Packet Intelligence LLC v. NetScout Systems, Inc. et al

Filing 396

MEMORANDUM AND OPINION. Signed by District Judge Rodney Gilstrap on 5/4/2022. (klc, )

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
PACKET INTELLIGENCE LLC,
Plaintiff,
v.
NETSCOUT SYSTEMS, INC.,
TEKTRONIX COMMUNICATIONS,
TEKTRONIX TEXAS, LLC,
Defendants.

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CIVIL ACTION NO. 2:16-CV-00230-JRG

MEMORANDUM OPINION AND ORDER
Before the Court are the following briefs and motions filed by Plaintiff Packet Intelligence
LLC (“PI”) and Defendants NetScout Systems, Inc. and NetScout Systems Texas, LLC (formerly
known as Tektronix Texas, LLC d/b/a Tektronix Communications) (collectively, “NetScout” or
“Defendants”):
1. PI’s Opening Brief Concerning Post-Appeal Issues and the related briefing (Dkt.
Nos. 367, 372, 376, 377) as well as NetScout’s Opening Brief Regarding Issues on
Remand and the related briefing (Dkt. Nos. 369, 373, 375, 378) (all collectively, the
“Post-Appeal Briefing”);
2. NetScout’s Motion to Dismiss and Enter Final Judgment in its Favor or, in the
Alternative, to Stay the Case (the “Motion to Dismiss or Stay”) (Dkt. No. 380); and
3. NetScout’s Motion for Leave to File a Supplemental Brief Regarding Ongoing
Royalties (the “Motion for Leave”) (Dkt. No. 381).
Having considered the motions before the Court, the related briefing, and the applicable
law, and for the reasons stated herein, the Court concurrently issues its Amended Final Judgment

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and finds that the Motion to Dismiss or Stay (Dkt. No. 380) and the Motion for Leave (Dkt. No.
381) should be DENIED.
I.

BACKGROUND
A. Trial and Post-Trial Motion Practice
PI originally filed its complaint against NetScout asserting infringement of U.S. Patent

Nos. 6,665,725 (the “ʼ725 Patent”), 6,939,751 (the “ʼ751 Patent”), and 6,954,789 (the “ʼ789
Patent”) (collectively, the “Asserted Patents”) on March 15, 2016. (Dkt. No. 1). This case was
tried to a jury between October 10, 2017, and October 13, 2017. The jury returned a verdict finding
that NetScout willfully infringed at least one claim of the Asserted Patents, that the Asserted
Patents were not invalid, and that PI was entitled to a $3.5 million award for pre-suit infringement
and a $2.25 million award for post-suit infringement. (Dkt. No. 237). The jury answered that such
sums were intended as a running royalty. (Id. at 6).
On September 7, 2018, the Court entered its Final Judgment. (Dkt. No. 307). The Final
Judgement awarded PI: $5,750,000 in compensatory damages as a running royalty, enhanced
damages in the amount of $2,800,000, and set an ongoing royalty rate of 1.55% of the revenue
received by Defendants produced by the post-verdict infringing conduct of the accused G10 and
GeoBlade products through the life of the Asserted Patents. (Id.).
The $3.5 million pre-suit damages award was a result of the jury rejecting NetScout’s
marking defense. Packet Intel. LLC v. NetScout Sys., Inc., 965 F.3d 1299, 1313 (Fed. Cir. 2020)
cert. denied, No. 20-1289, 2021 WL 1520847 (Apr. 19, 2021); (see also Dkt. No. 237). In its
Motion for Judgement as a Matter of Law of No Pre-Suit Damages (the “JMOL”) pursuant to Fed.
R. Civ. P. 50(b) filed on October 5, 2018, NetScout argued that PI could not recover pre-suit
damages because PI failed to mark its licensees’ products that practiced the claimed inventions.

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(Dkt. No. 315 at 1). Specifically, NetScout argued that PI failed to prove: (1) marking for the Cisco
and Huawei products, (2) marking for the MeterFlow and MeterWorks products, and (3) that
infringement of any method claims could support the pre-suit damages award. (Id. at 4–7, 10–12).
The Court denied Netscout’s Motion for JMOL under Federal Rule of Civil Procedure 50(b)
finding that “the jury had a ‘sufficient evidentiary basis’ to find that NetScout failed to identify
specific Huawei or Cisco products that should have been marked for the ʼ789 Patent.” (Dkt. No.
344 at 9). The Court further found that the jury had a sufficient basis to conclude that “NetScout’s
own use of the claimed methods [of the ʼ725 and ʼ751 Patents] drove U.S. sales of the Accused
Products and justified an award of pre-suit damages.” (Id. at 15). Accordingly, the Court declined
to alter its Final Judgment which included the $3.5 million pre-suit damages award.
B. Appeal and Remand on the Discrete Issue of Pre-Suit Damages and Any
Enhancement Thereof
NetScout appealed the Final Judgment, and the Federal Circuit issued its opinion on July
14, 2020, affirming this Court’s judgment as to infringement, validity, and willfulness. Packet
Intel., 965 F.3d at 1313, 1316. However, the Federal Circuit held that “[b]ecause Packet
Intelligence failed to present substantial evidence to the jury that matched the limitations in any
claim of the ’789 patent to the features of the MeterFlow product, NetScout [was] entitled to
judgment as a matter of law that it is not liable for pre-suit damages based on infringement of the
’789 patent.” Id. at 1314. The Federal Circuit also rejected PI’s theory that “internal testing,
customer support, and customer training was pre-suit activity infringing the method patents” and
found that the method claims also could not support pre-suit damages under PI’s damages theory.
Id. at 1314–15. Accordingly, the Circuit reversed the award of pre-suit damages, and “any
enhancement thereof [was] vacated.” Id. at 1316. This Court’s Final Judgement was affirmed “in
all other respects.” Id. at 1303.
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Now on remand, the sole issue before this Court is amending its Final Judgment to remove
the pre-suit damages award and to remove the amount of the enhancement, if any, tied to the
now-reversed award of pre-suit damages. The parties filed a Joint Motion to Lift Stay and Request
for Status Conference (the “Joint Motion”) to “address the remaining issues in light of the Federal
Circuit’s decision to ‘reverse the district court’s pre-suit damages award and vacate the Court’s
enhancement of that award.’” (Dkt. No. 364 at 4). The Court held a telephonic status conference
on June 2, 2021, to discuss the remaining issues in light of the Federal Circuit’s opinion and
ordered the parties to file briefing regarding the same. (Dkt. No. 366). The Post-Appeal Briefing
concluded on July 20, 2021. (Dkt. Nos. 377, 378). However, on September 17, 2021, Netscout
filed its Motion to Dismiss or Stay (Dkt. No. 380) in light of post-appeal proceedings before the
Patent Office (the “PTO”) and the Motion for Leave (Dkt. No. 381) requesting to file additional
briefs regarding the previously awarded ongoing royalty. The Court considers each in turn.
II.

THE POST-APPEAL BRIEFING
In the Post-Appeal Briefing, the parties raise two disputes regarding how the Court should

implement the Circuit Court’s decision at Packet Intelligence LLC v. NetScout Sys., Inc., 965 F.3d
1299 (Fed. Cir. 2020).
First, the parties dispute whether reversal of the $3.5 million in pre-suit damages
necessitates modification of the $2.8 million enhanced damages award, and if so, how the Court
should modify the enhancement. Specifically, both parties argue that no modification is necessary,
yet reach opposite conclusions as to whether the enhancement should be retained in full or
completely removed. 1 Alternatively, the parties dispute how the Court should modify the

See Dkt. No. 367 at 1 (PI arguing that the enhancement should not be modified and should be reinstated in full); Dkt.
No. 369 at 4–8, 10 (NetScout arguing that the Court need not modify the enhancement and should instead reconsider
the Read factors to arrive at “no enhanced damages”).

