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

______________________ EPLUS, INC., Plaintiff

- Appellee,

v.

LAWSON SOFTWARE, INC ., Defendant

- Appellant.

______________________

2013

- 1506, - 1587

______________________ Appeals from the United States District Court for the Eastern District of Virginia in No. 09

- CV

- 0620, Senior Judge Robert E. Payne.

______________________
Decided: July 25, 2014

______________________

M ICHAEL G. S TRAPP , Goodwin Procter LLP, of Boston, Massachusetts , argued for plaintiff

- appellee. With him on the brief were J ENNIFER A. A LBERT and D AVID M. Y OUNG , of Washing ton, DC

.

M ARK A. P ERRY , Gibson, Dunn & Crutcher, LLP, of Washington, DC, argued for defendant

- appellant. With him on the brief were B LAINE H. E VANSON ; and J OSH A. K REVITT , D ANIEL J. T HOMASCH , R ICHARD W. M ARK , of New York, New York. Of counsel on the brief were D ONALD R. D UNNER and E RIKA H. A RNER , Finnegan, Henderson, Farabow, Garrett & Dunner LLP, of Washington, DC.EPLUS , INC

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______________________

Before, P ROST , Chief Judge

, ∗ D YK and O’M ALLEY , Circuit Judges. Opinion for the court filed by Circuit Judge D YK

. Dissenting opinion filed by Circuit Judge O’Malley

. D YK , Circuit Judge

. ePlus, Inc. (“ePlus”), the assign ee of U.S. Patent No s

. 6,023,683 (the “’683 patent”) and 6,505,172 (the “’172 patent”)

, sued Lawson Software, Inc. (“Lawson”) for infring ement. The district court found two of the asserted system claims and three of the asserted method claims not invalid , and a jury found that Lawson infringed those claims

. In an earlier appeal, we reversed in part on the ground that the system claims were invalid and that two of the asserted method claims were not in fri nged. We affirmed only the infringement verdict as to one method cl a im

— claim 26

— of the ’683 patent. We remand ed to the district court to make necessary modifications to the injunction

. On remand, the district court modified the injunc tion in one respect and found Lawson in civil contempt for violating th e injunction

. Lawson appealed both the i njunction and contempt order. During the pendency of Lawson’s appeals, t he Un it ed States Patent and Trad emark Office (“PTO”) completed a reexamination of the ’683 pa tent and determined that claim 26 was invalid

. In a separate appeal, w e affirmed the PTO’s invalidity determination

, and the PTO cancelled claim 26

. We now vacate th e injunction and contempt order because both

∗ Sharon Prost assumed the position of Chief Judge on May 3 1, 2014.EPLUS , INC

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were based on claim 26, which the PTO has now ca ncelled.

B ACKGROUND
This case raises two issues. The first is whether an i njunction can continue after t he PTO has cancelled the only claim on which the injunction was based . The second is whether civil contempt remedies based on the violation of an injunction are appropriate when the injunction has been overturned on direct appeal.

I

ePlus owns the ’172 patent and the ’683 patent, which both relate to methods and systems for electronic sour cing. See ePlus v. Lawson , 700 F.3d 509, 512 (Fed. Cir. 2012) (“ ePlus I ”). T he claimed method s and system s ar e directed to using electronic database s to search for product information and ordering selected prod ucts from third

- party vendors. The only claim now at issue in this appeal, claim 26 of the ’683 patent

, recites a “method comprising the steps of”: “ maintaining at least two pro duct catalogs on a database, ” “ selecting product catalogs to search, ” “ searching for matching items ,” “ building a requisition ,” “ processing the requisition to generate one or

more pur chase orders, ” and “ determining whether a selected matching item is available in inventory.” ’683 patent col. 26 l. 61 to col. 27 l. 7. In 2009, ePlus sued Lawson for infringement of the ’683 patent and the ’172 patent in the Eastern District of Virginia. 1 Lawson sells computer software to instit utional customers. Its products are modular

— customers

1 ePlus also alleged infringement of certain claims of U.S. Patent No. 6,055,516

. The jury found none of those claims infringed

, and ePlus did not appeal that aspect of the jury verdict

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decide which individual software components to purchase based on their needs

. As a result, different customers use different combinations, or configurations, of software modules. The different configurations generally let users search for, select, and order products electronically, but the nature and extent of those capabilities vary depending on the particular modules a customer selects. When ePlus sued Laws on , the basic software component (“Core Pr ocurement”) allowed users to load products into an internal database (“Item Master” ), search that database for pro ducts, create a requisition listing multiple selected pro ducts, and generate individual purchase orders to transmit to vendors

