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Capella Photonics, Inc. v. Cisco Systems, Inc.

United States District Court, N.D. California

December 31, 2019

CAPELLA PHOTONICS, INC., Plaintiff,
v.
CISCO SYSTEMS INC, et al., Defendants.

          ORDER DENYING DEFENDANTS' MOTION FOR RELIEF AND AWARDING COSTS DOCKET NO. 227

          EDWARD M. CHEN, UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiff Capella Photonics, Inc. brought patent infringement claims against four Defendants. In 2014, one of the Defendants filed a petition with the Patent Trial and Appeal Board (“PTAB”) seeking institution of inter partes review on the challenged claims. After the claims were cancelled by the PTAB (an outcome affirmed by the Federal Circuit), this Court granted Plaintiff's Motion to Dismiss Plaintiffs' claims without prejudice and dismissed Defendant Ciena's counterclaims without prejudice (on September 6, 2019). The Court also denied Defendants' request to be declared prevailing parties and, as a result, declined to award Defendants statutory costs. See Docket No. 226. Following a decision by the Federal Circuit on October 9, 2019 (in which that court affirmed the award of prevailing party status and statutory costs in a case factually similar to the instant case), Defendants filed a Motion for Relief from an Order and a Renewed Request to Be Declared Prevailing Parties and Awarded Costs. See Docket No. 227.

         II. BACKGROUND

         According to Plaintiff, “Capella is a pioneer of optical switching technology used in optical transmission networks by the telephone, Internet, and cable television industries.” Motion to Dismiss (“MTD”) at 3, Docket No. 221. The company has “an extensive of [sic] portfolio of patents on optical switching devices.” Id. This case is a consolidated patent infringement case that was originally filed as several cases in the Southern District of Florida in 2014. See Docket No. 1; Docket No. 111. Plaintiff “alleged that each respective Defendant infringed U.S. Patent Nos. RE42, 368 (the ‘‘368 Patent') and RE42, 678 (the ‘‘678 Patent').” Opposition to Motion to Stay or in the Alternative to Amend at 6, Docket No. 209. Plaintiff served infringement contentions on those patents, and Defendants served invalidity contentions. Id. On July 15, 2014, one of the Defendants filed a petition with the PTAB seeking institution of inter partes review (“IPR”) proceedings on the then asserted claims. Id. In July 2014, the case was transferred to this Court from the Southern District of Florida. See Order Granting Defendants' Motion to Transfer, Docket No. 77.

         In March 2015, the Court stayed this case pending the PTAB's IPR Proceedings. Docket No. 172. Between January 2016 and October 2016, the PTAB determined that all of Plaintiff's claims identified in its preliminary infringement contentions for the ‘368 and ‘678 patents were invalid. Motion to Stay or in the Alternative to Amend at 7 (“MTS”), Docket No. 205. The Federal Circuit affirmed that determination in February 2018. MTS at 7. Plaintiff then exhausted its appeals on November 5, 2018 when the Supreme Court denied its petition for writ of certiorari. Id. “On December 10, 2018, the PTO issued IPR certificates cancelling claims 1-6, 9-13 and 15-22 of the ‘368 Patent and claims 1-4, 9, 10, 13, 17, 19-23, 27, 29, 44-46, 53 and 61-65 of the ‘678 Patent.” MTS at 17; Becker Declaration ¶ 11, Docket No. 205-1. This effectively eliminated all the claims asserted by Plaintiff in the instant case. Other claims of the ‘368 and ‘678 patents were not adjudicated by the PTAB.

         Meanwhile, “[o]n June 29, 2018, before the PTO cancelled the challenged claims, ” Plaintiff filed reissue applications. MTS at 7. Plaintiff asserts that the “[c]laims in these newly reissued patents that are substantially identical with the original claims will constitute a continuation of the original Reissue Patents-in-Suit and have effect continuously from their original date of issuance.” Id. at 2. Plaintiff asked the Court to extend the imposed stay until after a determination on the reissue application. On June 4, 2019, the Court denied Plaintiff's Motion to Extend Stay and its subsequent request to amend its infringement contentions to include claims not brought in the IPR proceedings. Docket No. 219. The Court also denied Defendants' motion to dismiss for failure to prosecute pursuant to Federal Rule of Civil Procedure 41(b). Id.