1

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enhancement. 2 For the reasons stated below, the Court finds that the Federal Circuit’s opinion
necessitates modification of the enhanced damages award and that the proper modification is to
vacate $1,704,347.83 of the enhancement (the enhancement tied to the reversed $3.5 million
pre-suit damages award) and retain $1,095,652.17 of the enhancement (the enhancement tied to
the affirmed $2.25 million post-suit damages award).
Second, the parties dispute whether the reversal of pre-suit damages justifies an alteration
of the ongoing royalty rate of 1.55%. (See Dkt. No. 367 at 7; Dkt. No. 369 at 9). The Court finds
that the pre-suit damages award played a significant role in the Court’s calculation of the initial
base ongoing royalty rate. Accordingly, and as explained below, the Court finds that the ongoing
royalty rate—a form of ongoing equitable relief that this Court retains the authority to
modify—should be altered from 1.55% to 1.355%.
A. Legal Standard
“The mandate rule provides that ‘issues actually decided [on appeal]—those within the
scope of the judgment appealed from, minus those explicitly reserved or remanded by the
court—are foreclosed from further consideration.’” Amado v. Microsoft Corp., 517 F.3d 1353,
1360 (Fed. Cir. 2008) (quoting Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1383 (Fed.
Cir. 1999). “[W]hile a mandate is controlling as to matters within its compass, on the remand a
lower court is free as to other issues.” Engel Indus., 166 F.3d at 1382 (quoting Sprague v. Ticonic
Nat’l Bank, 307 U.S. 161 (1939)). Unless remanded by the appellate court, all issues within the
scope of the appealed judgment are deemed “incorporated within the mandate and thus precluded
from further adjudication.” Id. at 1383. “The scope of the issues presented . . . on appeal must be

See Dkt. No. 372 at 2–4 (NetScout arguing that the enhancement should be modified and reduced proportionally
based on the surviving post-suit damages award); Dkt. No. 376 at 1–2 (PI responding that a proportional reduction is
improper).

2

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measured by the scope of the judgment appealed from . . . [and] not by the arguments advanced
by the appellant.” Id. at 1382 (citing Sprague, 307 U.S. at 168). A contrary holding would allow
appellants to present appeals in a “piecemeal and repeated fashion,” and would lead to the
“untenable result that a party who has chosen not to argue a point on a first appeal should stand
better as regards the law of the case than one who had argued and lost.” Id. at 1382.
B. Discussion
The Court first considers the parties’ positions regarding the enhanced damages award and
concludes that a proportional reduction of the enhancement—which leaves intact the portion of
the enhancement tied to the surviving post-suit damages—is warranted to properly comply with
the Federal Circuit’s mandate.
1. The Court Need Not Reconsider the Read Factors
NetScout first asserts that the “Federal Circuit vacated this Court’s prior enhancement
award and there is no reason to reinstate any of [the] enhancement now.” (Dkt. No. 369 at 1)
(emphasis added). In effect, NetScout argues that on remand, the Federal Circuit vacated the entire
award of enhanced damages such that this Court should reconsider the Read factors to determine
whether enhancement is warranted in the first place. (See id. at 4–9; Dkt. No. 372 at 1, 4–8)
(suggesting that “the Federal Circuit vacated the prior enhancement award and this Court should
now re-weigh the relevant [Read] factors in light of the current circumstances to determine whether
any enhancement is justified on remand”). NetScout’s argument asserts that no modification of the
enhancement is necessary. Rather, NetScout invites the Court to set aside the entire enhancement
and reconsider whether any enhancement is warranted—despite the Federal Circuit’s clear
language that:

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we reverse the district court’s pre-suit damages award and vacate the court’s
enhancement of that award. We affirm the district court’s judgment in all other
respects.
Packet Intel., 965 F.3d at 1303 (emphasis added).
PI asserts that the mandate rule prevents the Court from reconsidering the Read factors and
that NetScout’s argument “is grounded in the false premise that the ‘Federal Circuit vacated this
Court’s [entire] prior enhancement award.’” (Dkt. No. 373 at 2) (quoting Dkt. No. 369 at 1). PI
notes that “[t]he mandate rule requires a district court on remand to effect [the Appellate Court’s]
mandate and to do nothing else.” (Id. at 3) (quoting Art Midwest, Inc. v. Atlantic Ltd. P’ship XII,
742 F.3d 206, 213 (5th Cir. 2014)). In PI’s view, here, the mandate was that “[t]he district court’s
award of pre-suit damages is reversed, and any enhancement thereof is vacated.” (Id. at 2) (quoting
Packet Intel., 965 F.3d at 1316 (emphasis added)). Accordingly, PI argues that “the Federal Circuit
did not remand with instructions to start the enhanced damages analysis anew, but rather only to
remove any portion tied to the jury’s pre-suit award, if any.” (Id. at 3). Thus, PI argues that it would
be improper for the Court to revisit the Read factor analysis for the portion of enhanced damages
tied to the post-suit damages award, which was not reversed by the Federal Circuit.
The Court agrees with PI that the mandate rule precludes a re-analysis of the Read factors
given that the Federal Circuit remanded with instructions to vacate only the portion of the
enhancement tied to the reversed pre-suit damages, if any:
Because the district court erred in denying NetScout’s motion for judgment as a
matter of law on pre-suit damages, we reverse the district court’s pre-suit
damages award and vacate the court’s enhancement of that award. We affirm
the district court’s judgment in all other respects.
...
Accordingly, the judgement of the district court is affirmed as to infringement,
validity, and willfulness. The district court’s award of pre-suit damages is
reversed, and any enhancement thereof is vacated.

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Packet Intel. 965 F.3d at 1303, 1316. As discussed above, the mandate rule provides that “issues
actually decided [on appeal]—those within the scope of the judgment appealed from, minus those
explicitly reserved or remanded by the court—are foreclosed from further consideration.” Amado,
517 F.3d at 1360. Here, the issues explicitly reserved for this Court on remand are the reversal of
pre-suit damages and the vacatur of the enhancement tied to such pre-suit damages, if any. Notably,
the Federal Circuit did not remand with instructions to alter or vacate the post-suit damage award
or the corresponding enhancement thereof. The award of post-suit damages, the Court’s balancing
of the Read Factors, and the portion of the enhancement tied to post-suit damages are thus within
the scope of the Federal Circuit’s mandate, 3 and the mandate rule operates as a bar to this Court
reconsidering the Read factors or vacating the enhancement tied to the post-suit damage award.
As a result, the Court proceeds by determining the portion of the enhancement tied to the pre-suit
damages award, vacating that portion of the enhancement, if any, and amending its Final
Judgement accordingly.

“[A]n issue that falls within the scope of the judgment appealed from but is not raised by the appellant in its opening
brief on appeal is necessarily waived.” Amado, 517 F.3d at 1360 (quoting Engel Indus., 166 F.3d at 1383). Here,
NetScout did not raise the propriety of the post-suit damages award or this Court’s weighing of the Read factors in
Packet Intel. LLC v. NetScout Sys., Inc., 965 F.3d 1299 (Fed. Cir. 2020). The mandate rule “precludes reconsideration
of any issue within the scope of the judgment appealed from—not merely those issues actually raised.” Id. Thus, the
proper inquiry is whether this Court’s weighing of the Read factors and award of post-suit damages were within the
scope of the Final Judgement appealed from in Packet Intel., 965 F.3d at 1299. See Amado, 517 F.3d at 1360. Such
issues were within the scope of the judgment because the Final Judgment entered on September 17, 2018, expressly
included this Court’s award of post-suit damages and the entirety of the $2.8 million enhancement based on the
weighing of the Read factors. (Dkt. No. 307 at 2). NetScout could have challenged this Court’s weighing of the Read
factors on appeal but declined to do so. Even further, NetScout expressly challenged the propriety of the entire
enhancement award on appeal—arguing that the Federal Circuit “should reverse the willfulness judgment and vacate
the $2.8 million in enhanced damages.” Brief of Appellants at 69, Packet Intel LLC v. NetScout Sys., Inc., 965 F.3d
1299 (Fed. Cir. 2020) (Dkt. No. 20). The Federal Circuit expressly affirmed this Court’s finding of willfulness and
declined to vacate the entirety of the enhancement. Packet Intel., 965 F.3d at 1316. In sum, the Federal Circuit upheld
the portion of the enhancement tied to the post-suit damages award, and NetScout failed to challenge the award of
post-suit damages or the weighing of the Read factors. Thus, these issues became a part of the Federal Circuit’s
mandate, and this Court is not required to reconsider them.
3

