Opposition Brief — Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc.

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: Supreme Court, U.S.

(4) FILED

OCT

No. 01-408 9 2001

IN THE

Supreme Court of the United States

THE HOLMES GROUP, INC.

Petitioner,

VORNADO AIR CIRCULATION SYSTEMS, INC.,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

BRIEF IN OPPOSITION

Peter W. Gowdey

Counsel of Record

Janine A. Carlan Shook, Hardy & Bacon L.L.P.

John K. Hsu Hamilton Square

Of Counsel 600 14™ St. N.W. Suite 800

Washington, D.C. 20005-2004

202-783-8400

QUESTION PRESENTED

The question presented is whether the United States

Court of Appeals for the Federal Circuit is correct in

exercising jurisdiction over an appeal of a non-patent issue in

a case having a pending patent counterclaim from a United

States district court.

STATEMENT PURSUANT TO RULE 29.6

Respondent Vornado Air Circulation Systems, Inc.

(“Vornado”) has no parent companies, subsidiaries, or

affiliates that have issued shares to the public.

TABLE OF CONTENTS

1. | THEACTIONS OF THE UNITED

STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT ARE IN

CONFORMITY WITH THE DECISIONS

OF THIS COURT AND OTHER

UNITED STATES COURTS OF

over the appeal follows the Federal Circuit’s

usual course of proceeding. .............cc.ccececceeseeeeeee 10

B. The Federal Circuit properly exercised

jurisdiction over a partial final judgment

under Fed. R. Civ. P. S4(b).......ccccocsccsecceccecseesess 12

C. The Federal Circuit follows the

“well-pleaded complaint” rule and

ET 5 a 13

TT) eT 16

TABLE OF AUTHORITIES

Page(s)

CASES

Aerojet-General Corp. v. Machine Tool

Works, Oerlikon-Buehrle Ltd,

895 F.2d 736 (Fed. Cir. 1990) ............cccccssrcessesessess passim

Atari, Inc. v. JS&A Group, Inc.,

747 F.2d 1422, 1434 (Fed. Cir. 1984)

ln at lk ea SE cc 13

Inc. v. Williams,

Nc 7

Chemical Engineering Corp v. Marlo, Inc.,

7S4 F.2G TB1 COE. Gat. 19D4) ....cccrccceccccccccsecesccccccccsoseees 15

Christianson v. Colt Indus. Operating Corp.,

822 F.2d 1544, 1552-3, (Fed. Cir. 1987). ..........ccccceseeeeeees 5

Christianson v. Colt, 486 U.S. 800 (1988) ............-eseeeeeees 5,6

Denbicare U.S.A. v. Toys "R" Us, Inc.,

84 F.3d 1143 (9th Cir. 1996) ............cccccceeeeeeees- in

DSC Communications Corp. v.

Pulse Communications, Inc.,

170 F.3d 1354, 1359 (Fed. Cir. 1999). .........cccccecceeneneees 10

FDIC v. Elefant,

ro ee 9

Franchise Tax Board v. Construction

Laborers Vacation Trust,

Ee eee 6,7

Great Northern Ry. Co. v. Alexander,

OD Gale BP GD ctrretsettrettinctenterseneatiantintntnsveniiteions 7

Gronholz v. Sears, Roebuck & Co.,

836 F.2d 515 (Fed. Cir. 1987) .........ccccccccccceecseceeseeees wee 1]

Isenberg v. Biddle,

125 F.2d 741, 743 (D.C. Cir. 1941) ...cceccccccscecsscecsesssceeeeee 9

Merrell Dow Pharm. Inc. v. Thompson,

ee 7

Metro Ford Truck Sales, Inc. v.

Ford Motor Co.,

ees 9

National Research Bureau, Inc. v.

Bartholomew,

482 F.2d 386, 389 (3d Cir. 1973).......cccccccccecceeeeesseeeececeeee 9

Nilssen v. Motorola,

ee ee Fe re Ge Be cecccccsccccndececcnssccccseerrensestien 11

Pioche Mines Consol, Inc. v.