. Requisition Self

- Service (“RSS”) was a module that provided a user interface for the Core Procurement unit. T he Procurement Punchout module (“Punchout”) let

users search third

- party vendors’ databases for products and put those vendors’ products on requisitions along with products stored in the internal Item Master dat abase

. Given the modular nature of Lawson’s products, ePlus asserted different patent claims against five distinct configurations of software modules (“Configuratio ns 1

– 5”)

. With respect to the asserted cla ims of the ’683 patent and the ’ 172 patent, t he jury found that three of the five accused configurations infringed . C onfigurations 3 and 5 were found to infringe two system claims ( claim 1 of the ’172 patent and claim 3 of the ’683 patent ) and three method claims (claims 26, 28, and 29 of the ’683 patent ). Configura tion 2 was found to infringe one system claim ( claim 1 of the ’172 patent ). Configurations 1 and 4 were found not to infringe any of the claims asserted against them

. Pursuant to the jury verdict s , t he district court permanently enjoined Lawson from directly or indirectly making, using, offering to sell, or selling within the United States or impor t-EPLUS , INC

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ing into the United States any of the [adjudged i nfringing] product configurations and/or install ation, implementation, design, configuration, consulting, upgrade, maintenance and support and training and other related and associated se rvices and any colorable variations thereof (the “I nfringing Products and Services”). J.A. 4263. The court defined the “Infringing Products and Services” to include the three software configurations (Configurations 2, 3, and 5) adjudged infringing by the jury . T he c ourt also enjoined Lawson from “[c]irculating, publishing or disseminat ing within the United States any literature or information that encourages the use, sale or importation of any of the Infringing Products and Se rvices ,” and from “[a]iding and abetting, actively inducing, or in any way contributing to the making , use, sale or importation of any of the Infringing Products and Se rvices.” J.A. 4264. Lawson appealed

. On this first appeal, we determined that the two asserted system claims (claim 1 of the ’172 patent and claim 3 of the ’683 patent) were invalid, and that two of the three asserted method claims (claims 28 and 29 of the ’683 patent) were not infringed. We affirmed only the infringement finding as to method claim 26 . O nly C onf i gurations 3 and 5 were found to infringe that claim. As a result of our holding on appeal, C onfigura tion 2 was no longer infringing

. We remanded “for the district court to consider what changes are required to the terms of the injunction, consistent with this opinion.” ePlus I , 700 F.3d at 523. After our ruling, the district court ordered the parties to file statements of position on the effect of our dec ision on the injunction

. These were filed before Lawson’s Rule 60(b) motion discussed below. Most importantly, Lawson challenged the very provis i ons of the injunction that led to the contempt sanctions sought by ePlus

— namely, the barEPLUS , INC

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against sales of particular software products. Originally, these provisions concerning software sales were supported by the jury’s finding s of infringement of the system claims (claim 1 of the ’172 patent and claim 3 of the ’683 p atent). 2 After our decision vacated those findings, Lawson argued that infringement of a single method claim (claim 26 of the ’683 patent) could n ot support the injunction against product sales (and hence, contempt sanctions based on such sale s) and that our opinion distinguished “sales” of software from “installation” and other services provided to customers. 3 This court upheld the finding of induc ed infringement of claim 26 not based on sales, but based on Lawson ’s providing custom er services, including software installation, demonstrations, and maintenance

. 4 Lawson also urged that, in light of this court’s narrowing

2 In sustaining the jury verdict, the district court relied on the determination that “Lawson actively induces its customers’ direct infringement by selling and offering to sell the infringing systems with the intent that its
custom ers use those systems in an infringing manner.” ePlus, Inc. v. Lawson Software, Inc. , No. 3:09

- cv

- 620, 2011 WL 3584313, at *4 (E.D.V.A., Aug. 12, 2011). We did not sustain the finding of infringement of the system claims or the findings of direct and induc ed infringement based on the sales of the systems.

3 We recognized that “[i]n addition to selling pr ocurement software, Lawson provides services to custo mers who purchase its products. These services may include installation and maintenance of the products.” ePlus I

, 700 F.3d at 5 14.

4 We relied on “evidence that Lawson installed, maintained, demonstrated and managed the infringing systems for its customers” to conclude that a reasonable jury could “inf er that Lawson performed the steps of claim 26” and “induced its customers to infringe claim 26.” Id. at 521.EPLUS , INC

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of the jury’s infringement findings, the enjoined software

pro d ucts were capable of significant non

- infringing uses and sales of such software should not be enjoined

. Add itiona l ly, Lawson argued that under eBay Inc. v. Me rcExchange, L.L.C. , 547 U.S. 388 (2006), the bal ancing of equities no longer supported an y injunction. ePlus argued that the only modification required was the removal of Configur a tion 2 from the list of enjoined products. Lawson thereaf ter filed a Rule 60(b) motion to modify the injun ction.

