012 judgment for immediate appeal pursuant to Rule 54(b). And, because the court’s contempt order does not dispose of any claims in this case, the requirements for certification under Rule 54(b) are not satisfied." Id. at *16-17.
[2] Camtek Lacks Standing to Appeal Decision on Willfulness
Prevailing Party Lacks Standing to Appeal
“A party that is not adversely affected by a judgment lacks standing to appeal.” As such, a prevailing party generally lacks standing to appeal from a judgment in its favor. Where the appellant lacks standing, we lack jurisdiction to hear the appeal.
August Tech. at *18 (citations omitted).
[T]he district court found that Camtek’s post-verdict infringement was willful, but denied August Tech’s request for enhanced damages. Camtek was, therefore, the prevailing party. Although Camtek speculates that the willfulness finding will damage its business reputation, we agree with the district court that such speculation is insufficient to demonstrate injury in fact.
Id. at *18.
No Final Judgment on WillfulnessWe also lack jurisdiction for the separate reason that there is no final judgment on willfulness. Although Camtek argues in its reply brief that we have jurisdiction to review the willfulness finding under Rule 54(b), the requirements for certification under that rule are not satisfied. Specifically, the district court’s order denying enhanced damages is not a final resolution of any claims in this case. As such, we do not have jurisdiction to consider the district court’s non-final willfulness finding.
Id. at *19. (citations omitted).
Conclusion
“For the foregoing reasons, we lack jurisdiction to hear this appeal at this stage in the proceedings. Accordingly, we are required to dismiss it.”
August Tech. at *19 (citations omitted).
 
 
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