N OTE : This disposition is nonprecedential. 

# United States **Court of Appeals**  **for the Federal Circuit**

______________________ VALSPAR SOURCING, IN C., Appellant

v.

PPG INDUSTRIES, INC. , Appellee

______________________

2018

- 1462, 2018

- 1463, 2018

- 2164, 2018

- 2165

______________________ Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No s . 95/001,950, 95/001,951.

______________________
Decided: September 9, 2019

______________________
A NDREW B ALUCH , Smith Baluch LLP, Washington, DC, argued for appellant. Also represented by M ATTHEW A. S MITH , Menlo Park, CA.

E DWARD A NTHONY F IGG , Rothwell, Figg, Ernst & Manbeck, PC, Washington, DC, argued for appellee. Also represented by B RETT A LAN P OSTAL

.

______________________VALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 2

Before P ROST , Chief Judge

, N EWMAN and S TOLL , Circuit Judges.
Opinion for the c ourt filed by Circuit Judge S TOLL , in which Circuit Judge N EWMAN joins, and in which Chief Judge P ROST joins except as to part I of the Discussion section

. S TOLL , Circuit Judge

. Valspar Sourcing, Inc. appeals the Patent Trial and Appeal Board’s application of our mandate from a prior appeal, PPG Industries, Inc. v. Valspar Sourcing, Inc.

, 679 F. App ’ x 1002 (Fed. Cir. 2017) (“ Valspar I ”)

. Because the Board misinterpreted our manda te, we vacate the Board’s decision s and remand for the Director of the Patent Office and the Board to properly implement our mandate.

B ACKGROUND

I
In March 2012, PPG Industries, Inc. requested inter partes reexamination of two patents owned by Valspar, U.S. Patent Nos. 7,592,047 and 8,092,876. In both the

r eexam ination s, the e xaminer rejected all the original, amended, and new claims. Valspar appealed to the Board, which reversed all the e xaminer’s rejections. PPG then appeal ed the Board’s reversals to this c ourt , and t he parties briefed the merits.
During briefing in the original appeal, but before oral argument, Valspar separately sued PPG in the District of Minnesota for infringement of related patents. 1

1 Valspar originally filed in the District of Minnesota as Case No. 0:16

- cv

- 01429

- SRN

- SER, but the case was later transferred to the Western District of Pe nnsylvania. After filing suit, Valspar was acquired by The Sherwin

- Williams Company. The case continued as Sherwin

- WilliamsV ALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 3

During oral argumen t in the original appeal, the panel raised the issue of standing. T he panel specifically questioned whether PPG had standing when it initiated the appeal because PPG had not been sued by Valspar at that time. This court ordered the parties to submit supp lemental briefing on the standing issue

. V alspar included with its opening letter brief a unilateral covenant not to sue PPG on the two challenged patents. Valspar explained that it had decided not to includethe two challenged patents in the parallel district court litigation, and that the covenant was designed to simplify the issues for th is c ourt and “to keep the Minnesota litigation moving forward.” J

. A

. 4143.
The parties each submitted responsive letter briefs. PPG argued that Supreme Court precedent

— including U

nited S tates v. Munsingwear, Inc. , 340 U.S. 36 (1950)

, and its progeny

— requ ired this c ourt to vacate the Board’s decision s if it determined that the appeal was mooted by the
covenant . Valspar agreed that vacatur was an option

, but it argued that this c ourt could not vacate the Board’s decision s unless it determined PPG had stand ing to appeal in the first instance.
In February 2017, this c ourt issued a n opinion addressing the standing issue without reaching the merits. Valspar I , 679 F. App’x at 100 4

– 06

. We held that PPG had standing at the time it filed its notice of appeal

, but Valspar had subsequently mooted the appeal by “tardily and unilaterally” granting the covenant not to sue

. Id. at 1004

– 05. Based on the circumstances, we determined that “vacatur would be ‘most consonant to justice.’” Id. at 1006 (quoting U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship , 513 U.S.

Co. v. PPG Industries, Inc. , No. 2:17

- cv

- 01023

- JFC (W.D. Pa.)

.VALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 4

18, 24 (1994)). The opinion concluded with a statement that

The Final Decisi ons of the PTAB in Reexaminations Nos. 95/001,950 and 95/001,951 are VACATED, and appeals No. 16

- 1406 and 16

- 1409 are DISMISSED.

Id. The opinion did not expressly remand to the Board totake any further action, including dismissal of the underlying proc eedings before the e xaminer

. II
On receiving our opinion and mandate from Valspar I

, the Board ordered the proceedings remanded to the e xaminer with instructions to issue reexamination certificates rejecting all the challenged claims. Valspar petitioned t he Chief Judge of the Board to revise the order s , arguing that the Board had misinterpreted our mandate. Valspar argued that this c ourt’s dismissal and vacatur without remand effectively ended the case, and the only appropriate action for the Patent Offic e would be an administrative termination of the r eexam ination s without any action on the merits.