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2. Even if It Were Proper to Reconsider the Read Factors, the Court Would
Exercise Its Discretion to Award Enhanced Damages
Although a reconsideration of the Read Factors is unwarranted, the Court—after reviewing
the parties’ arguments in the Post-Appeal Briefing—finds that the Read factors still indicate that
an award of enhanced damages is appropriate.
A properly supported finding of willfulness “invites the Court to exercise its discretion to
determine whether enhanced damages are appropriate under 35 U.S.C. § 284.” Core Wireless
Licensing S.A.R.L. v. LG Elecs., Inc., No. 2:14-cv-912-JRG, Final Judgment Order, Dkt. No. 47 at
1 (E.D. Tex. Nov. 1, 2016). In addition to determining whether to award enhanced damages, courts
also have discretion as to the amount of damages to be awarded. Halo Elecs., Inc. v. Pulse Elecs.,
Inc., 136 S. Ct. 1923, 1932 (2016) (“District courts enjoy discretion in deciding whether to award
enhanced damages, and in what amount.”); see also Halo, 136 S. Ct. at 1926 (“§ 284 allows district
courts to punish the full range of culpable behavior.”). The Court may increase damages up to
three times the damages assessed by the Jury. See Jurgens v. CBK, Ltd., 80 F.3d 1566, 1570 (Fed.
Cir. 1996). To determine whether and how much to enhance damages, courts consider the “Read
factors:”
(1) “whether the infringer deliberately copied the ideas or design of another”;
(2) “whether the infringer, when he knew of the other’s patent protection, investigated the
scope of the patent and formed a good-faith belief that it was invalid or that it was not
infringed”;
(3) “the infringer’s behavior as a party to the litigation”;
(4) “[d]efendant’s size and financial condition”;
(5) “[c]loseness of the case,”
(6) “[d]uration of defendant’s misconduct”;
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(7) “[r]emedial action by the defendant”;
(8) “[d]efendant’s motivation for harm”; and
(9) “[w]hether defendant attempted to conceal its misconduct.”
Read Corp. v. Portec Inc., 970 F.2d 816, 826–27 (Fed. Cir. 1992), abrogated in part on other
grounds by Markman v. Westview Instr. Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc).
As discussed above, the Court is presented with a properly supported finding of willfulness
in this case—now expressly affirmed on appeal—and thus may determine whether enhanced
damages are appropriate under 35 U.S.C. § 284 (assuming such revisiting is not barred by the
mandate rule). See Packet Intel., 965 F.3d at 1315–16 (concluding that the “jury’s willfulness
verdict is supported by substantial evidence”). The Court addresses each factor in turn considering
the arguments raised by PI and NetScout in the Post-Appeal Briefing.
i.

The Five Read Factors Previously Weighing Against Enhancement
Continue to Weigh Against Enhancement

Previously, the Court found that the following five Read factors weighed against
enhancement: (1) copying, (2) good-faith belief in noninfringement or invalidity, (3) the
infringer’s litigation conduct, (8) the infringer’s motivation for harm, (9) the infringer’s attempts
to conceal its misconduct. (Dkt. No. 305 at 5–8, 13–14). On remand, NetScout argues that all five
of these factors continue to weigh against enhancement. 4 (Dkt. No. 369 at 4–5; Dkt. No. 372 at
4
Although NetScout first asserts that the “second Read factor . . . continues to weigh against enhancement,” NetScout
offers an alternative argument that “[i]f anything, this factor weighs more heavily against enhancement given that the
Federal Circuit reversed the damages award on the pre-suit infringement and . . . split two-to-one on NetScout’s
Section 101 defense.” (Dkt. No. 369 at 4–5). The Court finds this argument unpersuasive. First, the pre-suit damages
were vacated based on a post-trial change in the law as outlined in Arctic Cat Inc. v. Bombardier Recreational Prod.
Inc., 876 F.3d 1350, 1356 (Fed. Cir. 2017) rather than a good-faith belief of non-infringement or invalidity on the part
of NetScout. See Packet Intel., 965 F.3d at 1312 (“When the district court charged the jury in this case, [the Federal
Circuit] had not yet ruled on which party bears the burden of proving compliance with the marking statute. After the
verdict, [the Circuit] held that an alleged infringer ‘bears an initial burden of production to articulate the products it
believes are unmarked ‘patented articles’ subject to [the marking requirement].’”) (quoting Arctic Cat, 876 F.3d at
1368). Second, NetScout’s infringement and invalidity defenses were rejected by the jury and by this Court, and those
findings were upheld on appeal—with nothing in the Federal Circuit’s opinion changing this Court’s previous analysis
of this factor, which still weighs against enhancement to the same degree as before.

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4–5). PI does not contest that these factors continue to weigh against enhancement and asserts that
“none of the [post-appeal Read] factors impact this Court’s prior analysis.” (See Dkt. No. 373).
Accordingly, without opposition from PI, the Court finds that the five factors previously found to
weigh against enhancement continue to weigh against enhancement.
ii.

Read Factor Four Continues to Favor Enhancement

Under the fourth factor, a defendant’s size and financial condition should be viewed both
relative to the plaintiff and also individually to ensure that enhanced damages would “not unduly
prejudice the [defendant’s] non-infringing business.” Krippelz v. Ford Motor Co., 670 F. Supp. 2d
815, 822 (N.D. Ill. 2009) (internal citations omitted); Read, 970 F.2d at 827.
NetScout argues that its size and finances alone are of little relevance and that this factor
should only be assessed—and only weigh against enhanced damages—in cases where the other
Read factors strongly support enhancement. (Dkt. No. 369 at 7). PI notes that NetScout merely
copies the same argument previously raised in NetScout’s Opposition to Packet Intelligence’s
Motion for Enhanced Damages and Entry of Judgment. 5 (Dkt. No. 373 at 6; compare Dkt. No. 369
at 7, with Dkt. No. 277 at 11). Accordingly, PI asserts that the Court has already addressed—and
rejected—NetScout’s argument regarding this factor.
The Court again finds NetScout’s arguments unpersuasive and notes that this factor is not
as limited as NetScout suggests. Rather, the Court finds that ignoring the size of infringing firms
would not properly ensure that the damages assessed for willful infringement are sufficient “to
punish the full range of culpable behavior.” Halo Elecs., 136 S. Ct. at 1926; but see
Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co., No. 2:15-cv-1202-WCB, 2017 WL

The Court notes that NetScout’s Post-Appeal Briefing is premised on its assertion that “the recent appeal and other
changed circumstances” justify a reconsideration of the Read factors. (Dkt. No. 369 at 4). The Court finds it puzzling
that—for this factor—NetScout asserts verbatim the same argument it raised prior to appeal in its initial opposition to
PI’s Motion for Enhanced Damages.
5

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3034655, at *10 (E.D. Tex. July 18, 2017) (Bryson, J., sitting by designation) (noting that
defendant’s “size and financial condition, while sufficient to weather an award of an enhanced
royalty, does not by itself support [plaintiff’s] contention that [defendant] has engaged in conduct
deserving” of enhancement). For the same reasons as before, the Court finds that this factor
supports enhancement. (See Dkt. No. 305 at 9–10).
iii.

