Fed. Circ. Backs Double Dismissals, but Dodges Preclusion

Sterne Kessler Director Richard Crudo spoke to Law360 about the Federal Circuit’s precedential opinion in AML IP, LLC v. Bath & Body Works Direct, Inc. affirming a district court’s decision to dismiss a patent case on multiple grounds.

Discussing the court’s reasoning, Crudo noted, “If the court had only granted one motion and the plaintiff had then appealed and won, the district court would have had [to address] the other motion, which would have inevitably led to another appeal,” he continued, “The Federal Circuit said, ‘Actually, yes, we endorse the district court’s ability to manage its docket to do what is most efficient.'”

Crudo commented on the unusual nature of the appeal, “If anything, the appellee may wish to waive argument, but even then only if the [appellant] agrees, in which case both parties submit the case on the briefing.” He added, “Here, the appellant filed a notice saying, ‘We waive argument.'”

He further explained that while there is no uniform procedure for making decisions on the layered motions, part of the Federal Circuit’s decision allowed district courts to have the choice to decide multiple case-dispositive issues at once. “I would imagine that some judges would be perfectly happy to dismiss on a single ground, like where venue is clearly improper. They can dismiss on that basis alone without wading into the merits of invalidity,” Crudo said. “But for the judge who does want to weigh in on the merits, the Federal Circuit here is saying that that is a permissible exercise of the court’s discretion.”

In discussing jurisdiction-based dismissals, judges could not hold that they lack subject matter jurisdiction and then decide another motion, as Crudo explained, “If there isn’t jurisdiction in that sense, the court is literally without power to do anything.”

The Federal Circuit did not rule on whether AML would still be able to enforce the patent in the future, leaving unanswered questions on the patent owner’s ability to assert the patent against other parties in future litigation. Crudo noted, “I do think that if and when AML does try to assert this patent against another entity, that this will be the first issue that is litigated.”

“The reason that it’s not quite clear in this case is because the invalidity ruling was not necessary for the judgment. The district court could have entered judgment in favor of the defendant without ever having addressed the patent eligibility motion.” Crudo concluded.