T he Board rejected Valspar’s arguments, holding that the applicable statute, regulations, and procedures required the challenged result

. T he Board reasoned th at our mandate from Valspar I vacated the Board’s revers al of the

e xaminer

, but le ft the underlying o ffice action s in place

— i.e.

, the e xaminer’s determination s that all the claims were in valid. T he Board further held that the applicable statute and procedures required the e xaminer to issue reexamination certificate s because the appeal had terminated. The Board reasoned that the issuance of a reexamination certificate is required by law and, becau se it is a ministerial act, would not constitute further prosecution on the merits. The Board pointed out that i f Valspar had any concerns or disagreement with our mandate, then it should haveV ALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 5

requested rehearing from this c ourt when the original opinion issued. Valspar appealed the Board’s d ecision s to this
court. 2

D ISCUSSIONAt the outset, we briefly address our jurisdiction to review the Board’s d ecision s interpreting this c ourt’s mandate from Valspar I

. T he A merica I nvents A ct provides the Federal Circuit with jurisdiction over “any decision” of the Board with respect to inter partes reexaminations. See Leahy

– Smith America Invents Act (“AIA”), Pub. L. 112

– 29 § 7(e) , 125 Stat. 284, 3 15 (2011). 3 T he Board’s d ecision s are final decision s because they provide the Board’s final determination of the scope of this court’s mandate and makeclear that “no[] further prosecution on the merits” will occur in the r eexaminations. See J.A. 12, 26.

I

We now turn to the merits. Munsingwear and its progeny set forth the proper protocol for dealing with cases that are mooted while on appeal. In Munsingwear , the Supreme Court recognized that “the duty of the appellate court” is to

2 After the Board issued its decisions on Valspar’s petition s , Valspar filed requests for reconsideration. The Board dismissed Valspar’s requests for lack of jurisdiction because Valspar filed the instant appeal while its requests for reconsideration were still pending before the Board. Nevertheless, the Board explained why it would have denied the requests for reconsideration if it had jurisdiction. The Board’s rationale is essentially the same as that of the decisions that we review here, and for the same reasons described herein, we also vacate the Boa rd’s decisions on reconsideration.

3 In general, the AIA is codified in various parts of Title 35 of the U.S. Code. Section 7(e) of the AIA, however, is not codified; it is found o n page 3 15 of 125 Stat.VALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 6

“reverse or vacate the judgment below and remand with a direction to dismiss” when a civil case becomes moot while pending appellate review of the merits. 340 U.S. at 39

– 40 (first quoting Duke Power Co. v. Greenwood Cty

. , 299 U.S. 259, 267 (1936)) . According to the Court, this procedure “clears the path for future relitigation of the issues between the parties

, ” id. at 40, and prevents “a judgment, unreviewable because of mootness, from spawning any legal consequences , ” i d. at 41. T hrough this approach

, “the rights of all part ies are preserved” and “none is prejudiced by a decision which in the statutory scheme was only preliminary.” Id. at 40. 4

T he Supreme Court later explained in Bancorp that the Munsingwear approach applies to situations where cases are mooted by happenstance, or

, as particularly relevant here

, by “ the unilateral action of the party who prevailed in the lower court. ” Bancorp , 513 U.S. at 23. The Court emphasized that vacatur (as opposed to remand) is the operative action that “clears the path for future relitigationof the issues between the parties and eliminates a judgment.” Id. at 22 (quoting Munsingwear , 340 U.S. at 40). The Court also underscored that

, when a case is mooted on appeal

, it “may make such disposition of the whole case as justice may require

. ” Id. at 21

– 22 (emphasis added) (quoting Walling v. James V. Reuter, Co. , 321 U.S. 671, 677 (1944) )

. Indeed, the Bancorp Court relied on equitable principles when it decline d to ext end the Munsingwear approach to situations in which the parties had settled. See i d. at 23

– 2 9

. The Court reasoned that vacatur is an equitable remedy, and the losing party forfeits its entitlement

4 The Supreme Court later acknowledged this particu lar passage in Munsingwear as dictum, Bancorp , 513 U.S.
at 23 , but numerous opinions have since confirmed this approach and refined it further.V ALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 7

to equitable relief when it voluntarily surrenders its claim. Id. at 25

– 26.