The district court agreed with ePlus ’s position and o rdered that the injunction be “modified by deleting f rom its scope the product

. . . colloquially known as ‘Configuration 2,’” and “remain in effect in all other respects.” J.A. 1.

On remand, in addition to reconsidering the injun ction, the district court also instituted contempt proceedings

. Following the jury verdicts, Lawson had decommissioned and stopped selling products with RSS

, the user interface module for Core Procurement , the basic building block of Lawson’s system

. Lawson had also redesigned its software in two pertinent respects

. First, it redesigned Configurations 3, and 5 by developing a new module

, Requisi tion Center (“RQC”) to replace the RSS user interface module

. As redesigned, RQC prevent ed a user from simultaneously putting items from both the inter nal Item Master database and a third

- party vendor’s database (accessible via Punchout) on the same requis ition. Second, Lawson redesigned Configurations 3 and 5 by developing downloadable software (“Patch 1”) that limited the functionality of Punchout in Configur ations 3 and 5. As modified by Patch 1, those configurations no longer allowed users to put items from multiple third

party vendors on the same requisition when using Pu nchout . As a result, users could only build requisitions with products from the internal Item Master database or from a single third

- party database

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ePlus alleged that Lawson was in contempt for vio la ting the injunction with respect to the redesigned software

, arguing that the changes d id not make the software more than colorably different from Configurations 3 and 5 , and that the redesign ed software in fringe d claim 26

. Lawson argued that it was not violating the injunction because the redesigned software was more than color ably different from the originally accused software and that ePlus could not show that the redesigned software continued to i nfringe claim 26. The court held Lawson in contempt for violating the injunction , finding that the redesigned products were no more than colorably different and i nfringed

. T he court ordered Lawson to pay a compensatory fine of $18,167,950 and coercive daily fines of $62,362 until it could show compliance with the injunction. It declined to award enhanced damages or attorneys’ fees. La wson appealed the district court’s modified injunction and contempt order. We stayed the accumulation of fines during the pendency of the appeal s.
W hile Lawson’s appeals were pending, in another

case, we affirmed the PTO’s reexamination decision invalidating claim 26 of the ’683 patent

. In re ePlus, Inc.

, 540 Fed App’x 998 (Fed. Cir. 2013) (per curiam) . O ur mandate issued, and the PTO cancelled claim 26 in April 2014

. We have jurisdiction over the appeal of the injun ction pursuant to 28 U.S.C. § 1292 (a)(1) & (c)(1) and over the ap peal of the contempt order pursuant to 28 U.S.C § 1291

. We re view a grant, denial, or modification of an injunction in a patent case for abuse of discretion. Int’l Rectifier Corp. v. Samsung Elecs. Co.

, 361 F.3d 1355, 1359 (Fed. Cir. 2004) (citing Carborundum Co. v. Molten Metal Equip. Innovations, Inc. , 72 F.3d 872, 881 (Fed. Cir. 1995)). We review a contempt order based on an injun ction against infringement for abuse of discretion. Merial L td. v. Cipla Ltd. , 681 F.3d 1283, 1292 (Fed. Cir. 2012)EPLUS , INC

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(citing Fujifilm Corp. v. Benun , 605 F.3d 1366, 1370 (Fed. Cir. 2010) ).

D ISCUSSION

I . Injunction The first question is whether the distri ct court ’s mod ified injunction against Lawson must be set aside now that th e PTO has can celled the patent claim on which it is based . It is well established that a n injunction must be set aside when the legal basis for it has ceased to exist. In Pennsylvania v. Wheeling & Belmont Bridge Co.

, 54 U.S. (13 How.) 518 , 577

– 79 (1851), the Supreme Court a pproved an injunction sought by the state of Pennsylvania, ordering the removal of a bridge across the Ohio River because it illegally obstructed navigation

. Congress subsequently enacted a law authorizing the bridge

. Pen nsylvania v. Wheeling & Belmont Bridge Co.

, 59 U.S. (18 How.) 421, 422 (1855) (“ Wheeling Bridge ”)

. Pennsyl vania requested that the Court execute its decree ordering the abatement of the bridge and punish the defendants for contempt for violating the Court’s order by fa iling to remove the bridge

. Id. at 427

. The Court denied the motions and instead dissolved t he injunction because “there [wa] s no longer any interference with the enjo yment of the public right inconsistent with law.” Id. a t 432. The Court held that an injunction “is executory, a conti nuing decree . . .

