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District Court Grants Indicative Ruling to Vacate Judgment Based on Settlement of the Parties

In this patent infringement action, the parties reported that they had settled their dispute while it was pending before the Federal Circuit. The settlement was contingent upon the district court’s granting an indicative motion that it would vacate the underlying judgment.

The district court began its analysis by noting that “Federal Rule of Civil Procedure 60(b) grants district courts the authority to relieve a party from a final judgment when ‘applying [the judgment] prospectively is no longer equitable’ or for ‘any other reason that justifies relief.’ Fed. R. Civ. P. 60(b)(5), (6). Rule 60(b) ‘vests power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.’ Klapprott v. United States, 335 U.S. 601, 614-15 (1949). Whether to grant a Rule 60(b) motion ‘lies within the sound discretion of the district court.’ Neuberg v. Michael Reese Hosp. Found., 123 F.3d 951, 955 (7th Cir. 1997).”

The district court also recognized that “[j]udicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes the public interest would be served by a vacatur.” U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18, 26 (1994). Thus, mootness caused by settlement, in and of itself, does not justify vacatur. Id. at 29. The party seeking relief from the status quo must demonstrate ‘equitable entitlement to the extraordinary remedy of vacatur.’ Id. at 26.’

Turning to the facts here, the district court concluded that the parties had established that the public interest would be served by a vacatur. “Above and beyond the preservation of judicial resources and the overriding public interest in favor of privately resolving disputes that accompanies every settlement, here, there is great uncertainty as to whether the Court’s Markman order has any potential preclusive effect whatsoever. This is not a case in which a patent has been invalidated, where the public interest in preserving judicial precedent is overwhelming. See Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 100 (1993).”

The district court therefore concluded the benefits of granting the Rule 60 motion “substantially outweighs any harm the judicial system may suffer from losing legal precedent in this matter. Accordingly, pursuant to Rule 62.1, the Court indicates that it would grant the motion for vacatur should the Federal Circuit remand for that purpose.”

Cleversafe, Inc. v. Amplidata, Inc., Case No. 11 C 4890 (N.D. Ill April 7, 2016)

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