] Trust Co.,

206 F.2d 336, 336-37 (9th Cir.),

cert. denied, 346 U.S. 899 (1953) ..........ccccecccceccsececeeeeeeeeee 8

Rengo Co. v. Molins Mach. Co.,

657 F.2d 535, 539, (3d Cir.),

cert. denied, 454 U.S. 1055 (1981) .......---+0+

Schwartzkopf Development Corp. v.

Ti-Coating, Inc.,

800 F.2d 240, 245 (Fed. Cir. 1986) .............

Takeda v. Northwestern Nat'l Life Ins. Co.,

765 F.2d 815 (9th Cir. 1985) ..........-eecceeeeees

Traffix Devices v. Marketing Displays, Inc.,

121 S.Ct. 1255 (2001).........-ecceeeeereeererneennnes

USM Corp. v. SPS Technologies, Inc.,

770 F.2d 1035 (Fed. Cir. 1985) ...........-0-e0+

Vornado Air Circulation Systems, Inc.

v. Duracraft Corp.,

58 F.3d 1498 (10th Cir. 1995) .......---c-eeee00s

19 U.S.C. § 1337...........00ccccrscserresereoeseressrosees

2B U.S.C. § 1295.........cscrcereeerssererecsssssersneneees

2B U.S.C. § 1441........ccccerscorreersceersccsseseressosooes

19 CF.R. § 210.51(a)...............-. :

No. 01-408

eee

IN THE

Supreme Court of the United States

THE HOLMES GROUP, INC.

Petitioner,

eon Y, ooo

VORNADO AIR CIRCULATION SYSTEMS, INC.,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

BRIEF IN OPPOSITION

Respondent Vornado Air Circulation Systems, Inc.

(“Vornado”) respectfully requests that this Court deny the

Holmes Group’s petition for writ of certiorari seeking review

of the Federal Circuit’s decision in this case.

OPINIONS BELOW

The opinion of the Federal Circuit is unreported and

is attached to Holmes’s Petition at Appendix A. The opinion

of the United States District Court for the District of Kansas is

reported at 93 F.Supp.2d 1140 and is attached to the

Petition at Appendix B.

STATEMENT OF THE CASE

In 1989 Respondent Vornado began selling its

distinctive household fans, which have a uniquely designed,

removable front grill structure with spiral (arcuate) vanes.

In May 1990, Vornado obtained a utility patent (later re-

issued as U.S. Patent No. Re. 34,551 (the “551 patent”))

claiming a ducted fan with multiple elements, one being a

spiral grill that is removable. The grill alone was not

patented.

In 1999 Vornado discovered that Petitioner Holmes

had been importing from China and distributing its

BLIZZARD fan, which incorporates a spiral grill that looks

identical to Vornado’s distinctive spiral grill. Vornado

concluded that Holmes’s fans both infringe the claims of

Vornado’s patent and violate Vornado’s trade dress.

In an effort to prevent further importation of the

infringing fans, on November 26, 1999 Vornado filed a

complaint with the United States International Trade

Commission (“ITC”), pursuant to § 337 of the Tariff Act of

1930, as amended, 19 U.S.C. § 1337. Vornado’s complaint

alleged both patent and trade dress infringement and

requested that the ITC initiate an investigation of Holmes’s

importation activities with respect to Holmes’s fans and other

products. Vornado submitted patent claim charts showing

Holmes’s infringement of Vornado’s patent on an element-by-

element basis. The ITC ‘instituted its investigation on

January 21, 2000.

In an attempt to get the case into the tenth circuit,

Petitioner Holmes commenced a district court action against

Vornado in the U.S. District Court for the District of Kansas.

Holmes filed its complaint on December 8, 1999, two weeks

after Vornado filed the ITC action. Holmes filed suit seeking

a declaration that Holmes’s sale of its products do not

infringe Vornado’s asserted trade dress in its spiral grill on

the ground that the ruling in Vornado Air Circulation Systems,

Inc. v. Duracraft Corp, 58 F.3d 1498 (10 Cir.

