## United States Court of Appeals for the Federal Circuit

06-1238

EOLAS TECHNOLOGIES, INCORPORATED and REGENTS OF THE UNIVERSITY OF CALIFORNIA, Plaintiffs-Appellees,

v. MICROSOFT CORPORATION, Defendant-Appellant.

Martin R. Lueck , Robins, Kaplan, Miller & Ciresi L.L.P., of Minneapolis, Minneapolis, for plaintiffs-appellees. Wi th him on the brief were Jan M. Conlin , Richard M. Martinez , and Munir R. Meghjee

. David T. Pritikin , Sidley, Austin, Brown & Wood LL P, of Chicago, Illinois, for defendant-appellant. With him on the brief were Constantine L. Trela, Jr. , Richard A. Cederoth , and Robert N. Hochman of Chicago, Illinois, and Carter G. Phillips , of Washington, DC. Of counsel on the brief were M. Michael Hartmann , Brett A. Hesterberg , and Steven P. Petersen , Leydig, Voit & Mayer, Ltd., of Chicago, Illinois.

Appealed from: United States District Cour t for the Northern District of Illinois Judge James B. Zagel

## United States Court of Appeals for the Federal Circuit

06-1238 EOLAS TECHNOLOGIES INCORPORATED and REGENTS OF THE UNIVERSITY OF CALIFORNIA, Plaintiffs-Appellees,

v. MICROSOFT CORPORATION, Defendant-Appellant.

__________________ _________ DECIDED: July 31, 2006

__________________ _________ Before RADER, Circuit Judge , PLAGER, Senior Circuit Judge , and PROST, Circuit Judge

. RADER, Circuit Judge

. On remand from an earlier decision of this court, Eolas Techs. Inc. v. Microsoft Corp. , 399 F.3d 1325 (Fed. Cir. 2005) (Eolas I ), the United States District Court for the Northern District of Illinois den ied Microsoft Corporation’s (Microsoft’s) motion seeking to have the case reassigned to a different j udge. Eolas Techs. Inc. v. Microsoft Corp. , No. 99 C 0626 (N.D. Ill. Oct. 26, 2005) (opi nion and order denying motion to reassign) (Denial Order ). Microsoft petitioned this court fo r permission to appeal the district court’s denial. This court gr anted that petition. Eolas Tech s. Inc. v. Microsoft Corp. , Misc. No. 811, slip op. (Fed. Cir. Jan. 18, 20 06). Because this court defers to the law of the regional circuit on the iss ue of reassignment and Seventh Circuit Rule 36 requiresreassignm ent, this court reverses the district court’s denial of Microsoft’s motion to reassign the case.
I. In 1999, Eolas T e chnologies Inc o rporat ed and The Regents of t he University of California (collectively, Eolas) sued Microsoft, alleging that Microsoft’s Internet Ex plorer infringed c l aims of U.S. Pat ent No. 5,838,906 (the ’906 patent). After the district court construed the claims, a jury found that Micros oft infringed claims 1 and 6 of the ’906 patent and actively induced others to infr inge claim 1 of that patent. Eolas I , 399 F.3d at 1328. Invoking 35 U.S.C. § 271( f) , the district court determine d that the royalty awarded to Eolas s hould reflect the forei gn sales of Internet Explorer. Id. The district court further ruled in Eolas’ favo r on Microsoft’s defenses, granti ng judgment as a matter of law (JMOL) against Microsoft’s invalidity def enses of anticipation and obv iousness, and against its inequitable conduct defense. Id. On appeal, this court affirmed the distric t court’s claim construction and its damages analys is with respect to section 271(f). Id. at 1341. At the same time, this court found that the district court erred in rejecting Microsoft’s defenses. Therefore, this c ourt vacated the JMOL and remanded for further proceedings, including the resolution of genuine factual disputes . Id. at 1 335. On Microsoft’s inequitable conduct defense, this court vacated the dist rict court’s decision because it incorrectly exc l uded from its analys is a software product, which was potentially prior art. Id. Thus, this court remanded for the district court to assess inequitable conduct in light of that software product, and to, if necessary, “reconsider its findings” regarding intent to deceive the Un ited States Patent & Trademark Office. Id. at

06-1238 21336. This court’s decision in Eolas I did not mention reassignm ent to a different judge on remand. After the case returned to the district court, Micros oft sought reassignment to a different judge. Microsoft di d not assert any bias or mi sconduct on the part of the original judge, but instead ur ged that reassignment should occur automatically by operation of Local Rule 40.5, entitled “Remands, Procedures for Following Appea ls.” That rule, applic able in the Northe rn District o f Illinois, states: (a) General. This rule shall not apply to remands resulting from appeals of summary judgment s or interlocutory orders unless the mandate or order re manding the case indicates that it is to be reassigned to a judge other than the judge to whom the case was previous ly assigned ("prior judge"). Whenever a mandate from the Court of Appeals for the Federal Cir cuit or the Seventh Circuit is file d with the clerk indic a ting t hat the cas e appealed is remanded for a new trial, the case shall be assigned to the Exec utive Com m ittee, except (1) if the mandate or accompanying opinion indic a tes that the case is to be retried by the prior judge, then the c a se shall r e main on that judge's calendar . . .

