PartsRiver, Inc. v. Shopzilla, Inc. et al

Filing 278

ORDER by Judge Claudia Wilken DENYING PARTSRIVER, INC.S 260 MOTION TO VACATE JUDGMENT.(ndr, COURT STAFF) (Filed on 4/21/2011)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 PARTSRIVER, INC., No. C 09-0811 CW 5 Plaintiff, ORDER DENYING PARTSRIVER, INC.’S MOTION TO VACATE JUDGMENT (Docket No. 260) 6 v. 7 8 SHOPZILLA, INC.; YAHOO! INC.; EBAY INC.; AND MICROSOFT CORPORATION, 9 Defendants. / United States District Court For the Northern District of California 10 11 12 SHOPZILLA, INC.; YAHOO! INC.; AND MICROSOFT CORPORATION, 13 14 15 16 Counterclaim-Plaintiffs, v. PARTSRIVER, INC., Counterclaim-Defendant. / 17 18 Plaintiff and Counterclaim-Defendant PartsRiver, Inc., moves 19 to vacate the judgment in this action. 20 Defendants and Counterclaim-Plaintiffs Shopzilla, Inc.; Yahoo! 21 Inc.; and Microsoft Corporation (collectively, Defendants) oppose 22 the motion. 23 considered oral argument and the papers submitted by the parties, 24 the Court DENIES PartsRiver’s motion. 25 Defendant eBay, Inc., and The motion was heard on March 17, 2011. Having BACKGROUND 26 On October 3, 2007, PartsRiver initiated this action in the 27 Eastern District of Texas, alleging that Defendants infringe its 28 U.S. Patent No. 6,275,821 (’821 patent). In November, 2007, 1 Defendants moved to transfer the action to this judicial district. 2 On October 28, 2008, while their motion to transfer was under 3 submission, Defendants filed a request with the U.S. Patent and 4 Trademark Office (PTO) for an ex parte reexamination of the ’821 5 patent. 6 claims 1 and 2 of the ’821 patent was necessary because they were 7 anticipated and obvious based on prior art not cited or disclosed 8 previously to the PTO. 9 Defendants’ request for an ex parte reexamination. United States District Court For the Northern District of California 10 11 12 Specifically, Defendants argued that reexamination of On December 22, 2009, the PTO granted On January 30, 2009, the Texas district court granted Defendants’ motion to transfer venue. On May 1, 2009, the PTO issued its first office action on the 13 reexamination, indicating that claims 1 and 2 were subject to 14 rejection based on anticipation by prior art. 15 the PTO issued a final office action rejecting claims 1 and 2. On June 18, 2009, 16 Meanwhile, on May 28, 2009, Defendants moved for summary 17 judgment of non-infringement and of invalidity based on the on-sale 18 bar, 35 U.S.C. § 102(b). 19 summary judgment in favor of Defendants, concluding that claims 1 20 and 2 were invalid based on the on-sale bar. 21 2009, PartsRiver appealed this decision to the Federal Circuit. 22 On August 21, 2009, the Court granted On September 18, On November 3, 2009, after two failed attempts to amend the 23 ’821 patent to avoid the PTO’s finding of invalidity based on 24 anticipation, PartsRiver appealed that decision to the Board of 25 Patent Appeals and Interferences (BPAI). 26 PartsRiver’s appeal, the patent examiner suggested that limiting 27 language PartsRiver added to another claim of the ’821 patent, if 28 2 In the PTO’s Answer to 1 inserted into claim 1, could save it from invalidity. 2 amendment would also affect claim 2, which incorporated claim 1. 3 On May 20, 2010, PartsRiver filed amendments to claim 1. 4 submission to the PTO, PartsRiver stated, 5 6 7 8 This In its Claim 1 is now believed to reflect, albeit explicitly, the legal scope of claim 1 as previously issued. As such, although the text of claim 1 has been altered by amendment, the claim scope is legally identical to that of originally issued claim 1. This change in language has been adopted for the sole purpose of terminating the present reexamination to avoid lengthy appeal proceedings. 9 Hansen Decl., Ex. C., at 8. On June 24, 2010, the PTO issued, in United States District Court For the Northern District of California 10 light of PartsRiver’s amendments, a notice of intent to issue a 11 reexamination certificate. On November 2, 2010, the PTO issued a 12 re-examination certificate, stating that claims 1 and 2 were 13 patentable, as amended. 14 PartsRiver then asked the Federal Circuit to dismiss its 15 appeal as moot because claims 1 and 2, as litigated in this Court, 16 no longer exist. PartsRiver also moved the Federal Circuit to 17 vacate this Court’s judgment. Defendants did not oppose 18 PartsRiver’s motion to dismiss, but opposed its motion to vacate. 19 The Federal Circuit granted PartsRiver’s motion to dismiss its 20 appeal and remanded to this Court the matter of whether judgment 21 should be vacated. 