The Halo Effect Won't Cure Lack of Final Judgment

The US Court of Appeals for the Federal Circuit dismissed the appeal of a disappointed movant seeking prejudgment interest and a new damages trial after concluding that the district court did not enter an appealable final order despite closing the case nearly three years before the appeal was filed. Halo Electronics, Inc. v. Bel Fuse Inc., Case No. 2021-1861 (Fed. Cir. May 6, 2022) (per curiam) (nonprecedential).

The Halo v. Bel Fuse litigation has been percolating in the federal courts for over a decade, with multiple significant decisions that continue to reshape patent litigation practice (the most well-known of which restructured the legal framework for willful patent infringement and the recovery of enhanced damages).

Halo first sued Pulse for patent infringement in 2007. The jury found that Pulse willfully infringed Halo's patents, however, the district court denied Halo's motion for enhanced damages. On Halo's appeal, the Supreme Court of the United States articulated a new test for enhanced damages.

While that appeal was pending in 2015, Halo moved the district court for award of prejudgment interest. The district court held that Halo was entitled to prejudgment interest at the state's statutory rate and directed the parties to either agree to the amount owed or submit briefing that outlined proposed calculations. The parties submitted briefing but before the district court determined what calculation to use, Pulse filed a notice of appeal challenging the district court's order stating prejudgment interest would be awarded and directing the briefing. The Federal Circuit held that the district court's prejudgment interest order was not final "because the district court had not determined, or specified the means for determining, the amount of prejudgment interest."

While Pulse's appeal was pending in 2017, Halo renewed its motion in the district court for enhanced damages. The district court denied that motion and directed the clerk to enter judgment and close the case, but neither the court's order nor the ensuing "judgment" addressed prejudgment interest. At the time, Halo did not move for relief from the September 2017 order and judgment.

Then, after nearly three years of inactivity, Halo filed a "Motion for Pre-Judgment Interest Award and Damages Trial" in the district court in July 2020. The district court denied Halo's motion as untimely under Federal Rules of Civil Procedure 59(e) and 60(b), reasoning that "if Halo believed an issue remained unresolved, it should have brought that to the court's attention then, not three years later," adding, "the parties are entitled to rely on court judgments and move on with their affairs" and reopening the case "would be unfair to Pulse and contrary to the goal of finality of judgments."

On appeal, the Federal Circuit held that the district court's September 2017 judgment was not a final, appealable one because, "with respect to a final judgment for money damages, finality does not exist if the district court does not determine, or specify the means for determining, the amount of the judgment." Because the district court never resolved the issue of prejudgment interest, the Court explained that its decision could not be final: "to conclude otherwise would mean that our earlier dismissal of Pulse's prejudgment interest appeal was improper." Consistent with that reasoning, the Federal Circuit disagreed with the district court that Halo should have moved for relief under Rules 59(e) or 60(b), explaining that those time limitations are triggered only by final judgments or orders. The Court pointedly noted that Halo could have notified the district court of the omission of prejudgment interest promptly after the September 2017 orders.

Halo also petitioned for mandamus relief in the form of directing the district court to decide the prejudgment interest issue, which the Federal Circuit rejected. As the Court explained, the right to mandamus is subject to laches, which barred Halo's sought mandamus relief because "[t]he district court found that Halo's nearly three-year delay in seeking relief from the September 2017 judgment was unreasonable and that reopening the case would be unfair to Pulse."

In its final disposition, the Federal Circuit stated that "[i]n the event of further proceedings in this case, the district court will have the discretion either to adjudicate the amount of prejudgment interest to be awarded to Halo or to consider whether to terminate the proceedings on Halo's request for prejudgment interest and any further relief based on Halo's failure to prosecute after September 2017."

For more background on the history of Halo Electronics v. Bel Fuse, check out the following IP Update case notes:

• US-Centered Negotiations for Product Made and Sold Outside United States Do Not Constitute Sale or Offer for Sale in United States
• The Halo Effect: Original Halo Case Remanded to District Court to Consider New Test for Enhanced Damages
• District Courts on Willful Infringement Post-Halo
• Federal Circuit Dismisses Premature Appeal of Pre-Judgment Interest Award