Cardpool Inc., v. Plastic Jungle, Inc., No. C 12-04182 WHA (Judge William Alsup)
It might seem tempting for a losing plaintiff in a patent-infringement suit to later use an ex parte reexamination certificate from the USPTO to "moot" its losing judgment by changing the claims of the patent in suit. That is exactly what the plaintiff in Cardpool Inc. v. Plastic Jungle, Inc. attempted to do. However, the plaintiff's strategy backfired, and its original loss was upheld in a recent case before Judge Alsup.
Some background is in order. In January 2013, U.S. District Court Judge William Alsup granted defendant Plastic Jungle, Inc.'s motion to dismiss the underlying patent infringement action, finding the asserted claims not patentable subject matter under 35 U.S.C. § 101. Cardpool appealed that decision to the Federal Circuit but also simultaneously sought an ex parte reexamination of an amended version of the claims originally at issue in the district court case. A few months later, the Federal Circuit affirmed the district court's dismissal. One month after that, the USPTO issued a notice of an intent to issue a reexamination certificate for the amended claims. Cardpool then filed a petition for a rehearing with the Federal Circuit in light of the USPTO's decision affirming patentability of the amended claims. Both parties argued that the prior district court ruling should be vacated and the case dismissed in light of the USPTO's findings, but for different reasons. Cardpool claimed the USPTO's ruling had effectively reinstated the lawsuit, since it contended that Plastic Jungle was infringing the reexamined claims, as amended. Plastic Jungle argued the entire appeal was moot, and that the case needed to be dismissed. However, the Federal Circuit refused to follow either party's suggestion to vacate the district court's decision, because it concluded that it was the unilateral actions of Cardpool, the losing party, that caused the case to be moot. Instead, the Federal Circuit remanded the case "to determine what actions, if any, are appropriate in light of the reexamined claims."
Following the remand, the parties submitted a joint statement requesting the district court vacate its judgment as moot so they could be free to stipulate to a voluntary dismissal without prejudice. Plastic Jungle represented that it was no longer engaged in the accused activities, and Cardpool, for its part, argued that Plastic Jungle only ceased infringing because it was insolvent but might resume activities that infringed the amended claims at some point in the future. Nonetheless, Judge Alsup refused to vacate the Judgment. He distinguished between mootness caused by "happenstance" or the unilateral actions of the prevailing party versus mootness caused by "the losing party's voluntary [unilateral] actions." Quoting the Supreme Court, he found that "[t]he principal condition to which we have looked is whether the party seeking relief from the judgment below caused the mootness by voluntary action." In this case, Cardpool had caused the mootness by amending the claims at issue and unilaterally obtaining reexamination of the amended claims. Judge Alsup stated that judicial precedents are valuable, and once issued, belong to the public. He held that Cardpool's actions could not be grounds to erase a judicial decision and so held that "[t]he judgment (and order) are a part of the history of the asserted patent and cannot be removed by some joint request for vacatur."
Further, he found that under the facts of this case, the reexamination certificate from the USPTO could not trump the earlier Article III court ruling since there had been no ruling relating to the claims as amended through reexamination. He distinguished this case from the Federal Circuit's Fresenius case in which the court vacated a district court's judgment because of a parallel USPTO proceeding in which the USPTO cancelled the claims at issue. The distinguishing factor was that the Federal Circuit reviewed the reexamination record and affirmed the USPTO's decision in the other case, while in this case no Article III court had reviewed the reexamination decision. Under these facts, Judge Alsup concluded that the USPTO examiner's allowance of reexamined claims provided no grounds for vacating his earlier Article III court judgment, especially since the Federal Circuit had specifically refused Cardpool's request to vacate the earlier Judgment.
In the end, Judge Alsup found that Cardpool was attempting to "manipulate the public record to erase its loss so that it would be free to sue Plastic Jungle (and others) on the amended claims." He found this was an impermissible attempt at a second bite of the apple. Namely, he found that a second suit on the same patent based on amended claims resulting from a reexamination would be barred by claim preclusion. Thus, he found that "Cardpool's ship against Plastic Jungle has sailed" and that it "must live with the final judgment and order."
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