McCullough v. Kammerer Corp.

Background

A company that owned a patent and its licensee (respondents) had sued the petitioner for patent infringement. The District Court found the patent valid and infringed and ordered an accounting of profits and damages. The petitioner later argued that the patent had been used to restrain trade, fix prices, and suppress competition, and asked the court to stay the accounting and dismiss the claim because of that alleged misuse. The District Court made extensive findings against the petitioner and denied the motion. The Circuit Court of Appeals dismissed the petitioner’s appeal on the ground that the order was not a final decree.

Reasoning

The Supreme Court examined whether the order denying the misuse-based dismissal was appealable before the separate accounting. It relied on the 1927 law that allows appeals in patent equity cases when everything but an accounting has been finished. The Court explained Congress intended to avoid forcing parties to undergo expensive accountings before they could seek review. Because the District Court reopened the case, decided the misuse question on its merits, and only the accounting remained, the order was "final except for the ordering of an accounting" and therefore appealable. The Court reversed the appeals court’s dismissal.

Real world impact

The decision lets accused infringers seek appellate review of key misuse or dismissal disputes without first incurring the time and expense of a full accounting. It does not decide whether the patent was finally lawful or unlawful on the merits, but it requires courts to allow immediate appellate consideration of such motions when only an accounting remains.