Read Factor Five Continues to Favor Enhancement

Under the fifth factor, the Court previously found that “[t]his case was not very close.” (Id.
at 10–11). NetScout argues that the Federal Circuit “confirmed the closeness of this case by
(1) reversing more than half of the compensatory damages awarded by the jury, and (2) splitting
on the question [of] whether to reverse and remand the Court’s denial of NetScout’s patent
eligibility motion.” (Dkt. No. 369 at 5–6) (citing Packet Intel., 965 F.3d at 1307–10, 1312–15,
1316–20). NetScout argues that the surviving $2.25 million in compensatory damages represents
a significant reduction of the $15.6 million sought by PI and indicates that this case was close. (Id.
at 6). Further, NetScout asserts that the case was close because the Federal Circuit split two-to-one
on whether to reverse this Court’s decision regarding the eligibility of the Asserted Patents under
Section 101—although the panel’s majority ultimately affirmed this Court’s eligibility
determination. 6 (Id.). Finally, NetScout argues that the case is closer than it originally appeared

NetScout repeatedly references the panel’s decision at the Circuit Court as “splitting two-to-one” on the eligibility
issue and uses this to indicate that this Court should factor that split into its decisions here. (See Dkt. Nos. 369 at 1,
4–6, 372 at 5, 375 at 2, 377 at 1–2). This Court rejects NetScout’s invitation. It is simply wrong to apply a different
result to an appellate decision of two-to-one than to a decision of three-to-zero. The Circuit Court has spoken regarding
eligibility, and it would be folly to take its decision less seriously when it is reached by less than a unanimous
consensus among the panel members. Trial courts should not weigh the impact of appellate decisions on some sliding
scale—as NetScout suggests. As Chief Justice Marshall famously said, “[i]t is emphatically the province and duty of
the judicial department to say what the law is.” Marbury v. Madison, 5 U.S. 137, 177 (1803). What the law is does
not change when the judicial department speaks unanimously or by a simple majority. To act otherwise would make
a mockery of stare decisis.
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because the PTO has found the asserted claims invalid in IPRs instituted post-trial, yet still subject
to appeal. (Id. at 7; see also Dkt. No. 379).
PI responds this case was not close because “nothing in the Federal Circuit’s ruling alters
[this Court’s previous] findings, nor did the appellate court disagree with [the Court’s findings on
infringement and invalidity].” (Dkt. No. 373 at 5). PI asserts that the reversal of pre-suit damages
has no bearing on the closeness of the case because it resulted from a post-verdict change in the
law. (Id. at 5). Further, PI notes that the Court previously considered the fact that “NetScout did
not present any testimony on an alternative damages theory, relying on cross-examination of PI’s
damages expert alone” in deciding that this case was not close. (Dkt. No. 305 at 9). PI argues that
this fact remains unchanged post-appeal. (Dkt. No. 367 at 5). Finally, PI responds that, regardless
of the panel’s split on the eligibility issue, the findings of infringement, validity, and willfulness
of the Asserted Patents were affirmed, and the Asserted Patents have not been adjudicated invalid
in any final proceeding—thus, the post-appeal circumstances bolster this Court’s previous
conclusion under this factor. (Id.; see also Dkt. No. 382 at 3 (noting that a Final Written Decision
by the PTAB is not “final” and cannot be given any preclusive effect against the patent owner until
the time for appeal has expired, or any appeal has terminated) (citing XY, LLC v. Trans Ova
Genetics, L.C., 890 F.3d 1282, 1294 (Fed. Cir. 2018))).
The Court agrees with PI that the post-appeal developments do not shift this factor against
enhancement. First, the post-verdict change in law and reversal of pre-suit damages does not affect
the Court’s previous analysis—which already credited NetScout by noting that the “reduction in
the damages award from PI’s damages demand supports NetScout’s position.” (Dkt. No. 305 at
11). Despite the reduction of PI’s damages ask, NetScout still failed to “present any testimony on
an alternative damages theory, relying on cross-examination of PI’s damages expert alone.” (Id. at

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10). All other inferences regarding the closeness of the case favor PI’s position, as the jury—the
sole judges of the facts in this case—arrived at a verdict finding the Asserted Patents valid and
willfully infringed. 7 (Dkt. No. 237). While NetScout may have raised its defenses in good-faith,
the Court notes that its “inventorship defense completely collapsed during testimony at trial” and
the jury accordingly “reject[ed] the position whole-cloth.” (Dkt. No. 305 at 6). The jury retired to
deliberate at 10:36 am and returned its verdict shortly before 2 pm, rendering a verdict fully in
favor of PI after a brief period of deliberation. (Dkt. No. 242).
Further, the decision on appeal bolster’s this Court’s previous analysis, and the parallel
proceedings at the PTO do not compel a different result. NetScout’s arguments regarding the
Federal Circuit’s opinion are unavailing. First, the Circuit affirmed the findings of infringement,
validity, and willfulness upon which this Court previously relied when weighing this factor.
Second, NetScout’s reliance on the concurrence-in-part and dissent-in-part regarding the eligibility
of the Asserted Patents ignores the fact that the panel’s majority upheld this Court’s finding that
the Asserted Patents were eligible and were not directed to an abstract idea. 8 Packet Intel., 965
F.3d at 1309. The Court also notes that the non-final post-verdict PTO proceedings finding the
asserted claims invalid do not weigh against the conclusion that this case was close. As this Court
has previously recognized, “ongoing proceedings at the USPTO [do not] effectively tie the Court’s
hands and mandate a finding that this is a close case, especially in light of the other evidence”
supporting the contrary. SSL Servs. LLC v. Citrix Sys., Inc., No. 2:08-cv-158-JRG, 2012 WL

The Court notes that the jury’s finding against “[NetScout] does not automatically mean that this factor weighs in
Plaintiff[’s] favor.” Hako-Med USA, Inc. v. Axiom Worldwide, Inc., No. 06-CV-1790, 2009 WL 3064800, at *10
(M.D. Fla. Sept. 22, 2009); see also Emcore Corp. v. Optium Corp., No. CV-7-326, 2010 WL 235113, at *3 (W.D.
Pa. Jan. 15, 2010) (“Simply because Plaintiffs won does not mean this case was not close.”).
8
NetScout’s argument remains unpersuasive. The same merely suggests an alternative ruling that would “vacate the
district court’s judgment of patent eligibility and remand for the court to make factual findings [regarding Alice step
2].” Packet Intel., 965 F.3d at 1316 (Reyna, J., concurring-in part, dissenting-in-part). Thus, NetScout’s argument that
its eligibility defense was close improperly speculates regarding this Court’s conclusions on Alice step 2, which the
Federal Circuit “[did] not reach.” Id. at 1310.
7

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4092449, at *5 (E.D. Tex. Sept. 17, 2012) vacated and remanded on other grounds, 769 F.3d 1073
(Fed. Cir. 2014). Having presided over the trial, this Court is intimately familiar with the evidence
presented and the testimony of the witnesses and again “does not view this as a particularly close
case.” (Dkt. No. 305 at 10).
iv.

Read Factor Six Continues to Favor Enhancement

NetScout asserts that the Court should not give factor six—the duration of the infringer’s
misconduct—any weight because NetScout had no pre-suit notice of the Asserted Patents and
because PI never sought an injunction to prevent post-suit sales. (Dkt. No. 369 at 7–8). NetScout
also argues that the Federal Circuit’s reversal of pre-suit damages confirms that pre-suit
infringement should not be considered under this factor. (Id.). In response, PI notes that the Court’s
previous analysis of this factor considered a period starting “at least from the date of the
commencement of this suit,” and thus disregarding pre-suit conduct would not change the Court’s
conclusion, which was not dependent on NetScout’s pre-suit conduct. Further, PI argues that
NetScout continues to advertise and offer infringing products for sale—thus, if anything,
NetScout’s duration of misconduct has only expanded, and this factor continues to weigh in favor
of enhancement. (Id.) (citing Dkt. No. 368-1 (indicating the revenue NetScout derived from the
sale of accused products in 2020 and 2021)).
The Court finds PI’s arguments persuasive. The Court previously noted that “NetScout’s
continued infringement . . . lasted over two years and five months” from the date suit was filed.
(Dkt. No. 305 at 11–12). Even considering the post-appeal circumstances, NetScout’s conduct
prior to appeal, which the Court previously considered, remains unchanged—and if anything,
NetScout’s sale of infringing products has only increased since the Court’s first consideration of
this factor. (See Dkt. Nos. 368-1, 368-2). “Given that NetScout’s period of willful infringement,

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including the period during the course of litigation, spans at least two years and continue[d] without
any indication of remediation, this factor favors enhancement.” (Dkt. No. 305 at 12).
v.

