Target Training International v. Extended Disc North America , 645 F. App'x 1018 ( 2016 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
TARGET TRAINING INTERNATIONAL, LTD.,
Plaintiff-Appellant
v.
EXTENDED DISC NORTH AMERICA, INC.,
Defendant-Appellee
______________________
2015-1873, 2015-1908
______________________
Appeals from the United States District Court for the
Southern District of Texas in No. 4:10-cv-03350, Judge
Gray H. Miller.
______________________
Decided: April 22, 2016
______________________
CHRISTINE MARIE LEBRON-DYKEMAN, McKee, Voor-
hees & Sease, P.L.C., Des Moines, IA, argued for plaintiff-
appellant. Also represented by EDMUND J. SEASE, ROBERT
SCOTT JOHNSON.
STEPHEN F. SCHLATHER, Collins, Edmonds, Pogor-
zelski, Schlather & Tower PLLC, Houston, TX, argued for
defendant–appellee. Also represented by JOHN J.
EDMONDS, SHEA NEAL PALAVAN.
______________________
2 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
Before PROST, Chief Judge, DYK and O’MALLEY, Circuit
Judges.
O’MALLEY, Circuit Judge.
Appellant Target Training International, Ltd. (“TTI”)
brought suit against Extended DISC North America, Inc.
(“EDNA”) alleging infringement of U.S. Patent No.
7,249,372 (“the ’372 patent”). While the suit was pending,
third-party Extended DISC International Oy Ltd. (“EDI”)
initiated an ex parte reexamination of all claims of the
’372 patent. The district court litigation was stayed
pending the resolution of the reexamination and the
issuance of the reexamination certificate. The Patent
Trial and Appeal Board (“Board”) ultimately determined
that claims 1-11 (“the original claims”) of the ’372 patent
were invalid, but confirmed that thirty claims that were
newly added during the reexamination—claims 12-41
(“the newly added claims”)—were patentable, and this
court affirmed that decision under Federal Circuit Rule
36. Following the issuance of a reexamination certificate,
the district court granted EDNA’s motion to dismiss the
case as moot, despite the existence of the newly added
claims. Target Training Int’l, Ltd. v. Extended Disc North
Am., Inc., No. 4:10-cv-03350, 2015 U.S. Dist. LEXIS
159526 (S.D. Tex. June 1, 2015). Because we agree with
the district court that the newly added claims were not
asserted in the district court litigation prior to dismissal,
we affirm.
BACKGROUND
TTI is engaged in the business of producing and
providing individual employee assessments throughout
the United States. It is the assignee of the ’372 patent
which issued on July 24, 2007. The patent relates to a
method of distributing and displaying documents on a
website, accepting responses to the documents on the
website, processing the responses into a report for an
TARGET TRAINING INT’L v. EXTENDED DISC N. AM. 3
interested party, and delivering the report to one or more
locations. ’372 patent col. 2 ll. 24-28.
Defendant EDNA is a Texas-based company with its
principal place of business in Texas. EDI, the defendant
in the companion case to this appeal, No. 2015-1856, is a
Finnish company with its principal place of business in
Finland. EDI produces and provides personality reports
through its “Extended DISC System.” See TTI’s Prelimi-
nary Infringement Contentions at 2, Ex. B to Defendant’s
Motion for Summary Judgment, Target Training, 2015
U.S. Dist. LEXIS 159526 (No. 4:10-cv-03350), ECF. No.
252-3. EDI had a franchise agreement with EDNA be-
ginning in 1996 or 1997 under which EDNA, the franchi-
see, was given exclusive rights to distribute EDI’s product
in the United States and Canada.
On September 17, 2010, TTI filed a patent infringe-
ment claim against EDNA. On January 14, 2011, third-
party EDI filed a request for ex parte reexamination of all
of the original claims of the ’372 patent. TTI provided
Preliminary Infringement Contentions on February 18,
2011 alleging infringement of claims 1, 2, and 5-11.
