The U.S. Court of Appeals for the Federal Circuit has affirmed a come-from-behind win for Sprint Spectrum L.P. that Sidley Austin partner Carter Phillips described as unlike any other he’s seen in nearly 40 years of practice.
And the court laid part of the blame squarely on Sprint opponent Prism Technologies LLC and its own litigation position.
Sprint was hit with a $32 million judgment in 2015 after a jury found it had infringed two of Prism’s patents on managing information over an “untrusted” network. The Federal Circuit affirmed the award in March 2017 in a 29-page opinion.
Meanwhile, Prism took another case to trial involving the same patents against T-Mobile and Gibson, Dunn & Crutcher. Unlike Sprint, T-Mobile challenged the eligibility of the patents under Section 101. On appeal, the Federal Circuit agreed in June 2017 that “the patents-in-suit” were invalid.
Sprint had been trying to get the U.S. Supreme Court to review its case. But with the patents now declared dead, Sprint instead filed a Rule 60(b) motion asking U.S. District Judge Lyle Strom of Nebraska to reopen its case. Strom did and, over Prism’s strenuous objection, threw out the $32 million judgment.
Back before the Federal Circuit last month, Prism attorney Paul Andre of Kramer Levin Neftalis & Frankel argued that Strom never should have reopened the case. “The case was done. This case was past finality,” Andre told the court. “You can’t go back in time once a case has gotten to finality.”
He also argued that Prism had dropped two of the four patent claims that Sprint was found to have infringed before it went to trial against T-Mobile.
On Friday, the Federal Circuit ruled in Prism Technologies v. Sprint Spectrum that the Sprint judgment had not yet been final. And while Prism may indeed have dropped some claims prior to the T-Mobile trial, that didn’t change that T-Mobile had counterclaimed for invalidity against all of the asserted claims at summary judgment.
“At the appellate level, both parties, and this court, effectively treated the Section 101 challenge as a counterclaim: the Section 101 discussion clearly extended beyond the tried claims,” Judge Richard Taranto wrote.
“Of particular note,” Taranto added, was an argument Prism itself had made for patent eligibility. “Prism, in making that argument, was addressing claims other than the six that were tried,” he concluded.
Judges Pauline Newman and Raymond Chen concurred.
They agreed with Sidley’s Phillips that there’s “a strong federal patent policy against enforcing an unexecuted judgment of patent liability” when the the patent claims underlying the judgment have been held invalid.