Patent Case Summaries - May 2021 #1

Alston & Bird

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

Cap Export, LLC, et al. v. Zinus, Inc., et al., No. 2020-2087 (Fed. Cir. (C.D. Cal.) May 5, 2021). Opinion by Dyk, joined by Bryson and Hughes.

Zinus owns a patent directed to an “assemblable mattress support.” Cap Export filed a declaratory judgment action against Zinus, alleging that the claims are invalid and not infringed. The district court awarded Zinus summary judgment of no invalidity, relying on the testimony of Zinus’s then-president and testifying technical expert. The parties then stipulated to a final judgment of infringement, validity, damages in the amount of $1.1 million, and a permanent injunction.

Later, Cap Export discovered evidence that the provided testimony had been false. Cap Export therefore filed a motion to vacate the judgment and injunction under Federal Rule of Civil Procedure 60(b)(3), which provides grounds for relief for reason of “fraud . . . , misrepresentation, or misconduct by an opposing party.” Addressing the motion, the district court ordered a video deposition of the president, where he acknowledged that his prior testimony was “literally incorrect” but stated that he did not intend to provide false testimony. The district court found his explanation to be “wholly implausible” and granted the motion under Rule 60(b)(3). Zinus appealed.

On appeal, Zinus argued that under Ninth Circuit precedent, Cap Export had not performed the requisite due diligence to discover fraud. The Federal Circuit disagreed, ruling that the district court did not err in finding that Cap Export had no reason to suspect that the testimony was fraudulent. The later-discovered evidence was not widely available, in the public record, or in Cap Export’s possession.

The Federal Circuit also saw no error or abuse of discretion in the district court’s assessment of the remaining requirements under Rule 60(b)(3). The Federal Circuit summarized that Zinus’s president had “misrepresented his knowledge of highly material prior art,” and “the district court properly declined to condone such conduct.” Thus, the Federal Circuit affirmed the vacatur of the judgment under Rule 60(b)(3).

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