1995)(“Vornado I”) collaterally estops Vornado from

asserting protectable trade dress rights in the spiral grill

design.

Vornado counterclaimed in the district court, raising

the same allegations of patent and trade dress infringement

that Vornado had raised in its earlier ITC complaint.

Petitioner Holmes alleges that Vornado’s assertion of

the patent counterclaim in the district court was an attempt

to steer any appeal to the Federal Circuit, yet Holmes

conveniently omits any mention to this Court that Vornado’s

patent counterclaim was compulsory. Further, Holmes fails

to inform this Court that Vornado’s patent and trade dress

infringement claims had already been asserted against Holmes

at the International Trade Commission before Holmes filed

its district court action regarding only trade dress

infringement.’

The district court applied the principles of collateral

estoppel to grant summary judgment on the issue of trade

dress infringement in favor of Holmes. Yet in its opinion,

even the district court recognized that “the Federal Circuit

has exclusive jurisdiction over an appeal from a final

judgment of a district court if the district court’s jurisdiction

is based in whole or in part on a patent claim.” The Holmes

’ Any “manipulation” of the appeal process would therefore appear

to be on the part of Holmes, who filed a district court case on only

the trade dress issues in the 10® Circuit, and then requested a stay

of the ITC action. Appeals from the ITC are sent to the Federal

Circuit. 28 U.S.C. § 1295(a)(6).

Group, Inc. v. Vornado Air Circulation Systems, Inc., 93

F.Supp.2d 1140, 1143 (D. Kan. 2000).

Vornado appealed the district court’s partial final

judgment to the United States Court of Appeals for the

Federal Circuit (Appeal No. 00-1286). During the appeal to

the Federal Circuit, Vornado did not have the resources to

simultaneously litigate at the ITC, but, aware of the ITC’s

obligation under 19 CFR § 210.51(a) to resolve cases

quickly, Vornado did not seek a stay of the ITC action.

Instead, Vornado entered into partial settlement with

Holmes, whereby Vornado withdrew the ITC case with the

understanding that it would seek reinstitution of the

investigation if the Federal Circuit ruled in Vornado’s favor.

On June 5, 2001, the Federal Circuit vacated the

judgment of the district court, and remanded the case for

proceedings in light of the recent decision of this Court in

Traffix Devices v. Murketing Displays, Inc., 121 S.Ct. 1255

(2001). Holmes then petitioned this Court for writ of

certiorari.

REASONS FOR DENYING THE PETITION

I. THE ACTIONS OF THE UNITED STATES COURT

OF APPEALS FOR THE FEDERAL CIRCUIT ARE

IN CONFORMITY WITH THE DECISIONS OF

THIS COURT AND OTHER UNITED STATES

COURTS OF APPEALS ON THE SAME MATTER

A. The Federal Circuit’s exercise of jurisdiction

over the appeal accords with this Court’s

precedent.

Petitioner Holmes asserts that the Federal Circuit, in

exercising jurisdiction over Vornado’s appeal (No. 00-1286),

has become a renegade court that fabricates its own version

of the law and rules of procedure. Contrary to Petitioner's

characterization that the Federal Circuit has departed “from

an unbroken line of this Court’s decisions spanning nearly a

century,” the Federal Circuit’s jurisdiction over the appeal

adheres to the sound reasoning of this Court and the other

circuit courts of appeals. In fact, the Federal Circuit has

previously addressed the- very issue for which Holmes

petitions this Court, and in doing so, the Federal Circuit

sought guidance from this Court’s prior rulings. In Aerojet-

General Corp. v. Machine Tool Works, Oerlikon-Buehrle Ltd.,

895 F.2d 736 (Fed. Cir. 1990), the Federal Circuit addressed

the following issue:

In light of Christianson v. Colt, 486 U.S. 800

(1988), does this court have jurisdiction to

hear an appeal in a case in which the

district court's jurisdiction over the

complaint was not based on §1338(a) but

there is a counterclaim over which the

district court would have §1338(a)

jurisdiction if the counterclaim had been a

complaint?

