Holding

The Federal Circuit in this appeal vacated the district court's consent judgment in a contract dispute over intravascular stent patents, and remanded the case for clarification. Plaintiff-appellant David Jang as the inventor of patents-at-issue had earlier filed contract claims against patent assignees Boston Scientific and Scimed to collect payments. The right to these payments depended on whether the sale of certain devices by Boston Scientific and Scimed were “covered by” (i.e., would have infringed) the patents at issue. The district court issued a consent judgment that included its earlier claim constructions. Aggrieved, Jang timely appealed from the judgment, challenging only the district court’s claim construction with respect to the patents. In this appeal, the Federal Circuit found that the consent judgment suffered from two ambiguities. First, the Federal Circuit found it impossible to discern from the stipulated judgment which of the district court’s claim construction rulings would actually affect the issue of infringement. Second, the stipulated judgment provided no factual context for the claim construction issues presented by the parties. In particular, nothing in the stipulated judgment provided any context with respect to how the disputed claim construction rulings related to the accused products.

Detailed Summary

Plaintiff-appellant Jang is the named inventor of the ’021 and ’743 patents, relating to the design or architecture of intravascular stents, tube-shaped mesh devices used to treat certain forms of cardiac disease. In this contract case, Jang alleged that defendant-appellee Boston Scientific Corporation (“Boston Scientific”) and Scimed Life Systems Incorporated (“Scimed”) breached a contract with Jang by failing to make required payments. The right to these payments depended on whether the sale of certain devices by Boston Scientific and Scimed were “covered by” (i.e., would have infringed) the patents at issue, originally issued to Jang and later assigned to defendants-appellees. Opinion, pp. 1-2.

The U.S. District Court for the Central District of California issued a claim construction order, and the parties entered into a stipulation conceding that infringement could not be shown if the district court’s claim constructions were upheld on appeal. The stipulation did not explain whether Jang’s success on appeal in overturning any particular claim construction issue would, in fact, affect the infringement dispute. Id.

The subject of this appeal was the district court’s consent judgment drafted by the parties and granting declaratory relief that the disputed balloon angioplasty patents “are not within the scope of Dr. Jang’s assignment obligations to (Boston Scientific) under any current or past agreement between the parties.” Id., pp. 5-6, citing J.A. at 29. The consent judgment also preserved Jang’s right to appeal the district court’s claim construction rulings with respect to the ’021 and ’743 patents, and preserved Jang’s “right to pursue his breach of fiduciary duty and rescission claims in the event the Court of Appeals reverses or vacates [the district court’s] claim construction order.” Id. citing id . at 30. Jang timely appealed from the final consent judgment, challenging only the district court’s claim construction with respect to the ’021 and ’743 patents. At oral argument on appeal, counsel for plaintiff admitted that resolution of at least one of the claim construction disputes would not affect the issue of infringement.  Id., p. 6.

In this appeal, the Federal Circuit found that the consent judgment under review suffered from two ambiguities, thus prompting the Federal Circuit to conclude that the case be remanded to the district court for clarification. Id., p. 9.

First, the Federal Circuit found it impossible to discern from the stipulated judgment which of the district court’s claim construction rulings would actually affect the issue of infringement. Here, plaintiff challenged several aspects of the district court’s claim construction on appeal, such as the interpretation of “expansion column” to require a “tubular” structure and the failure to require that the expansion column be “vertical.

If the Federal Circuit did not require clarification of the stipulated judgment in this case, it would risk rendering an advisory opinion as to claim construction issues that do not actually affect the infringement controversy between the parties. The Supreme Court has explicitly held that Article III does not permit the courts to resolve issues when it is not clear that the resolution of the question will resolve a concrete controversy between interested parties. Id., pp. 10-11, citing Coffman v. Breeze, 323 U.S. 316, 322-24 (1945).

Second, the stipulated judgment provided no factual context for the claim construction issues presented by the parties. In particular, nothing in the stipulated judgment provided any context with respect to how the disputed claim construction rulings related to the accused products. Id., p. 11.

“This is not a case in which the impact of the constructions is obvious from a simple examination of the record documents. While the record contains depictions of the accused products and the parties offer cryptic comments in their appeal briefs on the infringement issue, there is no explanation in the stipulation as to why the accused products would not infringe under the district court’s claim construction or why they would infringe under the alternative claim constructions offered by Jang. Nor is it possible to infer this information from the record. It is, in fact, not even clear from the stipulation or from the briefs on appeal which claims of the two patents are asserted. The lack of information concerning infringement makes it difficult to comprehend the claim construction issues. In other words, on this record, we lack “a proper context for an accurate claim construction.” Lava Trading, 445 F.3d at 1350. Under these circumstances we conclude that a remand for clarification is both necessary and appropriate.” Id., p. 13.

On the basis of the foregoing, the Federal Circuit vacated the district court’s consent judgment, and remanded the case for further proceedings not inconsistent with its opinion.