Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 1 of 10 PageID #: 19163
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`AMERANTH, INC.,
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`Plaintiff,
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`v.
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`MENUSOFT SYSTEMS CORPORATION
`and CASH REGISTER SALES & SERVICE
`OF HOUSTON, INC. (dba CRS TEXAS)
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`Defendants.
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`Civil Action No. 2:07-cv-271-DF
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`JOINT STIPULATED MOTION FOR INDICATIVE RULING
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 2 of 10 PageID #: 19164
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`Plaintiff Ameranth, Inc. (“Ameranth”) and defendants Menusoft Systems Corp.
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`(“Menusoft”) and Cash Register Sales & Service of Houston, Inc. (“CRS”), pursuant to Fed. R.
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`Civ. P. 62.1 and Fed. R. App. P. 12.1, jointly submit the following Stipulated Motion for Indicative
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`Ruling.
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`A.
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`Procedural Background
`On June 28, 2007, Ameranth filed its Complaint for patent infringement against Menusoft and
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`CRS in this action. On September 4, 2007, Menusoft and CRS filed their Answer and asserted
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`Counterclaims of Invalidity and Unenforceability of the asserted patents. This Court held a jury trial on
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`September 13 through September 17, 2010. On September 20, 2010, the jury reached verdicts of
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`noninfringement and invalidity of the seven (7) asserted claims of the total forty-seven (47) claims of the
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`three asserted patents. (Dkt. No. 263). On September 21, 2010, the Court entered judgment on the jury
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`verdicts. (Dkt. No. 265). On May 26, 2011, the Court entered orders denying Ameranth’s motions for
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`new trial and judgment as a matter of law on invalidity (Dkt. Nos. 313, 314) and denying Menusoft and
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`CRS’s motions for findings of inequitable conduct and exceptional case (Dkt. Nos. 315, 316).
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`Ameranth timely filed a Notice of Appeal with the United States Court of Appeals for the
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`Federal Circuit on June 23, 2011 (Dkt. No. 317), appealing the Court’s denials of its motions for new trial
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`and judgment as a matter of law. Ameranth also noticed appeal of the Court’s entry of the jury verdicts
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`based on various issues including, inter alia, the Court’s jury instructions, verdict form and evidentiary
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`rulings. Menusoft and CRS filed a Notice of Cross-Appeal appealing the Court’s denial of a finding of
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`inequitable conduct. (Dkt. No. 318).
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`The appeal was selected for inclusion in the Federal Circuit’s mandatory mediation program. On
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`October 13, 2011, the parties attended a mediation conference with the Federal Circuit Mediation
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`Office, Chief Federal Circuit Mediator James Amend presiding.
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`The Federal Circuit Mediator’s efforts resulted in the parties reaching a confidential and
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`comprehensive binding settlement of all issues between them, inclusive of Ameranth also dismissing
`1
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 3 of 10 PageID #: 19165
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`Menusoft and CRS from a second case currently before this Court1 involving eight (8) claims of the
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`Ameranth patents (which claims were not asserted or adjudicated in the present case). Under the
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`Settlement Agreement, the parties agreed, inter alia, to jointly request this Court to vacate the
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`verdicts of invalidity of the seven (7) asserted claims of the asserted patents.2 Under the Settlement
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`Agreement, and at the direction of Chief Federal Circuit Mediator Amend, pursuant to Fed. R. Civ. P.
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`62.1 and Fed. R. App. P. 12.1, the parties file this Stipulated Motion For Indicative Ruling requesting
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`vacatur of the jury verdicts of invalidity and the Court’s judgment of invalidity. This motion does not
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`seek any indicative ruling regarding vacatur of any other verdicts or judgments.3
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`B.
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`The Court Has Authority to Make the Requested Indicative Ruling
`Rule 62.1 of the Federal Rule of Civil Procedure prescribes the procedure in the district court
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`when a party moves for post-judgment relief that the district court, deprived of jurisdiction due to a
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`pending appeal, lacks authority to grant. See Dominguez v. Gulf Coast Marine & Assocs., 607 F.3d
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`1066, 1074 n.5 (5th Cir. 2010) (noting that Rule 62.1 was recently modified to encompass this “widely
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`accepted” procedure in the federal courts). Specifically, Rule 62.1 provides:
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`If a timely motion is made for relief that the court lacks authority to grant because of an
`appeal that has been docketed and is pending, the court may. . . state either that it would
`grant the motion if the court of appeals remands for that purpose or that the motion raises
`a substantial issue.
