Remand with Guidance

Network-1 Techs., Inc. v. Hewlett-Packard Co. (Fed. Cir. Nov. 20, 2020) (modified opinion) (US6218930 – providing power via ethernet cable)

This case has gone back-and-forth several times.  Here are a few highlights:

  • PTAB instituted IPR on likelihood of invalidity, but then concluded the claims were not proven invalid.
  • Later, in the infringement lawsuit, jury found the claims invalid.
  • Judge Schroeder (E.D.Tex.) rejected the jury verdict – holding that HP was estopped from challenging validity under 35 U.S.C. § 315(e)(2). (Granting renewed motion for JMOL under R.50(b).)
  • Then on appeal, the Federal Circuit vacated JMOL but did not expressly reinstate the jury verdict – seemingly leaving that for Judge Schroeder to decide what to do. (Sept 2020 decision).

An additional problem with Judge Schroeder’s decision below is that he did not rule on Network-1’s conditional motion for new trial as required by R.50(c):

If the court grants a renewed motion for judgment as a matter of law, it must also conditionally rule on any motion for a new trial by determining whether a new trial should be granted if the judgment is later vacated or reversed.

Fed. R. Civ. Pro. R. 50(c).  In addition to the new trial motion, Judge Schroeder also made no ruling on other substantive JMOL motions filed by Network-1.

The remand order demanded the district court proceed in a manner “consistent” with the appellate decision.  However, Network-1 foresaw some conflict and argument regarding how that order might be interpreted.  In particular, HP wants the district court to simply reinstate the Jury Verdict of invalidity; while Network-1 wants the district court to rule on its alternative JMOL motions or alternatively order a new trial on validity.  As such, Network-1 petitioned the Federal Circuit for a clarifying order:

To avoid any possible confusion on remand, Network-1 respectfully asks the panel to clarify that its remand includes deciding Network-1’s motion for a new trial and addressing Network-1’s remaining arguments for JMOL on validity— including significant evidentiary shortcomings that no court has yet to address given the district court’s estoppel ruling.

Network-1 Petition for panel rehearing.

The court has granted the petition and now expressly stated:

We therefore remand to the district court for further proceedings consistent with this opinion, which include ruling in the first instance on Network-1’s entitlement to JMOL (notwithstanding this court’s holding on estoppel) and its new-trial motion.

Modified opinion (underlined portion is the new part).  The court also explained that the appellate panel “will not consider either Network-1’s alternative grounds for JMOL or its new-trial motion in the first instance.”

In its briefing, HP explained its position that Network-1 had forfeited its right to make its renewed-JMOL motions on sufficiency of the validity evidence because Network-1 had failed to raise that particular challenge in its R.50(a) motion.

[A] party that fails to move for judgment as a matter of law under Rule 50(a) on the basis of insufficient evidence at the conclusion of all of the evidence waives its right to file a post-verdict Rule 50(b) motion, and also waives its right to challenge the sufficiency of the evidence on appeal.

Moss v. Princip, 913 F.3d 508, 522 (5th Cir. 2019).  In its rehearing order, the Federal Circuit did not decide the forfeiture issue, which will be open for debate back before the District Court.  (Note issue of waiver vs forfeiture).

Network-1 had requested that the Federal Circuit order the district court to consider “Network-1’s previously asserted substantive grounds for JMOL” and did not mention the forfeiture issue.  Although not entirely clear, it appears that this requested order might have overcome the potential waiver.  The Federal Circuit was careful to require only examination of Network-1’s “entitlement to JMOL” without requiring that the merits of the motion be considered.

4 thoughts on “Remand with Guidance

  1. 1

    As to just one piece of this mess, IPR estoppel here is denied for two reasons. It does not apply to a “public use” prior art reference and it does not apply to patents or publications as to a party that was only in an IPR by joinder who could not raise those references.

    1. 1.1

      not sure that I am following as to why a party by joinder could not raise references that may otherwise create IPR estoppel…

      1. 1.1.1

        The Fed.Cir. has held that a party involved in an IPR only by joinder cannot add new prior art references to that IPR and thus is not estopped to raise references in a D.C. that were not among those raised in the IPR.

        1. 1.1.1.1

          Ah, thanks Paul – in other words, if you are merely a party “jumping on” someone else’s IPR effort, then the fact that you may also have had other art that you COULD have brought, but did not, is not held against you.

          I suppose that I could see the equity of this, as the ‘jumper-on’ is not the party in control of the IPR contest, and is really just an “also this guy” type of thing.

          The moment that “also this guy” has any power to affect the outcome of an IPR though (such as, through better arguments as co-counsel or the like), then I think that FULL estoppel should apply. It becomes a type of mere technicality of not applying full estoppel because of a ‘late join’ or a decisionnot to run one’s own IPR effort.

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