Opinion ID: 413317
Heading Depth: 2
Heading Rank: 1

Heading: Nature of the District Court's Order

Text: 40 The order from which Trans Tech now appeals reads, in relevant part: Trans Tech's making, using, or selling of rear window defrosters exemplified by the experimental sample which is Exhibit C to the McAulay affidavit, would be a civil contempt of this Court's injunction of September 6, 1978 [i.e., the consent decree]. Interdynamics, Inc. v. Firma Wolf, No. 78-647 (D.N.J. Oct. 2, 1981) (order and judgment holding Trans Tech in contempt). Appellate jurisdiction will not lie in this Court unless the district court's order constitutes a final decision, appealable under 28 U.S.C. Sec. 1291 (1976) (amended 1982), or an interlocutory order, appealable under 28 U.S.C. Sec. 1292 (1976) (amended 1982). 41 The district court did not actually hold Trans Tech in contempt; rather, it declared that Trans Tech would be in contempt only if the company thereafter proceeded to produce and manufacture the second Trans Tech product. Because the district court's order expressly contemplated the initiation of further legal proceedings before any sanctions would be imposed on Trans Tech, we doubt whether that order could be considered a final decision within the meaning of section 1291. Nor do we believe that the order is appealable as an interlocutory order under section 1292(a). However, we have before us a procedurally unusual patent case. In that context, and for the reasons that follow, we will read the district court's order as granting essentially declaratory relief and therefore hold that the order is appealable as a final decision, see 28 U.S.C. Sec. 2201 (Supp. IV 1980). 4 42 This Court elaborated almost forty years ago the function of a declaratory judgment in a patent-infringement context: 43 Prior to the passage of the Declaratory Judgment Act, the patentee was in a position to make oppressive use of his asserted monopoly while carefully avoiding the test of litigation with an alleged infringer. [Citations omitted.] Further, the patentee might, in his own good time, sue the alleged infringer for an accounting, after large damages on account of a possible infringement had accrued. The alleged infringer could not take the initiative in litigation to challenge the validity or scope of the patent. 44 In providing the remedy of a declaratory judgment it was the Congressional intent to avoid accrual of avoidable damages to one not certain of his rights and to afford him an early adjudication without waiting until his adversary should see fit to begin suit, after damage had accrued. E. Edelmann & Co. v. Triple-A Specialty Co., 7 Cir., 1937, 88 F.2d 852, 854. This court has emphasized that the Act should have a liberal interpretation, bearing in mind its remedial character and the legislative purpose. [Citations omitted.] 45 Dewey & Almy Chemical Co. v. American Anode, Inc., 137 F.2d 68, 69-70 (3d Cir.), cert. denied, 320 U.S. 761, 64 S.Ct. 70, 88 L.Ed. 454 (1943). See also Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87, 89 (2d Cir.1963) (expressing similar concerns and emphasizing that the declaratory remedy should be construed with liberality in the patent field as in general). We therefore recognize that declaratory judgments play a special role in patent cases, and our recognition of this role has influenced our characterization of the district court's order. 46 We understand, of course, that this latest proceeding brought by Trans Tech in the district court arose in the posture of an order requiring Interdynamics to show cause why Trans Tech should be held in contempt, and we acknowledge that Trans Tech did not expressly elect to sue under the Declaratory Judgment Act, 28 U.S.C. Sec. 2201-2202 (1976 & Supp. IV 1980). However, a court is not bound by the procedural labels attached to the proceeding by the moving party. 5 What Trans Tech really sought was a judicial declaration of whether it could press forward with its plans for the second Trans Tech product. Trans Tech chose to proceed by way of an order to show cause because it believed that it thereby would obtain a speedier ruling from the previously assigned district judge, who already had jurisdiction to supervise the standing injunction he had issued pursuant to the 1978 consent decree. Although it might have been wiser for Trans Tech to have sued for a declaratory judgment, we are unwilling to say, on the facts of this case, that Trans Tech committed a fatal procedural blunder. 47 We thus find the proceeding below to have been essentially a declaratory-judgment suit. Assuming for the moment that the district court properly issued what we have characterized as declaratory relief, we hold that the district court's order is appealable as a final judgment or decree under sections 2201 and 1291. 6