The Supreme Court has confirmed that the Munsingwear approach also applies to unreviewed administrative orders. See A. L. Mechling Barge Lines, Inc. v. U nited S tates , 368 U.S. 324, 329 (1961). In Mechling , the appellants acknowledged that changed circumstances had rendered the challenged administrative order devoid of any practical effect. Id. at 328. But the appellants remained

concern ed that the order, if not vacated, would have a collateral effect on subsequent litigation. Id. at 328

– 29. The Court agreed and modif ied the district court’s dismissal to include a remand to the agency with instructions to vacate the challenged administrative order. Id. at 331. In doing so, the Court reiterated its view that “ a party should not be concluded in subsequent litigation by a District Court ’ s resolution of issues, when appellate review of the judgment incorporating that resolution, otherwise available as of right, fails because of intervening mootness .” Id. at 329 (citing Munsingwear , 340 U.S. at 36).

T he Supreme Court has since repeatedly vacated decisions of appellate courts and given instructions for vacatur of the underlying administrative action. See, e.g.

, NTA Graphics, Inc. v. NLRB , 511 U.S. 1124 , 1124 (1994) (vacating the appellate court’s judgment and remanding “with instructions to remand the case to the [agency] to vacate the Board’s order”); Bd. of Governors of the Fed. Reserve Sys. v. Sec. Bancorp , 454 U.S. 1118 , 1118 (1981) (vacating the appellate court’s judgment and remanding “with instructions to remand the case to the [age ncy] to vacate the administrative decision”). The Court recently applied Munsingwear to vacate this court’s judgment and remand a mooted Covered Business Method review to the Patent Trial and Appeal Board for vacatur of the Board’s order

. PNC Bank Nat. A ss’n v. Secure Axcess, LLC , 138 S. Ct. 1982 , 1982 (2018). This court has also repeatedly relied on Munsingwear to vacate agency actions. See, e.g.

, Ebanks v.VALSPAR SOURCING , INC

. v. PPG INDUS ., INC

. 8

Shulkin , 877 F.3d 1037 , 1040 ( Fed. Cir. 2017) ; LSI Corp. v. Int ’ l Trade Com m ’ n , 401 F. App ’ x 545 , 546

– 47 ( Fed. Cir. 2010) ; DiOrio v. Nicholson , 216 F. App ’ x 974 , 975 ( Fed. Cir. 2007) ; Lerman v. Nicholson , 125 F. App ’ x 997 , 997 ( Fed. Cir. 2005)

. Thus, Munsingwear and its progeny instruct us to prevent appellants from being forced to acquiesce in a judgment that they can no longer challenge on the merits. They further instruct us to protect all parties from the collateral effects of a case that is mooted before a n appellate determination on the merits. Accordingly

, our duty is to use our vacatur powers to dispose of the whole case

, wip ing the slate clean for future relitigation of the issues without prejudice to either party

. PPG would have us go further, leav ing in place certain adverse determinations from the proceedings below b ecause Valspar “ should suffer the consequences ” of its choice to unilaterally moot the original appeal

. Oral Arg.
at 37:18

– 41, http://oralarguments.cafc.uscourts.gov/ d efault.aspx?fl=2018

- 1462.mp3

. In support of its view, PPG points to Walling , a pre

- Munsingwear case in which the Supreme Court vacated an appellate reversal but left the district court’s injunction in place. 321 U.S. at 671

. Walling is inapposite because there the Court expressly held that the case was not moot. See i d. at 673

– 74. Although the Court could no longer rule on the merits because thesole respondent corporation had been unilaterally dissolved, the Court explained that the challenged injunction remained enforceable against other individuals not presently before the Court. Id. at 674

– 7 6

. For the reasons set forth above, Munsingwear and its progeny do not require the result that PPG seeks . Nor did our opinion and mandate in Valspar I order such a result.

II

The Board misint erpreted our opinion and mandate from Valspar I

. “Upon its determination the [FederalV ALSPAR SOURCING , INC

. v. PPG INDUS ., INC

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Circuit] shall issue to the Director its mandate and opinion,which shall be entered of record in the Patent and Trademark Office and shall govern the further proceedings in the

case .” 35 U.S.C. § 144 (emphasis added). “[B]oth the letter and the spirit ” must be considered in interpreting the scope of our mandate. Engel Indus., Inc. v. Lockformer Co.

, 166 F.3d 1379, 1383 (Fed. Cir. 1999) (citing Quern v. Jordan , 440 U.S. 332, 347 n.18 (1979))

. “ [T] he opinion delivered by this court at the time of renderi ng its decree maybe consulted to ascertain what was intended by its mandate

. ” Laitram Corp. v. NEC Corp. , 115 F.3d 947, 952 (Fed. Cir. 1997) (quoting In re Sanford Fork & Tool Co.