Id. at 738. In resolving the above question in the Aerojet

case, the Federal Circuit thoroughly analyzed this Court's

decision in Christianson. The Federal Circuit found that

Christianson dealt with the effect on jurisdiction of patent

law issues raisrd only as a defense, and no patent claims

appeared in the complaint or in any counterclaim.

Christianson was clearly distinguishable or its facts from

pat>nt issues, but the defendant's compulsory counterclaims

? Holme: implies that the Federal Circuit discounts the law set forth

in Christianson. However, the law of Christianson was originally

that of the Federal Circuit. This Court “reached the same

conclusion” as the Federal Circuit in Christianson v. Colt Indus.

Operating Corp., 822 F.2d 1544, 1552-3, (Fed. Cir. 1987). Aerojet-

General Corp., 895 F.2d at 741.

dia include claims of patent infringement. Ir Aerojet, the

Federal Circuit indicated a need to clarify its jurisdiction

under the distinct circumstance in which the patent laws

constitute the basis of a nonfrivolous compulsory

counterclaim. Id. at 741. After analyzing the “well-pleaded

complaint rule” and the legislative history of 28 U.S.C.

§1295, the Federal Circuit held:

Because [defendant's] compulsory

counterclaim for patent infringement is a

separate, nonfrivolous claim, having its own

section 1338 = jurisdictional basis

independent of the jurisdictional basis of the

complaint, the district court’s subject matter

jurisdiction in this case was based “in part”

on section 1338. Accordingly, this court

would have appellate subject matter

jurisdiction over an appeal from a final

judgment in this case, 28 U.S.C. §1295. .

Id. at 745. Further, < cosaiaitiy iy Tenia Siiaes 'o te

Christianson concurrence is particularly supportive of the

Federal Circuit's exercise of jurisdiction based upon a

counterclaim: “the ‘well-pleaded complaint’ rule helps ferret

out claims from issues, and says nothing about whether such

separation should be made only on the basis of the original

complaint.” Christianson, 486 U.S. at 820 n. 1 (Stevens, J.,

concurring).

Petitioner Holmes also alleges that the Federal Circuit

circumvents this Court’s rulings in other cases. Yet Holmes

consistently presents out-of-context statements and fails to

acknowledge the significance of the procedural questions at

issue in those cases. The decisions cited by Holmes relate to

this Court’s xe standing precedent regarding removal

jurisdiction, in particular state cases being removed to

federal court. For example, Holmes cites Franchise Tax

Board v. Construction Laborers Vacation Trust, 463 U.S. 1

(1983), as support for Holmes’s proposition that the Federal

Circuit improperly considered a counterclaim as sufficient to

find that the civil action “arises under” federal patent law.

Holmes misleadingly states that the Franchise Tax Court held

that it “simply is not the law” to consult the answer as well

as the complaint in determining whether a case arises under

federal law. Holmes Br. at 9. That holding, however, is

incorrect. In fact, to “create” this holding Holmes added its

own language to dicta in a footnote. The complete text

_ actually supports the actions of the Federal Circuit:

It is possible to conceive of a rational

jurisdictional system in which the answer as

well as the complaint would be consulted

before a determination was made whether

the case “arose under” federal law, or in

which original and removal jurisdiction were

not coextensive.

Franchise Tax, 463 U.S. at 10 n.9.

Franchise Tax and other cases cited by Holmes

address the issue of remova! jurisdiction.’ As the Federal

Circuit determined, the issue of removal is clearly

distinguishable from a case that is already in federal court.

Citing Franchise Tax, the Federal Circuit stated that the basic

purpose of the well-pleaded complaint rule is to avoid

serious federal-state conflicts.” Aerojet-General

Corp., 895 F.2d at 743 (citing Franchise Tax, 463 U.S. at 10).

But “no such conflicts are possible here, where we deal only

with the direction of an appeal in a case already properly in

the federal court system.” Id. at 743-744. In our case, the

facts are in line with Aerojet, where Holmes filed its

complaint in federal district court, and Vornado properly

appealed to the Federal Circuit based on the pending patent

infringement counterclaim.

