Gen-Probe Inc. announced today that the United States Court of Appeals for the Federal Circuit has affirmed the summary judgment in favor of Gen-Probe in the patent infringement lawsuit initiated by Enzo Biochem, Inc. The summary judgment was granted in July of 2004 by the U.S. District Court for the Southern District of New York. The District Court ruled that the patent on which Enzo’s lawsuit is based is invalid and dismissed Enzo’s infringement claims against Gen-Probe and its co-defendant, Becton Dickinson. Enzo filed the infringement lawsuit in June 1999. Enzo alleged that Gen-Probe and Becton Dickinson willfully infringed U.S. Pat. No. 4,900,659 through the manufacture and sale of products for the diagnosis of gonorrhea.

Enzo is the assignee of the ’659 patent, which relates to nucleic acid probes that selectively hybridize to the bacteria that cause gonorrhea, namely, Neisseria gonorrhoeae, as well as methods for using those probes to detect the bacteria. The district court’s decision invalidated the ’659 patent for violating the on-sale bar. The trial judge specifically held that “there are no triable issues of fact,” and he granted defendants’ motion for summary judgment. The District Court judge made it clear that his rulings affected all six claims of the patent and held them invalid. Importantly, the trial judge concluded the hearing by asking the parties “if there is anything that I have missed in my rulings that I should rule upon.” Both counsel responded that the court had covered all the issues raised, and Enzo’s counsel indicated that it would appeal the decision. The judge then stated that he would “enter a summary order . . . that will enable you to proceed with dispatch in the Federal Court of Appeals on your rights if I have erred.” Enzo filed a Notice of Appeal and Gen-Probe then moved to dismiss the appeal, arguing that its remaining unadjudicated counterclaim of unenforceability for inequitable conduct rendered the district court’s judgment nonfinal.

Gen-Probe argued that there was no final judgment in this case because there was no adjudication of Gen-Probe’s unenforceability counterclaim, nor had Gen-Probe agreed to a dismissal without prejudice or without a finding of mootness. The district court also did not expressly find that the counterclaim was moot in light of its summary judgment of invalidity.

Gen-Probe did not bring the pending counterclaim to the district judge’s attention when asked whether any issues were outstanding and Enzo contends that the district court believed that the judgment was final, as evidenced by its statements during the summary judgment hearing and the unequivocal direction to the clerk of the court to enter an order closing the case. Second, Enzo asserts that Gen-Probe’s counterclaim for unenforceability is moot because all claims of the patent were held invalid. It argues that the allegations of inequitable conduct would be relevant only to a claim for attorney fees, which Enzo maintains does not render a judgment on the merits nonfinal for appellate review under Federal Rule of Civil Procedure 58(c). Enzo contends that Gen-Probe did not timely move for attorney fees, so it waived any such claim, and its unenforceability counterclaim is therefore moot. Gen-Probe responds that the district court’s belief that the judgment was final is irrelevant to whether jurisdiction is satisfied. It argues that the district court’s pronouncement that an order is final for purposes of appellate jurisdiction is not itself conclusive of finality, and it alleges that the district court had no occasion to address the counterclaim during the summary judgment hearing, which focused on invalidity.

Gen-Probe asserte that the responses by Gen-Probe’s counsel to the district court’s inquiry concerning whether all issues had been resolved did not unambiguously refer to the case as a whole, including the outstanding counterclaims. Gen-Probe asserted that its answer to the district court was in the more specific context of the summary judgment hearings; the affirmative statement by its counsel came at the end of a hearing on invalidity lasting several days and was not intended to waive its unenforceability counterclaim.

The Fed Circuit held:

We agree with Gen-Probe that its pending unenforceability counterclaim renders the district court’s judgment nonfinal for purposes of appeal. … Although it is true that the district court here did make a clear statement that the case was at an end, it was mistaken, because an unadjudicated counterclaim remained. Gen-Probe’s brief to this court, supported by the record, and unrefuted by Enzo, makes that clear. While it is, to say the least, regrettable that a party with a remaining counterclaim that it wishes to pursue, as well as its opponent, leaves a trial judge with the impression that no claims remain in the case, we have no choice but to take cognizance of the nonfinality created by the unquestioned existence of that counterclaim.

… although the district court may have indicated its intent that its order “will enable you to proceed with dispatch in the Federal Court of Appeals,” Summary Judgment Hearing at 35, it did not address at any time Gen-Probe’s unresolved counterclaim of unenforceability. At no time was the counterclaim waived, and, whether through inadvertence or not, the parties should not have let the trial court conclude its deliberations under that false impression. Because Gen-Probe’s counterclaim remains unadjudicated, the judgment is nonfinal.

We also disagree with Enzo that the only issue remaining is Gen-Probe’s claim for attorney fees. Enzo’s argument under Federal Rule of Civil Procedure 58(c) that a pending motion for attorney fees will not render an otherwise final judgment unappealable, is relevant only when all other claims have been adjudicated. More litigation lay ahead than awarding fees. To be eligible for attorney fees on the basis of inequitable conduct, Gen-Probe still has to establish that Enzo actually engaged in such conduct, an issue that remains unresolved in the district court. Despite the jurisdictional defect in the instant appeal, we have held that “a premature notice of appeal ripens upon subsequent action of the district court,” Pause, 401 F.3d at 1295 (citing E-Pass Techs., Inc. v. 3Com Corp., 343 F.3d 1364, 1367 (Fed. Cir. 2003) and Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 830 (Fed. Cir. 2003)). Accordingly, inasmuch as the appeal has been briefed and argued on the merits, in the interest of judicial economy we grant Enzo leave to seek remedial action in the district court and thereafter reinstate the appeal if and when the judgment becomes final.

See the entire holding here.

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