                     United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 08-3189
                                    ___________

Industrial Wire Products, Inc., a    *
Missouri corporation,                *
                                     *
           Appellee,                 *
                                     * Appeal from the United States
      v.                             * District Court for the Eastern
                                     * District of Missouri.
Costco Wholesale Corporation, a      *
Washington corporation,              *
                                     *
           Appellant.                *
                                ___________

                              Submitted: April 15, 2009
                                 Filed: August 6, 2009
                                  ___________

Before RILEY, BENTON, and SHEPHERD, Circuit Judges.
                            ___________

SHEPHERD, Circuit Judge.

       Costco Wholesale Corp. (“Costco”) appeals from the district court’s order
denying its motion to compel arbitration and stay proceedings involving claims of
patent and trade dress infringement brought against it by Industrial Wire Products, Inc.
(“IWP”). For the reasons set forth below, we reverse.
                                           I.

       In 2006 and 2007, IWP and Costco entered into vendor agreements in which
IWP agreed to supply Costco with IWP’s patented “Configurable Bins,” which are
interlocking plastic storage containers. The 2007 vendor agreement1 contains the
following arbitration clause:

      [¶]27.1 All claims and disputes that (1) are between Vendor [IWP] and
      Costco Wholesale . . . and (2) arise out of or relate to the Agreement
      Documents or any agreement or transaction or occurrence between
      Vendor [IWP] and Costco Wholesale or to their performance or breach
      (including any tort or statutory claim) . . . shall be arbitrated under the
      Commercial Arbitration Rules of the American Arbitration Association
      (“AAA”), in English in Seattle, Washington . . . .

      [¶]27.2 Vendor [IWP] acknowledges and agrees that . . . this agreement
      to arbitrate covers, without limitation, any claims with respect to matters
      relating to the distribution rights of any of the parties arising under this
      Import Agreement or any applicable law.

(J.A. 68-69.)

      After entering into these vendor agreements with IWP, Costco began selling a
product called an “Interlocking Shoe Organizer” that it obtained from a different
vendor. The Interlocking Shoe Organizer is a storage device that is assembled by
joining a series of panels with interlocking connectors to produce bins of various
shapes and configurations. In January 2008, IWP filed the present action against


      1
        Like the district court, we limit our analysis to the 2007 agreement because
“the 2007 Import Vendor Agreement states that it supercedes all prior written
communications between the parties for the matters covered in the Import Vendor
Agreement.” Indus. Wire Prods., Inc. v. Costco Wholesale Corp., No. 4:08-cv-00070,
slip op. at 3 n.1 (E.D. Mo. June 9, 2008).

                                          -2-
Costco contending that Costco’s sale of the Interlocking Shoe Organizer infringed
IWP’s patent and trade dress rights and violated Missouri unfair competition laws.
Costco moved to compel arbitration.

      The district court denied Costco’s motion to compel arbitration. The court
analyzed paragraph 27.1 of the 2007 vendor agreement and held that IWP’s claims
were not arbitrable because they did not arise from the vendor agreement or any
agreement, transaction, or occurrence between the parties:

      The claims are that Costco infringed on plaintiff’s patent by selling the
      Interlocking Shoe Organizer. These infringement claims exist separate
      from any agreement, transaction, or occurrence between the parties.
      Although it happens that at some point in the past plaintiff sold products
      using its patented design to Costco, and signed a vendor agreement with
      an arbitration clause related to this sale, this fact is irrelevant to the
      present suit. Plaintiff’s claims would exist regardless of whether the
      plaintiff had ever entered into any vendor agreement with Costco.

Indus. Wire Prods., Inc. v. Costco Wholesale Corp., No. 4:08-cv-00070, slip op. at 5
(E.D. Mo. June 9, 2008). However, the court did not analyze whether IWP’s claims
were arbitrable under paragraph 27.2. Costco brings this appeal.

                                         II.

       Both IWP and Costco agree that we have jurisdiction over this interlocutory
appeal. Still, we must examine our appellate jurisdiction sua sponte, even if the
parties concede the issue. Dieser v. Cont’l Cas. Co., 440 F.3d 920, 923 (8th Cir.
2006). An order denying a motion to compel arbitration is immediately appealable
under the Federal Arbitration Act (“FAA”). See 9 U.S.C. § 16(a)(1). However, the
FAA does not specify which court(s) possess jurisdiction over such appeals. This
court has previously exercised jurisdiction in a patent infringement case over an
interlocutory appeal from a district court’s denial of a motion to stay pending

                                         -3-
arbitration. See Medtronic, Inc. v. Advanced Cardiovascular Sys., Inc., Nos. 99-3188,
00-1566, 2000 WL 637045, at *1 (8th Cir. May 18, 2000) (unpublished) (per curiam).
However, this circuit has not squarely addressed the issue of whether, in a patent
infringement action, an interlocutory appeal concerning arbitrability falls within the
exclusive appellate jurisdiction of the Federal Circuit. The Third and Federal Circuits
have addressed this issue and reached opposite conclusions. See Microchip Tech. Inc.
v. U.S. Philips Corp., 367 F.3d 1350, 1354-55 (Fed. Cir. 2004) (the Federal Circuit
has exclusive jurisdiction); Medtronic AVE, Inc. v. Advanced Cardiovascular Sys.,
Inc., 247 F.3d 44, 51-53 (3d Cir. 2001) (the Federal Circuit does not have exclusive
jurisdiction).