22 DISCUSSION 23 “When a civil case becomes moot pending appellate 24 adjudication, ‘[t]he established practice . . . in the federal 25 system . . . is to reverse or vacate the judgment below and remand 26 with a direction to dismiss.’” Arizonans for Official English v. 27 28 3 1 Arizona, 520 U.S. 43, 71 (1997) (quoting United States v. 2 Munsingwear, Inc., 340 U.S. 36, 39 (1950)). 3 vacatur is appropriate, a court considers primarily “whether the 4 party seeking relief from the judgment . . . caused the mootness by 5 voluntary action.” 6 513 U.S. 18, 24 (1994). 7 controversy is rendered moot through “‘happenstance,’” that is, 8 “‘due to circumstances unattributable to any of the parties.’” 9 Id. at 23 (quoting Karcher v. May, 484 U.S. 72, 82, 83 (1987)). To determine whether U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, For instance, vacatur is required when a United States District Court For the Northern District of California 10 Vacatur must also “be granted where mootness results from the 11 unilateral action of the party who prevailed in the lower court.” 12 U.S. Bancorp, 513 U.S. at 23. 13 The parties’ primary dispute in this motion is whether 14 mootness -- that is, the elimination of claims 1 and 2, as 15 presented in this litigation -- was caused by PartsRiver’s 16 voluntary action. 17 for an ex parte reexamination of the ’821 patent led to the 18 amendment of claims 1 and 2. 19 actions in the reexamination proceeding were voluntary and, as a 20 result, vacatur is inappropriate. 21 PartsRiver maintains that Defendants’ request Defendants assert that PartsRiver’s It is true that Defendants precipitated the reexamination 22 proceedings. 23 PartsRiver’s appeal, which had not yet been taken. 24 time Defendants petitioned for reexamination, this case was not 25 even before this Court. 26 27 28 However, Defendants’ act could not render moot Indeed, at the By voluntarily amending claims 1 and 2 during reexamination, PartsRiver gave up its right to appeal this Court’s judgment. 4 The 1 exercise of PartsRiver’s volition can be seen in the positions it 2 took before the PTO, the BPAI and the Federal Circuit. 3 beginning of the reexamination, PartsRiver “believed that the ’821 4 Patent was valid as issued.” 5 examiner rejected PartsRiver’s position, PartsRiver appealed to the 6 BPAI. 7 and agreed to amend the claims, albeit for the “purpose of 8 terminating the present reexamination to avoid lengthy appeal 9 proceedings” in the BPAI. PartsRiver’s Reply 4:4. At the When the During the pendency of the appeal, PartsRiver changed course Defs.’ Opp’n Ex. 31, at 7. PartsRiver’s United States District Court For the Northern District of California 10 appeal to the BPAI was then dismissed. 11 request did not compel PartsRiver to make the strategic decision in 12 May 2010 to amend claims 1 and 2 “to avoid lengthy appeal 13 proceedings.” 14 PartsRiver could have attempted to pursue its appeal before the 15 Federal Circuit and insisted that its appeal was not moot. 16 could have asserted, as it did to the examiner, that the amended 17 claims were “legally identical” to claims as published in the 18 original ’821 patent. 19 Defendants’ reexamination After the reexamination proceedings concluded, Id. It PartsRiver chose not to. Even though it took action voluntarily, PartsRiver insists 20 that the equities weigh in favor of vacatur, arguing that its 21 amendments were intended to respond to the examiner’s rejections, 22 not the Court’s summary judgment order. 23 that, if it made such amendments, it could then attempt to vacate 24 the Court’s summary judgment order, as it has. 25 has disavowed any interest in the ’821 patent, pointing to its 26 assignment of the patent to Kelora Systems, LLC. 27 stake in the ’821 patent weighs against a conclusion that 28 5 However, PartsRiver knew Further, PartsRiver Its lack of a 1 2 PartsRiver will suffer an inequitable result. PartsRiver, by its own acts, circumvented appellate review of 3 the Court’s judgment. 4 Gunn, 64 F.3d 1365, 1372 (9th Cir. 1995). 5 6 7 8 Thus, vacatur is not appropriate. Dilley v. CONCLUSION For the foregoing reasons, the Court DENIES PartsRiver’s motion to vacate the judgment. (Docket No. 260.) IT IS SO ORDERED. 9 United States District Court For the Northern District of California 10 Dated: April 21, 2011 CLAUDIA WILKEN United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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