Blown Deadline by AT&T Snuffs Chance for Appeal to Federal Circuit

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By Anandashankar Mazumdar

March 19 — AT&T missed its chance to appeal a ruling in a patent infringement proceeding after it failed to file a timely notice of appeal, the U.S. Court of Appeals for the Federal Circuit held March 19.

The Federal Circuit affirmed a district court's refusal to grant AT&T an extension to appeal a jury award in favor of the holder of a patent covering live streaming technologies.

The appeals court rejected AT&T's argument that it was misled about the relevant deadlines because the notice of electronic filings (NEF) it received via e-mail mislabeled the lower court's orders that started the clock on AT&T's appeal period.

“We conclude that the district court did not abuse its discretion when it found that AT&T did not satisfy its burden to show excusable neglect for its failure to read the underlying orders and check the docket for more than a month after the court issued the final orders,” the court said.

It also noted that the underlying orders, which would have alerted AT&T to the start of the appeal period, could have been accessed through hyperlinks in the NEF, and that the district court corrected the docket entries for the relevant orders—although it did not send out new NEFs.

Jury Grants Infringement Verdict Against AT&T 

Two-Way Media LLC of Boulder, Colo., holds a series of patents relating to live streaming technologies (U.S. Patent Nos. 5,778,187 and 5,983,005).

In April 2008, Two-Way sued telecommunications giant AT&T Inc., headquartered in Bedminster, N.J., and related entities, alleging infringement of the patents.

In March 2013, a jury found in favor of Two-Way, handing down a verdict of infringement of nine claims under the doctrine of equivalents and awarding damages of $27.5 million.

A few months later, the trial court entered a final judgment and denied several motions by AT&T for judgment as a matter of law and motion for a new trial, adding pre-judgment interest of $11.4 million and post-judgment interest of $3,500 a day.

AT&T attempted to file a notice of appeal, but Judge Orlando L. Garcia of the U.S. District Court for the Western District of Texas rejected the notice, finding that it had not been filed in a timely manner.

The district court rejected AT&T's request for an extension of time to file a notice of appeal pursuant to Federal Rules of Appellate Procedure 4(a)(5) and (6) and AT&T appealed the denial.

AT&T Was Wrong to Rely on E-Mailed Notice 

Applying the law of the U.S. Court of Appeals for the Fifth Circuit, the Federal Circuit rejected AT&T's argument that it had a right to an extension because NEFs entered by the court in November 2013 had failed to make clear that all of AT&T's post-verdict motions had been denied.

Because of the error, AT&T said it did not become aware that its appeals period had expired until it was too late.

Under Rule 4, the court said, AT&T was required to show “excusable neglect or good cause” for an extension or a reopening of the appeal period, and this was within the discretion of the trial court.

The court agreed with the district court that even if the NEF had failed to offer complete information, it was the duty of the attorneys to “read the substances of each order received from the court and that it is not sufficient to rely on the email notifications received from the electronic filing system.”

“Even a complete lack of notice would not qualify as excusable neglect under Rule 4(a)(5), without some additional showing,” the court said, pointing to Federal Rule of Civil Procedure 77(d)(2), which says a court cannot grant relief just because an attorney has failed to receive notice of a docket entry. “Because AT&T would not be entitled to relief even if it had received no NEFs notifying it of the court's order, the district court was correct to require some additional evidence of excusable neglect or good cause.”

The court then rejected AT&T's argument that the trial court had violated Fed. R. Civ. P. 79 by sending out a misleading or incomplete notice. Rule 79 applied only to docket entries, not electronic e-mail notices, the court said.

Indeed, the docket itself “had a complete description of those orders had AT&T bothered to check the docket, as it should have done.”

The court also noted that there was an order assessing costs on the docket, which “was a clear indication that all matters relevant to the question of whether TWM was a prevailing party had been resolved.”

The court's opinion was authored by Judge Kathleen M. O'Malley and joined by Judge Evan J. Wallach.

Discrepancy Between Notice, Docket Dates 

Judge Timothy B. Dyk filed a dissenting opinion concluding that the district court did have discretion to reopen the appeal period under Rule 4(a)(6).

First, according to Dyk, the majority had erred in applying the law of the Fifth Circuit. In this case, the law of the Federal Circuit should have applied, on the basis that the matter was jurisdictional.

Dyk emphasized that the appeal period should not begin until an item has been entered on the docket, even if notice of the relevant order or judgment had been sent out days earlier.

Furthermore, the dissent said, the docket entries in question failed to comply with Rule 79 by failing to state the substance and date of entry of all the relevant orders.

Two-Way Media was represented by Heim, Payne & Chorush LLP, Houston. AT&T was represented by Sidley Austin LLP, Washington.

 

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bna.com

Full text at http://www.bloomberglaw.com/public/document/TWOWAY_MEDIA_LLC_Plaintiff_Appellee_v_ATT_INC_ATT_CORP_Defendants