EDNA moved to stay the district court proceedings pend-
ing the outcome of the reexamination, but the court
denied its motion. The PTO then initiated reexamination
proceedings. The court denied three more motions to stay
brought by EDNA, including one filed after the PTO
issued an initial rejection of all claims and another after
the PTO issued a final office action rejecting all claims on
January 6, 2012.
In July 2011, TTI filed a second complaint, this time
against EDI, after learning through discovery in the
EDNA matter of EDI’s ownership interest in, and exclu-
sive franchise arrangement with, EDNA. On October 6,
2011, EDI filed two motions to dismiss, one for lack of
personal jurisdiction and one for the plaintiff’s failure to
state a valid claim.
4 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
On March 26, 2012, the court in the EDI matter
stayed its case pending resolution of the reexamination
process. On July 25, 2012, the court in the EDNA mat-
ter finally stayed that case until the PTO concluded
reexamination and a certificate of reexamination was
issued. On September 28, 2012, the court supervising the
EDNA case entered a subsequent order stating that the
case was “administratively closed pending the issuance of
the certificate of reexamination.” Order Administratively
Closing Case, Target Training, 2015 U.S. Dist. LEXIS
159526 (No. 4:10-cv-03350), ECF. No. 243.
During the stay, TTI appealed the PTO’s determina-
tion of invalidity for anticipation to the Board, which
affirmed on September 20, 2013. TTI then appealed to
this court, and, after briefing and oral argument, we
issued a Rule 36 summary affirmance. On January 12,
2015, the PTO issued a reexamination certificate cancel-
ling claims 1-11, but issuing thirty new claims—claims 12
through 41—and confirming those claims as patentable.
The district court reopened the EDNA case on Janu-
ary 12, 2015. On January 22, 2015, EDNA moved for
summary judgment of noninfringement and invalidity,
and, alternatively, moved to dismiss the action as moot.
A few days later, TTI filed a notice with the court inform-
ing it of the reexamination certificate, stating that thirty
new claims were added during the reexamination, and
requesting a scheduling conference to discuss setting any
additional or modified deadlines in order to, inter alia,
update discovery, contentions, and expert reports. The
court never responded to this request.
TTI then moved to strike EDNA’s motion for sum-
mary judgment, arguing that it was untimely under the
original scheduling order. The court denied the motion to
strike, reasoning that “the original scheduling order is no
longer applicable, as . . . the case [was] stayed” and “there
is not a scheduling order in place.” Order Denying Motion
TARGET TRAINING INT’L v. EXTENDED DISC N. AM. 5
to Strike at 3, Target Training, 2015 U.S. Dist. LEXIS
159526 (No. 4:10-cv-03350), ECF. No. 262. The court
ordered TTI to provide a substantive response to the
motion for summary judgment. In that substantive
response, TTI argued that the district court was required
to analyze whether the new claims of the ’372 patent were
“substantively identical” to the cancelled claims before
they could be dismissed. EDNA replied, arguing that,
because the new claims were not included in TTI’s 3-1
Infringement Contention Disclosures, they should not be
considered part of the current suit. Rules of Practice for
Patent Cases in the S.D. Tex. Rule 3-1, at http://
www.txs.uscourts.gov/page/district-local-rules-practice-
patent-cases.
On June 1, 2015, the court granted EDNA’s motion to
dismiss the case as moot, and thus did not address the
motion for summary judgment. The court noted that the
complaint was for infringement of the patent and, with
the exception of claim 1, did not specify the particular
claims infringed. “[S]ince none of the new claims were
even part of the patent when the complaint was filed,
[however,] TTI obviously was not alleging that EDNA was
infringing the new, narrower claims of the reexamined
patent. Moreover, the court agree[d] with EDNA’s con-
tention that the disclosure pursuant to [P.R. 3-1 bound]
TTI to its preliminary infringement contentions [ ] unless
TTI [sought] leave of court to amend its contentions.”
Target Training, 2015 U.S. Dist. LEXIS 159526, at *8.