. If

, in the mean [] time, since the decree, this right has been modified by t he competent author ity

. . . it is quite plain the decree of the court cannot be enforced.” Id

. at 431

– 32

. Because the bridge was no longer unlawful, the Court had to set aside the previous order rather than enforce it.

“ The principles of the Wheeling Bridge case have r epeatedly been followed” by the Supreme Court as well as

“ by lower federal and state courts .” Sys. Fed’n No. 91, R y. Emp s’ Dep’t., AFL

- CIO v. Wright

, 364 U.S. 642, 65 0–52 (1961) ( holding that it is an abuse of discretion not toEPLUS , INC

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modify an injunction when, because of a change in the law, “[t]he parties have no power to require of the court continuing enforcement of righ ts the statute no longer gives ”) ; see also, e.g.

, Cobell v. Norton , 392 F.3d 461, 467 (D.C. Cir. 2004) (vacating injunction where subsequently enacted legislation relieved executive department of duties required by injunction because “an injunction may be a final judgment for purposes of appeal, [but] it is not the last word of the judicial department because any provision of prospective relief is subject to the continuing supervisory jurisdiction of the court, and therefore may be altered according t o subs equent changes in the law ” (quoting Nat’ l Coal. to Save Our Mall v. Norton , 269 F.3d 1092, 1096

– 97 (D.C. Cir. 2001) (internal quotation marks omitted in original ) ( quoting Miller v. French

, 530 U.S. 327, 347 (2000) )) ); Biodiversity Assocs. v. Cables , 357 F .3d 1152, 11 69

– 70 (10th Cir. 2004) (injunction arising from settlement agreement “must give way” because it was inconsistent with new legislation); Imprisoned Citizens Union v. Ridge , 169 F.3d 178, 184 (3rd Cir. 1999) (“ Whee ling Bridge therefore stands for the proposition that when Congress changes the law underlying a judgment awar ding prospective injunctive relief, the judgment becomes void to the extent that it is in consistent with the amended law .”).
Those principles reflect the fact that “ [a] continuing decree of injunction directed to events to come is subject always to adaptation as ev ents may shape the need. . . . [A] court does not abdicate its power to revoke or modify its mandate, if satisfied that what it has been doing has been turned through changing circumstances into an instrument of wrong.” U nited States v. Swift & Co. , 286 U.S. 106, 11 4–15 (1932); see also Salazar v. Buono , 559 U.S. 700, 718 (2010) ( “Where legislative action has undermined the basis upon which relief has previou sly been granted, a court must consider whether the orig inal finding of wrongdoing continues to jus tify the court'sEPLUS , INC

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intervention.” ( citing Wright , 364 U.S. at 648

– 49 and Wheeling Bridge , 59 U.S. at 430

– 32 ) ). Our court has applied these principles to an injun ction barring infringement of patents later found to be invalid

. Mendenhall v. Barber

- Greene Co. , 26 F.3d 1573, 158 4 (Fed. Cir. 1994)

. In Mendenhall

, we reviewed injun ctions based on findings of patent infringement. Id. at 1576. While those injunctions were pending on appeal, the same patents were held invalid in another case in our
court

. Id. at 15 76–77

. We held that the injunctions had to be reversed following the final judgment of patent invali dity. Id. at 1584. We recognized that upholding injunctions

wo uld be “anomalous in the extreme in connection with patents this court has just held invalid.” Id. at 157 8.
Under these authorities, t here is no longer any legal basis to enjoin Lawson’s conduct based on rights that claim 26 of the ’683 patent previously conferred as those rights have ceased to exist. T he PTO found claim 26 invalid, we affirmed that decision, our mandate issued, and the PTO cancelled the claim. Claim 26 no longer confers any rights that support an injunction against infringement

. During oral argument, ePlus even admitted that there could be no injunction moving forward. The PTO’s cancellation of claim 26 requires that we now vacate the injunction

. II. Civil Contempt Remedies
The second question is whether the civil contempt sancti ons should be set aside. It is well established that

“ [v]iolations of an order are punishable as crim inal contempt even though t he order is set aside on a ppeal

. . . or though the basic action has become moot.” United States v. United Mine Workers of Am.

, 330 U.S. 258, 294 & n.60 (1947) (citing Worden v. Searls , 121 U.S. 14 (1887); Gompers v. Buck’s Stove & Range Co.

