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Princeton Digital Image Corp. v. Office Depot Inc.

No Appellate Jurisdiction Over Judgment Not Addressing Non-Damages Issues

Princeton Digital Image Corp. v. Office Depot Inc., __ F.3d __, 2019 WL 272836 (Fed. Cir. Jan. 22, 2019) (DYK, Taranto, Stoll) (D. Del.: Stark) (3 of 5 stars)

Fed Cir dismisses appeal for lack of jurisdiction. The appeal concerns a complaint by intervenor Adobe against PDIC seeking fees and damages in connection with PDIC’s alleged failure to abide a license agreement. During the summary judgment phase, the district court had sharply limited the damages Adobe might recover. On a motion from Adobe, the district court entered final judgment for PDIC while noting that there were some damages Adobe might still prove. Such a judgment was not “final” for purposes of establishing appellate jurisdiction. The opinion discusses a variety of Supreme Court and regional circuit precedent, most notably Microsoft v. Baker, 137 S. Ct. 1702 (2017). It reasons that the district court’s judgment did not “bar recovery on Adobe’s breach claim because of a failure to prove a required element of that claim.” Op. at 12. Under applicable law, damages were not a required element of a breach of contract claim, and “[n]othing in the district court’s rulings foreclosed an award of nominal damages.” Id. at 12–13. Because Adobe “could still have proceeded to trial on its breach claim, and was required to do so to obtain a final decision on the merits that could be appealed,” the case is not ready for appellate review. Per Microsoft, 137 S. Ct. at 1715, Adobe’s ability to persuade the district court to enter a “final judgment” was insufficient to create the required finality.

Because there was no final judgment, the Fed Cir also lacked jurisdiction to consider Adobe’s objections to the district court’s assessment of exceptionality and its decision not to apply Rule 11 sanctions, nor PDIC’s cross-appeal regarding sanctions that were imposed against it. A fee denial order that comes before a final judgment is “generally not appealable.” Op. at 14. The same applies to orders imposing or denying sanctions.

KEYWORDS: APPELLATE JURISDICTION; FINAL JUDGMENT; DAMAGES; SANCTIONS; EXCEPTIONALITY