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`Fed. R. Civ. P. 62.1(a). Thus, under Rule 62.1, the district court may indicate whether the motion
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`would be granted. See id.; see also, e.g., Fobian v. Storage Tech. Corp., 164 F.3d 887, 891 (4th Cir.
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`1999) (“[W]hen a district is inclined to grant a Rule 60(b) motion during the pendency of an appeal . . .
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`the district court [should] indicate its inclination to grant the motion in writing; a litigant, armed with this
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`1 Ameranth v. Par et al., Case No. 2:10-cv-294-DF.
`2 Menusoft agreed to join in this Motion and therefore the entry of an indicative ruling was not made a
`condition of the settlement between the parties. Entering into a binding settlement also avoided any
`issue as to whether the parties would be required to brief the merits of the appeal while an indicative
`ruling was being sought.
`3 Specifically, the parties do not request any ruling from the Court regarding the verdicts and judgment
`of noninfringement nor the Court’s Orders on inequitable conduct and exceptional case.
`2
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 4 of 10 PageID #: 19166
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`positive signal from the district court, can then seek a limited remand from the appellate court to
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`permit the district court to grant the Rule 60(b) motion.”).
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`If the district court makes an indicative ruling stating that it would either grant the post-judgment
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`motion or that the motion raises a substantial issue, the moving party must promptly notify the circuit
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`court. The circuit court, having been properly notified of the district court’s ruling, has discretion to
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`“remand for further proceedings.” Fed. R. App. P. 12.1(a); Fed. R. Civ. P. 62.1(b). When remanding
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`for this purpose, the court of appeals retains jurisdiction unless it expressly dismisses the appeal. See
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`id. Upon remand, the district court may then decide the motion. Fed R. Civ. P. 62.1(c).
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`C.
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`Vacatur Based On The Parties’ Post-Judgment Settlement Is Appropriate In This Case
`Federal Rule 60(b) authorizes the district court to relieve a party from final judgment or order
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`for “any . . . reason justifying relief from the operation of the judgment.” See Fed. R. Civ. P. 60(b)(6).
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`The Supreme Court has held that Rule 60(b) is the proper vehicle to seek vacatur of a judgment
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`based on a post-judgment settlement between the parties. See U.S. Bancorp Mortgage Co. v. Bonner
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`Mall Partnership, 513 U.S. 18, 29 (1994). In Bancorp, the Court held that, absent exceptional
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`circumstances, an appellate court may not order a district court to vacate a judgment rendered moot
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`by settlement. However, the Supreme Court expressly recognized in Bancorp the power of the district
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`court to vacate a judgment after settlement on appeal. See id. 4 “[A] Rule 60(b) motion is addressed
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`to the sound discretion of the [district] court [and] gives the court a grand reservoir of equitable power
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`to do justice in a particular case.” Pierce v. Cook & Co., Inc., 518 F.2d 720, 722 (10th Cir. 1975);
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`accord Reid v. Angelone, 369 F.3d 363, 374 (4th Cir. 2004). The Court may vacate a judgment where
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`“it is no longer equitable that the judgment should have prospective application.” Fed. R. Civ. P.
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`60(b)(5). Under Rule 60(b)(6), a court has “ample power to vacate judgments whenever that action is
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`4 When considering a request for vacatur of a judgment or verdict on remand from an
`appellate court, a district court is not constrained by the exceptional circumstances test. See
`Marseilles Hydro Power LLC v. Marseilles Land & Water Co., 481 F.3d 1002, 1003-04 (7th Cir. 2007);
`American Games, Inc. v. Trade Products, Inc., 142 F.3d 1164, 1168-69 (9th Cir. 1998); Mayes v. City of
`Hammond, 631 F. Supp. 2d 1082, (N.D. Ind. 2008) (“[T]his court is not cabined by the ‘exceptional
`circumstances for a request for vacatur made to an appellate court.”).
`3
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 5 of 10 PageID #: 19167
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`appropriate to accomplish justice.” See 11 Charles A. Miller, et al., Federal Practice and Procedure
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`§ 2864 (2nd ed. 1995).