, 221 U.S. 418 (1911)); see also Walker v. Birmingham , 388 US 307, 319 (1967) ( upholding criminal contempt sentencesEPLUS , INC

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for violation of injuncti on regardless of the validity of the injunction ) ; Howat v. State of Kansas , 258 U.S. 181, 189

– 90 (1922) ( criminal contempt sentences do not depend on constitutionality of law on which injunction is based) . If Lawson had been found guil ty o f criminal contempt, that order a nd any resulting penal ties would not be set aside simply because claim 26 had been cancelled.
However, the district court found Lawson in civil , not criminal, contempt. It awarded “compensation” to ePlus for economic injury during the period that the injunction was in effect, based on the Supreme Court decision in Leman v. Krentler

- Arnold Hinge Last Co. , 284 U.S. 448 (1932). In Leman , the Court upheld an award of the infringer’s profits “not by way of punishment but to insure full comp ensa tion.” I d. at 456

. 5 The rule for civil contempt is that “ [t]he right to remedial relief falls with an injun ction which events prove was erroneously issued .” United Mine Workers

, 330 U.S. at 295 (citing Worden

, 121 U.S. at 25, 26; Salvage Process , 86 F.2d at 727; S. Anargyros v. Anargyros & Co.

, 191 F. 208 ( C.C.D. Cal. 1911) ). T he Supreme Cou rt disti nguis hed civil from criminal co ntempt , explaining that:

I t does not follow, of course, that simply because a defendant may be punished for crim inal co ntempt for disobedience of an order later set aside on appeal, that the plaintiff in the action may profit by way of a fine imposed in a simult aneous proceeding for civil contempt based upon a violation of the same order.

5 The district court also ordered coercive sanctions. We stayed these sanctions pending the resolution of this appeal. There is no question that ePlus is not entitled to seek coercive sanctions now that the injunction ha s been vacated.EPLUS , INC

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Id. at 294 –95

. The Court explaine d that if the injunction had been overturned, “the conviction for civil contempt

wo uld be reversed in its entirety .” Id. at 29 5. “[ A party’s ] right, as a civil litigant, to the [civil] compensatory fine is dependent upon th e outcome of the basic controversy.” Id. at 304. Civil contempt sanctions must be set aside when the resolution of the case requires overturning the injun ction on which those sanctions are based

. The Supreme Court has specifically applied this rule
to set aside civil contempt sanctions imposed for violating an injunction based on patent s subsequently found to be invalid

. Worden

, 121 U.S at 26. 6 In Worden

, the district court had declar ed the patent not invalid, found the defendants liable for infringement, and ordered a perm anent injunction

. Id

. at 19. The court also found the d efendants in contempt of its preliminary injunction and ordered them to pay fines for civil contempt. Id. at 20. The defendants appealed the court’s rulings on infringement and validity, as well as the contempt order and resulting fines. Id

. at 20, 24

. On appeal, the Supreme Court found the patent invalid and

, on that basis, vacated the injun ction. Id

. at 25. Becaus e the Court found the patent inv alid, id. at 24, and reversed the injunction on appeal, id. at

6 Curiously, the dis sent now finds Worden inappl icable to this situation, Diss. Op. at 1 1 n. 4 , after previously urging in Fresenius that Worden required the reversal of contempt sanctions in such situations. Judge O’Malley, in dissenting from the denial of en banc rehearing i n Fresenius , stated: “[ Worden ] merely stands for the proposition that the right to fines for violation of a preli mi nary i njunction is founded on that injunction which i n turn is predicated on the validity of the patent.” Fresenius USA, Inc. v. Baxter Int’l, Inc. , 733 F.3d 1369, 1376 n.5 (Fed. Cir. 2013) ( dissenting from the denial of the petition for r ehearing en banc) (citing Worden , 121 U.S. at 25)

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26
, it set aside the civil contempt order and re sulting fines , declaring that the sanctions “cannot be upheld.” Id. The Court explained that the civil sanctions were “ inc idents of [the patentee ’ s] claims in the suit. His right to them was, if it existed at all, founded on his right to the injunction, and that was founded on the validity of his patent. ” Id. at 25

. Under Worden

, compensatory civil contempt remedies must be set aside when the injunction on which they are based is set aside because the patent is determined to be invalid. 7 Other circuit s have similarly held that civil contempt sanctions must be set aside if the underlying injunction is reversed on appea l. 8

7 ePlus claims that some cases it cites have reached contrary results, but those cases involve situation s where the basis for the injunction was eliminated prospectively only, s ee, e.g. , Klett v. Pim , 965 F.2d 587, 590 (8th Cir. 1992) (passage of Agricultural Credit Act made injunction moot, not baseless), Coleman v. Espy , 986 F.2d 1184, 1190 (8th Cir. 1993) (citing Klett , 965 F.2d at 590) (same), or penalties that were not determined to be civil. See, e.g.

