## United States Court of Appeals for the Federal Circuit

04-1484

ERICSSON, INC., Plaintiff,

v. INTERDIGITAL COMMUNICATIONS CORPORATION and INTERDIGITAL TECHNO LOGY CORPORATION, Defendants-Appellants,

v. NOKIA CORPORATION, Intervenor-Appellee.

Dan D. Davison , Fulbright & Jaworski L.L.P., of Dallas, Texas, argued for defendants-appellants. With him on the brief were Linda L. Addison and Warren S. Huang , of Houston, Texas. Keith E. Broyles , Alston & Bird, LLP, of Atlanta, Georgia, argued for intervenorappellee. With him on the brief was Patrick J. Flinn . Of counsel was William R. Hubbard

. Appealed from: United States District C ourt for the Northern District of Texas Judge Barbara M.G. Lynn

## United States Court of Appeals for the Federal Circuit

04-1484 ERICSSON INC., Plaintiff,

v. INTERDIGITAL COMMUNICATIONS CORPORATION and INTERDIGITAL TECHNO LOGY CORPORATION, Defendants-Appellants,

v. NOKIA CORPORATION, Intervenor-Appellee.

__________________________ DECIDED: August 4, 2005

__________________________ Before RADER, SCHALL, and BRYSON, Circuit Judges

. SCHALL, Circuit Judge

. InterDigital Communications Corporation and InterDigital Technology Corporation (collectively, “InterDigital”) appeal the decision of the United States District Court for the Northern District of Texas t hat (i) granted leave to Nokia Corporation (“Nokia”) to intervene in proceedings relating to this pr eviously-settled lawsuit between Ericsson, Inc. (“Ericsson”) and InterDigital; and (ii) granted Nokia’s motion to reinstate certain previously vacated rulings in the Ericsson-Inter Digital suit. Ericsson, Inc. v. InterDigitalCommunic a tions Cor p

. , No. 3:93-CV-1809-M (N.D. Tex. June 3, 2004) (“Reinstatement Order ” ) . W e reverse. BACKGROUND
I. InterDigital owns a group of patents rela ting to digit a l wireless telephony. In 1993, Eric sson filed a declarat o ry judgment suit against In terDigital, as serting that InterDigital’s patents were invalid under 35 U.S.C. §§ 101, 102, 103, and 112, and/or were unenf orceable. InterDigital c ounterclaimed for pat ent infringement. 1 Ericsson and InterDigital litigated the case for mo re than a decade, with the litigation resulting in v a rious orders and rulings by the distri ct court. Most notably, the district court issued various rulings constr uing the claims in suit, and granted summary judgment of non-infringement of some of the asserted claims . All of these rulings were sealed pur suant to a broad confidentiality order. The parties finally reac hed a settlement in March of 2003. In connection with the settlement, they filed a joint m o tion to va cate the claim construction and summary judgment orders, and to maintain the record under seal. The dist rict court granted the parties’ motion. Ericsson, Inc. v. InterDigital Communications Cor p

. , No. 3:9 3 -CV-1809- M (N.D. Tex. Mar. 18, 2003) (“Vacatur Order ”). The ne xt day, the district court signed a joint stipulation that dismiss ed the case with prejudice.

1 The patent s in suit, according to t he original complaint and counterclaim, were: U.S. Patent Nos. 4,675,863; 4,785,450; 4,811, 420; 4,817,089; 4,912,705; 5,022,024; 5,119,375; 5,121,391; 5,657,358; and 5,687,194.