       The district court has original jurisdiction in this case because it is a “civil
action arising under [an] Act of Congress relating to patents[.]” 28 U.S.C. § 1338(a).
The Federal Circuit would have exclusive jurisdiction over an appeal from a final
decision in this case. See 28 U.S.C. § 1295(a)(1) (giving Federal Circuit exclusive
jurisdiction “of an appeal from a final decision of a district court . . . if the jurisdiction
of that court was based . . . on section 1338”). However, the district court’s denial of
Costco’s motion to compel arbitration was not a “final decision.” See Microchip
Tech., 367 F.3d at 1354 (“The district court’s decision [denying defendants’ motion
to compel arbitration] was not final[,] [and] we do not have jurisdiction under 28
U.S.C. § 1295(a)(1).”); Medtronic AVE, 247 F.3d at 52 (“[T]his appeal [from the
denial of a motion to stay pending arbitration] is not from a ‘final decision.’”). Thus,
the Federal Circuit does not have jurisdiction over this appeal under section 1295.

      The Federal Circuit would also have exclusive appellate jurisdiction over “an
appeal from an interlocutory order or decree described in subsection [1292](a) or
[1292](b) of this section.”2 28 U.S.C. § 1292(c). Section 1292(a) describes, inter

       2
       Section 1292(b), which vests district courts with discretion in extraordinary
circumstances to certify for interlocutory appeal orders that are not otherwise
appealable, is inapplicable to the present case.

                                             -4-
alia, orders granting and refusing injunctions. See id. § 1292(a)(1). The Federal
Circuit has determined that “order[s] compelling arbitration [are] in effect []
mandatory injunction[s].” Microchip Tech., 367 F.3d at 1354. Thus, the Federal
Circuit finds that “section 16 [of the FAA] renders appealable under section
1292(a)(1) the denial of an injunctive order (i.e. motions to compel arbitration)[.]” Id.
at 1355.

       The Third Circuit disagrees, finding that an order denying a motion to stay
proceedings pending arbitration is “not . . . an order denying an interlocutory
injunction under section 1292(a)(1).” Medtronic AVE, 247 F.3d at 52 (citing
Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 287-88 (1988) (order
granting or denying motion to stay legal proceedings is not appealable as injunction
under 28 U.S.C. § 1292(a)(1))). Therefore, the Third Circuit holds that “this case is
the unusual one that finally turns on the residual jurisdictional statute, 28 U.S.C. §
1294(1)[.]” Id. at 53. Section 1294(1) states, “Except as provided in sections 1292(c),
1292(d), and 1295 . . . appeals from reviewable decisions . . . shall be taken . . . [f]rom
a district court of the United States to the court of appeals for the circuit embracing
the district[.]”3

      In sum, the key difference between the Third and Federal Circuits’ analyses
concerns whether the denial of a motion to compel arbitration is equivalent to the
denial of an injunction. Under the Federal Circuit approach, denying a motion to
compel has an injunctive effect and, therefore, the Federal Circuit has exclusive
appellate jurisdiction under 28 U.S.C. § 1292(a)(1) and 1292(c). See Microchip


      3
        As we already noted, the Federal Circuit cannot have jurisdiction under section
1295 because the district court’s order was not a “final decision.” Section 1292(d),
which deals with appealability of orders from the Courts of International Trade and
Federal Claims, is also inapplicable. Thus, if the Federal Circuit does not have
jurisdiction under section 1292(c), then section 1294(1) vests this circuit with
jurisdiction over the present appeal.

                                           -5-
Tech., 367 F.3d at 1354-55. According to the Third Circuit, denying a motion to
compel does not have an injunctive effect and, thus, subsection 1292(a)(1) and
1292(c) do not vest the Federal Circuit with appellate jurisdiction. See Medtronic
AVE, 247 F.3d at 51-53. In a non-patent case, this court has already rejected the
argument that section 1292(a)(1) grants jurisdiction to review denials of motions to
compel arbitration because of their alleged “injunctive effect.” See McLaughlin
Gormley King Co. v. Terminix Int’l Co., 105 F.3d 1192, 1193 (8th Cir. 1997).
Consequently, we must reject the Federal Circuit’s analysis in Microchip Tech.

       Because the district court’s decision denying Costco’s motion to compel
arbitration was neither “final” nor “injunctive,” the Federal Circuit does not have
exclusive jurisdiction over this appeal.4 Instead, as the Third Circuit decided in
Medtronic AVE, this court has jurisdiction pursuant to 9 U.S.C. § 16(a)(1), which
renders the denial of a motion to compel arbitration appealable, and 28 U.S.C. §
1294(1), “which provides, with exceptions that [] are inapplicable, that an appeal from
a reviewable decision of a district court ‘shall be taken to the . . . court of appeals for
the circuit embracing the district.’” Medtronic AVE, 247 F.3d at 53 (quoting 28
U.S.C. § 1294(1)). Because this appeal came from the United States District Court
for the Eastern District of Missouri, which is within this circuit, we have appellate
jurisdiction.




