In Re Princo Corporation

478 F.3d 1345, 81 U.S.P.Q. 2d (BNA) 1997, 2007 U.S. App. LEXIS 4646, 2007 WL 610732
CourtCourt of Appeals for the Federal Circuit
DecidedMarch 1, 2007
Docket2007-M841
StatusPublished
Cited by44 cases

This text of 478 F.3d 1345 (In Re Princo Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Princo Corporation, 478 F.3d 1345, 81 U.S.P.Q. 2d (BNA) 1997, 2007 U.S. App. LEXIS 4646, 2007 WL 610732 (Fed. Cir. 2007).

Opinion

ORDER

DYK, Circuit Judge.

This case involves a suit for patent infringement by U.S. Philips Corporation (“Philips”) against Princo Corporation and Princo America Corporation (“Princo”). Princo seeks a writ of mandamus directing the United States District Court for the Southern District of New York to (1) stay the case pursuant to 28 U.S.C. § 1659 (2000) and (2) vacate its order granting Philips’s motion for summary judgment on Princo’s patent misuse defense. We conclude that the district court erred under § 1659 when it did not stay the case until related proceedings before the Commission, including any appeals, become final. We accordingly grant Princo’s petition for a writ of mandamus.

BACKGROUND

This is the third time this case or the related Commission proceeding has been before this court. See U.S. Philips Corp. v. Int’l Trade Comm’n, 424 F.3d 1179 (Fed.Cir.2005) (“Philips I”); U.S. Philips Corp. v. Princo Corp., 173 Fed.Appx 832 (Fed.Cir.2006) (“Philips II ”). Six of Philips’s patents are alleged to have been infringed: U.S. Patent Nos. 4,809,209 (Kramer); 4,962,493 (Kramer); 4,972,401 (Carasso); 4,999,825 (Raaymakers); 5,023,856 (Raaymakers); and 5,418,764 (Roth).

These six allegedly infringed patents cover technology for manufacturing recordable compact disks (“CD-Rs”) and rewritable compact disks (“CD-RWs”). Philips licenses those six patents through package licensing together with other patents, meaning that licensees must pay a royalty based on the number of discs manufactured regardless of how many of the patents are actually used in the manufacturing. Manufacturers cannot license the patents individually from Philips or pay a lower royalty for a license to fewer than all of the patents. Princo’s theory is that Philips unlawfully tied licenses to the six patents (that are essential to the manufacture of CD-Rs and CD-RWs) to licenses to other patents (that are not essential to the manufacture of such items).

In 1997 Princo entered into a licensing agreement with Philips, but stopped paying the licensing fees shortly thereafter. Philips terminated the agreement and, on January 10, 2002, filed an infringement complaint against Princo in the Southern District of New York asserting that Princo infringed all six patents.

On July 22, 2002, the Commission initiated an investigation into the importation of CD-Rs and CD-RWs pursuant to 19 U.S.C. § 1337 (2000). At issue were the same six patents that were before the district court. On August 14, 2002, Princo intervened in the Commission proceedings as a respondent.

In the district court proceeding, Princo moved for a stay pursuant to § 1659. Section 1659 provides that

*1349 [i]n a civil action involving parties that are also parties to a proceeding before the United States International Trade Commission under section 337 of the Tariff Act of 1930, at the request of a party to the civil action that is also a respondent in the proceeding before the Commission, the district court shall stay, until the determination of the Commission becomes final, proceedings in the civil action with respect to any claim that involves the same issues involved in the proceeding before the Commission.

The party requesting the stay must do so either within “30 days after the party is named as a respondent in the proceeding before the Commission” or “30 days after the district court action is filed.” § 1659. Princo moved for a stay on September 10, 2002, within 30 days of when it intervened in the Commission proceedings. Philips did not oppose the motion, and the district court issued the stay.

On March 11, 2004, the Commission held that Philips engaged in patent misuse. The Commission found that (1) the six patents were “essential” to the manufacture of CD-Rs or CD-RWs, and (2) four patents were “not essential” to that activity. 1 Philips I, 424 F.3d at 1183. The Commission then ruled that “the four nonessential patents were impermissibly tied to [the] patents that were essential to manufacturing CR-Rs and CD-RWs, because none of the so-called essential patents could be licensed individually for the manufacture of CD-RWs and CD-Rs apart from the package that Philips denominated as essential.” Id. (internal quotation marks omitted). Philips appealed the Commission’s decision to this court on May 10, 2004. The Commission did not address whether Philips unlawfully tied a fifth allegedly nonessential patent, U.S. Patent No. 4,942,565 (Lagadec), and the Lagadec patent was not at issue in Philips’s appeal to this court.

After the Commission’s ruling but before Philips appealed, on March 16, 2004, the district court lifted the § 1659 stay. On April 16, 2004, Princo requested that the stay be continued pending appeal of the Commission proceedings. The district court apparently did not rule on that motion, thus effectively denying it. On January 24, 2005, the district court granted Philips’s motion for summary judgment, ruling that Princo had infringed Philips’s patents and, on February 2, 2005, granted another Philips motion for summary judgment, rejecting Princo’s patent misuse defense. Princo appealed to this court on the patent misuse issue. Princo did not argue on appeal from the district court determination that the district court erred in failing to grant a stay pending appeal of the Commission proceedings or that this court should stay the appeal from the district court determination.

While the appeal to this court from the district court’s decision was pending, on September 21, 2005, this court reversed the Commission’s finding that Philips committed patent misuse. See Philips I. We held that the Commission’s finding that the tying practice was unlawful was “predicated on legal errors and on factual findings that were not supported by substantial evidence.” Philips I, 424 F.3d at 1193, 1198. “Because the Commission did not address all of the issues presented by the administrative law judge’s decision,” we remanded to the Commission to determine “whether Philips’s patents are enforceable *1350 and, if so, whether Philips is entitled to any relief from the Commission.” Id. at 1198. After Philips I, this court denied rehearing en banc, and the Supreme Court denied certiorari. On remand to the Commission Princo urged that Philips unlawfully tied the Lagadec patent to the six essential patents (an issue raised before the Administrative Law Judge but not resolved by the Commission). On January 17, 2006, the Commission sought comments from the parties to the investigation on how to proceed on remand, and on March 21, 2006, the Commission ordered the parties to submit responses to the comments of the other parties.

On March 27, 2006, this court vacated the district court’s judgment against Prin-co and remanded the case for further consideration in light of Philips I and

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478 F.3d 1345, 81 U.S.P.Q. 2d (BNA) 1997, 2007 U.S. App. LEXIS 4646, 2007 WL 610732, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-princo-corporation-cafc-2007.