04-1484 2II. In 1999, while the suit between Ericsson and InterDigital was pending, Nokia negotiated a lic ense agreement under the Inter Digital patents (“the InterDigital-Nok ia licens e”). The InterDigital-Nok ia licens e div i ded Nok i a’s royalty payments to InterDigital into two time periods . For the period prior to 2002, Nokia agreed to pay InterDigital a lump-sum royalty. Howev e r, for the year 2002 and thereafter, Nokia’s royalty obligations would be determined by what InterDigital charac terizes as a “most favored licens e” provision. Under this provision, Nokia agr eed that the amount owed to InterDigital for 2002 and thereafter would be calculated based on the financial terms of future licenses to Inte rDigital’s patents taken by certain third-parties. In other words, Nokia agreed to pay InterDigital a royalt y calculat ed (at least in part) on what competitors were prepared to pay in royalties to InterDigital. 2 When Ericsson and InterDigital settled t heir suit, Ericsson agreed to a license. Subsequently, InterDigital issued a press release announcing that its settlement with Ericsson meant that N o kia owe d InterDigit al between $ 1 00 and $1 20 million in royalties for the year 2002 under the Inte rD igital-Nokia license. At some point, Nokia initiated arbitrat ion proceedings against InterDigital under procedures outlined in its licens e. In July of 2003, after t he Ericsson-InterDigital s u it had been dismissed, Nokia s ought to intervene in the case, “for the purpose of obtaining access to the sealed pleading s and orders in this c a se on th e same basis as the litigants themselves . . . .” Nokia ar gued that orders relati ng to t he scope of

2 The precis e terms of the InterDigit al-Nokia license ar e not in the record before us. What we say in this opinion about the Nokia-InterDigital license is based upon what appear to be undisput ed statements in the briefs.

04-1484 3InterDigital’s patents were matters of general public interest. Nokia als o ar gued that it , in particular, had a “specific, compelling and financially quantifiable need” to gain access to the documents in the case, in light of InterDigital’s pr ess releas e indic a ting that Nokia owed InterDigital mil lions of dolla rs in royalties. The district court held a hearing on Nok i a’ s intervention request. Thereafter, on December 2, 2003, pursuant to Federal Rule of Civ il Proc edure 24(b)(2), the district court granted Nokia’s request to intervene and affo rded it access to the sealed record in the litigation. See Reinstatement Order , slip op. at 3. In addition, the cour t indic a ted that it would make av ailable to the Inter Digital-Nokia arbitrat ion panel any documents that the panel request ed. The court also unsealed its Vacatur Order . See id. On December 29, 2003, Nokia sought to expand the scope of its intervention. Specifically , it moved under F ed. R. Civ. P. 60(b) for rein statement of the orders and rulings v a cated on M a rch 18, 2003. Alter nat ively, Nokia moved un der Fed. R. Civ. P. 24(b)(2) to intervene for the purpose of pursui ng its Rule 60(b) motion. InterDigital and Ericsson opposed both motions. Addressing t he first motion, the court noted that the scope of Nokia’s intervention up to that ti me had been limited to gaining acc e ss to the sealed rec o rd. Id. at 15-16. For that r eason, the court rejected N o kia’s cont ention that the scope of the previously-granted interv ention was broad enough to permit the court to consider Nokia’s motion under Rule 60(b) to reinstate the vacated orders and rulings. Id. at 8. The court next turned to Nokia’s motion to i n tervene pursuant to Fed. R. Civ. P. 24(b)(2) for the purpos e of making a Rule 60(b ) motion. The cour t determined first that Nokia had standing t o chal lenge the Vac a tur Order because “ v acatur of the Court’s