3 Other “removal” cases cited by Holmes include Caterpillar Inc. v.

Williams, 482 U.S. 386 (1987), Great Northern Ry. Co. v. Alexander,

246 U.S. 276 (1918), and Merrell Dow Pharm. Inc. v. Thompson,

478 U.S. 804 (1986).

Far from being a renegade appellate court, the

Federal Circuit has carefully reviewed the prior decisions of

this Court regarding appellate jurisdiction, and has

concluded:

In all events, the Supreme Court did not hold

in Christianson, or in any other case, that for

all cases and circumstances only the

complaint and never a counterclaim can

serve as the basis of district court

jurisdiction, and, under section 1295, the

basis of district court jurisdiction is for this

court an appeal-directing mechanism.

Aerojet-General Corp. 895 F.2d at 742. This conclusion is

certainly relevant to Holmes’s petition before this Court.

Because the Federal Circuit’s exercise of jurisdiction

followed the law of this Court, Holmes’s petition for writ of

certiorari should be denied.

B. The Federal Circuit’s exercise of jurisdiction

conforms with decisions of other United

States courts of appeals.

The Federal Circuit's decision to hear Vornado’s

appeal No. 00-1286 accords with other circuit courts’

jurisdictional decisions. In Aerojet, the Federal Circuit

pointed to instances where different circuit courts repeatedly

retained jurisdiction and adjudicated a counterclaim having

its own jurisdictional basis even where the circuit court had

no jurisdiction over the complaint:

Rengo Co. v. Molins Mach. Co., 657 F.2d 535,

539, (3d Cir.), cert. denied, 454 U.S. 1055

(1981) (“a jurisdictional defect in the

complaint will not preclude adjudication of

a counterclaim over which the court has an

independent basis [§1338] of jurisdiction”);

Pioche Mines Consol, Inc. v. Fidelity-

Philadelphia Trust Co., 206 F.2d 336, 336-37

(9th Cir.), cert. denied, 346 U.S. 899 (1953)

(“counterclaim persists where it is supported

by an independent basis [diversity] for

jurisdiction,” even though complaint

dismissed); Isenberg v. Biddle, 125 F.2d 741,

743 (D.C. Cir. 1941) (where independent

jurisdictional basis [trading with enemy act)

exists for counterclaim that seeks affirmative

relief, “it is sustainable without regard to

what happens to the original complaint”).

Aerojet-General Corp., 895 F.2d at 742-3. The Federal Circuit

also discussed National Research Bureau, Inc. v. Bartholomew,

482 F.2d 386, 389 (3d Cir. 1973), where the 3™ Circuit held

that a counterclaim supported by independent jurisdiction

(anti-trust) afforded the district court federal jurisdiction:

“But where, as here, jurisdiction is independent, the

counterclaim must be allowed to proceed without regard to

the fate of the original claim, and it was error to dismiss it

out of hand.” Aerojet-General Corp., 895 F.2d at 743.

Petitioner Holmes cites to several circuit courts of

appeal cases alleging that these circuit courts support

Holmes’s theory that counterclaims do not change the status

of a civil action as one “arising under” federal law. Yet these

cases, Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145

F.3d 320 (5* Cir. 1998), FDIC v. Elefant, 790 F.2d 661 (7*

Cir. 1986), and Takeda v. Northwestern Nat'l Life Ins. Co., 765

F.2d 815 (9* Cir. 1985), again deal with removal jurisdiction

under 28 U.S.C. §1441 and are therefore distinguished from

the facts of our case. In Metro Ford, the 5“ Circuit held that

a defendant's third-party claim alleging a federal question

did not bring it within purview of removability. Metro Ford,

145 F.3d at 326-7. In Elefant, the 7* Circuit also addressed

the propriety of removal of a case. Elefant, 790 F.2d at 667.

Finally, the 9* Circuit held that removability cannot created

by a defendant's federal question counterclaim. Takeda, 765

F.2d at 822.