, Cassidy v. Puett Elec. Starting Gate Corp. , 182 F.2d 604, 608 (4th Cir. 1950) (district court ordered penalties “ to punish those who have deliberately and without any reasonabl e excuse disobeyed [its] orders ” (internal quot ation marks omitted)).

8 “T he general rule is that whether a contempt judgment survives the avoidance of an underlying order depends on the nature of the contempt decree. If the contempt is criminal it stands; if it is civil it falls.” LaTrobe Steel Co. v. United Steelworkers of Am., AFL

CIO , 545 F.2d 1336, 1342, 1347

– 48 (3rd Cir. 1976) (V aca ting coercive civil contempt order because “reversal of the underlying injunction indicates that the complainant never had a valid right which was en forceable against the defendant. ”); see also e.g., McLean v. Cent. States, S. & S.EPLUS , INC

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This case is not distinguishable on the ground that the injunction has been set aside as the result of the PTO proceeding rather than a court judgment. In Fresenius USA, Inc. v. Baxter International, Inc. , we held that a

non

- final money judgment of da mages for infringement must be set aside where the judgment rested on a patent claim that the PTO later cancelled. 721 F.3d 1330, 1344, 1347 (Fed. Cir. 2013). 9 We held that the cancellation of a patent requires that non

- final judgments be set aside because the “cancelled claims [a]re void ab initio

, ” i d. at 1346, relying on Moffit v. Garr

, 66 U.S. 273, 283 (1861), where the Supreme Court held that “unless [the patent] exists, and is in force at the time of trial and judgment, the suits fail.” Id. at 1345 (quoting Moffit , 66 U.S. at 283 ). Thus, t he cancellation of the patent precluded the paten tee from recovering damages in Fresenius . Similarly, here the civil contempt sanctions must be set aside.
This case does not require us to decide whether civil
cont empt sanctions would survive if the injunction had

Areas Pen. Fund , 762 F.2d 1204, 1210 (4th Cir. 1985) (O rdering “reversal of the con tempt order because [the appellant] has prevailed in overturning the [underlying] order on appeal

. ”); Scott and Fetzer Co. v. Dile , 643 F.2d 670, 675 (9th Cir. 1981) (R emedial civil contempt jud gment “must fall as a result of our decision invalidating the underlying injunction.”); ITT Comm. Dev. Corp. v. Barton

, 569 F.2d 1351, 1361 (5th Cir. 1978) ( V acating contempt orders because the underlying turn

- over order “was invalid ab initio.”); Blaylock v. Cheker Oil Co ., 547 F.2d 962, 966 (6th Cir. 1976) ( C onclud ing that “the remedial contempt order . . . falls with [the relevant provision] of the injunction.”).

9 The Supreme Court denied the petition for certi orari on May 19, 2014. Baxter, Int’l., Inc. v. Fresenius USA, Inc.

, 134 S. Ct. 2295 ( 2014).EPLUS , INC

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been final at the time the district court imposed civil contempt sanctions

. 10 T he injunction here was not final even though claim 26 had been held infringed. W e held in Fresenius that even if this court has rejected an invalidity defense to infringement, an “intervening decision inval idating the patents unquestionably applies” as long as “the judgment in [the present] litigation is not final.” Id. at 1344; see also Moffit , 66 U.S. at 283 (“[P]ending suits fa ll with the surrender” of a patent “which, in judgment of law, extinguishes the patent.”); Mendenhall , 26 F.3d at 158 4 (“ Because the Mendenhall patents are invalid, the plaintiffs cannot now enjoin or recover damages from these defendants .”). In Fresenius , we had previously reviewed the district court’s ruling s on infringement and invalidity and remanded the case to the district court to determine the scope of damages and injunctive relief. 721 F.3d at 1333

. When reviewing the judgment reached by the distr ict court on remand, we held that t he original district court judgment, while “final for pur poses of a ppeal

. . . was not sufficiently final to preclude application of the intervening judgment” that led to the cancellation of the patent

. Id. at 1340. With respect to the determin ation of finality, we explained that “w here the scope of relief rema i ns to be determined, there is no final jud gment binding the parties ( o r the court).” Id

