Resqnet.Com, Inc. v. Lansa, Inc.

138 F. App'x 312

• Court: Court of Appeals for the Federal Circuit
• Decided: June 9, 2005
• Docket: No. 05-1279
• Status: Published

Opinion

ORDER

PROST, Circuit Judge.

Jeffrey I. Kaplan, Esq. and Kaplan & Gilman, LLP (Kaplan) and ResQNet.com, Inc. file a joint response to the court’s March 31, 2005 order directing them to respond concerning whether their appeal should be dismissed as premature. Lansa, Inc. also responds.

ResQNet brought suit against Lansa in the United States District Court for the Southern District of New York for patent infringement. ResQNet.com, Inc. v. Lansa, Inc., No. 01-CV-3578 RWS, 2002 WL 31002811 (S.D.N.Y. Sept. 5, 2002). Kaplan is counsel to ResQNet. On January 26, 2005 the district court entered an order granting in part Lansa, Inc.’s motion for sanctions against ResQNet and Kaplan, and ResQNet and Kaplan appealed.

There is no dispute that proceedings are ongoing in the district court and that no final judgment has been entered. Further, there is a pending motion for reconsideration of the sanctions order. In M.A. Mortenson Co. v. United States, 877 F.2d 50, 52 (Fed.Cir.1989), we determined that an order imposing sanctions against a party is not appealable before final judgment. In Sanders Assoc., Inc. v. Summagraphics Corp., 2 F.3d 394, 398 (Fed.Cir.1993), we stated that “an order imposing sanctions against an attorney is reviewable after final judgment is entered.”

ResQNet and Kaplan argue that the district court order imposing sanctions is appealable under the collateral order doctrine. Pursuant to Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), an order may be appealable before final judgment if it (1) conclusively determines the disputed question, (2) resolves an important issue completely separate from the merits, and (3) -will be effectively unreviewable on appeal from a final judgment. ResQNet and Kaplan argue that the district court’s order has put them in an untenable position. On the one hand, the order determined that it was unreasonable for ResQNet to file an amended complaint alleging infringement of one of the patents at issue here. On the other hand, the district court denied Lansa’s motion for partial summary judgment of noninfringement of that patent on the ground that genuine issues of material fact exist. ResQNet and Kaplan argue that the order will be effectively unreviewable after final judgment because they may be subject to further sanctions in the district court if they continue to litigate the patent, that ResQNet may not be able to retain its current counsel, or that ResQNet may be forced to abandon some of its claims.

While the court is not insensitive to ResQNet and Kaplan’s dilemma, the order is not appealable at this time. As we stated in Sanders, ResQNet and Kaplan may obtain review of the sanctions order after final judgment. ResQNet and Kaplan have not shown that the possibility of further sanctions will impair effective appellate review after final judgment of the order imposing sanctions on ResQNet and Kaplan. Further, the Supreme Court in Cunningham, v. Hamilton County, 527 U.S. 198, 119 S.Ct. 1915, 144 L.Ed.2d 184 (1999) held that a discovery sanctions order imposed on an attorney was not appealable under the Cohen doctrine because it did not satisfy the second prong of Cohen, i.e., the issue was not completely separate from the merits of the case. We conclude that ResQNet and Kaplan have not satisfied this prong either. Thus, ResQNet and Kaplan’s appeal is dismissed as premature.

*

Accordingly,

IT IS ORDERED THAT:

(1) The appeal is dismissed.

(2) Each side shall bear its own costs.

We assume that the district court, having determined that ResQNet and Kaplan did not have a good faith basis in pursuing the infringement claim, will either dismiss the infringement claim so that ResQNet can pursue the issue on appeal after final judgment without risking further sanctions or assure them that continued pursuit of the infringement claim will not subject them to continuing sanctions. We note that a motion for reconsideration is pending, another sound reason why interlocutory appeal is not appropriate, and a ruling on that motion may change the circumstances of this case.