Case 2:11-cv-10474-GAF-JCG Document 157 Filed 08/01/13 Page 1 of 5 Page ID #:3980
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`Caroline H. Mankey, SBN 187302
`Email: caroline@cypressllp.com
`Robert J. Muller, SBN 189651
`Email: bob@cypressllp.com
`CYPRESS, LLP
`11111 Santa Monica Blvd., Suite 500
`Los Angeles, California 90025
`Telephone: (424) 901-0123
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`Seth H. Ostrow (Pro Hac)
`sostrow@ostrowkaufman.com
`Matthew L. Kaufman (Pro Hac)
`mkaufman@ostrowkaufman.com
`Jeanpierre J. Giuliano (Pro Hac)
`jgiuliano@ostrowkaufman.com
`OSTROW KAUFMAN LLP
`555 Fifth Avenue, 19th Floor
`New York, NY 10017
`Telephone: (212) 682-9200
`
`Attorneys for Plaintiff
`Advanced Media Networks, LLC
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`ADVANCED MEDIA
`NETWORKS, LLC,
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`Plaintiff,
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`Case No. CV-11-10474 GAF (JCGx)
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`Assigned to: Hon. Gary Allen Feess
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`MEMORANDUM OF POINTS AND
`AUTHORITIES SUPPORTING
`AMN’S UNOPPOSED MOTION TO
`VACATE THE CLAIM
`CONSTRUCTION ORDER DATED
`JUNE 14, 2013
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`Date: September 9, 2013
`Time: 9:30 a.m.
`Place: Courtroom 740 – Roybal
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`) ) ) ) ) ) ) ) ) )
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`) ) ) )
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`v.
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`GOGO LLC, AIRCELL BUSINESS
`AVIATION SERVICES LLC, DELTA
`AIR LINES INC., NETJETS INC.,
`AND XOJET, INC.,
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`Defendants.
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`MOTION TO VACATE CLAIM CONSTRUCTION
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`Petitioners' Ex. 1025 - Page 1
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`Case 2:11-cv-10474-GAF-JCG Document 157 Filed 08/01/13 Page 2 of 5 Page ID #:3981
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`I.
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`Introduction
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`Plaintiff Advanced Media Networks, LLC (“AMN”) submits this
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`memorandum in support of its Unopposed Motion to Vacate the Claim Construction
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`Order dated June 14, 2013. Defendants Gogo LLC, Aircell Business Aviation
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`Services LLC, Bombardier Aerospace Corporation, Delta Air Lines Inc., Learjet Inc.,
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`NetJets Inc., United Airlines, Inc., and XOJET, Inc. (collectively, “Defendants” and
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`collectively with AMN, the “Parties”) do not oppose this motion.
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`II. Background and Procedural History
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`AMN filed its Complaint in the present case on December 19, 2011 and filed
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`its Amended Complaint on April 9, 2012. On February 8, 2013, the Parties submitted
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`their respective opening claim constructions briefs. (Dk. Nos. 78, 81). On February
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`28, 2013, the Parties submitted their responsive claim construction briefs. (Dk. Nos.
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`110, 113). The Markman hearing was held on April 10, 2013, and the Court issued its
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`claim construction ruling on June 14, 2013. (Dk. No. 140, the “Claim Construction
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`Order”).
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`Since the Court issued the Claim Construction Order, the Parties have been
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`engaged in settlement discussions and have agreed to a settlement of the action. The
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`agreement to settle the action is predicated on the Court granting the present motion
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`and vacating its Claim Construction Order. Upon this Court granting the present
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`motion, the Parties have committed to jointly file a Stipulated Order of Dismissal,
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`thereby terminating all disputes between the Parties in the present action.
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`III. Legal Standard
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`Federal Rule of Civil Procedure 54(b) grants this Court the authority to modify
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`any non-final judgment at any time. See Fed. R. Civ. P. 54(b). Claim construction
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`orders are “interlocutory in nature and [do] not fully adjudicate the rights and claims
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`of the parties.” See United States Gypsum Co. v. Pacific Award Metals, Inc., No. C
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`04-04941 JSW, 2006 WL 1825705, at *1 (N.D. Cal. July 3, 2006). As such, a claim
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`construction order “can be vacated at any time prior to final judgment.” Id.; Fed. R.
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`MOTION TO VACATE CLAIM CONSTRUCTION
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`Petitioners' Ex. 1025 - Page 2
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`Case 2:11-cv-10474-GAF-JCG Document 157 Filed 08/01/13 Page 3 of 5 Page ID #:3982
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`Civ. P. 54(b); see also Lycos, Inc. v. Blockbuster, Inc., 2010 U.S. Dist. LEXIS
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`136252, *7 (D. Mass. Dec. 23, 2010) (“the court has the authority to modify claim
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`construction prior to the entry of a final judgment”). Applying Ninth Circuit
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`authority, district courts in this circuit have found that “[t]he standard for vacatur of a
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`claim construction order, which is not final but interlocutory, is even less rigid.”
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`RE2CON, LLC, v. Telfer Oil Co., 2013 U.S. Dist. LEXIS 46192, *7 (N.D. Cal. 2013)
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`(citing Persistence Software, Inc. v. Object People, Inc., 200 F.R.D. 626, 627 (N.D.
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`Cal. 2001)).
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`The Supreme Court previously addressed the standard appropriate for an
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`appellate court to vacate a final judgment in connection with settlement. U.S.
