Archive for the ‘Stay in Federal Circuit’ Category

Eastern District of Texas Denies SAP’s Motion to Vacate the Judgment in the Versata Patent Infringement Case

Thursday, April 24th, 2014

SAP recently learned that the Eastern District of Texas denied its motion to set aside or stay a district court judgment in favor of Versata for infringement of its U.S. Pat. 6,553,350 (Versata Software, Inc v. SAP America, Inc., No. 2:07-cv-00153 (E.D. Tex)).  On April 20, 2014, Judge Roy S. Payne dismissed SAP’s motion despite its successful patentability challenge of Versata’s ‘350 patent last year in the PTAB.  Could SAP’s win in the first covered business method patent review be too late to rid itself of the judgment?

History of the Patent Infringement Suit and PTAB CBM Proceeding

The patent infringement suit by Versata started when it sued SAP for alleged infringement of its U.S. Patent Nos. 6,553,350 and 5,878,400 in 2007 (Versata Software, Inc v. SAP America, Inc., No. 2:07-cv-00153 (E.D. Tex)).

A first jury trial was held in 2009, and a second jury trial was held in 2011.  In the first trial, the jury found both patents directly infringed and inducement of infringement of one claim of the ’350 patent.  Shortly after the first trial, the Court granted JMOL of noninfringement of the ’400 patent.  A second trial was held on the ’350 patent and a jury found the ’350 patent infringed, resulting in a $392 million judgment and an injunction dated September 9, 2011 (stayed pending appeal).

SAP filed its petition for covered business method patent review on the first day it was available via the AIA:  September 16, 2012.  The petition included grounds for challenging the ’350 patent under 35 USC §§ 101, 112, and 102.  This was the the first covered business method patent review under the America Invents Act (CBM2012-000001).

About a month later, SAP filed a notice of appeal of the district court decision in the Federal Circuit (filed on October 11, 2011).  Briefing was completed some months later, and oral arguments were held on February 4, 2013.  About a month before the oral arguments (January 9, 2013), the PTAB instituted trial on the challenges under 35 USC §§ 101 and 102, but declined review on the challenges under 35 USC § 112.  So as of January, 2013, the dispute was being pursued both in the Federal Circuit and in the PTAB.

Based on a series of communications between the parties and the PTAB, SAP agreed to drop its challenge under 35 USC § 102 in exchange for an expedited trial on its challenges under 35 USC § 101.  The PTAB trial was held on April 17, 2013, where both parties presented their arguments concerning 35 USC § 101.

On May 1, 2013, the Federal Circuit affirmed the lower court jury decision on infringement and damages awards and vacated part of the trial court’s permanent injunction and remanded for further proceedings based on the opinion.

In June of 2013, the Patent Trial and Appeal Board (PTAB) decided that Versata’s U.S. Pat. 6,553,350 was unpatentable under 35 U.S.C. § 101.

After the Patent Office decided that the claims challenged in the related covered business method patent review were unpatentable, SAP motioned for a stay of proceedings in the Federal Circuit.  In a simple, one page document, the Federal Circuit denied that motion for stay on July 5, 2013 without providing further comment or opinion.  The Supreme Court denied certiorari of SAP’s petition on January 21, 2014.

Current Stay Motion

A “Motion of SAP America, Inc. and SAP AG For Relief From Judgment Under Fed. R. Civ. P. 59(e) or 60(b) Or For A Stay” was filed on January 21, 2014, and renewed on March 27, 2014 in the E.D. Tex. action.  Judge Payne’s denial of the stay observed:

The Court finds that all four of these [stay] factors counsel against a stay in this case. There are no remaining issues in this case to simplify. The trial has been held and the appeal is completed. A stay would clearly unduly prejudice the nonmoving party and provide a clear tactical advantage for the moving party. Moreover, a stay would not reduce the burden of litigation on the parties or the Court. Finally, the fact that the Federal Circuit has already denied Defendants’ request for a stay pending completion of the PTAB proceedings weighs heavily against Defendants’ request. Accordingly, the request for a stay is DENIED.

Judge Payne also denied the request to vacate under Rule 60(b):

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. Indeed, it is the finality of the judgments issued by the Federal Courts that is at stake here. Unlike the situation before the Court in Fresenius USA, Inc. v. Baxter Intern., Inc., 721 F.3d 1330 (Fed. Cir. 2013), the judgment in this case is final and there are no further issues to be resolved. That fact also clearly distinguishes this case from that before the Fifth Circuit in Bros. Inc. v. W. E. Grace Mfg. Co., 320 F.2d 594 (5th Cir. 1963).

Thus, Judge Payne distinguished the present matter from the Baxter case at least in part because the Baxter judgment was not final.  Apparently, the court is of the opinion that once certiorari was denied by the Supreme Court the district court judgement became final.  It will be interesting to see SAP’s response to this decision in the upcoming months.