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`Courts have found that, as here, exceptional circumstances and equitable considerations support
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`vacatur under Rule 60(b). See, e.g., Novell, Inc. v. Network Trade Center, Inc., 187 F.R.D. 657, 661
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`(D. Utah 1999) (granting parties’ motion to vacate under Rule 60(b)(5)); Mayes v. City of Hammond,
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`631 F. Supp. 2d 1082, 1098 (N.D. Ind. 2008) (granting joint motion to vacate a jury verdict and
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`judgment upon showing that public and private interests weighed in favor of vacatur); IBM Credit
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`Corp. v. United Home for Aged Hebrews, 848 F. Supp. 495, 496- 97 (S.D.N.Y. 1994) (granting Rule
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`60(b) motion, holding that “[v]acatur of a decision is appropriate where it benefits the parties but
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`does not run counter to any public interest”).
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`However, the “exceptional circumstances” standard of the Supreme Court’s Bancorp decision is
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`not applicable to district court vacatur determinations. Bancorp, "by its terms, does not apply to district
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`courts but rather only to the Supreme Court and to courts of appeals." Lycos v. Blockbuster, Inc., No. 07-
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`11469, 2010 U.S. Dist. LEXIS 136252, *8-9 (D. Mass. Dec. 23, 2010) (quoting Dana v. E.S. Originals,
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`Inc., 342 F.3d 1320, 1328 (Fed. Cir. 2003) (Dyk, J., concurring)). In fact, the Supreme Court held in
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`Bancorp that an appellate court confronted with a request to vacate a district court decision as part of a
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`settlement may remand to the district court to consider the request under Federal Rule of Civil Procedure
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`60(b) “even in the absence of, or before considering the existence of, extraordinary circumstances.”
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`513 U.S. at 29. This holding plainly indicates that the Supreme Court did not hold or otherwise indicate
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`that the extraordinary circumstances standard should apply to Rule 60(b) motions. It clearly would be
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`pointless to remand to a district court “in the absence of extraordinary circumstances,” if a motion to
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`vacate an order to facilitate a settlement under Rule 60(b) could only be granted under such
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`circumstances. Moreover, a district court should have wider discretion to vacate its own decision than
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`should an appellate court to vacate another court’s decision without even considering the merits.
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`American Games, Inc. v. Trade Prods., Inc., 142 F.3d 1164, 1170 (9th Cir. 1998) (“Given the fact-
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`4
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 6 of 10 PageID #: 19168
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`intensive nature of the inquiry required, it seems appropriate that a district court should enjoy greater
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`equitable discretion when reviewing its own judgments than do appellate courts operating at a
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`distance.").
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`In the present case, all parties desired settlement, the settlement is in the best interests of all
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`parties, the benefits of vacatur outweigh any harm the public or the judicial system might lose from a
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`loss of legal precedent and vacatur would produce significant judicial efficiencies both for this Court
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`and for the Federal Circuit Court of Appeals, while respecting and recognizing the objectives of the
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`Federal Circuit Mediation process as well.
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`The limited verdict and judgment for which vacatur is requested, i.e., only the
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`invalidity verdicts and the Court’s entry of judgment thereon, are limited to the seven (7)
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`claims of the asserted patents which were asserted at trial.5 The asserted patents contain
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`forty-seven (47) total claims. Only the enumerated seven claims were asserted at trial.
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`Critically, this Court has recently ruled that the verdicts and judgment of invalidity of the
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`particular seven claims asserted at trial do not collaterally estop Ameranth as to claims not
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`asserted at trial or which contain significantly different elements/terms than the previously
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`asserted claims.6 (Ameranth v. Par et al., No. 2:10-cv-294-DF, Dkt. No. 119) (adopting
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`Magistrate Judge Everingham’s recommendation). Judge Everingham’s recommendation,
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`which was adopted by the Court, stated:
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`Here, many of the claims asserted in this case contain limitations not found in the
`“representative” claims Ameranth asserted in the first case. In sum, there could have been
`no final decision on the validity of claims that were withdrawn, not asserted, or never
`litigated in first case – that is, there could have been no final decision on “the identical
`question” of the validity of claims that were not presented to the jury in the first case.
