from the United States District Court for the Northern
District of California in No. 3:12-cv-04182-WHA, Judge
William H. Alsup.
F. HOFFMAN, Baker & Hostetler LLP, Washington, DC, argued for
plaintiff-appellant. Also represented by JOHN P. MOY, EDWARD
A. PENNINGTON, SEAN PHELAN, Smith Gambrell & Russell, LLP,
Washington, DC; JAMES S. MCDONALD, Blackhawk Network,
BELLOLI, Feinberg Day Alberti & Thompson LLP, Menlo Park, CA,
argued for defendant-appellee. Also represented by JEREMIAH
A. ARMSTRONG, NICKOLAS BOHL, ELIZABETH DAY; THOMAS RICHARD
BURNS, JR., Adduci, Mastriani & Schaumberg, LLP, Washington,
NEWMAN, REYNA, and WALLACH, Circuit Judges.
Newman, Circuit Judge.
Inc., appeals the ruling of the United States District Court
for the Northern District of California, denying the joint
motion of Cardpool and Plastic Jungle, Inc. to vacate the
district court's judgment of patent invalidity
insofar as the judgment was with prejudice. The
parties' stated reason for the requested vacatur was that
all of the Cardpool patent claims had been replaced on
reexamination, and that Plastic Jungle (now operating as
CardFlo, Inc.) was no longer conducting the accused
infringing activities. Cardpool Dist. Dk. 89 at 2
(May 13, 2014) (" it is CardFlo's representation
that it is no longer in the business of computer-implemented,
online gift card exchange . . . . As a result, Plaintiff
believes this case is no longer viable or necessary at this
time." ). We affirm the district court's
denial of vacatur, because the denial is within the district
court's discretion and also because the premise of the
motion is both speculative and inaccurate: the district
court's final judgment as to an original group of claims
does not automatically render that judgment res judicata as
to new claims granted upon reexamination.
sued Plastic Jungle for infringement of U.S. Patent No.
7,494,048 entitled " System and Method for Brand Name
Gift Card Exchange" (the '048 patent). Plastic
Jungle's defenses were that the claims in suit are
invalid on the ground of obviousness, 35 U.S.C. § 103
(2006), and that the claimed subject matter is
patent-ineligible under 35 U.S.C. § 101. The district
court agreed as to ineligibility under section 101, and on
this ground the court granted Plastic Jungle's motion to
dismiss the suit with prejudice under Federal Rule 12(b)(6)
for failure to state a claim on which relief can be granted.
Cardpool appealed to the Federal Circuit on February 12,
that appeal was decided, in June 2013 Cardpool filed a
request for ex parte reexamination in accordance with 35
U.S.C. § 304. For reexamination, Cardpool presented both
amended and additional claims, in accordance with 37 C.F.R.
§ 1.510(e) (2013), alongside certain claims that stood
unamended. Cardpool provided the Patent and Trademark Office
(PTO) with the invalidity contentions made by Plastic Jungle
before the district court, along with a copy of the foreign
prior art Plastic Jungle cited. Reexamination was ordered by
reexamination was completed, on January 30, 2014 the Federal
Circuit affirmed without opinion under Federal Circuit Rule
36 the district court's judgment of ineligibility under
section 101. Cardpool, Inc. v. Plastic Jungle, Inc.,
552 Fed.Appx. 979 (Fed. Cir. 2014). On February 6, 2014, the
PTO issued a notice of intent to issue an ex parte
reexamination certificate. The Ex Parte Reexamination
Certificate was issued on February 27, 2014, holding amended
claims 1, 2-7, and 9-11, and new
claims 12-52, patentable under section 103. See 37
C.F.R. § 1.552 (section 101 eligibility is not
considered on reexamination).
then filed a petition for rehearing of the Federal
Circuit's decision of January 30, 2014, asking this court
to vacate our affirmance of the district court decision of
section 101 ineligibility because the claims that were the
subject of that decision no longer existed. Cardpool stated:
Because the District Court's decision dismissing the case
under Rule 12(b)(6) as not claiming statutory subject matter
under 35 U.S.C. § 101 was based on the original Asserted
Claims that no longer exist and have been superseded by the
amended Asserted Claims, the District Court decision is moot
and must be vacated. Not doing so would create the improper
ruling that an intervening final PTO decision is not
controlling of a still pending District Court case--directly
in conflict with Federal Circuit precedent. Accordingly, this
petition should be granted to allow rehearing consistent with
Federal Circuit precedent.
Pet. for Reh'g, No. 2013-1227, ECF No. 53 at 2-3 (Feb.
Jungle, in response to the request for rehearing, argued to
this court that " the entire case is moot" because
the reexamination " substantially changed" the
claims at issue, requiring that " the prior rulings must
be vacated and the case dismissed." Response to Petition
for Panel Rehearing, Appeal No. 2013-1227 Dk. 58 at 2.
Cardpool replied that, while the district court's
decision of section 101 unpatentability had been rendered
" moot" by the reexamination, the underlying cause
of action was not moot because infringement might be renewed
by Plastic Jungle or a successor to Plastic Jungle. Reply,
Appeal No. 2013-1227 Dk. 60 at 3-5. Cardpool stated that the
validity of the reexamined claims had not been evaluated by
any court, and asked that the district court decision of
invalidity be vacated as moot.
Federal Circuit then granted rehearing, vacated its summary
affirmance of section 101 invalidity, and remanded to the
district court " to determine what actions, if any, are
appropriate in light of the reexamined claims."
Cardpool, Inc. v. Plastic Jungle, Inc., 564 F.Appx.
582, 583 (Fed. Cir. 2014). However, the Federal Circuit
declined to vacate the district court's invalidity
judgment of January 22, 2013, stating that " it would
not be appropriate in this context to vacate the district
court's judgment because Cardpool, the losing party
below, caused the change in circumstances." Id.
return to the district court, Cardpool and Plastic Jungle
jointly moved the district court to vacate its prior judgment
so that the parties could move for a voluntary dismissal
without prejudice under Rule 41(a)(1)(A)(ii).