BrightEdge Technologies, Inc. v. Searchmetrics, GmbH. et al

Filing 221

ORDER by Judge Haywood S. Gilliam, Jr. DENYING UNOPPOSED 217 MOTION TO VACATE ORDER AND JUDGMENT.(ndrS, COURT STAFF) (Filed on 3/26/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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BRIGHTEDGE TECHNOLOGIES, INC.,
Plaintiff,

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v.
SEARCHMETRICS, GMBH., et al.,
Defendants.

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United States District Court
Northern District of California

Case No.14-cv-01009-HSG
ORDER DENYING UNOPPOSED
MOTION TO VACATE ORDER AND
JUDGMENT
Re: Dkt. No. 217

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Plaintiff BrightEdge Technologies, Inc. filed this action against Defendants Searchmetrics,

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GmbH. and Searchmetrics, Inc., accusing them of infringing U.S. Patent Nos. 8,135,706 (“the

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’706 Patent”), 8,478,700 (“the ’700 Patent”), 8,478,746 (“the ’746 Patent”), 8,577,863 (“the ’863

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Patent”), and 8,671,089 (“the ’089 Patent”) (collectively, “the Asserted Patents”). Dkt. No. 154

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¶ 5. The Asserted Patents relate to search engine optimization, a process by which an entity can

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enhance its online presence. See id. On October 18, 2017, Defendants moved for judgment on the

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pleadings, asserting lack of patent-eligible subject matter under 35 U.S.C. § 101. Dkt. No. 173.

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On January 19, 2018, the Court granted Defendants’ motion, finding all the patents-in-suit invalid

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as directed to ineligible subject matter under Section 101. Dkt. No. 208. The same day, the Court

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entered judgment in favor of Defendants, see Dkt. No. 209, and Plaintiff timely filed a notice of

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appeal to the Federal Circuit, see Dkt. No. 211. While the case was pending on appeal, the parties

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settled both this case and a concurrent state court litigation, and on August 2, 2018, the Federal

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Circuit remanded the action to this Court for consideration of whether to vacate its judgment. See

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Dkt. No. 214.

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Pending now before the Court is Plaintiff’s unopposed motion to vacate the January 19,
2018 order and judgment, on which the Court held a hearing on January 24, 2019. See Dkt. No.

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217 (“Mot.”). Having carefully considered Plaintiff’s motion and its arguments at the hearing, the

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Court DENIES the motion.

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I.

LEGAL STANDARD
Under Federal Rule of Civil Procedure 60(b), a court “may relieve a party or its legal

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representative from a final judgment, order, or proceeding.” While appellate court vacatur of

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district court judgments in the context of settlement agreements should be granted only in

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“exceptional circumstances,” U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18, 29

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(1994), district courts enjoy “greater equitable discretion when reviewing [their] own judgments

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than do appellate courts operating at a distance,” Am. Games, Inc. v. Trade Prods., Inc., 142 F.3d
1164, 1170 (9th Cir. 1998). In deciding whether to vacate a judgment, district courts consider

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United States District Court
Northern District of California

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“‘the consequences and attendant hardships of dismissal or refusal to dismiss' and ‘the competing

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values of finality of judgment and right to relitigation of unreviewed disputes.’” Am. Games, Inc.,

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142 F.3d at 1168 (quoting Dilley v. Gunn, 64 F.3d 1365, 1370–71 (9th Cir. 1995)). The Ninth

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Circuit has held that, although “mootness by happenstance provides sufficient reason to vacate”

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because it prevents appellate review, the “equitable principles weighing in favor of vacatur . . . cut

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the other direction where the appellant by his own act prevents appellate review of the adverse

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judgment.” Dilley, 64 F.3d at 1370 (citation omitted). Where parties have settled, the Ninth

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Circuit has provided that a district court is “not required to vacate a judgment when the appellant

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causes the dismissal of its appeal by settling.” Bates v. Union Oil Co. of Cal., 944 F.2d 647, 649–

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50 (9th Cir. 1991). Otherwise, “any litigant dissatisfied with a trial court's findings would be able

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to have them wiped from the books.” Id. (quoting Ringsby Truck Lines, Inc. v. W. Conf. of

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Teamsters, 686 F.2d 720, 721 (9th Cir. 1982)).