         Plaintiff then brought a Motion to Dismiss Actions Without Prejudice as Moot and for Lack of Jurisdiction. See Docket No. 221. Plaintiff's contention was that “[a]s a result of the cancellation of all of Capella's asserted patent claims and this Court's subsequent rulings prohibiting Capella from adding new infringement claims of the Patents-in-Suit that have not been cancelled, these actions are moot and the Court no longer has subject matter jurisdiction.” Id. at 3. Defendants argued that the matter should be dismissed with prejudice. Defendants' Opposition to Motion to Dismiss at 1, Docket No. 223. Defendants requested that the Court “deny Plaintiff's motion and enter summary and/or final judgment in Defendants' favor on Plaintiff's infringement counts pursuant to Federal Rules of Civil Procedure 54, 56, and/or 58 and award statutory costs to Defendants.” Id. On September 6, 2019, the Court granted Plaintiff's Motion to Dismiss Plaintiffs' claims without prejudice and denied Defendants' request to be declared prevailing parties; as a result, it declined to award Defendants statutory costs. See Docket No. 226.

         III. DISCUSSION

         A. Legal Standard

         Rule 60(b) permits a court to provide relief from final judgment, order, or proceeding on several different grounds. Fed.R.Civ.P. 60(b). Rule 60(b)(6) specifically provides that a court may grant relief from a final judgment, order, or proceeding for “any other reason that justifies relief.” Fed.R.Civ.P. 60(b)(6). This catch-all provision has been narrowly construed. Hoffman v. Lloyd, No. C-12-0198 EMC, 2012 WL 4857799, at *3 (N.D. Cal. Oct. 11, 2012). Moreover, relief under Rule 60(b)(6) is reserved for cases in which there are extraordinary circumstances. See Lal v. State of Cal., 610 F.3d 518, 524 (9th Cir. 2010) (stating that Rule 60(b)(6) is used “sparingly as an equitable remedy to prevent manifest injustice” and explaining that to receive relief under the rule “a party must demonstrate ‘extraordinary circumstances which prevented or rendered him unable to prosecute [his case]'”).

         A change in law may sometimes “constitute[] a ground for re-opening a final judgment.” Styers v. Ryan, 632 Fed.Appx. 329, 331 (9th Cir. 2015); see also Henson v. Fid. Nat'l Fin., Inc., 943 F.3d 434, 444 (9th Cir. 2019) (“We have previously recognized that a change in the controlling law can- but does not always-provide a sufficient basis for granting relief under Rule 60(b)(6).”). However, “a subsequent change in the law cannot itself constitute an extraordinary circumstance sufficient to entitle the district court to vacate a final judgment on its own initiative.” Clifton v. Attorney Gen. of State of Cal., 997 F.2d 660, 665 (9th Cir. 1993). Instead, a district court must weigh several factors:

To decide whether a change in law constitutes a ground for reopening a final judgment, a court must find extraordinary circumstances and may consider whether (1) the intervening change in law overruled an otherwise settled legal precedent in petitioner's favor; (2) the petitioner was diligent in pursuing the issue; (3) the final judgment caused one or more of the parties to change his position in reliance on the judgment; (4) there is delay between the finality of the judgment and the motion for Rule 60(b)(6) relief; (5) there is a close connection between the original and intervening decisions at issue in the Rule 60(b) motion; and (6) relief from judgment would upset the principles of comity governing the interaction between coordinate sovereign judicial systems.

Styers, 632 Fed.Appx. at 331 (citing Phelps v. Alameida,569 F.3d 1120, 1135-40 (9th Cir.2009); see also Henson, 943 F.3d at 440 (finding it appropriate to apply the Phelps factors in a non-habeas context). The Ninth Circuit has also emphasized that, in addition to these factors, “courts must consider all of the relevant circumstances surrounding the specific motion before the court in ...


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