. at 1341. This rule follows from the Supreme Court’s holding that “a

10 See, e.g., Maggio v. Zeitz , 333 U.S. 56, 68 (1948) (reviewing contempt order, but not underlying order requiring turnover of property because “the turnover proceeding is a separate one, and when completed and terminated in a final order, it becomes res jud icata and not subject to collateral attack in the contempt procee dings ”); Proveris Sci entific Corp. v. Innovasystems, Inc. , 739 F.3d 1367, 1370, 1374 (Fed. Cir. 2014) (holding defendant cannot raise invalidity as a defense to contempt when the underlying injunction is final and not on appeal).EPLUS , INC

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final d ecree [is] one that finally adjudicates upon the entire merits, leaving nothing further to be done except the execution of it.’” John Simmons Co. v. Grier Bros. Co.

, 258 U.S. 82, 88 (1922 ).
There is no question here that the district court’s modified injunction was not final when the PTO cancelled claim 26. Ou r previous appeal did not affirm the injun ction, rather it remanded the case to the district court, requiring it “to consider what changes are required to the
te rms of the injunction, consistent with this opinion.” ePlus I , 700 F.3d at 512 . Our decision necessitated chan ges to the injunction because of our reversal of the i nfringement findings under claims 28 and 29 , and our conclusion that Configuration 2 was not infringing

. On remand, the district court had to consider the scope of relief to which ePlus was entitled, which necessarily impacted what activities Lawson could undertake. The district court ordered the parties to file statements of position “respecting the effect, if any, of the decision of the Court of Appeals on the scope of the injunction previously entered.” ePlus

, Inc. v. Lawson Software, Inc.

, No. 3:09

- cv

620, Order, (E.D. Va . Nov. 28, 2012)

, ECF No. 981. In light of those submissions, the court re cognized that “it is

a ppropriate to reassess the prop r ie ty and scope of an injunction, as directed by the United States Court of Appeals for the Federal Circuit.” ePlus

, Inc. v. Lawson Software, Inc.

, No. 3:09

- cv

- 620, Order 2 , (E.D. Va . Mar. 12, 2013)

, ECF No. 1019. On the remand (as on appeal), Law son argued that our ruling required more than eliminating the reference to Configuration 2 . Specifically, Lawson contend ed that it was necessary to alter the injunction as to sales of pro ducts. Lawson also a ssert ed that the requisite eBay anal ysis for the injunction changed because Configurations 3 and 5 were used by a substantially smaller portion of its customer base than Configuration 2

. The district court rejected Lawson’ s arguments and found that the onl yEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 18

change our mandate required was removing the provision of the injunction that referenced Configuration 2. Cons equently, it issued an order modifying the injunction in this one respect. The court ordered that “[p]ursuant to the mandate of the United State s Court of Appeals for the Federal Circuit . . . it is hereby ORDERED that the i njunction . . . is modified by deleting from its scope the product . . . colloquially known as ‘Configuration 2[.]” J.A. 1. Lawson appealed the modification on the ground that it was not sufficient or consistent with our mandate and did not make the required changes

. Under these circumstan ces, as in Fresenius , the district court’s order was not final. 721 F.3d at 1342

– 43. After the district court modified the injunction, Lawson appealed th e modifica tion under 28 U.S.C. § 1291(a)(1). That appeal was pending when the PTO cancelled the only claim at issue in the litigation.

ePlus asserts that Lawson viewed the injunction as final because it fil ed a R ule 60(b) motion asking the district court to modify or dissolve the modified injun ction

. The filing of a Rule 60(b) motion under such circu mstances is not unusual. Filing a Rule 60(b) motion did not prevent Lawson from appealing the modified injunction in addition to appealing the denial of the Rule 60(b) motion

. See Stone v. I.N.S. , 514 U.S. 386, 401 (1995) ( “E ither before or after filing his appeal, the litigant may also file a Rule 60 ( b) motion for relief with the district court. The denial of the [Rule 60(b)] motion is appealable as a sep arate final order, and if the ori ginal appeal is still pen ding

. . . the court of appeals can consolidate the proceedings .” ). We conclude that the compensatory award for the vi olation of the injunction must be set aside in light of the cancellation of claim 26. Given our disposition, we need not reach the question of whether Lawson’s redesigned products are more than colorably different from the original accused products and whether the redesigned products infringe.EPLUS , INC

. v. LAWSO N SOFTWARE , INC

. 19

C ONCLUSION For the foregoing reasons, the district court’s injun ction and contempt orders are vacated. The case is r emande d with instructions to dismiss.

VACATED AND REMANDED

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

______________________ EPLUS, INC., Plaintiff

- Appellee,

v.