. . . . (c) Reassignment. When a stipulation is filed indicat i ng that the parties wish the case assi gned to the prior judge, the Executive Committee shall reas si gn the case to that judge. When no such stipulation is filed, the Executive Committee shall direct that the case be reas signed to a judge other than the prior judge. A cas e reassign ed pursuant to this rule shal l be treated for assignment purposes as a new c a s e . The judge receiving the case is not authorized to transfer a similar cas e to the Executive Committee for reassignm ent to the prior judge. N.D. Ill. Local Rule 40 .5 (L R 40.5). In the D enial Order , the district court explained that LR 40.5 “has become a mostly dormant sect ion” of the Local Ru les. Denial Order at 2-

06-1238 33. According to the district court, that dor mancy is a result of Circuit Rule 3 6 of The United States Court of Appeals for the Se venth Circuit. That rule provides: Whenever a case tried in a district court is r e manded by this court for a new trial, it shall be reassigned by the district court for tri a l before a judge other than the judge who heard the prior trial unless t he remand order directs or all parties request that the same judge retry the case. In appeals which are not subject to this rule by its terms, this court may nevertheless direct in its opinion or order that this rule shall apply on remand. 7th Cir. R. 36. Thus, in the case of a rem and from the Seventh Circu it, Circuit Rule 36 makes reassignment the default rule—hence t he “dormant” status of LR 40.5. The district court explained that application of LR 40.5 to c a se s on remand from the Fed e ral Circuit was “problematic” because the local ru le does not mirror a F ederal Circuit rule like Circuit Rule 36. Denial Order at 3. The district cour t further concluded that “the policy of the Federal Circuit is not at all lik e that of the Seventh Circuit.” Id. Thus, the district court concluded that application of Circuit Rule 36 would be incon s istent wit h “Federal Circuit policy

. ” Finally, the district court reasoned that even if LR 40.5 were applied, reassignment would not be required because Eolas I indicated tha t the case should remain with the same judge. Accordi ng to the district court, when this court directed that “the district court may rec onsider its findings” on remand, Eolas I , 399 F.3d at 1336, it signaled an intent to send the c a se back to the same judge bec ause only the same judge could “r econsider its findings.” Denial Order at 5. Microsoft appeals, arguing that the Seventh Circuit’s Rule 36 should operat e to reassign this case.
II. The reassignment of a case to a new district court judge after remand is a procedural question that is not un ique to this court’s exclusive jurisdiction. Accordingly ,

06-1238 4regional circuit law governs reassignment questions. See, e.g. , Juicy Whip, Inc. v. Orange Bang, Inc. , 382 F.3d 1367, 1370 (Fed. Cir. 2004) (citing Micro Chem., Inc. v. Lextron, Inc. , 318 F.3d 1119, 1122 (Fed. Cir. 2003)). This court bases its d e ference for regional circuit law on a concern for “consis tency of future trial management.” See Biodex Corp. v. Lor edan Biomedical, Inc. , 946 F.2d 850, 857-58 (Fed. Cir. 1991) (explain ing that regio n a l c i rcuit la w sho u ld a pply to construction of the Federal Rules of Civil Procedure or the local rules of the dist rict court). In this case, trial management came to a halt as the district court departe d from the normal rule s for remands in the Seventh Circuit and sought instead a proper cour se for remands from this court. This court intended to prevent this type of confus ion with its rule of deference for procedural matters without substantive bearing on this cour t’s exclusive jurisdiction. Thus, while it examined both Juicy Whip and Micro Chem in its search for the correct law on judicial reassignm ent, Denial Order at 4, the district court er red in its assessment of those opinions. Both Juicy Whip and Micro Chem applied r egional cir c uit law in deciding the question of reassignm ent on remand. See Juicy Whip , 382 F.3d at 1373-74 (citing and apply i ng Ninth Circuit law); Micro Chem , 318 F.3d at 1126 (citing and applying Tenth Circuit la w); see also Int’l Rectifie r Corp. v. IXYS Corp. , 361 F.3d 1363, 1377 (Fed. Cir. 2004) (look ing to regional circuit law when c onsidering whether to remand to a different judge). In short, as these cases show, the law of the Sev enth Cir cuit controls the reassignm ent question in this case. The Sev e nth Circuit appear s unique among the circuit courts of appeals bec a use it sets forth its law on judicial r eassignmen t in the form of a rule. Thus, contrary to Eolas ’ arg u ments, Circuit Rule 36 is not merely an inter nal glossary for construing

