Overlooked Counterclaim Bounces Appeal and Costs Appellant

In Enzo Biochem, Inc. v. Gen-Probe, Inc., et al. (Fed. Cir., July 13, 2005), the trial judge concluded its hearing by asking the parties "if there is anything that I have missed in my rulings that I should rule upon." Both counsel responded that the court had covered all the issues raised, and Enzo’s counsel indicated that it would appeal the decision. The judge then stated that he would "enter a summary order . . . that will enable you to proceed with dispatch in the Federal Court of Appeals on your rights if I have erred" and the clerk of the district court entered judgment under Federal Rule of Civil Procedure 58 holding that all claims of the ’659 patent were invalid and that "the case was closed."

Gen-Probe moved to dismiss the appeal, arguing that its remaining unadjudicated counterclaim of unenforceability for inequitable conduct rendered the district court’s judgment nonfinal. The court agreed with Gen-Probe that its pending unenforceability counterclaim renders the district court’s judgment nonfinal for purposes of appeal:

Although it is true that the district court here did make a clear statement that the case was at an end, it was mistaken, because an unadjudicated counterclaim remained. Gen-Probe’s brief to this court, supported by the record, and unrefuted by Enzo, makes that clear. While it is, to say the least, regrettable that a party with a remaining counterclaim that it wishes to pursue, as well as its opponent, leaves a trial judge with the impression that no claims remain in the case, we have no choice
but to take cognizance of the nonfinality created by the unquestioned existence
of that counterclaim.

Notheless, after awarding costs, the court granted Enzo leave to seek remedial action in the district court and thereafter reinstate the appeal if and when the judgment becomes final.

Haven't these folks heard of the Take Your Adversary to Lunch program?