      4
        This outcome makes sense from a practical standpoint. We typically resolve
questions of arbitrability by interpreting contract language and provisions of the FAA,
not by analyzing the merits of underlying suits, whether they involve patent
infringement or not. Cf. Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1371 (Fed.
Cir. 2006) (the Federal Circuit “applies regional circuit law to questions of
arbitrability that are not intimately involved in the substance of enforcement of a
patent right” (quotation omitted)).

                                           -6-
                                           III.

       “[T]he FAA limits a district court’s initial role in any challenge to an arbitration
agreement to deciding whether ‘the making of the agreement for arbitration or the
failure to comply therewith’ is at issue.” MedCam, Inc. v. MCNC, 414 F.3d 972, 974
(8th Cir. 2005) (quoting 9 U.S.C. § 4). “[O]ur circuit has refined this inquiry to
asking 1) whether the agreement for arbitration was validly made and 2) whether the
arbitration agreement applies to the dispute at hand, i.e., whether the dispute falls
within the scope of the arbitration agreement.” Id. (emphasis in original). Neither
party disputes the validity of the arbitration clause. The district court found that
IWP’s claims for patent and trade dress infringement did not fall within the scope of
the clause and, therefore, denied Costco’s motion to compel arbitration. “We review
de novo the district court’s denial of a motion to compel arbitration based on contract
interpretation.” Suburban Leisure Ctr., Inc. v. AMF Bowling Prods., Inc., 468 F.3d
523, 525 (8th Cir. 2006) (emphasis omitted). “The scope of an arbitration agreement
is given a liberal interpretation, with any doubts resolved in favor of arbitration.”
Medcam, 414 F.3d at 975. A motion to compel arbitration “should not be denied
unless it may be said with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.” Id. (quotation
omitted).

        The district court analyzed paragraph 27.1 of the 2007 vendor agreement,
finding that “the arbitration clause is limited to disputes that arise out of an agreement,
transaction, or occurrence” between IWP and Costco. Indus. Wire, No. 4:08-cv-
00070, slip op. at 4. As “[t]he claims asserted in the complaint do not arise out of or
relate to transactions or occurrences between the parties . . . [t]he Court [decided] that
none of plaintiff’s claims fall[s] within the scope of the arbitration clause . . . .” Id.
at 4-5. This interpretation of paragraph 27.1 is likely correct. However, the district
court failed to analyze paragraph 27.2, which contains additional language concerning
the scope of the parties’ arbitration agreement, despite the fact that Costco specifically

                                           -7-
cited paragraph 27.2 in both memoranda it filed in support of its motion. (See J.A. 31,
114.)

       Paragraph 27.2 states that “[IWP] acknowledges and agrees that . . . this
agreement to arbitrate covers, without limitation, any claims with respect to matters
relating to the distribution rights of any of the parties arising under this Import
Agreement or any applicable law.” (Id. at 68-69.) Costco contends this provision
mandates arbitration of IWP’s intellectual property claims:

      [P]aragraph 27.2 . . . covers the right to distribute products based on
      provisions within the Agreement or any applicable law such as patent
      law as asserted in the complaint. IWP’s complaint asserts that Costco
      has no right to distribute a product that is a “colorable imitation” of the
      product Costco previously distributed for IWP, and those claims fit
      squarely within this provision and must be arbitrated.

(Appellant’s Reply Br. 11 (emphasis in original); accord Appellant’s Br. 16.)
Although IWP quotes paragraph 27.2 in its Statement of Facts (Appellee’s Br. 4), IWP
never responds to Costco’s argument, nor does it provide any reason why we should
ignore paragraph 27.2.

       Given the broad language of paragraph 27.2, we simply cannot say “with
positive assurance that the arbitration clause is not susceptible of an interpretation that
covers the asserted dispute.” MedCam, 414 F.3d at 975. IWP’s infringement claims
reasonably “relat[e]” to Costco’s right to “distribut[e]” the Interlocking Shoe
Organizer, which IWP believes violates its intellectual property rights with respect to
the Configurable Bins. Indeed, “distribution” simply means “the marketing or
merchandising of commodities.” Webster’s Third New International Dictionary 660
(2002). At best, paragraph 27.2 plainly requires arbitration of IWP’s claims. At
worst, the provision is ambiguous and susceptible of an interpretation that covers
IWP’s claims. Because we interpret arbitration clauses liberally and resolve any


                                           -8-
doubts in favor of arbitration, MedCam, 414 F.3d at 975, we hold that this dispute
falls within the scope of the parties’ arbitration agreement and that the district court
erred in denying Costco’s motion to compel arbitration.

                                          IV.

       Accordingly, we reverse and remand to the district court with instructions to
enter an order compelling arbitration.
                       ______________________________




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