06-1238 5silenc e in Seventh Circuit opi nions as a direction t o rea ssign a case on remand. Rather, the Seventh Circuit rule makes rea ssignment the norm, unles s our sister circuit alters the default rule with an express as signment back to the same judge. “The purpose of Rule 36 is to avoi d, on retrial after reversal, any bias or minds et the judge
may have developed during the first tr ial.” Cange v. Sotler and Co. , 913 F.2d 1204 (7th Cir. 1990) (emphases added). Because t he operat ion of Rule 36 avoi ds “any bias or mindset” that “may have developed,” the law of the Seventh Cir cuit differs from that o f other circuits. See, e.g. , Procter & Gamble Co. v. Haugen , 427 F.3d 727, 744 (10th Cir. 2005) (“[W ] e will remand with inst ructions for assignment of a diffe rent judge only when there is proof of personal bi as or under extreme circumst ances.”) (internal quotes and citation omitted); Glen Holly Ent m ’t v. Tektronix Inc. , 343 F.3d 1000, 1017- 18 (9th Cir. 2003) (explaining that reassignm ent considerations include “w hether the district court judge would have substantial di fficulty in putting out of his or her mind previously expressed views”); United St ates v. Microsoft Corp. , 56 F.3d 1448, 1463 (D.C. Cir. 1995) (explaining that reassignment does not require a finding of actual bias or prejudice, “but only t hat the facts might reasonably cause an objective observer to question the judge's impartiality”) (int ernal quotes and citation omitted). Contrary to Eolas’ arguments, Rule 36 ap plies to remands from this court as well as from the Seventh Cir cuit itself. Nothing in the la nguage of that rule pr events this court from apply i ng the same rule. Because it is a rul e of the Seventh Circuit, the rule’s language referring to a case “remanded by this court for a new trial” refers literally to a case remanded by the Seventh Cir cuit. However, when this c o urt follows t he law of a regional cir c uit, it acts, as best it can, as that regional cir c uit wo uld when confronted with

06-1238 6the same issue. When this court adopts the Sevent h Circuit’s law on reassignment, it follows Rule 36 in the same way the Sevent h Circuit would. Thus , when applying Rule 36 in the place of the Seventh Circuit, the F ederal Circuit becomes “this court” within the language of the rule. Application of Rule 36 does not rob this court of its independent duty to assess reassignm ent in any particular case. Rather, Ru le 36 itself leaves “t his court” free to permit the default rule to operate or to permi t remand to the same judge or to requir e reassignm ent when the def ault rule would not otherwis e operate. See C a nge , 913 F.2d at 1298 (“[Rule 36] does not automatically apply wher e t he judgment reversed has no t resulted from a trial, but we apply it in our discretion to av oid the operation of bias or mindset which seem s likely to have dev elope d from consideration and decision of motions to dismiss or motions for summa ry judgment and the like.”); Jannotta v. Subway Sandwich Shops, Inc. , 125 F.3d 503, 517 (7th Cir. 1997) (vacating and remanding for a new trial with the instructi on that “Rule 36 shall not apply on remand”). Because Rule 36 applies on remand after the Eolas I decision, this court need
not exam ine the applicability of LR 40.5 to th is case. Nonetheless, the district court relied heav ily on LR 40.5, theref ore this c ourt will briefly addres s that reasoning. I n Eolas I , this court noted that “the district cour t may reconsider its findings” on remand. 399 F.3d at 1336. That statement addressed “the district court,” not any partic ular judge representing that court. In ot her words, this court did not use that language t o sign al a decision to depart from Circuit Ru le 36, or LR 40.5, to the ex t ent the latter applies. While courts often interchange loosely terms like “the judge” and “the c ourt,” the district court itself is not lit erally synony mous with t he presiding district c ourt judge. Thus, the

06-1238 7same district court, here the District Cour t for the Northern Distr ict of Illinois, may “reconsider” an iss ue even though a different judge s upplied the initial consideration. Any discus s ion of reassignment necessarily must distinguish between an individua l judge and the court itself. This court’s statem ent did not signal any departure from the Seventh Circuit rule by referring only to “the district cou r t.” COSTS Each party shall bear its own costs.
R E VER SED

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