Read Factor Seven Continues to Favor Enhancement

NetScout asserts the same arguments with respect to factor seven—remedial action—as it
does for factor six. Namely, NetScout argues that the Court should not give this factor any weight
because “NetScout had no pre-suit knowledge of the [Asserted Patents] and PI never sought an
injunction to stop ongoing sales.” (Dkt. No. 372 at 7–8). NetScout further argues that this factor
should not weigh in favor of enhancement because PI receives an ongoing royalty on the sale of
accused products, and such sales have “dramatically diminished.” (Dkt. No. 372 at 7–8; Dkt. No.
369 at 8 (citing Dkt. No. 248 at 38:20–39:21 (trial testimony of NetScout CEO that the accused
products are sold only “if a customer demands the old product.”))). PI notes that in the previous
pre-appeal briefing related to this factor, “NetScout d[id] not argue that it has undertaken any
remedial measures[,]” and the Court found that “there [was] no evidence of remedial action, only
preventative action.” (Dkt. No. 373 at 7) (quoting Dkt. No. 305 at 13). Further, PI argues that
NetScout continues to sell the accused products and has taken no remedial action—only
preventative action—post-appeal. (Id.).
The Court finds NetScout’s arguments unpersuasive. While NetScout argues that sales of
the accused products have dramatically diminished, the Court finds that NetScout has continued
to advertise the accused products and has sold millions of dollars of the same post-verdict. (See
Dkt. No. 368-1 at 2–3; Dkt. No. 373 at 7). NetScout’s continued sale of the accused products
bolsters this Court’s earlier conclusion that “there is no evidence of remedial action, only
preventative action.” (Dkt. No. 305 at 13). Thus, the Court finds that this factor again weighs in
favor of enhancement.

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Having readdressed all Read Factors and considering the developments post-appeal, the
Court finds that NetScout has not sufficiently shown that the balance of the factors differs from
that of the Court’s initial analysis. In short, regardless of the application of the mandate rule, this
Court properly exercises its discretion to award an enhancement tied to the surviving post-suit
damages in light of NetScout’s willful infringement. Accordingly, the Court now addresses the
proper method to effectuate the Federal Circuit’s mandate to vacate “any enhancement [of the
pre-suit damages award].” Packet Intel., 965 F.3d at 1316.
3. A Proportional Reduction of the Enhancement is Necessary to Comply
with the Federal Circuit’s Opinion on Remand
In its previous Order granting $2.8 million in enhanced damages, the Court found egregious
behavior was present but determined that “less than treble damages [was] appropriate” because
“only a subset of the [Read] factors weigh[ed] in favor of enhanced damages.” (Dkt. No. 305 at
15) (quoting WCM Indus., Inc. v. IPS Corp., No. 2016-2211, 2018 WL 707803, at *10 (Fed. Cir.
Feb. 5, 2018)). Following remand, the parties dispute the impact of the Federal Circuit’s mandate
to vacate the enhancement tied to the pre-suit damages award, if any.
Specifically, PI argues that the Court only enhanced the post-suit damages award of $2.25
million to arrive at the $2.8 million enhancement, and thus no vacatur is required. (Dkt. No. 367
at 1–4). To arrive at this conclusion, PI asserts that the only evidence supporting the Court’s
willfulness finding was NetScout’s post-suit willful conduct. 9 PI also notes that Netscout
represented in its Petition for Writ of Certiorari that “the decision below . . . permitted willfulness
The Court previously found that following evidence supported the jury’s finding of NetScout’s willfulness, all of
which occurred after the suit was filed: (1) testimony from NetScout’s corporate representative admitting that even
though he had not read the Asserted Patents, his position was that Mr. Deitz lied and stole the inventions (Dkt. No.
300 at 116:18–22); (2) testimony from NetScout’s CEO that he could not remember if he had read the Asserted Patents
or even a summary of them (Dkt. No. 248 at 87:11–88:4); and (3) testimony suggesting that Netscout decided to
continue selling the accused products despite having notice of the Asserted Patents at least as of the date suit was filed.
(Id. at 39:1–2; see also Dkt. No. 344 at 16 (noting that “[i]t is well-settled, at least in this District, that post-[suit]
behavior can establish willful infringement.”)).
9

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(and enhanced damages) based solely on a [NetScout’s] post-filing conduct.” (Dkt. No. 367-2 at
i., 4, 5, 14, 15, 17, 20) (arguing that “all of the evidence of willfulness occurred post-filing”).
Without citation to authority, PI then argues that because “willfulness is a predicate to awarding
enhanced damages, the [enhancement] awarded by this Court [must] stem solely from NetScout’s
[willful] post-suit conduct [and not from NetScout’s unwilful pre-suit conduct].” (Dkt. No. 367 at
4) Thus, PI asserts that the entire enhancement is tied only to the surviving award of post-suit
damages, and no vacatur is required. (Id.).
NetScout responds that the Court enhanced the entire $5.75 million compensatory damages
award to arrive at the $2.8 million enhancement, and thus the award should be vacated
proportionally given that $3.5 million (the pre-suit damages) of the total $5.75 million award has
been reversed. (Dkt. No. 372 at 4). Netscout argues that PI never sought enhancement of only
post-suit damages and clearly requested enhancement of all of its damages in its Motion for
Enhanced Damages and Entry of Judgment. (Dkt. No. 372 at 3) (citing Dkt. No. 269 at 1 (PI
“request[ing] that this Court enhance the damages that NetScout” will pay to PI, not just post-suit
damages), 14 (PI requesting the Court to “enhance NetScout’s damages by up to three
times . . . .”)). NetScout further notes that PI argued that pre-suit conduct justified an enhancement
of damages when addressing Read factor 6, the duration of misconduct, in its Motion for Enhanced
Damages and Entry of Judgment. (Dkt. No. 269 at 11) (arguing that NetScout’s duration of
infringement precedes the filing of the complaint). Finally, NetScout argues that the Federal
Circuit knew that all the evidence related to willfulness was post-suit, yet still remanded for this
Court to vacate any enhancement of pre-suit damages. (Dkt. No. 375 at 1). Accordingly, if PI were
correct that the entire enhancement could only be based on willful post-suit damages, the Federal
Circuit would have no need to remand to this Court to determine which portion of the enhancement

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to vacate—as none of the enhancement could properly be tied to the non-willful pre-suit damages
award. (Id.).
The Court finds NetScout’s arguments persuasive and that the Court previously enhanced
the entire compensatory damages award. Accordingly, as detailed below, the Court amends its
enhancement from $2.8 million to a proportional $1,095,652.17—vacating the portion tied to the
reversed pre-suit damages award and leaving intact the portion tied to the affirmed post-suit
damage award. 10 The jury found Netscout’s conduct to be willful, and the compensatory damages
found or assessed were $5.5 million. (Dkt. No. 307). After weighing the Read factors and finding
that the balance warranted an enhancement on the lower end of the scale, 11 the Court enhanced the
compensatory damages of $5.5 million by a factor of 1.486 to arrive at a $2.8 million enhancement
and $8.55 million in total damages. (Dkt. No. 305 at 3–15). The respective values of the
enhancement tied to the pre- and post-suit damages are shown below:
Damages

Multiplier

Enhanced Damages

Enhancement Award

$3.5 mil
(pre-suit)

1.486

$5,204,347.83

$1,704,347.83

$2.25 mil
(post-suit)
+

1.486

$3,345,652.17

$1,095,652.17

$5.75 mil

1.486

$8.55 mil

$2.8 mil

10
The Court notes that PI seems to argue—without reference to authority—that a court may only enhance damages
for those particular infringing sales that have been determined to be willful. (See Dkt. No. 367 at 4). However, the
patent damages statute authorizes a court to “increase the damages up to three times the amount found or assessed.”
35 U.S.C. § 284. A rule requiring a determination on a sale-by-sale basis, taking care to only enhance those particular
sales found to be willful, is not supported by the statutory text or precedent and would be impractical in most cases.
Rather, the Court may increase damages up to three times the damages assessed by the Jury. See, Halo, 136 S. Ct. at
1932) (“District courts enjoy discretion in deciding whether to award enhanced damages, and in what amount.”); Read,
970 F.2d at 826 (“Under section 284 of Title 35, damages may be enhanced up to three times the compensatory award.
An award of enhanced damages for infringement, as well as the extent of the enhancement, is committed to the
discretion of the trial court.”); see also Jurgens, 80 F.3d at 1570.
11
At the hearing on enhanced damages, this Court stated “[t]his is not a three-times enhancement case and it’s not a
two-times enhancement case . . . if there is going to be enhancement, it’s going to be on the lower end of the spectrum.”
(Dkt. No. 369-9 at 17:3–8). While the Court’s discussions with parties from the bench are not always its final rulings,
here, the Court notes that its final Order is consistent with the guidance provided to the parties at the hearing.

