Friday, April 19, 2013

Lazare Kaplan prevails (mostly)

From the Lazare Kaplan case

Of the issues and outcome:

Lazare Kaplan International, Inc. (“Lazare Kaplan”)
appeals from the order of the United States District Court
for the Southern District of New York granting summary
judgment of invalidity of claims 1 and 7 of U.S. Patent
6,476,351 (the “’351 patent”) and granting a motion under
Federal Rule of Civil Procedure 60(b) filed by Photoscribe
Technologies, Inc. and the Gemological Institute of America
(collectively “Photoscribe”) seeking to vacate the
district court’s prior judgment finding the same claims not
invalid. Lazare Kaplan Int’l, Inc. v. Photoscribe Techs.,
Inc., No. 06 Civ. 4005 (TPG), 2012 WL 505742, at *14
(S.D.N.Y. Feb. 15, 2012) (“Lazare Kaplan IV”). Lazare
Kaplan requests that, if remanded, the case be reassigned
to a different judge. For the reasons set forth below, we
reverse the grant of relief under Rule 60(b), vacate the
finding of invalidity with instructions to reinstate the
original judgment of “not invalid,” and decline the request
to reassign

The technology:

Lazare Kaplan owns the ’351 patent, which claims
methods and systems for using lasers to make microinscriptions
on gemstones.

Past history:

We vacated both the grant of summary judgment of
no literal infringement and the jury verdict of noninfringement
under the doctrine of equivalents, as both
were based on the district court’s erroneous construction.
Id. at 1370. In addition, we explicitly remanded the issue
of infringement to the district court because we could not
“determine with any certainty that the accused machines
infringe the asserted claims under this new construction.”

The issue here:

Here, the issue is whether, on remand, a district court
may reopen a prior final judgment as to patent validity,
not appealed by either party, based on a claim construction
modified by this court.
Because this issue requires
consistent and uniform application by district courts when
handling patent cases, we resolve it as an issue of the law
of this court. Fiskars, 279 F.3d at 1381; Broyhill, 12 F.3d
at 1083. We find persuasive, however, certain decisions of
our sister circuits, particularly the Second Circuit, on
issues relevant to this appeal. Broyhill, 12 F.3d at 1083

A 1796 case is cited:

The Supreme Court has long recognized this
cross-appeal rule as “inveterate and certain,” Morley
Constr. Co v. Md. Cas. Co., 300 U.S. 185, 191 (1937), and
the rule’s application has been noted since the Court’s
earliest years, McDonough v. Dannery, 3 U.S. 188, 198
(1796). See Greenlaw v. United States, 554 U.S. 237, 244–
45 (2008); El Paso, 526 U.S. at 479. Application of the
rule promotes orderly functioning of the appellate courts
by providing “notice of issues to be litigated and encouraging
repose of those that are not.” El Paso, 526 U.S. at

Radio Steel (an LBE favorite) is cited:

Not long after the creation of this court, we clarified
the application of the cross-appeal rule in Radio Steel &
Manufacturing Co. v. MTD Products, Inc., 731 F.2d 840
(Fed. Cir. 1984). In that case, the district court found the
asserted claims not invalid and not infringed, with the
patent owner appealing from the judgment of noninfringement,
but with the alleged infringer taking no crossappeal.
Radio Steel, 731 F.2d at 842–43. Acknowledging
lack of uniformity in the prior practice of the regional
circuits on whether a cross-appeal must be filed by a
similarly situated alleged infringer arguing invalidity, we
set forth our current rule: “[A] party will not be permitted
to argue before us an issue on which it has lost and on
which it has not appealed, where the result of acceptance
of its argument would be reversal or modification of the
judgment rather than affirmance.” Id. at 844.

The LK position:

Lazare Kaplan argues that the cross-appeal rule
should have barred reopening the prior judgment on
validity because Photoscribe seeks to lessen the rights of
Lazare Kaplan under that prior judgment but failed to file
a cross-appeal. In addition, Lazare Kaplan asserts that
the cross-appeal rule has no equitable exceptions permitting
the relief granted by the district court. Photoscribe
responds that prior decisions of this court permitted the
district court to address validity on remand. Further,
Photoscribe asserts that the granted relief was proper
under either Rule 60(b)(5) or 60(b)(6).
We agree with Lazare Kaplan...

As to re-assignment of a judge:

We evaluate such requests under the law of the
regional circuit in which the district court sits. Micro
Chem., Inc. v. Lextron, Inc., 318 F.3d 1119, 1122 (Fed. Cir.
2003). When assessing a request for reassignment, the
Second Circuit considers three factors: “(1) whether the
original judge would reasonably be expected upon remand
to have substantial difficulty in putting out of his or her
mind previously-expressed views or findings determined
to be erroneous or based on evidence that must be rejected,
(2) whether reassignment is advisable to preserve the
appearance of justice, and (3) whether reassignment
would entail waste and duplication out of proportion to
any gain in preserving the appearance of fairness.”
Shcherbakovskiy v. Da Capo Al Fine, Ltd., 490 F.3d 130,
142 (2d Cir. 2007).

Judge Dyk dissented:

No principle of patent law is better established than
that “claims must be interpreted and given the same
meaning for purposes of both validity and infringement
analyses.”, Inc. v., Inc.,
239 F.3d 1343, 1351 (Fed. Cir. 2001). Here the majority
declines to enforce that basic stricture, allowing the
patentee to assert infringement on a broad claim construction
while permitting it to defend against invalidity
using a different and far narrower claim construction.


However, the Supreme Court has held that an appellate
mandate generally does not constrain a district
court’s power under Rule 60(b). See Standard Oil Co. of
Cal. v. United States, 429 U.S. 17, 18–19 (1976) (holding
that a party need not obtain leave from an appellate court
prior to filing a Rule 60(b) motion in the district court).
Here, Photoscribe sought to reconcile the two inconsistent
judgments on invalidity and infringement using Rule


But the majority identifies no
case holding that a failure to file a contingent cross-appeal
bars Rule 60(b) relief. Rather, the cases cited by the
majority involved situations in which the Rule 60(b)
movant had lost entirely and failed to appeal.

Judge Dyk cites Bowen:

The Supreme Court’s decision in Bowen v. United
States Postal Service, 459 U.S. 212 (1983), is almost
directly on point. Bowen involved an action by a former
Postal Service employee against both the Service and the
American Postal Workers Union, to which the employee
had belonged during his employment. 459 U.S. at 214. A
jury found the Service had wrongfully discharged Bowen
and that the Union had breached its duty of fair representation.
Id. at 214–215.

Judge Dyk concluded:

In my view we should recognize that Rule 60(b)(5)
may be utilized to reopen the invalidity judgment for
reconsideration based on the correct claim construction. I
respectfully dissent.


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