04-1484 4rulings pot entially affects Nokia’s obligations under its agreement with InterDigital.” Id. at 10. The court then proceeded to analyze the timeliness of Nok i a’s motion under the four-part test formulated by the Fifth Circuit in Sta llworth v. Monsanto Co. , 558 F.2d 257, 264-66 (5th Cir. 1977). After finding that all four factors weighed in fav o r of Nokia, the court ruled that Nokia’s motion to in tervene unde r Rule 24(b)(2) was timely. The court therefore allowed Nokia to intervene. Reinstat ement Order , slip op. at 12-14. Next, the court determined t hat Nokia’s Rule 60( b) motion was made within a reasonable time. Finally, ha ving allowed intervention, the court granted Nokia’s request to reinstate the vacated orders and rulings. Id. at 24. The court first stated that the issue of whether vacatur w a s proper was before the court when it considered Ericsson’s and InterDigital’s joint motion to vacate. Therefore, the court reasoned, Nokia’s motion to reinstate met the requirement of Rule 24(b) that it “have a question of law or fact in c o mmon” with the “main action.” Id. at 13. F i nally, turning to Nok i a’s request for reinstatement, the court ruled tha t, in grant ing Ericsson’ s and Int e rDigital’s motion to vacate, it had erred as a matter of law bec ause it had not properly applied United States Bancor p Mort gage v. Bonner Mall Partnership , 513 U.S. 18 (1994). See Reinstatement Order , slip op. at 18. The court ther efore reinstated the vacated orders and rulings from the E r icsson-InterDigital lawsuit. InterDigital has timely appealed from the Reinstat ement Order . We have jurisdiction pursuant to 28 U.S.C. § 1295(a )(1) because the district court’s original jurisdiction in this cas e was bas ed in part on 28 U.S. C. § 1338( a). See Apotex, Inc. v. Thompson , 347 F.3d 1335, 1342 (Fed. Cir. 2003).

04-1484 5DISCUSSI ON
I. On appeal, InterDigital first challenges the district court’s ruling in the Reinstatement Order allowing Nokia to intervene under Rule 24(b)(2) to seek reinstatement of the vacated orders. 3 InterDigital further argues that, assuming the district court did not err in allo wing Nokia to intervene, it nevertheless did err in the Reinstatement Order in granting the motion to reinstate the vacated orders. 4
Whether the district court erred i n a llowing Nokia to intervene and to pursue a Rule 60(b) motion ar e matters not unique to patent law. They t herefore are governed by the law of the appropria te regional circuit. See Insituform Techs ., Inc. v. CAT Contr., Inc. , 385 F.3d 1360, 1372 (Fed. Cir. 2004) (proc edural matters general ly are governed by regional circuit law); Hawo rth, Inc. v. Steelcase, Inc. , 12 F.3d 1090, 1092 (Fed. Cir. 1993) (“This appeal involves a pr ocedural m a tter not unique to patent law, namely the denial of a motion to intervene. Therefore, [r egional circuit law] controls[.]”). In this case, Fifth Circuit law governs.
II. Rule 24(b)(2) of the Federal Rules of Civil Procedure states, in pertinent part: Upon timely application anyone may be permitted to intervene in an action . . . when an applicant’s claim or defense and the main action hav e a question of law or fact in c o mmon. . . . In exercis i ng its discretion the court shall cons ider whet her the intervention will

3 It does not appear that InterDigital c hallenges the district court’s order allowing Nokia to int e rvene ear lier for t he limited purpose of accessing t he sealed documents. Thus, our analys is is confined to the court’s June 2004 order allowing Nokia to intervene for the purpose of seeking reinst atement of t he vacated orders.

4 In view of our disposition of the ca se, it is not necess a ry for us to addres s the second issue raised by InterDigital.

04-1484 6unduly delay or prejudice the adjudi cation of the rights of the original parties. Under F i fth Circuit law, order s concerning permissive interv ention under Rule 24(b) are reviewed for an abuse of disc retion. See Taylor Communic a tions Group, Inc. v. Southwest e rn Bell Tel. Co. , 172 F.3d 385, 387 (5th Cir. 1999). “A district c ourt abuses its discretion if it bases its decision on an error of law or a clearly erroneous assessment of the evidence.” Fed. Trade Comm’n v. Nat’l Bus. Consultants, Inc. , 376 F.3d 317, 321 (5th Cir. 2004) (citations omitted). InterDigital argues that the district court’s decision al lowing Nok i a to intervene in order to seek reinstatement of the vacated orders and rulings is tainted by legal error in several res pects. Firs t, it argues that in tervention was improper because, in December of 2003, there was no live case in which Nokia could intervene. Second, it ar gues that intervention was improper becau se Nok i a lacked standing, t he reason being t h at Nokia did not hav e a claim or defense t hat it was seeking to protect by intervention. In other words, Nok i a failed to allege a c o gnizable injury in fact. Third, InterDigital contends that Nokia’s request to intervene was untimely, and finally, it urges that intervention was improper because Nokia’ s request to intervene did not pr esent a claim or defense that shared a question of law or fact in common with the Ericsson-InterDigital suit, as required by Rule 24(b)(2). Nokia responds that the Vacatur Order ca used it to suffer an injury in fact because the InterDigital-Nokia lic ense estab lished a complicated royalty rate setting process that involv es determining the scope and validity of Inte rDigital’s p a tents. It als o argues that its motion to intervene was timely and that, liberally cons trued, its motion to