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As indicated, $1,095,652.17 is the portion of the enhancement in this case tied to the surviving
post-suit damages award. However, $1,704,347.83 of the enhancement in this case is tied to the
reversed pre-suit damages award. Accordingly, the Court vacates $1,704,347.83 of the
enhancement in accordance with the Federal Circuit’s mandate.
The Court next considers the parties’ positions regarding whether the ongoing royalty rate
previously set in the Final Judgment should be amended on remand in light of the Federal Circuit’s
opinion reversing the jury’s award of pre-suit damages.
4. The Ongoing Royalty Rate Should Be Adjusted to 1.335%
Previously, “the ongoing royalty rate in this case [was] set at 1.55% of the revenue received
by Defendant[s] produced by the post-verdict infringing conduct . . . of the accused G10 and
GeoBlade products through the life of the asserted patents.” (Dkt. No. 303 at 8). The Court began
by calculating a base rate of 1.41%—the implied royalty rate based on the jury’s compensatory
damages award ($5.75 million divided by the infringing product revenue base of $408.3 million).
(Id. at 7; Dkt. 266-1 at 2). The Court then increased the rate to 1.55% based on (1) the finding of
liability strengthening PI’s bargaining position, (2) PI’s assertion and defense of its patents against
other entities since 2010, and (3) PI successfully preventing the institution of IPR proceedings on
its patents six times. (Dkt. No. 303 at 7).
NetScout argues that the Court should reconsider the ongoing royalty rate by calculating a
new base rate relying on only the surviving post-suit damages award and post-suit royalty base.
(Dkt. No. 369 at 9). PI opposes and argues that waiver and the mandate rule bar the Court from
reconsidering the ongoing royalty rate, or alternatively, that any change would be insignificant.
(Dkt. No. 373 at 9; Dkt. No. 367 at 8). The Court considers whether NetScout has waived its
request to amend the ongoing royalty rate, and, if not, whether the Court should amend said rate.
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i.

NetScout Did Not Waive Its Arguments and the Court May Amend
Ongoing Equitable Relief

First, PI argues that NetScout’s waiver and the mandate rule preclude the Court from
altering the ongoing 1.55% royalty rate. PI notes that Netscout already appealed the Final
Judgment stating that PI “is entitled to an ongoing royalty for future infringement of 1.55%.”
Packet Intelligence, 965 F.3d at 1303. However, aside from the pre-suit damages award and any
enhancement thereof, the Federal Circuit “affirm[ed] [this Court’s] judgment in all other respects.”
Id. PI thus argues that the prior appeal forecloses any argument that the ongoing royalty rate should
be altered. (Dkt. No. 367 at 7). PI also argues that Netscout waived its arguments regarding the
ongoing royalty rate by failing to brief the same before the Federal Circuit. (Dkt. No. 373 at 9)
(citing Matter of T-H New Orleans Ltd. P’ship, 116 F.3d 790, 796 (5th Cir. 1997)); see also
Amando, 517 F.3d at 1360 (“[A]n issue that falls within the scope of the judgement appealed from
but is not raised by the appellant in its opening brief on appeal is necessarily waived.”).
Netscout argues that it has not waived the right to challenge the royalty rate because the
royalty is a form of ongoing equitable relief that the Court retains the authority to modify going
forward. (Dkt. No. 372 at 9). NetScout notes that it is “not challenging the Court’s prior decision
setting the ongoing royalty applicable to sales that occurred while NetScout’s appeal was
pending.” (Id. at 8). Rather, “NetScout is asking the Court to reset the royalty rate that will apply
going forward based on a change in circumstances.” (Id.).
First, PI is correct that this Court’s award of an ongoing royalty of 1.55% was affirmed by
the Federal Circuit and, generally, “issues . . . within the scope of the judgment appealed from,
minus those explicitly reserved or remanded by the [Court of Appeals] . . . are foreclosed from
further consideration.” Amando, 517 F.3d at 1360. “There is a fundamental difference, however,
between the granting of retrospective relief and the granting of prospective relief. While the
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mandate rule would prevent the district court from dissolving [its equitable relief] ab initio, it does
not preclude the district court from modifying, or dissolving, the [equitable relief] if it determines
that it is no longer equitable.” Id. An ongoing royalty is an equitable remedy, and the Court has
discretion to amend such relief. See Paice LLC v. Toyota Motor Corp., 504 F.3d 1293, 1313 n.13
(Fed. Cir. 2007). Thus, the Court finds that neither waiver nor the mandate rule preclude
modification of the ongoing royalty on a prospective basis should the Court find that the current
rate is no longer equitable.
ii.

The Court Exercises Its Discretion to Modify the Ongoing Royalty
Rate by Starting at the Revised Implied Royalty Rate and Adjusting
Upward in Light of Changed Circumstances

PI argues that, even if the waiver and the mandate rule do not preclude amendment of the
1.55% ongoing royalty rate, the Court “should decline to” amend the prior rate because the reversal
of the “pre-suit damages award does not significantly impact” the previous starting rate of 1.41%.
(Dkt. No. 367 at 8). In short, PI asserts that NetScout’s proposed base rate of 1.3% “does not
significantly differ” from the original starting rate of 1.41%—thus no amendment is warranted.
(Id.). Finally, PI asserts that—if the Court accepts NetScout’s request—“[t]here is no basis to lower
the [ongoing royalty] rate below the [revised] implied royalty rate” of 1.3%. (Dkt. No. 378 at 3).
NetScout argues that the ongoing 1.55% royalty rate should be reset to 1.16%. (Dkt. No.
369 at 9). NetScout notes that the Court previously adjusted the implied base royalty rate upward
by 0.14% because PI had successfully asserted/defended its patents since 2010, its patents had
been cited more than 100 times by other patents, and PI had successfully prevented institution of
IPR proceedings on its patents six times. (Dkt. No. 369 at 9–10) (citing Dkt. No. 303 at 7–8).
NetScout then argues that IPRs have instituted post-verdict based on evidence and trial testimony
presented by PI in this case. (Id. at 10). NetScout concludes that “[b]ecause the [Asserted Patents]

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face imminent cancelation and accused product sales are diminishing, a downward departure from
the royalty rate of the same amount [(0.14%)] is appropriate”—yielding a 1.16% ongoing royalty
rate. (Id.).
“[W]hen calculating an ongoing royalty rate, the district court should consider the ‘change
in the parties’ bargaining positions, and the resulting change in economic circumstances, resulting
from the determination of liability. When patent claims are held to be not invalid and infringed,
this amounts to a ‘substantial shift in the bargaining position of the parties.’” XY, LLC, 890 F.3d
at 1298 (internal citation omitted). Importantly, “post-verdict factors should drive the ongoing
royalty rate calculation in determining whether such a rate should be different from the jury’s rate.”
Id. Of particular import here, “district courts may award a lower ongoing royalty rate if economic
factors have changed in the infringer’s favor post-verdict.” Id. “The district court may wish to
consider on remand additional evidence of changes in the parties’ bargaining positions and other
economic circumstances that may be of value in determining an appropriate ongoing royalty.”
ActiveVideo Networks, Inc. v. Verizon Comms., Inc., 694 F.3d 1312, 1343 (Fed. Cir. 2012)
(emphasis added) (citing Paice, 504 F.3d at 1315 (“Upon remand, the court may take additional
evidence if necessary to account for any additional economic factors arising out of the imposition
of an ongoing royalty.”)). Indeed, “[a party’s] bargaining position [may be] even stronger
after . . . appeal.” Id.
The Court finds Netscout’s arguments persuasive and concludes that reversal of the pre-suit
damages award strengthens its bargaining position with respect to an ongoing royalty post-appeal.
Accordingly, the Court finds that the previously set ongoing royalty rate is no longer equitable and
exercises its discretion to adjust the ongoing royalty rate as follows.

