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Court Declines to Modify Judgment Based on Collateral Proceedings before the PTAB Finding Claims of Patent-In-Suit Invalid

Summary: In the decision referenced below, the court declined to modify a judgment pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure even though the PTAB had found several claims of the patent-in-suit invalid.

After a trial and an appeal to the Federal Circuit, which affirmed the royalty damages verdict in favor of the plaintiff, the defendant moved the district court to grant it relief from the judgment under Federal Rule of Civil Procedure 60(b)(6). The defendant argued that it would be unjust for the court to enforce a judgment in which ongoing collateral proceedings before the PTAB may render certain patents invalid and may have impacted the fairness of the trial.

The court began by analyzing that Rule 60(b)(6) provides that a court may act to relieve a party from a final judgment for “any other reason justifying relief from the operation of the judgment.” Fed. R. Civ. P. 60(b)(6). “It is a catch-all provision, meant to encompass circumstances not covered by Rule 60(b)’s other enumerated provisions.” Hess v. Cockrell, 281 F.3d 212, 216 (5th Cir. 2002) (citing Batts v. Tow-Motor Forklift Co., 66 F.3d 743, 747 (5th Cir. 1995)). The Fifth Circuit has stated that “[a]lthough we frequently have recognized that Rule 60(b)(6) is a grand reservoir of equitable power to do justice in a particular case when relief is not warranted by the preceding clauses, . . . we have also narrowly circumscribed its availability, holding that Rule 60(b)(6) relief will be granted only if extraordinary circumstances are present.” Batts, 66 F.3d at 747 (internal citations and quotation marks omitted).

The defendant, ION, offered three reasons to find extraordinary circumstances meriting relief from the judgment: (1) the PTAB’s decisions of unpatentability; (2) ION’s present financial condition and the risks ION’s collapse would pose to the market; and (3) the alleged unfairness of ION’s position at trial. The court rejected each argument.

First, the court found that “[t]he PTAB’s Final Written Decisions are currently no more than non-final agency determinations, subject to appeal. Although potential appeal to the Supreme Court is still pending in this case, unlike in Versata, where the writ of certiorari had been fully pursued and denied, the Court’s finding there is nevertheless persuasive here.”

The court further 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.”

Indeed, the court also noted that “[t]he proceedings before the PTAB are not even final at the 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.
Versata Software, Inc., 2014 WL 1600327 at *2.”

Second, the court also rejected ION’ s alleged financial peril as presenting extraordinary circumstances that merit relief from judgment. “Certainly, ION is not the first party in litigation to be faced with difficult financial decisions as a result of an adverse judgment.

Third, ION argued that, in light of the decisions of the PTAB, it was unfairly prejudiced in proceeding to trial as an adjudged infringer due to the District Court’s summary judgment ruling. This court rejected this point as well. “For the same reasons that the PTAB’s Final written Decisions themselves do not justify Rule 60(b)(6) relief, the Court’s summary judgment decision does not entitle ION to relief from the judgment, even if potentially contrary to the determination of non-final agency review in a collateral proceeding.”

Westerngenco LLC v. Ion Geophysical Corp., Case No. 4:09-CV-1827 (S.D. Tex. May 4, 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