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Versata v. SAP: Stay of $390 Million Judgment Denied Even Though PTAB Found Patent Invalid

After the jury returned a verdict of approximately $390 million against SAP and the verdict was affirmed on appeal, the Patent Trial and Appeal Board (“PTAB”) preliminarily invalidated the patent (subject to appeal to the Federal Circuit). As a result, SAP moved to stay the execution of the judgment or, in the alternative, to vacate the judgment.

To determine whether execution should be stayed, the district court first analyzed whether a stay pending the finalization of the PTAB proceeding was appropriate. “Defendants assert that the PTAB has issued a non-final decision that the asserted claims are invalid. Of course, on the other hand, there is a final judgment in this case finding that the claims are valid. The CBM review process was created by the Leahy-Smith America Invents Act (“AIA”), Pub.L. No. 112-29, 125 Stat. 284, which directs district courts to consider the following factors in determining whether to stay their proceedings in favor of the PTAB:

A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date has been set;
(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and (D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.”

The district court then found that all four of the factors weighed again a stay. “There are no remaining issues in this case to simplify. The trial has been held and the appeal is completed. A stay would clearly unduly prejudice the nonmoving party and provide a clear tactical advantage for the moving party. Moreover, a stay would not reduce the burden of litigation on the parties or the Court. Finally, the fact that the Federal Circuit has already denied Defendants’ request for a stay pending completion of the PTAB proceedings weighs heavily against Defendants’ request.”

The district court then turned to whether it was appropriate to vacate the judgment. Here, Defendants argued for the application of the catchall provision in Rule 60(b)(6): “any other reason that justifies relief.” The district court discussed this provision and found that “[w]hile there is no concrete definition of ‘extraordinary circumstances’ in the context of Rule 60, the fact that the Defendants have obtained a contrary determination regarding the validity of the asserted patent in another forum does not appear to present such circumstances. Defendants have taken advantage of a full and fair opportunity to litigate the validity of the patent before this Court, before the jury, and before the Federal Circuit, even pursuing a writ to the United States Supreme Court. To hold that later proceedings before the PTAB can render nugatory that entire process, and the time and effort of all of the judges and jurors who have evaluated the evidence and arguments would do a great disservice to the Seventh Amendment and the entire procedure put in place under Article III of the Constitution. The proceedings before the PTAB are not even final at this time, but this Court does not believe that later finality will change this calculus. Indeed, it is the finality of the judgments issued by the Federal Courts that is at stake here. Unlike the situation before the Court in Fresenius USA, Inc. v. Baxter Intern., Inc., 721 F.3d 1330 (Fed. Cir. 2013), the judgment in this case is final and there are no further issues to be resolved. That fact also clearly distinguishes this case from that before the Fifth Circuit in Bros. Inc. v. W. E. Grace Mfg. Co., 320 F.2d 594 (5th Cir. 1963).”

The district court also disregarded the fact that the judgment was a large amount. “Defendants rely heavily on the amount of the judgment in arguing for a stay. However, the jury’s damage award has been closely reviewed by both this Court and the Federal Circuit and found to be proper. There is also no showing that the amount of the judgment would cause undue harm to the Defendants. Indeed, the affidavit of the Chief Financial Officer of Defendant SAP AG represents that it “has the financial wherewithal to satisfy the Judgment due to Plaintiffs” and will do so by wire transfer within 15 days of finality. (Dkt. No. 583-1 at 3).”

Accordingly, the district court denied the motion to stay or vacate the judgment.

Versata Software, Inc. v. SAP America, Inc., Case No. 2:07 cv 153-RSP (E.D. Tex. Apr. 21, 2014)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or