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As noted by both parties in the Post-Appeal Briefing, the implied royalty rate based on the
surviving post-suit damages award is 1.3%—$2.25 million in post-suit damages divided by $173.3
million in sales revenue for the accused products from “Post-Complaint to Trial” found by PI’s
damages expert, Mr. Bergman. (See Dkt. No. 369 at 9; Dkt. No. 367 at 8; Dkt. No. 369-3 at 2).
Previously, the Court found an upward adjustment of 0.14% from the implied royalty rate was
necessary based on (1) the finding of liability strengthening PI’s bargaining position, (2) PI’s
assertion and defense of its patents against other entities since 2010, and (3) PI successfully
preventing the institution of IPR proceedings on its patents six times.12 (Dkt. No. 303 at 7). The
Court finds that these factors still counsel in favor of an upward adjustment, albeit reduced in
proportion to the reduced enhanced damages award to reflect the change in bargaining positions
post-appeal. The surviving enhanced damages award is $1,095,652.17, while the previous
enhanced damages award was $2,800,000.00. On remand, this Court’s enhancement is thus
reduced to 39.1% of its original value. 13 In light of the changed circumstances post-appeal and the
decreased finding of liability against NetScout, the Court likewise reduces its previous 0.14%
enhancement of the implied royalty rate to 39.1% of its value to reflect the same proportional
reduction of the enhanced damages award post-appeal. Thus, the Court finds that the ongoing
royalty rate should be prospectively amended to 1.355%. 14

At the time of the Post-Appeal Briefing, the PTAB had not issued its Final Written Opinions in the IPR proceedings
regarding the Asserted Patents. (See Dkt. No. 379). As of September 9, 2021, the PTAB found all asserted claims
unpatentable. (Id.). However, a Final Written Decision by the PTAB is not “final” for the purposes of issue preclusion
until the time for appeal has expired or the appeal has terminated. See 35 U.S.C. § 318; XY, LLC v. Trans Ova Genetics,
890 F.3d 1282 (Fed. Cir. 2018). Accordingly, the PTAB’s Final Written Decisions which have not been affirmed on
appeal are not final judgements with respect to the patents and claims tried to this Court in 2017, and the Court declines
to give the Final Written Decisions significant weight in this analysis in light of the speculative nature of the ongoing
appeals. See Packet Intel. v. Juniper Networks, Inc., No. 22-1398 (Fed. Cir. filed Jan. 25, 2022).
13 $1,095,652.17
= 0.391
12

$2,800,000.00

This value reflects the 1.3% base implied royalty rate with an upward adjustment of 0.055%—which amounts to
39.1% of the Court’s pre-appeal upward adjustment of 0.14%.

14

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III.

THE MOTION TO DISMISS OR STAY
As a preliminary matter and as discussed above, NetScout notes that the PTAB issued Final

Written Decisions on September 8 and 9, 2021 declaring the asserted claims at issue in this case
unpatentable. (Dkt. No. 380 at 1). NetScout thus argues that this Court should dismiss PI’s causes
of action, disregard both the jury verdict of October 13, 2017 and September 7, 2018 Final
Judgment (affirmed on appeal as to infringement, validity, and willfulness), and enter a final
judgment in NetScout’s favor. (Id.). NetScout basis its argument on collateral estoppel precluding
this Court from proceeding with respect to the Asserted Patents. (Id. at 2–3) (citing B & B
Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 148 (2015) (recognizing “where a single issue
is before a court and an administrative agency, preclusion . . . often applies”)).
PI responds that the Federal Circuit has squarely rejected NetScout’s proposal that
“unreviewed PTAB decisions are entitled to immediate preclusive effect for related district court
proceedings [and can render a] fully adjudicated and appealed jury verdict null and void.” (Dkt.
No. 382 at 2). PI asserts that a “patent has not been canceled” and a “PTAB finding . . . does not
have preclusive effect as to this action unless and until the appeal is resolved.” (Id. at 4) (citing
Hologenic, Inc. v. Minerva Surgical, Inc., 325 F. Supp. 3d 507, 518 (D. Del. 2018), aff’d, 957 F.3d
1256 (Fed. Cir. 2020), vacated and remanded, 141 S. Ct. 2298 (2021)).
The Court finds NetScout’s argument unpersuasive. Under 35 U.S.C. §318, “[i]f the Patent
Trial and Appeal Board issues a final written decision under subsection (a) and the time for appeal
has expired or any appeal has terminated, the Director shall issue and publish a certificate
canceling any claim of the patent finally determined to be unpatentable . . . .” 35 U.S.C. § 318(b)
(emphasis added). A Final Written Decision is not “final” for the purposes of patent cancelation
when it issues. See Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365,

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1372 (2018) (“If the Board’s decision becomes final, the Director must ‘issue and publish a
certificate’ § 318(b). The certificate cancels the patent claims finally determined to be
unpatentable.”). As the Federal Circuit has noted, it is this subsequent “cancellation” of the patent
claims that “extinguishes the underlying basis for suits based on the patent.” Fresenius USA, Inc.
v. Baxter Intern., Inc., 721 F.3d 1330, 1340, 1344 (Fed. Cir. 2013). Here, no claims found to be
willfully infringed by the jury in 2017 and affirmed on appeal in 2020 have been cancelled because
the Federal Circuit has not affirmed a Final Written Decision regarding the Asserted Patents.
Accordingly, the Court finds it improper to dismiss PI’s causes of action or enter final judgment
in NetScout’s favor. 15
In light of the above, the Court addresses the merits of NetScout’s request to stay the case.
A. Legal Standard
The district court has the inherent power to control its own docket, including the power to
stay proceedings. Clinton v. Jones, 520 U.S. 681, 706 (1997). How to best manage the Court’s

15
The Court finds Versata Software, Inc. v. SAP Am., Inc. instructive regarding NetScout’s arguments that a non-final
PTAB decision still pending on appeal should nullify a final judgment of a district court—affirmed on appeal—finding
the asserted claims valid. (See Dkt. No. 387 at 2) (arguing that the Court should enter judgment in NetScout’s favor
now and allow PI to file a subsequent motion under Rule 60(b)(5) should the Federal Circuit reverse the PTAB’s Final
Written Decisions). There, this Court considered a Rule 60(b) Motion to relieve a defendant from a final judgment in
light of a subsequent and contrary determination on validity by the PTAB and 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. The proceedings before the PTAB are not even final at this time, but
this Court does not believe that later finality will change this calculus.
Versata Software, Inc. v. SAP Am., Inc., Case No. 2:07cv153-RSP, 2014 WL 1600327, at *2 (E.D. Tex. Apr. 21,
2014).

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docket “calls for the exercise of judgment, which must weigh competing interests and maintain an
even balance.” Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936).
“District courts typically consider three factors when determining whether to grant a stay[]:
(1) whether the stay will unduly prejudice the nonmoving party, (2) whether the proceedings before
the court have reached an advanced stage, including whether discovery is complete and a trial date
has been set, and (3) whether the stay will likely result in simplifying the case before the court.”
NFC Techs. LLC v. HTC Am., Inc., 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015) (Bryson,
J.). “Based on th[ese] factors, courts determine whether the benefits of a stay outweigh the inherent
costs of postponing resolution of the litigation.” Id.
B. Discussion
1. A Stay Will Unduly Prejudice PI
Netscout argues that a stay will not unduly prejudice PI because any delay would merely
postpone PI’s receipt of monetary damages. (Dkt. No. 380 at 4). NetScout asserts that a delay in
collecting damages “is present in every case in which a patentee resists a stay, and it is therefore
not sufficient, standing alone, to defeat a motion to stay.” (Id.) (quoting NFC Tech, LLC v. HTC
Am., Inc., No. 2:213-cv-1058-WCB, 2015 WL 1069111, *2 (E.D. Tex. Mar. 11, 2015)). Finally,
Netscout argues that there is no prejudice to PI because the PTAB has issued Final Written
Decisions declaring that the asserted claims are unpatentable. (Id.). Thus, NetScout alleges that “a
stay will not unduly prejudice PI” because it will at most suffer a delay in receiving damages in
the event the PTAB’s decisions are overturned on appeal. (Id.).
PI responds and notes that NetScout’s cited caselaw recognizes that a patentee’s interest in
proceeding in a timely manner in vindicating its patent rights is entitled to weight when considering
this factor—just that this interest standing alone is not enough to defeat a motion to stay. NFC