The court acknowledged TTI’s arguments that: (1) the
new claims could be identical in scope to the original
claims such that the case could continue under Fresenius
USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed.
Cir. 2013), and (2) even if the new claims were substan-
tively different in scope, the case could continue based on
ongoing infringement after the issuance of the newly
added claims. Target Training, 2015 U.S. Dist. LEXIS
159526, at *9. Nevertheless, on June 1, 2015, the court
6 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
relied on Fresenius to dismiss the case “because all of the
claims TTI asserted were being infringed were canceled in
the reexamination.” Id. at *10-11. The court’s order did
not specify whether it was dismissing with or without
prejudice.
EDNA thereafter filed a Bill of Costs in the amount of
$34,047.72, which the court taxed to TTI. On appeal, TTI
states that, “in the event TTI’s appeal is successful,
EDNA will no longer be the prevailing party, and this
Court should reverse the taxing of costs.” Appellant’s Br.
16.
In parallel, the EDI companion case was reopened on
January 23, 2015. The magistrate judge issued a recom-
mendation that EDI’s Rule 12(b)(2) motion to dismiss for
lack of personal jurisdiction be granted. On June 4, 2015,
Judge Gilmore adopted the magistrate judge’s recommen-
dation in its entirety and entered a final judgment of
dismissal.
TTI timely appeals the court’s order of dismissal and
order taxing costs in the EDNA case. TTI also appeals
the court’s order of dismissal in the EDI case, the compan-
ion case on appeal. This opinion addresses only the
EDNA case, but we are issuing our opinions in both cases
concurrently. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1).
DISCUSSION
The jurisdictional doctrine of mootness derives from
Article III section 2 of the U.S. Constitution, which limits
a federal court’s jurisdiction to live cases or controver-
sies. 1 A justiciable controversy “must be definite and
1 Courts often treat justiciability doctrines, includ-
ing standing and mootness, as a subset of subject-matter
jurisdiction. See, e.g., Genesis HealthCare Corp. v.
TARGET TRAINING INT’L v. EXTENDED DISC N. AM. 7
concrete, touching the legal relations of parties having
adverse legal interests.” Aetna Life Ins. Co. v. Haworth,
300 U.S. 227, 240-41 (1937). “A justiciable controversy is
thus distinguished from a difference or dispute of a hypo-
thetical or abstract character; from one that is academic
or moot.” Id. at 240 (citing United States v. Alaska S.S.
Co., 253 U.S. 113, 116 (1920)). A moot case must, there-
fore, be dismissed. In re Scruggs, 392 F.3d 124, 128 (5th
Cir. 2004). Moreover, “an actual controversy must be
extant at all stages of review, not merely at the time the
complaint is filed.” Steffel v. Thompson, 415 U.S. 452,
459 n.10 (1974).
We review a district court’s dismissal for the jurisdic-
tional question of mootness de novo. Ford Motor Co. v.
United States, 688 F.3d 1319, 1323 (Fed. Cir. 2012) (citing
King Pharms., Inc. v. Eon Labs, Inc., 616 F.3d 1267, 1282
(Fed. Cir. 2010)). See also Janssen Pharmaceutica, N.V.
v. Apotex, Inc., 540 F.3d 1353, 1359 (Fed. Cir. 2008)
(citing Teva Pharms. USA, Inc. v. Novartis Pharms. Corp.,
482 F.3d 1330, 1335-36 (Fed. Cir. 2007)).
We first turn to the original claims, which were found
anticipated and were cancelled as a result of the reexami-
Symczyk, 133 S. Ct. 1523, 1532 (2013) (holding that
district court appropriately dismissed suit for lack of
subject matter jurisdiction when the case was moot).
Nevertheless, the concepts derive from different textual
sources in the Constitution and are conceptually distin-
guishable. See Katherine Mims Crocker, Justifying A
Prudential Solution to the Williamson County Ripeness
Puzzle, 49 GA. L. REV. 163, 201, n.204 (2014) (“Justiciabil-
ity can thus be thought of as a threshold concern with
whether courts in general are equipped to resolve a dis-
pute in the abstract, whereas subject-matter jurisdic-
tion can be viewed as a logically subsequent inquiry into
whether a particular court can actually do so.”).