The Federal Circuit’s jurisdiction over Vornado’s

appeal was in conformity with the decisions of other United

States courts of appeals. Holmes’s petition for writ of

certiorari should therefore be denied.

Il. THE UNITED STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT HAS FOLLOWED THE

ACCEPTED AND USUAL COURSE OF JUDICIAL

PROCEEDINGS

A. The Federal Circuit’s exercise of jurisdiction

over the appeal follows the Federal Circuit’s

usual course of proceeding.

_ The Federal Circuit exercises jurisdiction over an

appeal when there is a pending, nonfrivolous patent

infringement counterclaim. DSC Communications Corp. v.

Pulse Communications, Inc., 170 F.3d 1354, 1359 (Fed. Cir.

counterclaim raising a nonfrivolous claim of patent

infringement is sufficient to support this court’s appellate

jurisdiction.” Id. It is undisputed that Vornado’s answer in

the district court action contains a counterclaim

jurisdiction over non-patent claims in cases where—unlike in

this case—patent counts have been dismissed without

prejudice or otherwise permanently removed from the case

prior to appeal of the non-patent issues. For example, in

Nilssen v. Motorola, 203 F.3d 782 (Fed. Cir. 2000), the

Federal Circuit ruled that it lacked jurisdiction to hear an

appeal of a judgment on state-law claims because patent law

claims that had previously been in the case had been

dismissed without prejudice so that those claims could be

tried in a separate action. Critically, the Nilssen court

stressed that it lacked jurisdiction only because the patent

claims had been dismissed without prejudice:

41(b), the district court’s jurisdiction over

the remaining state law claims ceased to be

based, either in whole or in part, on § 1338.

Nilssen, 203 F.3d at 784. In this case, by contrast, Vornado’s

patent infringement claim remained pending in the district

court. Thus, following Nilssen, the Federal Circuit had

jurisdiction to entertain this appeal.

Similarly, in Gronholz v. Sears, Roebuck & Co., 836

F.2d 515 (Fed. Cir. 1987), the Federal Circuit ruled that it

lacked jurisdiction to hear an appeal of a judgment on a

trade secret claim because the district court had previously

dismissed without prejudice a patent infringement claim that

had been part of the case. The Gronholz court concluded

that “Gronholz’s dismissal of the patent claim constituted an

amendment of his complaint. That amendment left a

complaint with a single, non-patent claim for unfair

competition.” Gronholz, 836 F.2d at 518. The same is true of

Schwartzkopf Development Corp. v. Ti-Coating, Inc., 800 F.2d

240, 245 (Fed. Cir. 1986), where the Federal Circuit ruled

that it lacked jurisdiction because “[w]hen the counterclaim

including the § 1338 counts was dismissed on the pleadings,

without opposition by the counter-claimant, it left no legacy

on which to base appellate jurisdiction in this court.” Finally,

in USM Corp. v. SPS Technologies, Inc., 770 F.2d 1035 (Fed.

Cir. 1985), the Federal Circuit held that it lacked jurisdiction

to hear an appeal of judgment on non-patent issues where

the patent infringement counts that originally had been part

of the case had been finally resolved in an appeal to the

Seventh Circuit (prior to the creation of the Federal Circuit):

“[I)n the instant appeal, all § 1338 patent claims have been

finally adjudicated and there is no possibility that these

claims will be reopened in the ultimate resolution of this

extended litigation.” USM Corp., 770 F.2d at 1037. This is

obviously not the case here, since Vornado’s patent

infringement counterclaim is still pending in the district

court.

Indeed, the Federal Circuit cases cited above establish

conclusively that the Federal Circuit had proper jurisdiction

to hear the appeal, because Vornado’s patent infringement

counterclaim is still pending in the district court. Therefore,

the Federal Circuit was correctly following its normal

procedure in exercising jurisdiction over the appeal, and

Holmes’s petition for writ of certiorari should be denied.

B. The Federal Circuit properly exercised

jurisdiction over a partial final judgment

under Fed. R. Civ. P. 54(b).

