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Nisus Corp. v. Perma-Chink Systems, Inc.

August 13, 2007

United States
Court of Appeals for the Federal Circuit

[1] Case No.: 06-1592, 07-1142

[2] Case Name:

NISUS CORP. V. PERMA-CHINK SYSTEMS, INC.

Rader, Bryson, Linn

[3] Date of Decision: August 13, 2007

[4] THE FEDERAL CIRCUIT HELD THAT IT DID NOT HAVE JURISDICTION TO HEAR AN APPEAL FROM AN ATTORNEY FROM A JUDGEMENT THAT THE PATENT THAT THE ATTORNEY PROSECUTED WAS UNENFORCEABLE FOR INEQUITABLE CONDUCT AND DISMISSED THE APPEAL AND AFFIRMED THE DISTRICT COURT'S DENIAL OF THE ATTORNEY'S MOTION TO INTERVENE IN THE SUIT.[6] Key Words:
Inequitable Conduct, Standing, jurisdiction, Intervention
[5] Patent No(s).: 6,426,095 B2[7] Case Link:
http://www.fedcir.gov/opinions/06-1592.pdf
Procedural Background:
Summary of the Case:

The United States District Court for the Eastern District of Tennessee found that a patent was unenforceable due to inequitable conduct committed by two of the patent attorneys prosecuting the patent because documents involved in a lawsuit on related patents were not disclosed to the United States Patent Office during patent prosecution. The plaintiff and defendant settled the case after that decision. One of the attorneys who had prosecuted the patent made a motion to intervene and the district court denied the motion. The attorney appealed the decision and the denial of his motion to intervene. The Federal Circuit held that it did not have jurisdiction over the appeal and affirmed the denial of the motion to intervene.

Patent

The United States District Court for the Eastern District of Tennessee found that a patent was unenforceable due to inequitable conduct committed by two of the patent attorneys prosecuting the patent because documents involved in a lawsuit on related patents were not disclosed to the United States Patent Office during patent prosecution.  The plaintiff and defendant settled the case after that decision.  One of the patent attorneys moved to intervene and his motion was denied.  He appealed the denial of his motion to intervene and the decision on the grounds that the district court's decision that he committed inequitable conduct while prosecuting the patent in suit was a finding that was essentially imposing sanctions on him and harming his reputation.

The Federal Circuit held that they did not have jurisdiction to hear the appeal as the attorney did not have standing to appeal because the district court's decision did not formally sanction him or hold him in contempt.  The Federal Circuit noted that although statements in the decision might be harmful to the attorney's reputation, that did not convert the statements into a decision from which the attorney could appeal.   Decisions that criticize attorneys and that are intended to be formal judicial actions in disciplinary proceedings are appealable, but other judicial criticism is not.  The Federal Circuit stated that allowing anyone who feels like a court's decision damaged his or her reputation to appeal from that decision when the person is a stranger to the lawsuit would result in multiple appeals from non-parties.  The Federal Circuit suggested that a petition for a writ of mandamus and a request that the offending material be expunged from the public record may be a better course of action.

The Federal Circuit affirmed the district court's denial of the attorney's motion to intervene because even if he were allowed to intervene, the Federal Circuit would not have jurisdiction over the appeal. The Federal Circuit also held that because the attorney did not have a substantial interest in the litigation, the district court did not commit legal error in denying his motion to intervene.

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