Opinion ID: 692072
Heading Depth: 2
Heading Rank: 2

Heading: Historical Test

Text: 83 The declaratory judgment action of this appeal fails to present a situation in which historically a party had a right to a jury trial. If no public rights issue is involved, a Seventh Amendment right to a jury trial on a statutory claim must meet the following test: 84 Although the thrust of the Amendment was to preserve the right to jury trial as it existed in 1791, the Seventh Amendment also applies to actions brought to enforce statutory rights that are analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty. Curtis v. Loether, 415 U.S. 189, 193 [94 S.Ct. 1005, 1007-08, 39 L.Ed.2d 260] (1974). 85 The form of our analysis is familiar. First, we compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. Second, we examine the remedy sought and determine whether it is legal or equitable in nature. Tull v. United States, 481 U.S. 412, 417-18 [107 S.Ct. 1831, 1835, 95 L.Ed.2d 365] (1987) (citations omitted). The second stage of this analysis is more important than the first. Id., at 421 [107 S.Ct. at 1837]. If, on balance, these two factors indicate that a party is entitled to a jury trial under the Seventh Amendment, we must decide whether Congress may assign and has assigned resolution of the relevant claim to a non-Article III adjudicative body that does not use a jury as factfinder. 86 Granfinanciera, 492 U.S. at 41-42, 109 S.Ct. at 2790. The second stage of this analysis [i.e., remedy] is more important than the first. Id. Additionally, both steps must be satisfied. Teamsters, 494 U.S. at 565, 110 S.Ct. at 1345 (we examine both the nature of the issues involved and the remedy sought); Tull, 481 U.S. at 417, 107 S.Ct. at 1835 (the Court must examine both the nature of the action and of the remedy sought); Curtis, 415 U.S. at 195, 94 S.Ct. at 1009 (a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law). 87 The panel recognizes the two part test (18th Century analog AND remedy) announced repeatedly but changes the and to or. The panel states: 88 [I]f a particular action entails either the adjudication of legal rights, Tull, 481 U.S. at 425 [107 S.Ct. at 1839], or, alternatively, the implementation of legal remedies, Curtis, 415 U.S. at 195 [94 S.Ct. at 1009], the district court must honor a jury demand to the extent that disputed issues of fact concerning those rights and remedies require a trial. 89 Majority op. at p. 972. The panel's holding is unprecedented. The panel's reliance on a footnote in Tull to support its truncated jury right analysis is wrong. See maj. op. at 972 n. 6. A reading of the entire Tull footnote shows that the Court rejected the panel's position. In Tull, the Court repudiated the government's attempt to divide a Clean Water Act action for civil penalties into a cause of action and a remedy, [ ] analyz[ing] each component as if the other were irrelevant. Tull 481 U.S. at 421 n. 6, 107 S.Ct. at 1837 n. 6. By completely disregarding any analysis of the remedy sought in this case, the panel is accomplishing what the Court specifically rejected in Tull. 6 90
91 The panel asserts that prior to the Declaratory Judgment Act in 1934, [v]alidity simply was not litigated in isolation from an infringement claim. In fact it was in England at the time the Seventh Amendment was adopted. A separate nullification action, similar to the present day declaratory judgment action, could be brought before the English equity court. In England, prior to 1791, anyone could challenge a patent's validity by a scire facias writ in equity. See Mowry v. Whitney, 81 U.S. (14 Wall) 434, 439-40, 20 L.Ed. 858 (1871); United States v. Stone, 69 U.S. (2 Wall) 525, 535, 17 L.Ed. 765 (1864). The scire facias to repeal a patent was brought in chancery where the patent was of record. And though in this country the writ of scire facias is not in use as a chancery proceeding, the nature of the chancery jurisdiction and its mode of proceeding have established it as the appropriate tribunal for the annulling of a grant of patent from the government. Mowry, 81 U.S. (14 Wall) at 440. 