PTAB Authorizes SAP to file Opposition to Versata’s Rehearing Request

Tuesday, July 16th, 2013

Even though the Rehearing Request filed by Versata last week is confidential, we can glean some insight about what it contained based on the publicly available documents of record.  Today the PTAB authorized SAP to file its motion to oppose Versata’s Rehearing Request, stating:

Patent owner Versata filed a motion for rehearing [ ] of the Board’s Final Written Decision [ ]. Versata’s motion raises at least two issues that SAP has not yet had an opportunity to brief. Specifically, SAP has not yet had an opportunity to brief how the following two Federal Circuit’s decisions affect this proceeding: Ultramercial, Inc. v. Hulu, LLC, 107 USPQ2d 1193 (Fed. Cir. 2013) and Versata Software Inc. v. SAP America Inc., 106 USPQ2d 1649 (Fed. Cir. 2013).

The Board authorizes SAP to file an opposition to Versata’s motion for rehearing. The opposition is limited to addressing the impact, if any, the two recent Federal Circuit decisions have on the Board’s Final Written Decision. SAP’s opposition is due no later than July 18, 2013.

The Ultramercial case resulted in a reversal of a district court holding of invalidity under 35 U.S.C. § 101.  You may recall that Ultramercial’s U.S. 7,346,545 patent (the ‘545 patent) claims relate to a method for distributing copyrighted products over the Internet where the the consumer received a copyrighted product for free in exchange for viewing an advertisement (and the advertiser pays for the copyrighted content).  The district court granted Wildtangent’s motion to dismiss pursuant to FRCP 12(b)(6), asserting that the method claims of the ‘545 patent did not claim statutory subject matter, but the Federal Circuit reversed the district court holding the subject matter patent-eligible under 35 U.S.C. § 101.  Therefore, it is not surprising that Versata cited Ultramercial in its Rehearing Request.

Of course, it is also not surprising that Versata cited decisions from its parallel Federal Circuit appeal given the fact that the Federal Circuit upheld Versata’s district court damages decision and recently denied stay of the Federal Circuit appeal in which the Federal Circuit recently remanded the case to the district court for correction of the injunction.

SAP has until July 18, 2013 to file its opposition; however, like Versata’s Rehearing Request, SAP’s opposition brief may not be publicly accessible if it addresses protected information from Versata’s Rehearing Request.

More Developments in the Patent Battle between SAP and Versata

Monday, July 15th, 2013

There has been a lot of activity in the litigations arising from the patent battle between SAP and Versata.  You will recall that there are parallel Federal Circuit, PTAB, and Eastern District of Virginia actions.  There have been activities in all of these courts since my last post.

Federal Circuit

After the Patent Office decided that the claims challenged in the related covered business method patent review were invalid, SAP motioned for a stay of proceedings in the Federal Circuit.  In a simple, one page document, the Federal Circuit denied that motion for stay on July 5, 2013 without providing further comment or opinion.

Patent Trial and Appeal Board (PTAB)

One month after the PTAB ruling, Versata filed a Rehearing Request.  That document shows up on the PTAB PRPS as being filed on July 11, 2013.  (It is currently showing availability to only the parties and the Board, so it was not available for download at the time of this post.)

Eastern District of Virginia

You may recall that Versata also challenged the institution of the CBM by suing the Patent Office in the Eastern District of Virginia.  As reported in a recent post, SAP intervened in that action.  On July 12, 2013, that court granted the Motion to Dismiss for Lack of Subject Matter Jurisdiction by the Patent Office and SAP.

So it appears that the contest is now boiling down to a race between a final judgment in the district court litigation and a final judgment in the PTAB proceeding.  Of course, this will likely amount to two cases before the Federal Circuit, because should Versata’s Rehearing Request fail, its recourse is an appeal to the Federal Circuit.  So that might mean two Federal Circuit cases:  (1) the existing appeal in the district court action (which was not stayed by the Federal Circuit) and (2) a (future) appeal from the PTAB decision if the rehearing request is denied.

SAP Moves for a Stay of Parallel Federal Circuit Action After PTAB Win

Saturday, June 22nd, 2013

SAP’s fight to dismiss Versata’s U.S. 6,553,350 patent assertion continues.  After SAP’s win in the PTAB on June 11, 2013, SAP filed a motion to stay the parallel Federal Circuit appeal on June 17th.  Now the Federal Circuit must decide whether to stay the ongoing appeal after upholding the district court judgment on damages and having remanding to that court on injunctive relief.  At stake is a nearly $400M judgment that SAP argues is based on invalid claims.

No one can accuse SAP of having delayed its efforts to challenge the patent under the provisions of the America Invents Act.  SAP’s counsel was the first petitioner to file a covered business method (CBM) patent review within minutes of the date it first became available on September 16, 2012.

SAP’s brief repeated the factors set forth by the AIA that are specific to CBM reviews.  SAP acknowledged that these factors were intended for use by a district court, but applied them by analogy to the Federal Circuit stay request:

Specific to CBM reviews, the AIA enumerates similar factors for determining whether to stay a case pending post-grant review. AIA § 18(b)(1), P.L. 112-29, 125 Stat. 284, 331 (2011) (factors include “(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial; (B) whether discovery is complete and whether a trial date has been set; (C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and (D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.”).

SAP’s Motion to Stay at p. 5.

The motion goes on to repeat the often-quoted remarks by Senator Schumer that the AIA “places a very heavy thumb on the scale in favor of a stay being granted.”  157 Cong. Rec. S1363 (Mar. 8, 2011).

It will be interesting to see Versata’s reaction to SAP’s arguments and even more interesting to see what the Federal Circuit will decide.