Order Denying Motion to Vacate Judgment, Protegrity USA, Inc. v. Netskope, Inc., Case No. 15-cv-02515-YGR (Judge Yvonne Gonzalez Rogers)
When parties settle a case, they usually want to put it all behind them and move on. But what if the court's decisions still hang over their heads? Protegrity thought it could erase the past by agreeing with its opponent to have an undesirable ruling vacated, but it learned the hard way that such a result is outside the parties' control.
We previously reported Judge Rogers' decision invalidating Protegrity's patent under Section 101. While the case was on appeal, the parties settled. Protegrity then brought an unopposed motion to vacate the judgment. But, while courts are sometimes amenable to vacatur, this time Judge Rogers held that Protegrity is stuck with the invalidity judgment.
Judge Rogers noted that, in deciding whether to vacate a judgment, courts consider the consequences and attendant hardships of either decision, and "the competing values of finality of judgment and right to relitigation of unreviewed disputes." Quoting Ninth Circuit precedent, she stated that a court need not vacate a judgment where the appellant caused the dismissal of its appeal by settling, otherwise "any litigant dissatisfied with a trial court's findings would be able to have them wiped from the books." And that seemed to be how she viewed Protegrity's request.
Protegrity candidly argued that it sought vacatur so it could enforce its patent against others, without being precluded by an unreviewed invalidity judgment. However, Judge Rogers found that "would result in unnecessary relitigation of issues already determined by this Court." She found that judicial precedents are "valuable to the legal community as a whole" and "not merely the property of private litigants," so vacatur was only appropriate when it served the public interest. That was not the case here, since Protegrity voluntarily caused the mootness (i.e., settlement of the case) that prevented the invalidity judgment from being reviewed.
Protegrity also argued that vacatur should be granted because it was an important factor in its settlement, but Judge Rogers rejected this argument as well, noting that the settlement was not contingent on the court granting vacatur. The bottom line is, when you're settling a case, make sure you know how the past might come back to haunt you, and make sure you can live with it.
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