04-1484 7intervene did meet the Rule 24(b)(2) requirem ent of presenting a cl aim or defense that shared a question of law or fact i n comm on with the Ericsson-In terDigital suit. We turn fir s t to In terDigital’s argument that the district court erred as a matter of law in granting intervention because, as of December 2003, there was no live case in which Nok i a could intervene. It is well-se ttled law in the Fifth Circuit that “[a] prerequisit e of an int e rvention (which is an ancillary proc eeding in an already instituted suit) is an ex isting suit within t he Court’ s jurisdiction.” Non Commissioned Officers Ass’n v. Army Times Publ’g Co. , 637 F.2d 372, 373 (5th Cir. 1981) (citing Truvillion v

. King’s Daughters Hosp. , 614 F.2d 520, 526 (5th Cir. 1980)); Kendrick v. Kendrick , 16 F.2d 744, 745 (5th Cir. 1926). In Kendrick , in what appears to be the seminal case on this issue in the Fifth Circuit, the court state d : An existing suit within the court’s jurisdiction is a prerequisite of an intervention, which is an ancillar y pr oceeding in an already instit uted suit or action by whic h a third person is permitted to make himself a party, either joining the plaintiff in claiming what is sought by the complaint, or uniting wit h the defendant in resisting the claims of the plaintiff, or demanding something adversely to both of them. Kendrick , 16 F.2d at 745; see als o Krim v. pcOrder.co m , Inc. , 402 F.3d 489, 502 (5th Cir. 2005) ( “ The ‘prerequisite of an interventi on’ that there be ‘an ex isting suit within the Court's jurisdiction’ depends here on the indivi dual claims. That none of the indiv i dua l claims remained v i able . . . when the motion to inter v ene was filed, disp oses of the attempt a t intervention.”) (citi ng Non Com m issioned Officers As s’n , 637 F.2d at 373); Houston Gen. Ins. Co. v. Moore , 193 F.3d 838, 840 (4th Cir. 1999) (“When Beaumont filed its motion to intervene more than 60 da ys after the entry of final judgment, there was no pending litigation in which Beaum ont c ould intervene. Therefore, the motion was untimely . . . .”).

04-1484 8We agree with InterDigital that Nokia’s motion to intervene failed to satisfy the Fifth Circuit requirement that there be an existing s u it in whic h to intervene. The Ericsson-InterDigital litigation ended on Ma rch 19, 2003, when the district court dismissed the case with pr ejudice after it was settl ed. Cons equently, when Nokia sought to intervene in December of 2003 in order to obtain re instatement of the vacated orders and rulings from the litigat ion, there did not exist the Fifth Circuit prerequis i te for intervention: “an existing suit within the court’s jurisdiction. ” Non Commissioned Officers As s’n , 637 F.2d at 373. 5 We are not persuaded by Nokia’s contention that Non Commissioned Officers Association is distinguishable because in this case, unlike there, the district court still retained jurisdiction to entertain a Rule 60(b) motion. In te rms of ti meliness, Rule 60(b) states that a motion “shall be m ade within a reasonab le time, and for reasons (1), (2), and (3) not more than one year after the judg ment, order, or proceeding was entered or taken.” The issue, ho wever, is not whether it was still within the autho rity of the district court to entertain a Rule 60(b) motion from a party, which Nokia was not. Rather, th e issue is whether there was “[ a]n existing suit within the c ourt’s jurisdiction” in whic h Nokia c ould either “join . . . the plaintiff in claiming what . . . [was] sought by the