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`Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 29 (1994). The
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`Federal Circuit, however, has explicitly noted that “by its terms, Bancorp does not
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`apply to district courts but rather only to the Supreme Court and to courts of
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`appeals.” Dana v. E.S. Originals, Inc. 342 F.3d 1320, 1328 (Fed. Cir. 2003) (Dyk, J.,
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`concurring). Additionally, the Ninth Circuit has explicitly found that “a district court
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`should enjoy greater equitable discretion when reviewing its own judgments than do
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`appellate courts operating at a distance.”’ American Games, Inc. v. Trade Products,
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`Inc., 142 F.3d 1164, 1170 (9th. Cir. 1998).
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`Thus, while Bancorp may provide guidance, the test set forth therein is not
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`directly applicable to district courts considering vacatur of non-final interlocutory
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`orders. See e.g., Lycos at *8 (“[i]t follows that the ‘exceptional circumstances’
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`standard established by Bancorp does not necessarily apply here, where Lycos seeks
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`to vacate the non-final order of a district court”). Rather, a district should use
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`equitable discretion when determining whether vacatur of a non-final order is
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`appropriate. See Cisco Systems Inc. v. Telcordia Tech., 590 F. Supp. 2d 828, 830
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`(E.D. Tex. 2008).
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`IV. ARGUMENT
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`As a result of the Court issuing its Markman ruling, both sides have been
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`MOTION TO VACATE CLAIM CONSTRUCTION
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`Petitioners' Ex. 1025 - Page 3
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`Case 2:11-cv-10474-GAF-JCG Document 157 Filed 08/01/13 Page 4 of 5 Page ID #:3983
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`working towards settlement for several weeks and have now reached a conditional
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`settlement agreement. The Federal Circuit has encouraged such behavior, repeatedly
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`emphasizing that there is a “strong public interest in settlement of patent litigation.”
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`Dana at 1328 (J. Dyk concurring). The Parties have conditioned their settlement on
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`vacating the claim construction order of this Court. As in Dana, the public interest
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`favors “allowing the parties to a settlement at the district court level to determine the
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`collateral estoppel effect of earlier orders in the litigation” and thus lends further
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`support towards vacatur. Id. Such a settlement between the Parties would remove the
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`potential threat of a final judgment on issues such as infringement and validity while
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`allowing the Parties to focus energy and resources on their customers and the general
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`public they service, as opposed to continued litigation.
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`In addition to the foregoing, absent vacatur and the closing of the settlement
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`agreement thereafter, at least one of the Parties is likely to appeal certain claim
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`construction issues, which could potentially result in years of further appellate
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`litigation and potential additional subsequent litigation before this Court, albeit
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`delayed. As of 2008 nearly forty percent of claim construction orders have been
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`reversed across all districts. Cisco, 590 F.Supp.2d at 830. Further, the Federal Circuit
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`has reversed claim construction orders from this district at a rate of approximately
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`43.5%. See David Schwartz, Claim Construction Reversal Rates I – Overall
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`Reversal Rates, PATENTLY-O (Feb. 27, 2008), http://www.patentlyo.com/
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`patent/2008/02/claim-construct.html.
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`Vacating the Claim Construction Order would render such appeals moot. As
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`stated in Bancorp, “the judicial economies achieved by settlement at the district-court
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`level are ordinarily much more extensive than those achieved by settlement on
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`appeal.” Bancorp, 513 U.S. at 28. Thus, the potential negative effects of any appeal
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`of the Claim Construction Order clearly favor vacatur. Additionally, vacatur of a
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`claim construction order may eliminate any confusion with respect to potential
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`preclusive effects and reduces the inconsistent execution of the law between forums.
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`MOTION TO VACATE CLAIM CONSTRUCTION
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`Petitioners' Ex. 1025 - Page 4
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`Case 2:11-cv-10474-GAF-JCG Document 157 Filed 08/01/13 Page 5 of 5 Page ID #:3984
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`Accordingly, this weighs in further favor of vacatur in view of the tentative
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`settlement reached by the Parties.
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`Vacating the Claim Construction Order and subsequent settlement would
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`significantly save both the Court’s resources as well those of the Parties. In the event
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`that certain constructions adopted by the Claim Construction Order are reversed on
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`appeal, there is the potential for increasing expenses and utilization of resources that
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`will occur if the case progresses towards trial. As noted in Cisco, while “the court
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`expends significant resources in construing the claims during a Markman hearing, the
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`court expends even more resources prior to and during trial.” Cisco at 831–2.
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`Vacatur of the Claim Construction Order and the resulting settlement of the
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`action will substantially contribute to the conservation of resources. Accordingly, the
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`Court should support the settlement entered into by the Parties, conditioned as it is on
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`the Court vacating the Claim Construction Order prior to final dismissal of the case.
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`V. Conclusion
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`Given the interests of the public, the Parties and the Court, AMN requests that
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`this Court vacate its Claim Construction Order, and Defendants do not oppose this
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`request.
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`Dated: August 1, 2013
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`By: /s/ Seth H. Ostrow
`Seth H. Ostrow
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`OSTROW KAUFMAN LLP
`Seth H. Ostrow (pro hac)
`sostrow@ostrowkaufman.com
`Matthew L. Kaufman (pro hac)
`mkaufman@ostrowkaufman.com
`Jeanpierre J. Giuliano (pro hac)
`jgiuliano@ostrowkaufman.com
`555 Fifth Avenue – 19th Floor
`New York, NY 10017
`Telephone: (212) 682-9200
`Facsimile: (212) 682-9222
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`MOTION TO VACATE CLAIM CONSTRUCTION
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`Petitioners' Ex. 1025 - Page 5