Holmes attempts to cloud the propriety of the Federal

Circuit's jurisdiction by stating that even if the Federal

Circuit had jurisdiction based upon a patent law

counterclaim, there remains the question of whether Rule

54(b) can be used to direct an appeal to a particular circuit.

Holmes erroneously relies on Denbicare U.S.A. v. Toys “R” Us,

Inc., 84 F.3d 1143 (9* Cir. 1996) for the principle that

parties may not “forum-shop” between the Federal Circuit

and other regional circuit courts for appeal. Holmes,

however, materially misstates the holding of Denbicare. The

Ninth Circuit ruled in Denbicare that an appeal of non-patent

claims did not fall within the Federal Circuit’s exclusive

Rule 54(b) judgment and appeal on the non-patent claims:

Because the district court both dismissed all

patent claims from this case and separated its

decision on the merits of the nonpatent

claims through the grant of a partial final

judgment under Rule 54(b), [the Ninth

Circuit has] appellate jurisdiction over the

partial final judgment.

84 F.3d at 1148 (9* Cir. 1996) (emphasis supplied). Holmes

misleadingly omits the Ninth Circuit’s express statement that

its decision hinged on the patent claims having been

dismissed prior to the appeal—a circumstance that does not

The Federal Circuit follows the “well-pleaded

complaint” rule and the intent of Congress.

Although Holmes contends throughout its petition

that the Federal Circuit has recklessly disregarded the well-

* In Atari, Inc. v. JS&A Group, Inc., 747 F.2d 1422, 1434 (Fed. Cir.

1984) (en banc) the Federal Circuit reviewed the Senate Report

language that Holmes quotes at page 15 of its brief and squarely

dlaim is not a “trivial patent claim . . . manipulatively joined to gain

the jurisdiction of the court” a Rule 54(b) judgment does not strip

the Federal Circuit of jurisdiction over the non-patent issues. Id

pleaded complaint rule, the Federal Circuit’s commentary in

Aerojet shows that it has carefully considered this rule.

Further, the Federal Circuit has thoughtfully concluded, in

light of the well-pleaded complaint rule and the words of

Congress, that a non-frivolous counterclaim for patent

infringement invokes its jurisdiction.

Petitioner's argument that the Federal Circuit has an

“aberrant” interpretation of the well-pleaded complaint rule

rests on semantics by focusing on the word “complaint” in

the phrase “well-pleaded complaint rule.” The Federal

Circuit, however, provided sound reasoning regarding the

importance of relying on substance rather than semantics:

“It would seem at best incongruous to hold that we have

appellate jurisdiction when a_ well- ed patent

cea tte & tee Gl 'et labeled

‘complaint’ but not when the identical well-pleaded claim is

the basis of a pleading labeled ‘counterclaim.” Aerojet-

General Corp., 895 F.2d at 742. The Federal Circuit

acknowledges that the distinction between complaints and

counterclaims may be important in other contexts (such as

removal), but such a distinction has “no meaningful role in

governing the direction of the appeal under the unique

statute that created this court... .” Id.

The Federal Circuit has also looked to this Court's

jurisdictional decisions employing the ‘"well-pleaded

complaint rule" and found that this Court’s focus on the rule

was particularly appropriate in Christianson, where there was

no counterclaim arising under a federal patent statute. Id. at

741.

In Aerojet, after careful analysis of whether the well-

pleaded complaint rule applied, the Federal Circuit

specifically found no conflict between a proper application of

the well-pleaded complaint rule and a holding that it had

appellate jurisdiction when a nonfrivolous well-pleaded

compulsory patent law counterclaim is present in a case

originally and properly filed in a district court. Id.

Se eet See See 8 ee

accepted judicial procedure, as mandated by Congress

this Court in exercising jurisdiction over the Vornado appeal,

where patent infringement counterclaims were still pending.

The Federal Circuit opined that “using the ramifications of

intent of Congress in creating this court.” Id at 744. The

Vornado appeal No. 00-1282 contains precisely the non-

No. 97-275, ome. 2d Sess. 2-7, reprinted in 1982 U.S.Code

CONCLUSION

For the reasons set forth above, Petitioner’s writ of