ABS Global v. Cytonome/St, LLC: Mootness and Preserving the Argument for Vacatur

Rothwell, Figg, Ernst & Manbeck, P.C.
Contact

In 2017, Cytonome filed suit in the Western District of Wisconsin (“the District Court”), accusing ABS of infringing six of its patents, including US Patent No. 8,529,161 (“the ’161 patent”). Subsequently, in October 2017, ABS filed for inter partes review (“IPR”) of the ’161 patent, and the Patent Trial and Appeal Board (“the Board”) issued a decision in April 2019 that invalidated certain claims of the ’161 patent while also finding that ABS had failed to demonstrate several other claims as unpatentable.

Shortly after the Board’s decision, the District Court granted in part a motion for summary judgment by ABS, finding that ABS’s products did not infringe any of the ’161 patent’s claims. Nevertheless, nearly two months later, ABS appealed the Board’s decision. At the beginning of January, the Court of Appeals for the Federal Circuit (“the CAFC”) issued a precedential decision in ABS Global v. Cytonome/St, LLC, dismissing ABS’s appeal as moot.

On appeal, Cytonome argued that ABS lacked standing because Cytonome had disclaimed an appeal of the District Court’s finding of non-infringement. ABS, however, argued that a patent-specific exception to the mootness doctrine articulated in Fort James Corp. v. Solo Cup Co., 412 F.3d 1340 (Fed. Cir. 2005) should govern and hence preclude dismissal. The CAFC disagreed with ABS, holding instead that the question of mootness under these circumstances should be guided by Already, LLC v. Nike, Inc., 568 U.S. 85 (2013) and the voluntary cessation doctrine.

In Already, a case of trademark infringement, the Supreme Court stated that a defendant attempting to moot a case by voluntary compliance “bears the formidable burden of showing that it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur.” The Court explained:

  1. Respondent Nike had the burden of showing it “could not reasonably be expected” to continue to enforce its trademarks against Already, which Nike showed by entering a covenant not to enforce; and
  2. Once this hurdle had been cleared by the defendant, the burden shifted to Petitioner Already to show “it engages in or has sufficiently concrete plans to engage in activities not covered by the covenant,” which Already failed to show with sufficient specificity.

Therefore, the Court concluded the case was moot. Applying the voluntary cessation doctrine of Already to the facts at issue, the CAFC held:

  1. Appellee Cytonome’s disclaiming its right to appeal the District Court’s finding of noninfringement showed Cytonome “cannot reasonably be expected” to resume enforcement efforts against Cytonome. The CAFC acknowledged that claiming a right to appeal is “narrower” than Nike’s covenant in Already, but the CAFC found it sufficient at least because it was “coextensive with the asserted inquiry.”
  2. Appellant ABS essentially failed to show with sufficient specificity evidence of present activity or plans to engage in activity that would create infringement liability for the ’161 patent. ABS in fact acknowledged that it faces no “specific threat” of an infringement suit under the ’161 patent.

Regarding ABS’s reliance on Fort James v. Solo Cup, the CAFC found the arguments unpersuasive. ABS argued that Fort James, a single district court proceeding, presented an exception to mootness where “a patent owner who strategically waits until after the resolution of its claim for patent infringement to offer a covenant not to sue (and not to appeal) does not moot a challenge to the patent’s validity.” The CAFC found ABS’s arguments overbroad and not necessarily applicable to parallel IPR and district court proceedings.

Finally, ABS asserted at oral argument that, if the CAFC were to find the case moot, then the proper order would be vacatur, not dismissal. The CAFC rejected this assertion, though, holding that ABS failed to timely request vacatur or adequately develop its assertion.

Therefore, the CAFC found the case moot and dismissed.

Chief Judge Prost dissented in part from the majority’s opinion, arguing that vacatur is the proper order, not dismissal.  When the party that prevails below unilaterally moots an appeal, the Chief Judge explained, then the proper course is vacatur, not dismissal, because the case was mooted by “the unilateral act of an adversary to cement its victories below.” Addressing the timeliness of ABS’s request for vacatur, the Chief Judge argued the rationale for vacatur was pronounced, that Cytonome’s theory was a “moving target,” and that courts can and sometimes should grant vacatur sua sponte. The Chief Judge concluded, “Cytonome obtained a favorable determination from the Board, took voluntary action to moot ABS’s appeal, and now will retain the benefit.”

Whether future cases will consider Chief Judge Prost’s dissent remains to be seen. However, at least one key takeaway is the importance of preserving the argument for vacatur on appeal, particularly when parallel proceedings are involved.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Rothwell, Figg, Ernst & Manbeck, P.C. | Attorney Advertising

Written by:

Rothwell, Figg, Ernst & Manbeck, P.C.
Contact
more
less

Rothwell, Figg, Ernst & Manbeck, P.C. on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.