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II.

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DISCUSSION
Plaintiff argues that vacatur is warranted for two reasons. First, Plaintiff contends that two

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Federal Circuit decisions following this Court’s order and judgment "changed the law by

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recognizing that factual questions underpin the Section 101 analysis, and that disputes on these

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factual questions present in this case would have precluded judgment on the pleadings had this

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Court had the benefit of these opinions." Mot. at 2. Second, Plaintiff contends that because this
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case's settlement was ancillary to settling a state court case that was nearing trial, settlement was

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done for "legitimate business reasons.” Id. at 10. At the hearing on this motion, Plaintiff clarified

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that the parties’ global settlement was not contingent on the pending vacatur. Dkt. No. 220 at 5.

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Plaintiff added that it was also concerned that it would need to raise “some of the same

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arguments” it now advances in support of vacatur to future courts, which would have “less

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familiarity” with this case. Id. at 7.

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The Court finds Plaintiff’s arguments unavailing. “Judicial precedents are presumptively

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correct and valuable to the legal community as a whole. They are not merely the property of

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private litigants and should stand unless a court concludes that the public interest would be served
by a vacatur.” U.S. Bancorp Mortg., 513 U.S. at 26 (citations omitted). And the fact that the

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United States District Court
Northern District of California

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order and judgment here are unreviewed despite the purportedly intervening authority does not

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counsel in favor of vacatur, because Plaintiff’s voluntary actions caused the mootness that

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prevented appellate review. Id. at 25, 29 (finding mootness by reason of settlement did not justify

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vacatur, in part, because the “losing party [had] voluntarily forfeited his legal remedy by the

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ordinary processes of appeal or certiorari”). Plaintiff cannot now object that “the order regarding

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validity in this case should not have any preclusive effect because of the change in law,” because

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exhaustion of its appellate rights would have resolved that question. See Mot. at 10. Further, even

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accepting Plaintiff’s position as true—that the preclusive weight of this Court’s order is tempered

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by intervening authority—the Court rejects Plaintiff’s concern that future courts will struggle to

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grapple with that issue because they are less familiar with this case. The Court has full confidence

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that future courts can review the disputed order and consider its preclusive effect in light of

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intervening authority—an exercise courts routinely perform.

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The Court also finds nothing exceptional about Plaintiff’s desire to settle a case unrelated

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to this litigation. Neither the settlement of that case nor the settlement of this case is exceptional

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under the circumstances, given that Plaintiff admitted at the hearing that the global settlement is in

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no way contingent on the Court granting the pending motion for vacatur. See Protegrity USA, Inc.

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v. Netskope, Inc., No. 15-cv-02515-YGR, 2016 WL 4761093, at *2 (N.D. Cal. Sept. 13, 2016)

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(denying vacatur where granting of vacatur was not necessary to consummation of settlement);
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Reynolds v. Allstate Ins. Co., No. C 10-4893 SI, 2012 WL 4753499, at *2 (N.D. Cal. Oct. 4, 2012)

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(same).

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III.

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CONCLUSION
The Court finds “exceptional circumstances” are not present to warrant vacatur. See U.S.

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Bancorp Mortg., 513 U.S. at 29. For the same reasons, the Court does not find in its “greater

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equitable discretion” that vacatur is warranted under the circumstances. See Am. Games, Inc., 142

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F.3d at 1169–70.

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This order terminates Docket Number 71. The clerk is directed to close the case.

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IT IS SO ORDERED.

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Dated: 3/26/2019

United States District Court
Northern District of California

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HAYWOOD S. GILLIAM, JR.
United States District Judge

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