8 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
nation. Fresenius makes clear that “when a claim is
cancelled, the patentee loses any cause of action based on
that claim, and any pending litigation in which the claims
are asserted becomes moot.” 721 F.3d at 1340. With
respect to the original cancelled claims of the ’372 patent,
therefore, we uphold the district court’s finding that
Fresenius rendered the suit moot to the extent those were
the only claims asserted in the litigation.
We turn, next, to the fact that new claims were ap-
proved on reexamination. TTI argues that the fact that
new claims were added and confirmed as patentable
through the ex parte reexamination distinguishes this
case from Fresenius. Where newly added claims are
substantially identical to cancelled claims, TTI argues,
the cancellation of the original claims “shall not affect any
action then pending nor abate any cause of action then
existing.” 35 U.S.C. § 252. See 35 U.S.C. § 307(b). Thus,
TTI continues, rather than dismiss the case as moot
under Fresenius, the district court should have substan-
tively compared the scope of the original and newly added
claims, taking into consideration, inter alia, the specifica-
tion, prior art references that occasioned the reexamina-
tion, and the prosecution history, to determine whether
the newly added claims are “substantially identical” to the
original claims. If found “substantially identical,” then
dismissal of the original cause of action would be inappro-
priate, as the original claims effectively would have
survived reexamination. Indeed, Fresenius states that
the reexamination statute preserves the patentee’s “abil-
ity to enforce the patent’s original claims to those claims
that survive reexamination in ‘identical’ form.” 721 F.3d
at 1339.
TTI further asserts that, even if the court, having per-
formed this analysis, determined that the newly added
claims were not substantially identical, it still should
have allowed the proceedings to continue because TTI
could sue EDNA for any ongoing infringement of the
TARGET TRAINING INT’L v. EXTENDED DISC N. AM. 9
newly added claims. See Laitram Corp. v. NEC Corp., 163
F.3d 1342, 1346 (Fed. Cir. 1998) (a patentee is entitled to
damages for infringement for the period following the
issuance of the substantively different claims from a
reexamination).
TTI’s characterization of Fresenius is not controver-
sial. The question before us, however, is whether it was
appropriate for the district court to dismiss the case when
TTI failed to amend its infringement contentions to assert
infringement of any of the thirty newly added claims. TTI
argues that it was not; we disagree because the newly
added claims were never actually asserted in the existing
litigation.
The district court found that TTI never asserted or
sought to assert the newly added claims. Specifically, the
district court found that (1) TTI “obviously” did not allege
that EDNA infringed on the new claims at the time it
filed its complaint because the newly added claims did not
exist, and (2) “the disclosure pursuant to Rule 3-1 [ ] binds
TTI to its preliminary infringement contentions.” Target
Training, 2015 U.S. Dist. LEXIS 159526, at *9-10. It is
undisputed that TTI’s preliminary infringement conten-
tions only specified infringement of claims 1-2 and 5-11.
See TTI’s Preliminary Infringement Contentions at 2, Ex.
B to Defendant’s Motion for Summary Judgment, Target
Training, 2015 U.S. Dist. LEXIS 159526 (No. 4:10-cv-
03350), ECF. No. 252-3. And, TTI does not dispute that
P.R. 3-1 requires, in relevant part, that TTI identify “each
claim of each patent-in-suit that is allegedly infringed by
an opposing party.” Pursuant to P.R. 3-6 and 3-7, “good
cause” must be shown in order to obtain leave to amend
infringement contentions except in certain circumstances
not alleged here. TTI cites no authority for the proposi-
tion that unasserted patent claims must be considered by
the district court prior to the dismissal of a case based on
cancelled asserted claims. We know of no authority that
so states.