7 92 The panel acknowledges only one of the three situations in which a writ of scire facias was grantable. Majority op. at 974-75 n. 9. Contrary to the panel's view, a scire facias could issue for the following reasons: 93 1. A previous patent had issued on the invention [There was no administrative examination before issuance]; 94 2. Fraud [Inequitable conduct]; 95 3. Unlawful grant [Invalid patent]. 96 Mowry, 81 U.S. (14 Wall.) at 439; Stone, 69 U.S. (2 Wall.) at 535; 2 William C. Robinson, The Law of Patents, Sec. 726 (1890). 97 The panel also declares that, even if a writ of scire facias is the closest 18th Century analog, a party to such a suit could demand a jury trial in a court of equity as a matter of right. Majority op. at 975 n. 9. The matter of right in patent cases is an overstatement. Frequently equity courts decided the facts respecting validity themselves or treated juries as advisory, merely to inform the conscience of the court. Cochrane v. Deener, 94 U.S. 780, 783, 24 L.Ed. 139 (1876); see also Johnson v. Harmon, 94 U.S. 371, 372, 24 L.Ed. 271 (1876); Van Iderstine v. National Discount Co., 227 U.S. 575, 580, 33 S.Ct. 343, 344, 57 L.Ed. 652 (1913); 2 Joseph Story, Commentaries on the Constitution, 553 (5th Ed.1891); Fleming James, Jr., Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 655 (1963). 8 98 Since the first part of the test to determine whether the Seventh Amendment requires a jury trial is negated by this English equity action, that should end the inquiry. 9 99
100 The patentee's claim of infringement 10 has been adjudicated in this case. The trial court held that the accused method did not meet the limitations of the claim and granted summary judgment. Thus, all that remains at this stage are the declaratory judgment counterclaim for invalidity and unenforceability. Neither remaining claim carries any right to damages. The panel decision relies solely on the challenge to validity as the basis for the jury right. 11 101 The remedy sought in this case is not legal and therefore, on this ground alone, no jury trial is required. The Supreme Court has conclusively and repeatedly stated that the remedy part of the two part test enumerated above is the more important inquiry, Teamsters, 494 U.S. at 565 n. 4, 110 S.Ct. at 1345 n. 4; Granfinanciera, 492 U.S. at 42, 109 S.Ct. at 2790; Tull, 481 U.S. at 421, 107 S.Ct. at 1837; Curtis, 415 U.S. at 196, 94 S.Ct. at 1009, yet the panel order finds a right to a jury nonetheless. 102 First, the panel analyzes a declaratory judgment claim here as a reverse infringement suit and attributes the patentee's original claim to damages to the invalidity counterclaim, citing Beacon Theatres as authority. However, the panel ignores the reality that the patentee's claim has been dismissed. Alternatively, the panel holds that the presence of a legal right issue is sufficient to invoke a right to a jury without a claim for damages. 103 First, a declaratory judgment action for a declaration of invalidity is not the flip side of an infringement claim nor necessarily the same as an affirmative defense. 12 The latter is limited to the particular claims of the patent asserted in the complaint; a counterclaim may challenge all claims. The issue of infringement or non-infringement is irrelevant to such declaratory judgment claim. The case or controversy underlying a declaratory judgment action is the patentee's threat of suit against the declaratory plaintiff on the patent. Infringement vel non simply is not an issue. As the Supreme Court recently stated: A party seeking a declaratory judgment of invalidity presents a claim independent of the patentee's charge of infringement. Cardinal Chem. Co. v. Morton Int'l., Inc., --- U.S. ----, ----, 113 S.Ct. 1967, 1975, 124 L.Ed.2d 1 (1993). 