Northern District of California Denies Capella Photonics’ Request for Vacatur in Cisco Patent Case

On Tuesday, Judge Edward M. Chen rejected an unopposed motion to vacate two orders in an already-settled patent infringement lawsuit. The plaintiff and counterclaimant, Capella Photonics Inc., asked the court to vacate an August 2020 order granting Cisco’s motion for judgment on the pleadings, concluding that Capella could not seek damages for alleged infringement that took place prior to the reissue of the relevant patents, and an April 2021 claim construction order largely adopting Capella’s proposed constructions.

The Northern District of California court’s analysis centered on whether vacatur of the interlocutory orders would be equitable in a four-part assessment. It first considered the policy implications born from allowing a patent holder to erase parts of the public record and body of law because of its dissatisfaction with litigation outcomes.

When a patent holder raises and litigates issues of claim construction and infringement, and later asks the court to invalidate those decisions, it “encourage(s) litigants like Capella to unnecessarily waste this Court’s time testing their merits arguments before deciding whether to settle the case,” the opinion said. It then applied the same reasoning to the judgment on the pleadings order.

The third and fourth factors consider the litigants and the courts’ expenditure of resources in relation to the litigation and possible future litigation. Judge Chen ruled that vacating the decisions would render the public-sponsored use of court resources a waste, explaining that it has already entertained briefing and heard oral argument on numerous issues.

The court noted a further concern, that granting vacatur would increase the likelihood that other courts might be asked to expend duplicative resources in construing the terms of the patents at issue. Finally, the court remarked that because the settlement is not contingent on granting the requested vacatur, the factors ultimately weigh in favor of denial.

Cisco is represented by Winston & Strawn, and Capella by Manatt Phelps and Philips and MoloLamken LLP.