## Facts

- Ron Nystrom owned U.S. Patent No. 5,474,831 covering certain deck-board constructions and sued TREX for patent infringement in the Eastern District of Virginia.
- TREX counterclaimed for declaratory judgments of non-infringement, invalidity, and unenforceability, and initially asserted antitrust counterclaims that were later dismissed and refiled in similar form before being dismissed again.
- Nystrom sought sanctions against TREX’s counsel under 28 U.S.C. § 1927 for allegedly multiplying proceedings; the district court denied sanctions.
- After a Markman hearing, the district court construed disputed claim terms in a manner that led Nystrom to concede he could not prove infringement.
- Nystrom requested entry of judgment of non-infringement and dismissal without prejudice of TREX’s invalidity/unenforceability counterclaims.
- The district court entered judgment of non-infringement on all asserted claims and summary judgment of invalidity as to claims 18–20, but stayed (and did not resolve) TREX’s invalidity/unenforceability counterclaims as to claims 1–17.
- Nystrom appealed the non-infringement judgment, the partial invalidity judgment, and the denial of § 1927 sanctions while TREX’s counterclaims as to claims 1–17 remained pending.

## Issues

1. Whether the Federal Circuit had appellate jurisdiction under 28 U.S.C. § 1295(a)(1) when the district court stayed and left unresolved TREX’s invalidity/unenforceability counterclaims as to claims 1–17.
2. Whether the court could review the denial of § 1927 sanctions absent a final, appealable judgment.

## Decision

- The Federal Circuit dismissed the appeal for lack of jurisdiction because there was no final decision under 28 U.S.C. § 1295(a)(1).
- The court held that the stayed invalidity/unenforceability counterclaims as to claims 1–17 remained pending and prevented finality.
- Because the merits appeal was jurisdictionally defective, the court also dismissed the challenge to the denial of § 1927 sanctions.

## Legal Principles

- Courts of appeals must examine their jurisdiction sua sponte; parties cannot create appellate jurisdiction by consent or omission.
- Under 28 U.S.C. § 1295(a)(1), appellate jurisdiction in patent cases generally requires a final decision that ends the litigation on the merits and leaves nothing for the district court to do but execute the judgment.
- A judgment adjudicating some claims or some patent claims is not final when other claims or counterclaims remain pending, even if the unresolved matters are stayed.
- Interlocutory review requires an applicable statutory or procedural basis (such as a proper Rule 54(b) certification); absent such a mechanism, an appeal must be dismissed.

## Conclusion

The Federal Circuit dismissed for lack of appellate jurisdiction because the district court’s stay left TREX’s invalidity and unenforceability counterclaims as to claims 1–17 unresolved, defeating finality and barring review of both the merits and the sanctions ruling.


Nystrom v. TREX Co., 339 F.3d 1347 (Fed. Cir. 2003)