Cardinal Chem. Co. v. Morton Int'l, Inc.

508 U.S. 83 (1993)

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Nature of the Case

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Facts

Morton International, Inc. (P) is the owner of two patents on chemical compounds used in polyvinyl chloride (PVC). P filed this action alleging that Cardinal Chemical Company and its affiliates (D), had infringed those patents. Cardinal filed an answer denying infringement and a counterclaim for a declaratory judgment that the patents are invalid. While this case was pending, P filed two other actions against other alleged infringers of the same patents. The defendants in both cases, like D, filed counterclaims for declaratory judgments that the patents were invalid. The Louisiana case was tried first and resulted in a judgment for D finding no infringement and declaring the patents invalid. On appeal, the Federal Circuit affirmed the finding of no infringement but vacated the judgment of invalidity. The Delaware case is still pending. The District Court, in this case, held that the patentee had failed to prove infringement and that D had proved by clear and convincing evidence that both patents were invalid. Accordingly, the court-mandated two separate judgments: one dismissing the action for infringement with prejudice, and another on the counterclaim, declaring the patents invalid. P appealed to the Federal Circuit, challenging both the dismissal of its infringement claim and the judgment of invalidity. D filed a cross-appeal contending that it was entitled to an award of fees pursuant to 35 U.S.C. 285 and that P should be sanctioned for prosecuting a frivolous appeal. The defendant in the third, Delaware, case filed a brief amicus curiae urging the Court to affirm the judgment of invalidity. After affirming the dismissal of the infringement claim, the Federal Circuit vacated the declaratory judgment. It explained: 'Since we have affirmed the district court's holding that the patents at issue have not been infringed, we need not address the question of validity. Vieau v. Japax, Inc., 823 F.2d 1510 (1987). Accordingly, we vacate the holding of invalidity. Both parties then filed petitions for rehearing, arguing that the court should have decided the validity issue instead of vacating the District Court's declaratory judgment; they also filed suggestions for rehearing en banc, urging the Court of Appeals to reconsider its post-1987 practice of routinely vacating a declaratory judgment of invalidity whenever noninfringement is found. Over the dissent of three of its judges, the court declined those suggestions. D filed a petition for certiorari asserting that the Federal Circuit errs in applying a per se rule to what should be a discretionary matter. Because the Federal Circuit has exclusive jurisdiction over appeals from all United States District Courts in patent litigation, the rule that it applied in this case, and has been applying regularly since its 1987 decision in Vieau v. Japax, Inc., 823 F.2d 1510, is a matter of special importance to the entire Nation. We therefore granted certiorari.