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`5 Claims 1 and 4 of U.S. Pat. No. 6,384, 850; claims 6, 9, and 10 of U.S. Pat. No. 6,871,325 and claims 1
`and 3 of U.S. Pat. No. 6,982,733.
`6 In addition to the seven claims asserted at trial, the Court ruled in Case No. 2:10-cv-294-DF (Dkt. No.
`119) that collateral estoppel applies to claim 3 of U.S. Pat. No. 6,384,850 and claim 1 of U.S. Pat. No.
`6,871,325.
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`5
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 7 of 10 PageID #: 19169
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`(Ameranth v. Par et al., No. 2:10-cv-294-DF, Dkt. No. 107 at 5). Therefore, the invalidity
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`verdicts in this case cannot be used by any other defendant in any other case as regards the
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`remaining thirty-eight claims which were not litigated in the first case. Moreover, the
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`particular claims for which vacatur is sought are not being asserted against any other party.
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`There will thus be no reduction or elimination of issues or any other form of efficiency in
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`any pending case regarding Ameranth’s patents if the Court were to deny the request for
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`vacatur.7
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`The public interest in resources expended by this Court and by the Federal Circuit would be
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`respected if this Court vacates the invalidity verdicts and judgment as to only the seven (7) particular
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`claims which were litigated in this case. When the potential effect on other parties or the public is
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`limited or nonexistent and when judicial resources are not squandered, vacatur is appropriate. See
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`Gould v. Bowyer, 11 F.3d 82, 84 (7th Cir. 1993). Effecting the terms of the settlement between the
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`parties, on terms amenable to all parties, would conserve the Federal Circuit’s resources, and
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`potentially this Court’s resources in the event the Federal Circuit remanded for further proceedings
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`after the appeal is litigated. The Federal Circuit’s resources would also be respected since the settlement
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`likely would not have been reached but for the efforts of the Chief Federal Circuit Mediator and
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`his suggestion of the present motion to facilitate the settlement. This is an important program which
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`significantly reduces the Federal Circuit’s case load. A Circuit Court Mediator’s assistance in helping
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`the parties reach a post-judgment settlement weighs in favor of vacatur. See, e.g., Auto. Club v. Mellon
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`7 In contrast, Judge Clark’s denial of a request to vacate an invalidity ruling in Willow Wood v. Thermo-
`Ply was based on a factual situation which was the opposite of the situation presented in this case. In
`Willow Wood, the claims for which vacatur was sought were being litigated in other cases, and
`essentially all claims of the asserted patents stood invalidated. Ohio Willow Wood Co. v. Thermo-Ply,
`Inc., C.A. No. 9:07-cv-274, Dkt. No. 142 at 2 (E.D. Tex. Feb. 2, 2011) (“Here, this court's ruling, which
`found that most claims of the '182 patent are invalid, will, unless reversed on appeal, dispose of
`significant litigation in other forums.”). Conversely, in the present case, the invalidity verdicts will not
`affect other cases irrespective of vacatur or reversal on appeal.
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`6
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 8 of 10 PageID #: 19170
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`Bank (DE) N.A., 224 F.R.D. 657, 658 (C.D. Cal. 2004); Motta v. District Director of Immigration &
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`Naturalization Servs., 61 F.3d 117, 118 (1st Cir. 1995).
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`The parties’ private interests also weigh in favor of vacatur. Importantly, settling the current
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`litigation will advance each of Ameranth’s, Menusoft’s and CRS’s interests by eliminating the
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`expense and risks associated with a lengthy appeal process and, potentially, a new trial. Still further,
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`the settlement between the parties will also result in the dismissal of a second case against Menusoft
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`and CRS currently before this Court (2:10-cv-294-DF).