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Tech. 2015 WL 1069111, at *2. PI further argues that the advanced stage of this case heightens
any prejudice caused by delay because liability has already been established in its favor following
trial and appeal. (Dkt. No. 382 at 12). Thus, PI asserts that its prejudice is certain, while prejudice
to Netscout is speculative—dependent on the outcome of a wholly separate appeal pending before
the Federal Circuit currently in its early stages. (Id. at 12–13) (citing Apple Inc. v. Samsung Elecs.
Co., 2013 WL 6225202, at *5). Finally, PI argues that it would be placed at a tactical disadvantage
by a stay if NetScout is permitted to delay these proceedings in order to raise a “non-finality of
judgment” argument should the third-party IPR proceeding resolve in manner beneficial to
NetScout. (Id. at 13).
The Court finds that this factor weighs against granting a stay. PI “has an interest in timely
enforcing its patents, which is entitled to weight, [even if it is] ‘not sufficient, standing alone, to
defeat a stay motion.’” VirnetX, Inc. v. Apple Inc., No. 6:12-CV-00855-RWS, 2018 WL 398433,
at *3 (E.D. Tex. Jan. 12, 2018). Further, this Court has previously found unpersuasive arguments
similar to Netscout’s asserting that “delay in receiving damages is not prejudicial.” See Garrity
Power Servs. LLC v. Samsung Elecs. Co. Ltd., No. 2:20-cv-00269-JRG, Dkt. No. 227 at 4 n.1
(noting that “[w]hile a delay in recovering money damages may not rise to the same level of
prejudice as delaying entry of warranted injunctive relief, such is far from non-prejudicial”).
Finally, PI tried this case in 2017 and has yet to recover monetary relief despite successfully
defending its finding of infringement and pre-suit damages on appeal—delaying this case further
in the face of its advanced stage only increases the prejudice on PI and places it at a tactical
disadvantage. See VirnetX, 2018 WL 398433, at *5.

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2. The Proceedings Have Reached an Advanced Stage
Netscout argues that “this is not a case where all issues have been finally adjudicated.”
(Dkt. No. 380 at 5). Although trial occurred in 2017, and the jury’s verdict was substantially
affirmed on appeal in 2020, NetScout argues that “the fact that at least two multifaceted and
substantial issues [related to enhanced damages and the ongoing royalty rate] remain outstanding”
supports a stay. (Id.).
PI responds that the relevant inquiry focuses on “whether the proceedings before the Court
have reached an advanced stage, including whether discovery is complete and a trial date has been
set.” (Dkt. No. 382 at 9) (quoting VirnetX, 2018 WL 398433 at *3). Accordingly, PI argues that
this case has been through trial, appeal, denial of certiorari, and the only remaining discrete issues
on remand relate to what measure of damages should be vacated and whether the ongoing royalty
should be amended. (Id. at 9–10). Thus, PI asserts that “[b]y any objective measure, this litigation
is at the end of its life” and this factor strongly weighs against a stay. (Id. at 10).
While two discreet issues relating to damages remain, the jury trial in this case concluded
over four years ago. (See Dkt. No. 252). As PI notes, the proper inquiry under this factor addresses
(i) how advanced are this Court’s proceedings, including (ii) whether discovery is complete, and
(iii) whether a trial date has been set. VirnetX, 2018 WL 398433 at *3. These proceedings are at
an unquestionably advanced stage—the Court and the parties have expended substantial resources
in adjudicating the parties’ issues. See Orion IP, LLC v. Mercedes-Benz USA, LLC, 2008 WL
5378040, at *8 (E.D. Tex. Dec. 22, 2008), rev’d on other grounds, Orion IP, LLC v. Hyundai
Motor Am., 605 F.3d 967 (Fed. Cir. 2010). Judicial economy and the relevant considerations under
this factor therefore weigh against a stay.

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3. A Stay Will Not Simplify the Case
Finally, NetScout asserts that a stay of the case will simplify the issues before this Court
because—in the event the Final Written Decisions of the PTAB are affirmed on appeal—the claims
of the Asserted Patents will be canceled, and PI’s causes of action will be extinguished. (Dkt. No.
380 at 5–6). Netscout argues that any amended judgment will be subject to vacatur by the Federal
Circuit if the PTAB’s Final Written Decisions are upheld on appeal and the claims are cancelled.
(Id. at 6) (citing XY, LLC, 890 F.3d at 1294) (finding that “an affirmance of an invalidity finding,
whether from a district court or the Board, has a collateral estoppel effect on all pending or
co-pending actions”).
PI responds that this factor strongly weighs against a stay because no validity issues remain
before this Court—only the appropriate measure of damages. (Dkt. No. 382 at 7–8). PI notes that:
the focus of this factor is on streamlining or obviating the trial by providing the
district court with the benefit of the PTO’s consideration of the validity of the
patents before either the court or the jury is tasked with undertaking that same
analysis.
Smartflash LLC v. Apple Inc., 621 Fed. App’x 995, 1000 (Fed. Cir. 2015) (citing NFC Tech., 2015
WL 1069111, at *4–5). Accordingly, PI argues that on remand, where validity is not an issue and
the remaining issues are those “with which the PTO is not concerned . . . it is unclear how the
PTO proceedings will simplify the case.” (Dkt. No. 382 at 8) (quoting VirnetX, 2018 WL 398433,
at *4) (citing Smartflash, 621 Fed. App’x at 1000).
The Court finds PI’s argument persuasive. Here, “[this Court] and the jury have already
addressed infringement and invalidity issues, which [have been affirmed by the Federal Circuit
and] are the only questions common to the two proceedings which could be ‘simplified’ by agency
review. The [remand] is limited solely to a consideration of the appropriate measure of
damages—an issue with which the PTO is not concerned.” Id. at 1001. Under NetScout’s
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reasoning, this factor would favor a stay in every case because speculatively waiting for IPR
proceedings to potentially invalidate the patents-in-suit would always simplify the issues if such
reality eventually came to pass. Such potential simplification “should be insufficient, standing
alone, to support a stay motion.” See VirnetX, 2018 WL 398433 at *4 (citing NFC Tech. 2015 WL
1069111, at *2). Given that the only issues remaining are discrete damages-related issues that do
not overlap with the previously-affirmed issues of validity, NetScout’s arguments related to
estoppel are misplaced and this factor strongly weighs against granting a stay.
In sum, the Court finds that all three factors weigh against NetScout’s request for a stay in
the above-captioned action. Accordingly, and in light of the above, the Court finds that the Motion
to Dismiss or Stay should be denied.
IV.

THE MOTION FOR LEAVE
In the Motion for Leave, NetScout requests that the Court permit it leave “to submit a

five-page supplemental brief addressing the impact of the[] recently issued PTAB invalidation
decisions on the ongoing royalty” should the Court consider the Post-Appeal Briefing. (Dkt. No.
381 at 1).
Having considered the arguments raised in the Post-Appeal Briefing regarding the
adjustment of the ongoing royalty rate in light of the Final Written Decisions of the PTAB currently
unaffirmed on appeal, and resolving the same above, the Court finds that further briefing on the
issue is not necessary. Accordingly, the Motion for Leave is DENIED.
V.

CONCLUSION
For the reasons stated above and following the mandate of the Federal Circuit, the Court

VACATES $1,704,347.83 of its previous enhanced damages award. Further, the Court ORDERS
that the ongoing royalty assessed against NetScout be altered from 1.55% to 1.355% effective on

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a prospective basis from the date of this Order. Finally, the Court DENIES the Motion to Dismiss
or Stay (Dkt. No. 380) and the Motion for Leave (Dkt. No. 381). The Court concurrently issues its
Amended Final Judgement reflecting the above.

So ORDERED and SIGNED this 4th day of May, 2022.

____________________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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