5 We also do not think that it is har sh to prevent Nokia fr om waiting until th is litigation was dead before atte mp ting to ex cavate the vaca ted orders. Nokia was a w ar e of the exis tence of the court’s rulings fo r more than two years before it sought t o intervene. During that time, Nokia did not contest the proprie ty of the district court’s confidentiality order barring public access to t hose rulings, nor did Nokia othe rwise seek to intervene. According to Nokia’s couns el , it thought that “Ericsson was winning, [and InterDigital’s] patents were either not infringed, or not valid.” In addition, to the extent that N o kia’s in terest in this case is to ascertain the scope of the InterDigit al patents in order to c a lculate its roya lty obligations, Nokia is free to argue the proper claim scope of the InterDigital patents in its pending arbitration with InterDigital.

04-1484 9complaint, or unite . . . with the defendant in resisting the claims of the plaintiff, or demand . . . something adverse to both of them.” Kendrick , 16 F.2d at 745. There was not such a suit within the c ourt’s j u risdiction because the Er icsson-InterDigital case ha d been dismissed, and Nokia was not seeking to interv ene for any of the cit ed purposes. In arguing that its intervention was not untimely, Nokia also relies on Ceres Gulf v. Cooper , 957 F.2d 1199 (5th Cir. 1992); Stallworth v. Monsanto Co. , 558 F.2d 257 (5th Cir. 1977); and McDonald v. E.J. Lavino Co. , 430 F.2d 1065 (5th Cir. 1970). In each of these cases, the court of appeals reversed a district court decision denying a motion for intervention under F e d. R. Civ. P. 24. Nokia’s reliance on thes e cases is misplace d, however. Each involved facts totally differ ent from those presen ted here and in No n Commissioned Officers Association , Truvillio n , and Kendrick

. In Ceres , the Director, Office of Worker’s Compensat ion Programs, sought to intervene as a matter of right purs uant to Fed. R. Civ. P. 24(a)(1) 6 in a workmen’s compensation case under the authority giv en to him by the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq. The motion to intervene was filed one day before entry of final judgment. See 95 7 F.2d at 12 02. Stallworth invo lved a motion to intervene—either as a ma tter of right under Rule 24(a)(2) 7 or permissively under Rule 24(b)(2)—by individuals directly affected by a settlement agreement in a c i v il rights case. See 558 F.2d at 263. The motion to i n te rvene was filed before entry of

6 Rule 24(a)(1) provides that “[ u]pon timely applic ation anyone shall be permitted to intervene in an action . . . when a statute of the Unit ed States confers an unconditional right to intervene[.]”

7 Rule 24(a)(2) provides, in perti nent part, for intervention when “the applicant claims an interest relating to the pr oper ty or transaction which is th e subject o f the action . . . .”

04-1484 10final judgment. See id. at 262-63. Finally, McDonald involved an insurance company’s motion to intervene as a matter of ri ght under Rule 24( a)(2) in a workmen’s compensation suit to protect its subrogation interest. See 430 F.2d at 1066. T h e motion to intervene was filed the day after a jury, pursuant to inst ructions from the trial court, returned a verdict in acc o rdance wi th a compromise settlement between the parties. Id. at 1068. Signific antly, each of these cases involv ed “an e x isting suit within the court’s jurisdiction” in which a third par ty sought to intervene to assert an interest different from thos e of the parties. For the foregoing reasons, the decision of the district cour t allowing Nokia to permissively intervene under Rule 24(b)(2) was in corr ect as a matter of law. It therefore constituted an abuse of discretion and must be reversed.

