• Jan 22 2019
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  • Category: CAFC Updates

Princeton Digital Image Corporation (“PDIC”) licensed U.S. Patent No. 4,813,056 (which relates to methods for encoding image data) to Adobe, promising not to sue Adobe’s customers for claims arising “in whole or part owing to an Adobe Licensed Product.” PDIC then sued numerous Adobe customers, alleging infringement of the ’056 patent. Adobe filed a complaint in intervention for breach of contract, seeking: (1) attorneys’ fees expended in defending its customers; and (2) fees expended in bringing the breach of contract claim itself. After PDIC dismissed each of the infringement actions brought against Adobe’s customers, the district court denied Adobe’s request  for attorneys’ fees under 35 U.S.C. § 285 and for sanctions under Rule 11. As litigation continued on Adobe’s breach of contract claim, the district court denied PDIC’s motion for summary judgment on damages and requested Adobe to provide evidence relating to “defense” fees (fees Adobe incurred in defending its customers from PDIC’s infringement suit). The Court rejected Adobe’s submissions, ruling that they were not limited to defense fees. Then, in an effort to secure an appealable decision, Adobe requested that the court enter judgment in favor of PDIC. The court granted Adobe’s request and entered judgment in favor of PDIC. Adobe appeals, contending that the district court erred in (1) not awarding fees under § 285 and sanctions under Rule 11; (2) limiting the damages for Adobe’s breach of contract claim; and (3) refusing to compel PDIC to produce documents.  PDIC cross appeals, contending that the district court erred in imposing monetary sanctions on PDIC. The CAFC holds that only once there has been a final decision on the contract claim may there be an appeal from the denial of fees pursuant to § 285, the denial of Rule 11 sanctions, and the imposition of monetary sanctions on PDIC. Because the district court’s judgment is not final (despite the fact that Adobe persuaded the district court to issue an order purporting to end the litigation), the CAFC concludes that it lacks jurisdiction over this appeal and cross appeal which are dismissed.

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