10 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
TTI’s principal contention is that the district court
erred in failing to permit TTI to amend its infringement
contentions to assert the newly added claims. Appellant
Br. 12; Appellant Reply Br. 8. TTI did not argue in its
briefs that it had requested or moved for leave to amend
its infringement contentions or that the court ever denied
such a request or motion. Despite this, TTI’s counsel
initially contended at oral argument that TTI had sought
leave to amend and that the court failed to act on its
request, pointing to (1) TTI’s request for a scheduling
conference in order to set deadlines for, inter alia, updat-
ing contentions, and (2) a footnote in its substantive
opposition to EDNA’s summary judgment motion stating
that, “TTI is prepared to provide amended Preliminary
Infringement Contentions . . . pursuant to a new sched-
ule.” Plaintiff’s Opposition to Defendant’s Motion for
Summary Judgment at 2, n.1, Target Training, 2015 U.S.
Dist. LEXIS 159526 (No. 4:10-cv-03350), ECF. No. 263.
When pressed on whether TTI actually requested
leave to amend its infringement contentions to allege
infringement of the newly added claims, however, the
following exchange took place:
Q: Was there anything that prevented you from
making a motion to amend the infringement con-
tentions?
A: I would say your honor, just the fact that we
were waiting on the court’s response to our re-
quest for this conference to have a scheduling or-
der in play.
Q: So there wasn’t any order of the court that pre-
vented you from making such a motion?
A: No. But the court didn’t address the issue of
additional contentions to say whether or not we
had the right to amend them until the dismissal
order, at which point, of course, the case was over.
TARGET TRAINING INT’L v. EXTENDED DISC N. AM. 11
Oral Argument at 09:49-10:20, available at
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
15-1873.mp3. TTI’s counsel thus conceded that there was
nothing preventing it from making a formal motion leave
to amend its infringement contentions. 2
In fact, although TTI stated that it refrained from
making a request because it was waiting for the court’s
response to its request for a scheduling conference, it
knew when the court denied its motion to strike EDNA’s
motion for summary judgment that there was “not a
scheduling order in place.” Order Denying Motion to
Strike at 3, Target Training, 2015 U.S. Dist. LEXIS
159526 (No. 4:10-cv-03350), ECF. No. 262. If there was
any confusion before, that denial should have been TTI’s
cue that it was permissible for it to move for leave to
2 The closest TTI came to making a formal motion
for leave to amend appears in the last paragraph of its
motion to strike, where it closed with:
TTI respectfully requests this Court to strike
EDNA’s Motion for Summary Judgment and reo-
pen discovery in the case to allow the parties to
take discovery and amend its complaint and in-
fringement contentions to reflect the newly added
claims of the ’372 Patent. Alternatively, if this
Court does not strike EDNA’s Motion for Sum-
mary Judgment as untimely and not compliant
with the Federal Rules, TTI requests an extension
to provide a substantive opposition relating to the
motion’s merits.
TTI’s Motion to Strike at 7, Target Training, 2015 U.S.
Dist. LEXIS 159526 (No. 4:10-cv-03350), ECF. No. 257
(emphasis added). This request arguably was conditioned
on the court granting TTI’s motion to strike, however,
which the court did not do.
12 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
amend its infringement contentions. Instead, TTI pro-
ceeded only to file its court-ordered substantive opposition
to defendant’s motion. A district court has no obligation
to provide relief not sought. Because TTI failed to assert
the newly added claims, despite opportunities to do so, the
district court did not err by dismissing the case as moot.
We now address TTI’s concern that affirming the dis-
missal of the proceedings would render illusory its statu-
tory right to add new claims during reexamination under
35 U.S.C. § 305. Appellant Br. 15-16. TTI cites Senju
Pharm. Co. v. Apotex Inc., 746 F.3d 1344, 1353 (Fed. Cir.
2014) as potentially precluding it from asserting the
newly added claims in a future action, despite the fact
that EDNA has been on notice of TTI’s intent to enforce
the ’372 patent for five years.
To be clear, the claim preclusion principles set forth in
Senju would not bar a future suit on the facts of this case.
