CAFC Vacates Enhanced Damages Judgment Due to Preclusive Effect of Intervening PTAB Decisions

The U.S. Courtroom of Appeals for the Federal Circuit (CAFC) issued a precedential decision today vacating and remanding with directions to dismiss as moot a district courtroom last judgment that granted enhanced damages for willful infringement to Packet Intelligence LLC. The enchantment was introduced by NetScout Programs, Inc. in opposition to Packet and pertains to a co-pending case by which the CAFC today affirmed a number of choices of the Patent Trial and Enchantment Board (PTAB) holding all challenged claims of 4 of Packet’s patents unpatentable as apparent. Decide Stark authored the opinion.

Packet Intelligence is the proprietor of U.S. Patent Nos. 6,665,725 (the ’725 patent), 6,771,646 (the ’646 patent), 6,839,751 (the ’751 patent), and 6,954,789 (the ’789 patent), that are directed to strategies and apparatuses for monitoring packets exchanged over a pc community.

The CAFC issued an earlier decision within the case in 2020, affirming-in-part and vacating-in-part the choice of the US District Courtroom for the Jap District of Texas relating to 3 of the patents. The courtroom affirmed the district courtroom’s judgments on the problems of infringement, invalidity, and willfulness, however reversed with respect to pre-suit damages. Decide Reyna wrote individually, dissenting on the problem of patent eligibility below Part 101.

In the course of the time the case was on remand, the PTAB issued last written choices in inter partes evaluations (IPRs) introduced by third events Juniper Networks, Inc. and Palo Alto Networks, Inc, discovering all asserted claims of the Packet patents unpatentable as apparent. Packet appealed these choices and the CAFC coordinated it so they’d be thought of by the identical panel deciding the NetScout enchantment.

After the Board issued the ultimate written choices, NetScout moved to dismiss Packet’s district courtroom infringement case or, within the various, to remain the district courtroom litigation till the conclusion of Packet’s enchantment from the PTAB’s choices. Packet opposed and the district courtroom denied NetScout’s movement to dismiss or keep the case and entered an amended last judgment. Most related, the courtroom denied NetScout’s request to reevaluate the components it had initially thought of in deciding to boost damages.

On enchantment to the Federal Circuit, NetScout argued that if the co-pending appeals from the PTAB are affirmed, the courtroom should discover that it could have “an instantaneous issue-preclusive impact,” leaving Packet unable to “acquire on an excellent financial damages award for patent infringement.” Packet argued all of the CAFC needed to determine was if its 2020 choice “rendered this case sufficiently last such that it’s proof against the Board’s subsequent dedication of unpatentability.”

In its evaluation, the CAFC defined that its choice within the Fresenius case is instructive. There, the Federal Circuit held that it was certain by John Simmons Co. v. Grier Bros. Co., 258 U.S. 82 (1922), which reasoned {that a} “district courtroom should apply intervening authorized developments affecting the asserted patent’s validity, even when the courtroom of appeals already determined the validity problem the opposite approach.” The CAFC additionally discovered there that “to ensure that a judgment to be ‘sufficiently last to forestall the applying of’ an intervening unpatentability discovering, ‘the litigation have to be completely concluded in order that the reason for motion in opposition to the infringer was merged right into a last judgment [and is] one which ends the litigation on the deserves and leaves nothing for the courtroom to do however execute the judgment.”

Counting on that reasoning, the CAFC concluded that “Packet’s infringement case in opposition to NetScout stays pending and, thus, isn’t proof against the Board’s now-affirmed findings of unpatentability.” For the reason that earlier choice remanded for the district courtroom to excise pre-suit damages and enhanced damages associated to pre-suit damages, it was clearly not at a stage that “leaves nothing for the courtroom to do however execute the judgment,” wrote the CAFC.

Packet argued that the case ought to be distinguished from Fresenius and others as a result of “this Courtroom has already affirmed legal responsibility and damages and didn’t remand to resolve open damages points with the likelihood for additional evaluation by this Courtroom.” Nonetheless, the CAFC stated the “affect of excision of pre-judgment damages on enhanced damages was a problem left open by our remand in Packet I” and that, in any case, “our precedents maintain that remanded patent circumstances stay weak to post-mandate developments regarding patentability, even when legal responsibility –together with patent validity – has already been conclusively resolved by appellate evaluation.”

The opinion went on to elucidate that the choice is in line with VirnetX Inc. v. Apple Inc., (Fed. Cir. Mar. 31, 2023) (“VirnetX II”); Chrimar Sys., Inc. v. ALE USA Inc., (Fed. Cir. 2019); and XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282, 1294 (Fed. Cir. 2018). The courtroom additionally stated that, whereas Packet accurately famous that in Chrimar the CAFC famous it “would possibly sometime encounter a celebration engaged in ‘an abuse of the judicial course of within the type of presentation of insubstantial arguments” to maintain a case from changing into “last,” right here, “NetScout’s appellate points aren’t insubstantial.” Thus, the PTAB’s unpatentability choices have to be given last impact, stated the CAFC, and the district courtroom’s last judgment subsequently vacated and dismissed as moot.