MFA launched its suit in 2019, alleging that Alaska’s mobile apps infringe MFA’s patent regarding nonstandard fonts in mobile apps. MFA has accused over 20 companies of patent infringement based on the companies’ apps’ use of fonts that are not built into mobile operating systems, as many apps do for branding purposes.
Utah litigation stalls
During the underlying litigation in federal district court in Utah, Alaska was required to produce the source code for its accused apps and designated it “Attorneys Eyes Only” under the court’s standard protective order. This blocked MFA’s in-house counsel from accessing the source code.
MFA challenged the Attorneys Eyes Only designation and moved to modify the standard protective order to permit its in-house counsel access to the source code. Those arguments did not fly, however, as the district court upheld Alaska’s Attorneys Eyes Only designation and rejected MFA’s proposed modifications of the standard protective order.
That’s when MFA put the Utah litigation into a stall, filing an interlocutory appeal with the U.S. Court of Appeals for the Federal Circuit and asking to stay the district court litigation.
MFA’s missed connection — the collateral order doctrine
Litigation ordinarily is a nonstop flight to final judgment. Appellate courts’ jurisdiction is limited to final judgments, with few exceptions. MFA tried to add a layover in this case by taking a mid-case appeal of the discovery orders under one of those exceptions, the collateral order doctrine.
MFA argued that the collateral order doctrine applied because of “one of its key strategists and analysts being effectively removed from large portions of th[e] case.” MFA claimed it will be “irreparably prejudic[ed] . . . both financially and in its ability to effectively evaluate and prosecute its claims” if the district court’s order stands and interlocutory appeal is denied.
Judge Tiffany Cunningham, writing for the Federal Circuit panel, shot down MFA’s argument: “Such discovery orders are generally unreviewable under the third requirement of the collateral order doctrine because they can be adequately reviewed after a final judgment.” Judge Cunningham concluded, “[t]o permit MFA’s interlocutory appeal here would encourage parties to unduly delay the resolution of district court litigation and needlessly burden this court by seeking appellate review of any pretrial discovery dispute in any patent case.” That grounded MFA’s appeal, resulting in dismissal for lack of jurisdiction.
Recognizing that non-practicing entities (commonly called NPEs) often try to avoid paying outside counsel and experts to handle litigation work involving confidential material, Nixon Peabody’s Patent Litigation Team aimed at an Achilles’ heel of the NPE business model here to promote Alaska’s interests. Forcing NPEs to incur ordinary litigation expenses that they are set up to avoid reduces their effective range by depleting their fuel reserves faster than they expect. The district court’s finding that in-house counsel’s involvement in licensing makes them a competitive decisionmaker who can be excluded from access to commercially sensitive information is a cautionary tale for many NPE in-house counsel. Because it was precedential, this victory has broader implications for in-house counsel involved in patent enforcement and licensing.