TTI would be free to commence a new litigation asserting
infringement of the newly added claims, and could even
request the incorporation of discovery from the case that
was dismissed so as not to waste judicial resources.
Senju rests on a specific set of facts not at issue here.
Senju recognized that claim preclusion requires “(1) a
final judgment on the merits in a prior suit involving[ ] (2)
the same parties or their [privies]; and (3) a subsequent
suit based on the same cause of action.” Senju, 746 F.3d
at 1348 (citing CoreStates Bank, N.A. v. Huls Am., Inc.,
176 F.3d 187, 194 (3d Cir. 1999)). See also Senju, 746
F.3d at 1348 (“[U]nder the doctrine of res judicata, a
judgment ‘on the merits’ in a prior suit involving the same
parties or their privies bars a second suit based on the
same cause of action.”) (quoting Lawlor v. Nat’l Screen
Serv. Corp., 349 U.S. 322, 326 (1955)). In Senju, the
district court in the prior action had issued findings of fact
and conclusions of law holding that the accused product
infringed the claims, but also that the claims were invalid
TARGET TRAINING INT’L v. EXTENDED DISC N. AM. 13
as obvious. 746 F.3d at 1347. Thus, “both parties
agree[d] that Senju meets the first two of the three re-
quirements for claim preclusion,” but disagreed only with
respect to the third requirement. Id. at 1348-49.
As a preliminary matter, the panel in Senju explicitly
declined to opine on whether “a reexamination could ever
result in the issuance of new patent claims that were so
materially different from the original patent claims as to
create a new cause of action.” Id. at 1353. More im-
portantly, by contrast to Senju, the district court here
never reached a judgment on the merits. Instead, the
court dismissed TTI’s claims as moot, and a dismissal for
mootness is a dismissal for lack of jurisdiction. A dismis-
sal for lack of jurisdiction is not a dismissal on the merits.
Rather, the Supreme Court has specifically rejected
deciding the merits of a case where the court lacks juris-
diction because jurisdiction is a threshold question, and
“[w]ithout jurisdiction the court cannot proceed at all in
any cause.” Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 94 (1998) (quoting Ex parte McCardle, 74 U.S.
506, 514 (1869)). See also Orff v. United States, 358 F.3d
1137, 1149-50 (9th Cir. 2004) (citing, inter alia, Cupey
Bajo Nursing Home, Inc. v. United States, 23 Cl. Ct. 406,
412 (1991) (“It is well settled that a question relating to
subject matter jurisdiction goes to the very heart of our
power to hear a controversy, and any decision on the
merits rendered in the absence of such authority would, of
course, be a nullity.”)).
In addition, we have held that, in patent cases, res ju-
dicata does not apply to bar the assertion of new claims
acquired during the pendency of a litigation that could
have been, but were not, litigated or adjudicated in the
action. Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672
F.3d 1335, 1345 (Fed. Cir. 2012) (“While a party may seek
to pursue claims that accrue during the pendency of a
lawsuit adjudicated in that lawsuit, the party is not
required to do so, and res judicata will not be applied to
14 TARGET TRAINING INT’L v. EXTENDED DISC N. AM.
such accruing claims if the party elects not to have them
included in the action.”) (citing Gillig v. Nike, Inc., 602
F.3d 1354, 1363 (Fed. Cir. 2010)).
Nothing in this opinion shall be construed as passing
judgment on whether we believe a future action brought
by TTI against EDNA and EDI for alleged infringement of
the ’372 patent ultimately would be successful on the
merits. If that suit were brought, it would be up to the
district court to assess whether the newly added claims
are of the same substantive scope as the cancelled claims
and to proceed from there. A finding that the new claims
are not substantively identical in scope would result in
the limitation of TTI’s potential recovery only to in-
fringement of the claims for the period following the
issuance of the reexamination certificate, but it would not
preclude those claims. Laitram, 163 F.3d at 1346.
CONCLUSION
Because the district court did not err in dismissing
the suit as moot in light of the cancellation of the only
claims asserted in the case, we affirm.
AFFIRMED