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District Court Declines to Vacate Ruling That Patent Is Invalid for Covering Unpatentable Abstract Ideas after the Parties Settled the Case with an Appeal to the Federal Circuit Pending

The Plaintiffs filed a patent infringement action against the defendant, Netskope, accusing Netskope of infringing U.S. Patent Number 7,305,707 (the “707 Patent”). Netskope filed a motion for judgment on the pleadings, which the district court granted finding that the asserted claims for the 707 Patent were unpatentable abstract ideas. The district court subsequently entered judgment in favor of Netskope, invalidating the ‘707 Patent.

After the Plaintiffs filed an appeal with the Federal Circuit, the parties settled the case and the Federal Circuit remanded the case back to the district court. The Plaintiffs then filed an unopposed motion to vacate the district court’s judgment invalidating the ‘707 Patent.

In support of their motion, the Plaintiffs argued that a vacatur of the judgment would be appropriate because, otherwise, they would be precluded from enforcing the 707 Patent against others and the judgment would not be subject to any appellate review. In addition, the Plaintiffs argued that the vacatur was an important factor in the settlement with Netskope and the beneficial effect of such settlement outweighs any public policy concerns.

The district court was not persuaded. “The Court finds that here, the balance of the equities weighs against vacating its judgment invalidating the 707 Patent. By their own admission, plaintiffs seek vacatur so that they may assert the 707 Patent again against others, which would result in unnecessary relitigation of issues already determined by this Court. ‘Judicial 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 that the public interest would be served by vacatur.’ U.S. Bancorp Mortg. v. Bonner Mall P’ship, 513 U.S. 18, 26-27 (1994) (citations omitted). That the judgment is unreviewed does not weigh in favor of vacatur here, where plaintiffs’ voluntary actions caused the mootness that prevented appellate review.”

The district court also rejected the Plaintiffs’ assertion that the beneficial effect of their settlement outweighed any other factors because the Plaintiffs admitted that the settlement was not contingent on the district court granting the motion for vacatur. See Reynolds v. Allstate Ins. Co., No. 10-CV-4893, 2012 WL 4753499, at *2 (N.D. Cal. Oct. 4, 2012) (denying vacatur where granting of vacatur was not necessary to consummation of settlement).

Accordingly, the district court denied the motion to vacate.

Protegrity USA, Inc., et al. v. Netskope, Inc., Case No. 15-cv-02515-YGR (N.D. Cal. Sept. 13, 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

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