, 160 U.S. 247, 256 (1895) ). “ Unless remanded by this court, all issues wi thin the scope of the appealed judgment aredeemed incorporated within the mandate and thus are precluded from further adjudication.” Engel , 166 F.3d at 1383.We review de novo the Board’s interpretation of our mandate. Laitram , 115 F.3d at 950

– 51.
In these circumstances, t he Board’s r einstat ement of the examiner’s rejection s and effective cancel ation of the challenged claims stands contrary to the very purpose of ordering vacat ur following mootness on appeal. See Munsingwear , 340 U.S. at 39

– 41 (endorsing procedure that

“ clear s the path for future relitigation of the issues between the parties ”). Vacatur is an equitable remedy

. Bancorp

, 513 U.S. at 25. T he Board ’ s interpretation of our mandate produced an inequitable result. The ordered va catur wasdesigned to protect the challenger from being forced to acquiesce to an unreviewable adverse ruling by the Board. But by effectively canceling all the challenged claims, the Board’s approach unfairly convert ed the vacatur shield into a sword for the challenger. That is an inequitable result

— especially here, where the Board previously determined that the challenged claims are not invalid.
Had we intended such an incongruous result, we would have made that intent explicit in our opinion. The Boar d should have interpreted the scope of the vacatur based onVALSPAR SOURCING , INC

. v. PPG INDUS ., INC

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the context provided by this c ourt’s opinion. See Laitram

, 115 F.3d at 952 (consult ing opinion to ascertain inten ded effect of mandate). Our opinion did not meaningfully distinguish between the Board’s decision s and the e xaminer’s decision s

. Neither party asked this court for the relief theBoard understood this court to have granted. Furthermore, the cases cited in this c ourt’s opinion and by the parties stand for the proposition o f vacating the whole case below, not a piecemeal approach. See, e.g.

, Bancorp

, 513 U.S. at 21

. With this context, it was clear that this

c ourt’s intent was to nullify the entire inter partes reexamination without any collateral effect on other litigation

. See Munsingwear , 340 U.S. at 4 1 ( endorsing procedure that prevents “a judgment, unreviewable because of mootness, from spawning any legal consequences” ).
PPG argues that had we intended to vacate the entire Patent Office proceeding, we would have had to “vacate the judgment below and remand with a direction to dismiss

, ” as the Supreme Court stated in Munsingwear

. See id

. at 39. We do not agree. See Banco rp, 513 U.S. at 22 (“[ V ] acatur ‘ clears the path for future relitigation of the issues between the parties and eliminates a judgment .’ ” (emphasis added) (quoting Munsingwear , 340 U.S. at 40) ) ; Laitram

, 115 F.3d at 951 (“[W]hile this court could have remanded with explicit instructions

. . . the failure to do so is not dispositive .”)

. Other appellate courts have used similar language to ours to dispose of the entire proceeding without remand

. See, e.g.

, Sands v. NLRB , 825 F.3d 778, 781, 786 (D.C. Cir. 2016) ( dismiss ing the petition for review as moot and vacat ing the agency’s order without remand to address underlying ALJ determination); Beethoven.com LLC v. Librarian of Cong. , 394 F.3d 939, 941

– 42, 954 (D.C. Cir. 2005) (vacating “ the Li brarian’s determination of the effective date for payment as moot,” without remand to address underlying panel proceedings ); Hollister Ranch Owners’ Ass’n v. FERC , 759 F.2d 898, 899

– 900, 903 (D.C. Cir. 1985)V ALSPAR SOURCING , INC

. v. PPG INDUS ., INC

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( vacat ing agency order as moot without remand to address underlying ALJ determination)

. In any event, for the reasons above, the Patent Office erred in its application of our mandate . We vacated but did not remand for any further adjudication by the Patent Office

. See Engel , 166 F.3d at 1383 ( holding that issues within the scope of appeal but not remanded are precluded from further adjudication). To the extent the Patent Office interprets our mandate to require further action, such action should be limited to concluding the r eexamination s by

v acating the proceeding s without any further adjudication, and without the issuance of any reexamination certificate. See M anual of P atent E xamining P rocedure § 2694(A) (9th ed. 2018) (“The prosecution of the [inter partes] reexamination proceeding may be brought to an end, and the proceeding itself concluded

, by

. . . vacating the examination proceeding.

. . . (In these instances , no reexamination certificate is issued).”)

. C ONCLUSION We have reviewed PPG’s remaining arguments and find them unpersuasive. Accordingly, w e vacate the Board’s d ecision s and remand for the Director and the Board to properly implement our mandate in accordance with the principles set forth above

. VACATED AND REMANDED

C OSTS

Costs to appellant

.