III. Nokia also argues that, even if its Rule 24( b) intervention to seek reinstatement of the vacated orders wa s untim ely, that fact should not cause us to disturb the district court’s decision to reinstate the vacated orders. According to Nok i a, that is because the court’s decision to vac a te its claim constr uction orders and summary judgment rulings in light of the parties’ s e ttlement was an “obvious error of law” t hat is corr ectable as a “mistake” under Federal Rule of Civil Procedure 60(b)(1). See In re Grimland, Inc. , 243 F.3d 228, 233 (5th Cir. 2001) (“When a judicial dec is ion contains an obv ious error of law, apparent on the record, then the error may be corrected as a mistake pursuant to Rule 60(b). The error of law mus t involve a fundamental misconc eptio n of the law or a conflict wit h a clear statutory ma ndate.”). N o kia argues that t he district court can correct such an error sua sponte . Accordingly, it reasons t hat because the district court

04-1484 11indic a ted that it would have so acted in this case, whet her the intervention motion was proper is irrelevant. 8 Rule 60(b)(1) states, in pertinent part: On motion and upon s u ch terms as are just, the court may relieve a party or a party’s legal representati ve from a final judgment, order, or proceeding for . . . mistake, inadv ertence, surprise, or excus a ble neglect[.] Fed. R. Civ. P. 60(b). Rule 60(b) allows a court to relieve “a party” or “a party’s legal representative” from a final judgment or order. We have ruled in Par t II, supra , that the district court erred in granting Nok i a permissive interven tion under Rule 24(b). At the same time, Nokia was never “a party” to the original ac tion, and n one of the original parties hav e requested reinstatement of the vacated or ders. The plai n language of Rule 60(b) on ly allows relief to be giv en to “a party” to t he litigation. Edmonson v

. United States Stee l Corp. , 659 F.2d 582, 585 (5th Cir. 1981) (Clark, J., concurring) (“Normally, a non-part y has no right under Rule 60(b) to bring an independent action to modify a consent decree agr eed upon by the parties, when no such relief is sought by any of the parties themselves.”); Smith v. Mo. Pac. R.R. Co. , 615 F.2d 683, 685 (5th Cir. 1980) (affirming a district court’s determination that Rule 60(b) may not be used by a nonparty to attack a final judgment where t he nonparty failed to timely int e rvene); Houston Gen. , 193 F.3d at 839 (noting that a non-party’s Rule 60 m o tion to va cate the underlying judgment was rendered moot when its Rule 24 motion for in tervention was de nied); Unit ed States v. 8136 S. Dobson St. , 125 F.3d 1076, 1082 (7th Cir. 1997) (“Rule 60 confines the relief it

8 In its opinion, the district court no ted that “The Court ma y initiat e its own Rule 60(b) motion . . . . In this case, if the Court had found that Nokia did not have standing to assert a Rule 60( b) motion, the Court would have reexamined the Court’s Order of vacatur on its own motion, pursuant to Rule 60(b).” Intervention Order , slip op. at 10.

04-1484 12offers to parties, or a party’s legal repres entative . . . .”); P opovich v. United States , 661 F. Supp. 944, 951 (C.D. Cal. 1987) (“Courts have be en quite strict in cons truing Rule 60(b) and have limited relief under it to those who are unquestiona bly par ties.”); 12 James Wm. Moore et al., Moore’s Feder al Pr actice § 60.63 (3d ed. 2003) (“In most situations, a Rule 60( b) moti on will be granted on ly on behalf of a par ty or ‘a party’s legal representative.’”). We therefore reject Nokia’s al ternative argument based upon Rule 60(b). We have reversed the district court’s decis ion allowing Nokia to intervene to seek reinstatement of the va cated orders. Without interventi on, there is no proper party with standing to be afforded relief under Rule 60(b). Therefore, it is not necessary for us to address whether the distri ct court’s original vacatur order in light of the settlement was proper under United States Bancorp Mo rtgage Co. v. B o nner Mall Partnership

. CONCLUS ION We hold that the distri ct court erred as a matter of law and therefore abused its discretion in granting Nokia’s mo tion to intervene in this case for the purpose of seeking reinstatement of the orders vacated pursuant to the Ericsson-InterDigital settlement. Accordingly, the court’s decision granting intervention and reinstating t he vacated orders is
R E VER SED

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