Friday, December 05, 2008

P&G wins procedural matter in coffee wars

The CAFC noted:

This case therefore presents the issue of whether we have
jurisdiction to hear this interlocutory appeal, and if so, whether the district court abused
its discretion with respect to Kraft’s motion to stay and/or P&G’s motion for a preliminary
injunction. Because the stay order effectively denied P&G’s motion, jurisdiction is
proper. Further, we hold that the district court abused its discretion by effectively
denying P&G’s motion without proper consideration of the merits. Therefore, we vacate
the stay and remand for consideration of the merits of P&G’s motion for a preliminary

Of factual material, the CAFC should consider a re-write on the sentence:
P&G owns the Folgers brand of ground, roast coffee; Kraft owns the competing
Maxwell House brand.

Of the issue of jurisdiction:
Taken together, these subsections provide that this court has exclusive jurisdiction over
appeals from interlocutory orders “granting, continuing, modifying, refusing or dissolving injunctions,”
28 U.S.C. § 1292(a)(1), in any case over which this court would have jurisdiction of an
appeal under § 1295. 28 U.S.C. § 1292(c)(1). (...)
In Woodard, this court stated that
“[a]n order which is deemed to deny a preliminary injunction readily satisfies the Carson
requirements.” 818 F.2d at 851; see also id. at 853. Accordingly, we have jurisdiction
over P&G’s appeal if the trial court’s stay order had the practical effect of denying P&G’s
motion for a preliminary injunction.

With the camel's nose in the tent-->

Because we have jurisdiction to review the effective denial of P&G’s motion for a
preliminary injunction, we also have jurisdiction over the trial court’s decision to stay this
case pending reexamination proceedings before the PTO. When this court reviews a
properly appealable interlocutory order, “other interlocutory orders, which ordinarily
would be nonappealable standing alone, may be reviewed.”
Intermedics Infusaid, Inc.
v. Regents of Univ. of Minn., 804 F.2d 129, 134 (Fed. Cir. 1986).

Preliminary injunction issues-->

The district court abused its discretion by effectively denying P&G’s motion for a
preliminary injunction without considering and balancing the required factors. “A
decision to grant or deny a preliminary injunction is within the sound discretion of the
district court, based upon its assessment of four factors: (1) the likelihood of the
patentee’s success on the merits; (2) irreparable harm if the injunction is not granted;
(3) the balance of hardships between the parties; and (4) the public interest.” Oakley,
Inc. v. Sunglass Hut Int’l, 316 F.3d 1331, 1338–39 (Fed. Cir. 2003) (citing,
Inc. v., Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)). In this case,
the district court expressly refused to consider the first three factors.


We would, however, caution the court that the PTO does not appear to equate
the “substantial new question of patentability” standard for whether reexamination
should take place, see 35 U.S.C. § 312(a)(1), with the “substantial question of validity”
standard by which a defendant may prevent a patentee from demonstrating a likelihood
of success on the merits, see,
e.g., E.I. du Pont de Nemours & Co. v. MacDermid Printing Sol’ns L.L.C., 525 F.3d
1353, 1358 (Fed. Cir. 2008).

Of relevance to groups such as ConsumerWatchdog (FTCR), which seem confused-->

“Thus, ‘a substantial new question of patentability’ as to a patent claim could be
present even if the examiner would not
necessarily reject the claim as either anticipated by, or obvious in view of, the prior art
patents or printed publications.”

Also: In re Etter, 756 F.2d 852, 857 n.5 (Fed. Cir. 1985).

There was some interesting discussion about 35 U.S.C. § 318, arguments about which P&G lost.

Bottom line: Accordingly, we vacate the stay and
remand to the district court for a determination on the merits of P&G’s request for a
preliminary injunction. Upon completing that determination, including such underlying
proceedings (e.g., claim construction) as are necessary, the district court of course
remains free to exercise its discretion and stay this case pending reexamination should
either party so move.

BUT OBSERVE: we note that the district court ordinarily should not grant both a
preliminary injunction and a stay. A preliminary injunction should not be granted if there
is a substantial issue of patent validity.

AND NOTE footnote 2: If a preliminary injunction is denied, and a stay is granted, as the inter
partes reexamination moves forward it may appear that the invalidity challenge is, in
fact, insubstantial. If that occurs, the district court would then be free to lift the stay and
grant a preliminary injunction, without waiting for a final conclusion of the PTO


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