104 A patentee has no possibility of suing for a declaration of validity, the flip side to the declaratory judgment claim presented here. The closest counterpart for a patentee is reexamination in the Patent and Trademark Office (PTO). If a reexamination request is granted, the PTO will review the cited prior art and, if appropriate, issue a certificate upholding the patent over that art. In ordinary patent litigation the patentee receives, at best, a judgment that the patent was not proved invalid. 13 105 Second, the panel creates a conflict with all other circuits in upholding a Seventh Amendment right without a damage claim remaining to be tried. Filmon Process Corp. v. Sirica, 379 F.2d 449 (D.C.Cir.1967), is dismissed by the panel in a footnote because the case does not involve a declaratory judgment. The panel's rationale is difficult to follow. In denying a mandamus petition, the court in Filmon stated: The record before [the trial judge] does not show that petitioner has any action for damages pending, a prerequisite to a claim that it is being deprived of a right to a jury trial. Id. at 451. Similarly in other cases cited to the panel, the circuit courts focused on the demand, or lack thereof, for money damages. United Transp. Union, Local 74 v. Consolidated Rail Corp., 881 F.2d 282, 286 (6th Cir.1989), vacated on other grounds, 494 U.S. 1051, 110 S.Ct. 1517, 108 L.Ed.2d 757 (1990), reaffirmed, 902 F.2d 36 (6th Cir.1990) (We hold that the nature of the remedy requested by Local 74, insofar as it prays for compensatory damages, is legal.); Francis v. Dietrick, 682 F.2d 485, 487 (4th Cir.1982) (Withdrawal of the claim for damages left only equitable issues.); Hildebrand v. Board of Trustees of Michigan State Univ., 607 F.2d 705, 708 (6th Cir.1979) (A key dividing line between law and equity has historically been that the former deals with money damages and the latter with injunctive relief.); Skippy, Inc. v. CPC Int'l, Inc., 674 F.2d 209, 215 (4th Cir.), cert. denied, 459 U.S. 969, 103 S.Ct. 298, 74 L.Ed.2d 280 (1982) (Since [plaintiff] failed altogether to pursue its claim for damages for the alleged fraudulent inducement, it was not prejudiced by the district court's failure to give it a jury trial on a claim not contemplated at trial.). 106 Shubin v. United States Dist. Court for S. Cal., 313 F.2d 250 (9th Cir.), cert. denied 373 U.S. 936, 83 S.Ct. 1539, 10 L.Ed.2d 690 (1963), a case directly on point and relied upon by the trial judge in this case, accords with Supreme Court precedent. In Shubin, the court stated: There is no prayer for damages in any amount.... Hence there exists no possibility that damages could be awarded.... There is left only an 'equitable cause' before the court below. The lack of damages in Shubin controlled the denial of a jury. Again, the truncated test adopted by the opinion makes that consideration irrelevant. 14 107 Finally, I have found no Supreme Court case upholding the Seventh Amendment right in civil litigation where damages were not requested. Teamsters, 494 U.S. at 563, 110 S.Ct. at 1343 (they sought, inter alia, compensatory damages for lost wages and health benefits); Granfinanciera, 492 U.S. at 36, 109 S.Ct. at 2787 (Respondent sought to avoid what he alleged were constructively and actually fraudulent transfers and to recover damages, costs, expenses, and interest.); Tull, 481 U.S. at 422, 107 S.Ct. at 1838 (A civil penalty was a type of remedy at common law that could only be enforced in courts of law.); Curtis, 415 U.S. at 190 n. 1, 94 S.Ct. at 1006 n. 1 (petitioner ... sought to recover actual damages as well); Ross, 396 U.S. at 542, 90 S.Ct. at 740 (In the instant case we have no doubt that the corporation's claim is, at least in part, a legal one. The relief sought is money damages.); Dairy Queen, 369 U.S. at 476, 82 S.Ct. at 899 (insofar as the complaint requests a money judgment it presents a claim which is unquestionably legal); Beacon, 359 U.S. at 504, 79 S.Ct. at 953 (the right to trial by jury applies to treble damage suits under the anti-trust laws). Without the pendency of a legal remedy request, petitioner in this case is not denied a constitutional right to trial by jury. 108 This court's mandamus order in this case creates the type of conflict with other circuits that warrants Supreme Court review.