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District Court Declines Request to Vacate Claim Construction Order after Parties Enter into Consent Judgment

Canvs filed a patent infringement action in 2014 asserting that Nivisys induced and contributed to the infringement of its patent through the sale of TACS and TACS-M products. After a lengthy stay, the district court held a Markman hearing and before the district court took any action related to the Markman hearing, Nivisys filed a Motion for Summary Judgment. After that, the district court entered its Claim Construction Order.

After the claim construction order, the partied asked the district court to enter judgment in favor of Nivisys on all claims asserted in the action and to vacate its Claim Construction Order “[t]o avoid collateral estoppel against Canvs.”

The district court began its analysis by explaining that “[t]here is no doubt that public policy favors the settlement of disputes, and therefore courts should accept settlement agreements where it is appropriate to do so. But public policy also dictates ‘that those who have contested an issue shall be bound by the result of the contest, and that matters once tried shall be considered forever settled as between the parties.’ Louisville Bedding Co. v. Pillowtex Corp., 455 F.3d 1377, 1381 (Fed. Cir. 2006) (citation omitted). There is not ‘overriding public policy [] in favor of vacating an otherwise valid court order because one or more of the parties, after settlement, finds that order inconvenient.’ City of Aurora, Colo. v. PS Sys., Inc., No. 07-CV-02371-PAB-BNB, 2010 WL 2670819, at *1 (D. Colo. July 2, 2010). Indeed, ‘[t]o do so in the absence of extraordinary circumstances may, in fact, adversely affect the dynamics of motions practice if litigants believe that they may later erase the effect of unfavorable court orders through a settlement agreement.’ Id. ‘Not only would such a practice come dangerously close to engendering improper advisory opinions by courts, it might also encourage inefficiencies through repetitive litigation.’ Id.

The district court then explained that “Canvs invoked the jurisdiction of this Court when it filed this action against Nivisys for patent infringement. The parties chose this forum to resolve their dispute over how the claims asserted in the patent should be construed. This involved arguments in open court and public filings. The parties must live by this decision. The parties fail to provide a single justification, and the Court is aware of none, for vacating the otherwise valid Claim Construction Order. The Court held a hearing, provided both sides ample time to present their respective arguments, and then issued an Order analyzing those arguments. The Court will not vacate its Order solely because Canvs believes it will be unfavorable in future litigation.”

Accordingly, the district court agreed to enter judgment against Canvs, but declined to vacate its Claim Construction Order.

Canvs Corporation v. Nivisys, LLC, Case No. 2:14-cv-99-FtM-38MRM (M.D. Fla. Nov. 18, 2015)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or