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`Moreover, the settlement on appeal demonstrates that there were reasonable grounds for
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`Ameranth’s challenge to the invalidity verdicts and judgment. The parties have agreed to this
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`procedure as a term of the Settlement Agreement, and thus neither party will be prejudiced by vacating
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`the invalidity verdicts and judgment. Strangers to this litigation certainly have no right to complain if a
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`verdict in a litigation in which they played no part is vacated. In fact, vacating a verdict or judgment to
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`facilitate a settlement is simply a recognition of a party’s legitimate challenge to a decision and that the
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`issue should be left to another day in the event that there are proceedings involving other parties. The
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`Federal Circuit’s review of this Court’s decision would have been plenary. Rite-Hite Corp. v. Kelley
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`Corp., 56 F.3d 1538, 1551 (Fed. Cir. 1995) (en banc) (“The question of standing to sue is a
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`jurisdictional one which we review de novo.”). In the interests of justice, this Court should exercise its
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`discretion to grant the parties’ requested relief pursuant to Rule 60(b) and vacate the jury verdicts and
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`judgment.
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`RELIEF SOUGHT
`Based on the foregoing analysis, and pursuant to Fed. R. Civ. P. 62.1, the parties jointly move
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`this Court for an indicative ruling that, if the Federal Circuit remanded to consider the parties’ Joint
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`Rule 60(b) Motion for Vacatur as a condition of their settlement, the Court would grant such a motion.
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`A proposed ruling is submitted herewith.
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`7
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 9 of 10 PageID #: 19171
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`This 28th day of October, 2011.
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`/s/ Otis W. Carroll, Jr.
`By:
`Otis W. Carroll, Jr.
`State Bar Number 03895700
`Email: fedserv@icklaw.com
`Ireland, Carroll & Kelley, PC
`6101 South Broadway, Suite 500
`Tyler, Texas 75703
`Telephone: (903) 561-1600
`Fax: (903) 581-1071
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`George R. McGuire
`Email: gmcguire@bsk.com
`Bond Schoeneck & King, PLLC
`One Lincoln Center
`Syracuse, NY 13202-1355
`315/218-8515
`Fax: 315/218-8100
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`Attorneys for Defendants Menusoft
`Systems Corp. and Cash Register
`Sales & Service of Houston, Inc.
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`Respectfully submitted,
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`/s/ Michael C. Smith
`By:
`Michael C. Smith
`State Bar Number 18650410
`Email: michaelsmith@siebman.com
`Siebman, Burg, Phillips & Smith, L.L.P.
`113 East Austin Street
`Marshall, TX 75671
`(903) 938-8900 – Telephone
`(972) 767-4620 – Facsímile
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`John W. Osborne
`josborne@lockelord.com
`Peter N. Fill
`pfill@lockelord.com
`James W. Gould
`jgould@lockelord.com
`Steven M. Purdy
`spurdy@lockelord.com
`Peter H. Noh
`pnoh@lockelord.com
`Locke Lord Bissell & Liddell LLP
`3 World Financial Center
`New York, NY 10281-2101
`(212) 415-8600 – Telephone
`(212) 303-2754 – Telecopier
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`Attorneys for Plaintiff Ameranth, Inc.
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`8
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`Case 2:07-cv-00271-RSP Document 331 Filed 10/28/11 Page 10 of 10 PageID #: 19172
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have to consented
`electronic service are being served with a copy of this document via the Court’s
`CM/ECF system per Local Rule CV-5(a)(3) this 28th day of October, 2011. Any other counsel
`of record will be served by facsimile transmission and/or first class mail.
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` /s/ Michael C. Smith
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`Michael C. Smith
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`9
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`Case 2:07-cv-00271-RSP Document 331-1 Filed 10/28/11 Page 1 of 1 PageID #: 19173
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`AMERANTH, INC.,
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`Plaintiff,
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`v.
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`MENUSOFT SYSTEMS CORP. and
`CASH REGISTER SALES & SERVICE OF
`HOUSTON, INC. (dba CRS TEXAS),
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`Defendants.
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` Civil Action No. 2:07-cv-271-DF
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`The Court, having considered the parties’ Joint Stipulated Motion for Indicative Ruling
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`ORDER
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`regarding vacatur of the invalidity verdicts and judgment, is of the opinion that the Motion
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`should be, in all things,
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`GRANTED.
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`IT IS THEREFORE ORDERED that the parties’ Joint Stipulated Motion for Indicative
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`Ruling is hereby GRANTED and the Court hereby indicates that, pursuant to Fed. R. Civ. P.
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`62.1, if the Federal Circuit remanded to consider the parties’ Joint Rule 60(b) Motion for
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`Vacatur of the invalidity verdicts and judgment as a condition of their settlement, the Court
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`would grant such a motion.
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