The “Collateral Order Doctrine” was the issue in the recently decided case Copan Italia v. Puritan Medical Prods., No. 22-1943 (Fed. Cir. decided May 14, 2024). In that case, Copan sued Puritan for infringement of patents covering flocked swabs (these are the swabs used for nasal fluid sampling during the Covid-19 pandemic). The infringement suit was filed in June 2018 but it was stayed during the pandemic. The stay was lifted in Oct. 2021, and Puritan asserted it had immunity from infringement liability under the PREP Act (Public Readiness and Emergency Preparedness Act, codified at 42 U.S.C. § 247d-6d and 42 U.S.C. 247d-6e). Copan countered that the PREP Act did not apply to claims for patent infringement. The district court agreed with Copan and refused to dismiss the infringement claims. Puritan appealed, arguing that the Collateral Order Doctrine (COD) applied to this case. However, the Federal Circuit panel determined that they had no jurisdiction under the COD. This post will explain the COD.
The COD is a form of interlocutory appeal (an appeal prior to a final decision) in a litigation. Although “final decisions” typically are the only decisions appealable, courts have recognized there are also prejudgment orders that are “collateral to” the merits of an action and too important to be denied immediate review. Mohawk Industries, Inc. v. Carpenter, 558 US 100 (2009), citing Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).
The COD allows an interlocutory appeal when a trial court’s order “affect[s] rights that will be irretrievably lost in the absence of an immediate appeal” prior to a final decision. Depuy Synthes v. Veterinary Orthopedic Implants, 990 F. 3d 1364, 1367 (Fed. Cir. 2021), citing Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214, 1220 (Fed. Cir. 2013).
The elements of COD jurisdiction are that the petition must (1) conclusively determine the disputed question; (2) resolve an important issue completely separate from the merits of the action; and (3) be effectively unreviewable on appeal from a final judgment. Depuy at 1368 (cleaned up).
Mohawk was an employment case involving an allegedly improper termination of an employee. Mohawk (the employer) was ordered to disclose certain confidential information on the grounds that attorney-client privilege was waived. Mohawk sought to invoke the COD to prevent the disclosure. The appeals court held that the first two elements of the COD were met by Mohawk, but the third element, unreviewability, was not satisfied. Mohawk argued that breaking the privilege would cause irreparable harm, but the Supreme Court upheld the appeals court finding that postjudgment appeals generally suffice to “ensure the vitality of the attorney-client privilege.”
In Depuy, the issue was that Depuy argued that a Veterinary Orthopedic (VOI) supplier possessed critical information and Depuy wanted to name the supplier in its complaint. VOI contended the identity of the supplier was a trade secret and should be redacted in the publicly accessible version of the complaint. The district court agreed with DePuy that the information should be made public. VOI appealed this decision. DePuy invoked the COD to enforce the order to name the supplier.
The DePuy court first concluded that the Federal Circuit court had proper jurisdiction. First, the panel found that the district court order to unseal the information did not merit sealing or redaction and should be filed on the public docket and this was conclusively decided. Second, the sealing issue is unrelated to the merits of DePuy’s infringement claim. Third, the order could not be meaningfully reviewed after a final judgment because the information in the amended complaint, once disclosed to the public, could not be made confidential again.
On the merits of VOI’s position that the supplier name should be made public, the Federal Circuit Court balanced the proprietary interest of VOI with the public’s right to public access, and found that the public right to know prevailed. VOI argued that the supplier name was a trade secret, but the panel agreed that the district court’s conclusion that the supplier’s identity has not been shown to be a trade secret was well supported, so VOI lost this appeal.
Returning to Copan v. Puritan, the district court denied Puritan’s argument that the patent infringement claims were within the scope of the PREP Act, and Puritan appealed this limited decision to the Federal Circuit. The Federal Circuit panel concluded here that they lacked jurisdiction to review the appeal, because the district court’s order did not conclusively determine the disputed question of whether Puritan had immunity, so the first factor of the COD was not met. One of Puritan’s claims was that it constructed a factory (the “P3 factory”) to manufacture swabs for the Air Force, and as a government customer, the PREP Act applied. But the district court found that Puritan did not establish (a) that it carried through with its contractual obligations, (b) that it did so at its P3 factory, or (c) that all of the flocked swabs from its P3 factory (as opposed to some subset) were produced in relation to its government contract. This was a disputed issue of material fact in front of the Federal Circuit, and the panel declined to make a finding here not fully addressed by the District Court.
Conclusion: It is important that a party seeking to invoke the COD clearly establish that it meets all requirements of the doctrine. Puritan failed to do in Copan, so the Federal Circuit found that it had no jurisdiction. In this case, it’s possible that Puritan jumped the gun seeking to cut short the patent infringement litigation, and it’s possible that Puritan can establish the facts of this case conferring immunity, but this requires another visit to the District Court.
