No Appellate Jurisdiction Over an Interlocutory Contempt Order

by McDermott Will & Emery

Arlington Industries, Inc. v. Bridgeport Fittings, Inc.

Addressing whether an interlocutory contempt order stemming from a violation of an existing injunction is directly appealable, the U.S. Court of Appeals for the Federal Circuit dismissed the appeal for lack of jurisdiction because the contempt order was not a “final” judgment and did not modify the injunction.  Arlington Industries, Inc. v. Bridgeport Fittings, Inc., Case No. 13-1357 (Fed. Cir., July 17, 2014) (Hughes, J.).

Both Arlington Industries and Bridgeport Fittings manufacture and sell electrical connectors.  Arlington sued Bridgeport for infringing a patent related to this technology.  The parties settled the case in 2004, and, as part of the settlement, the court permanently enjoined Bridgeport from making the accused electrical connectors as well as “colorable imitations” of them.  Bridgeport subsequently redesigned and began selling a new version of its electrical connectors.  In 2012, Arlington filed a motion for contempt, alleging that Bridgeport’s new connectors violated the 2004 injunction.  The district court agreed that Bridgeport’s new connectors were not more than colorably different from the old connectors and found Bridgeport in contempt.  The district court also expressly enjoined the sale of the new connectors for the life of the patent (the “2013 injunction”).  Bridgeport sought an immediate appeal of the contempt order.

To appeal the district court’s decision, Bridgeport first had to establish that the Federal Circuit had jurisdiction over the appeal.  Bridgeport argued that jurisdiction was proper under both 28 U.S.C. § 1292(c)(1) (appeals of interlocutory decisions) and § 1292(c)(2) (exception to the final judgment rule).  The Federal Circuit disagreed.

Section 1292(c)(1) provides for review of “interlocutory orders of district court . . . granting, continuing, modifying, refusing or dissolving injunctions.”  Bridgeport argued the district court’s 2013 injunction “modified” the original injunction because it broadened the scope of enjoined behavior.  The Federal Circuit disagreed, finding that the 2013 injunction was only a clarification of the original injunction.  The appellate court’s clarification-or-modification analysis focused on whether changes to the original injunction altered the legal relationship between the parties.  The Federal Circuit concluded that the 2013 injunction did not alter the parties’ legal relationship because “[t]he 2004 Injunction and the 2013 Injunction are directed to the same parties, apply to the same activities, and are in force for the same time period.”  The Court was also not persuaded that the district court’s claim construction changed the scope of the injunction, explaining that “first-time claim constructions provided in the course of contempt proceedings were clarifications, not modifications, to an injunction.”  For these reasons, the Federal Circuit declined to exercise jurisdiction under § 1292(c)(1).

Bridgeport’s argument under § 1292(c)(2), also failed to persuade the Court.  Section 1292(c)(2) gives the Federal Circuit jurisdiction over “an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable … and is final except for an accounting.”  But noting that contempt proceedings and patent infringement cases are not co-extensive, the Federal Circuit declined to extend the narrow exception of § 1292(c)(2) to contempt orders.  The Federal Circuit further noted that the district court’s contempt order was not “final” because the district court had not imposed any sanctions at the time of the appeal.  Although a sanctions order did ultimately issue, Bridgeport separately appealed that order.  The Federal Circuit declined to take judicial notice of the later-filed appeal, instead treating the later-filed appeal as evidence that the present appeal was premature.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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