Court Refuses to Vacate Markman Ruling Following Settlement

In the case Unigen Pharmaceuticals v. Walgreen Co. (07-471 RAJ), which is actually a consolidation of three cases brought by plaintiff Unigen, asserting infringement of US Patent No. 7,192,611 (for more on the consolidation, click here), the parties recently settled and approached the court jointly to dismiss the case and to also vacate a prior claims construction ruling.

The claims of the '611 patent are directed to a method for treating osteoarthritis using what is known as a Free-B-Ring flavonoid, which includes baicalein. The three defendants are Walgreens, Target, and Perrigo Company of South Carolina Inc. On March 18, 2009, Judge Jones construed the claims of the '611 to require inter alia: "that the patient recognize that he has a 'COX-2 and 5-LO mediated inflammatory condition' and to take the claimed composition for treating that condition by direct inhibition of COX-2 and 5-LO." This effectively required that the "Host Must Intend to Take the Extracts to Treat a Condition as Described in the Preamble." In other words, just proving that the extracts were taken, and that they exhibited the function as claimed, was not enough to show direct infringement. The court further concluded that "each of the preambles of the disputed claims contains a limitation restricting the claimed method to enzyme inhibition of an enzyme mediated disease (e.g., osteoarthritis in ‘611 Claims 1 and 8), condition (e.g., inflammatory condition in ‘868 Claims 1 and 4), or physical limitation (e.g., limited physical function, flexibility, and mobility in ‘611 Claim 15)."

In his order refusing to vacate the Markman ruling, Judge Jones concluded as follows:

Despite begin unable to point out why vacatur would be valuable, the parties want it. It would be more accurate, of course, to say that Plaintiff wants it. No Defendant has any stake in the order being vacated, as they are no doubt shielded from future litigation over the patents-in-suit by virtue of their settlement with Plaintiff. There is something (or perhaps many somethings) in the claim construction order that Plaintiff does not like, and vacating it is apparently preferable to Plaintiff. But again, the court has no idea what underlies Plaintiff’s belief. Whether the court vacates the order or not, it remains in the public record, and has as much persuasive effect as any court or party wishes to accord it. Vacatur does not make an order disappear. See Cisco, 590 F. Supp. 2d at 831 (“[The claim construction order] is now on the internet, available to anyone with a computer.”). If vacating the claim construction order is a nugatory act, then the court declines to take it if for no other reason than it does not wish to encourage parties to file motions requesting that the court issue meaningless orders.

If, on the other hand, vacating the claim construction order has some impact, either in terms of the slight possibility that a court will give it preclusive effect, or in terms of its value as a persuasive precedent, the equities counsel against vacating it. Only Plaintiff has an interest in vacating the order, whereas a larger set of potentially interested third parties has an interest in it as a precedent. The court’s orders “are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur.” United States Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18, 26 (1994) (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp., 510 U.S. 27, 40 (1993)). Because “[j]udicial precedents are presumptively correct and valuable to the legal community as a whole,” id., vacating them in the service of a single litigant is generally inadvisable.

Moreover, the court cannot overlook the investment of judicial (and thus public) resources in the claim construction order. See, e.g., Tumulty v. FedEx Ground Package Sys., Inc., No. C04-1425P, 2007 U.S. Dist. LEXIS 20429 (W.D. Wash. Mar. 22, 2007) (declining to impliedly undo decision reached after intensive litigation by vacating judgment). Patent cases, perhaps more than any other genre of litigation, strain the resources of district courts. The claim construction process in particular is burdensome, as the parties almost invariably flood the court with lengthy briefs and exhibits, and the court’s analysis of disputed claim terms is labor-intensive, to say the least. In this case, the court reviewed the parties’ voluminous claim construction materials, held a Markman hearing, and issued a lengthy (by this court’s standards) claim construction order. In doing so, it diverted focus from hundreds of other cases on its docket. Vacating a claim construction order deprives the public of whatever benefit inures from the court’s investment in resolving patent cases. Zinus, Inc. v. Simmons Bedding Co., No. C 07-3012PVT, 2008 U.S. Dist. LEXIS 33359, at *3-6 (N. D. Cal. Apr. 23, 2008) (declining to vacate claim construction order). As the Zinus court bluntly put it: The public paid for this use of court resources through its tax dollars. Vacatur would render that expenditure a waste, and the parties cite no public interest that would be served by vacatur which would justify the waste of public funds.
Id. at *6.

Finally, the court’s declining to vacate its order will not discourage settlement. It will not discourage settlement in this case because the parties’ settlement is not conditioned on vacatur. As to other litigants, vacating the claim construction order would set a dangerous precedent. This court is not a place for a patent holder to “test drive” its patent. A patent holder who asserts its patent and proceeds to claim construction must be prepared for the possibility of an unfavorable construction, and must not believe that vacatur will serve as its get-out-of-jail-free card. Otherwise, there is nothing to discourage a patent holder from refusing to settle questionable patent claims prior to the expensive claim construction process. Id. at *5 (citing United States Bancorp, 513 U.S. at 28). Indeed, in this case, the parties filed numerous motions before claim construction, leading to several other interlocutory orders. The prospect of a claim construction that will not be erased at the request of the parties can only discourage unnecessary litigation.

For all of these reasons, the court finds that the equities weigh against vacating its claim construction order. The court therefore DENIES the parties’ motion to vacate

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