LAWSON SOFTWARE, INC ., Defendant

- Appellant.

______________________

2013

- 1506,

- 1587

______________________ Appeals from the United States District Court for the Eastern District of Virginia in No. 09

- CV

- 0620, Senior Judge Robert E. Payne.

______________________

O’M ALLEY , Circuit Judge , dissenting.
I agree that, once thi s Court affirmed the PTO’s ca ncellation of claim 26 of the ’683 patent, an ongoing injun ction barring infringement of that patent could no longer stand and must be vacated prospectively

. That conclusion comes easily; as the majority notes, even Appellant’ s counsel conceded the point during oral argument. Maj. Op. at 11

. The more difficult question is whether Appe llees are relieved of all penalties for having violated theEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 2

injunction during the four years it was in place before the PTO’s cancellation was a ffirmed. 1 On this second question, t he majority concludes that “[t]his case does not require us to decide whether civil contempt sanctions would survive if the injunction had been final at the time the district court imposed civil contempt sanctions,” Ma j. Op. at 15

- 16 , because, under Fresenius USA, Inc. v. Baxter International

, Inc. , 721 F.3d 1330 (Fed. Cir. 2013) (“ Fresenius II ”) , cancellation of claims by the Patent and Trademark Office (“PTO”) “requires that non

- final judgments be set aside.” Maj. Op.
at 15

. Because it finds the judgment in this case non

final, the majority

— on the strength of Fresenius II

— renders all aspects of the earlier judgment against La wson, including the injunction premised thereon , a nullity. I respectfully dissent fr om that aspect of the majority’s opinion because Fresenius II is distinguisha ble from, and I do not believe governs, the present appeal

. I write separately, moreover, to note that, if we are bound by Fresenius II on these facts, I find Fresenius II even m ore troubling than I initially believed

. Fresenius USA, Inc. v. Baxter Int’ l, Inc. , 733 F.3d 1369, 1373

- 81 (Fed. Cir. 2013) (O’Malley, J., dissenting from denial of petition for rehea ring en banc)

. I

In Fresenius II , a panel of this court held that “cance llation of claims during reexamination would be binding in
concurrent litigation,” and, while “cancellation of a p a1 While Lawson contends it did not violate the di strict court’s injunction, because the majority does not reach that question, neither do I. The current record contains a district court finding that Lawson did violate the injunction. The question I debate with the majority is whether we can reach the merits of that finding.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 3

tent’s claims cannot be used to reopen a final damages judgment ending a suit based on those claims,” there can be “no final judgment binding the parties” “where the scope of relief remains to be determined.” 721 F.3d at 1339 , 1341 (emphasis added)

. The facts here are different than those before us in Fresenius II

. In the initial district court litigation between Fres enius and Baxter

, Fresenius brought suit seeking a decla ra tory judgment that the claims of three patents were “invalid and not infringed by Fresenius’s hemodialysis machines.” Fresenius USA, Inc. v. Baxter Int’l., Inc. , 582 F.3d 1288, 1293 (Fed. Cir. 2009) (“ Fresenius I ”) . The district court granted Baxter judgment as a matter of law, finding that the jury’s obviousness verdict was not su pported by substantial evidence. Id. After a separate jury trial on damages, the jury awarded Baxter over $14 million in pre

- verdict d amages. Id. at 1294. The district court issued a permanent injunction against Fresenius, but delayed implementation of the injunction to allow Fresenius time to develop a non

- infringing machine. Id. In lieu of the immediate injunction, the district cou rt ordered Freseniu s to pay an on

- going royalty for any infringing machines sold prior to the injunction taking effect. Id. Fresenius appealed the district court’s grant of judgment as a matter of law regarding validity, the pe rmanent injunction, the ong oing royalty award, and claim construction. Id. Fresenius , however, did not appeal the
pre

- verdict damages award, only the prospective royalties and injunction.

In Fresenius I , we reversed the district court’s grant of judgment as a matter of law for al l but six claims of one of Baxter’s patents. Id. at 1304. For those six claims, we held that Fresenius failed to prove invalid ity

. I d. We remanded to the district court with the following instruction: “[W]e vacate the injunction and remand so that the court may revise or reconsider the injunction in light of the fact that only claims 26

- 31 of the ’ 434 patent remainEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 4

valid and infringed. Finally, we vacate the royalty award entered by the district court and remand for further proceedings consistent with this opinion.” Id. On remand, Fresenius argued that no injunction should issue, th e post

- verdict ongoing royalty amount was unreasonable, and it should receive a “new trial for pre

verdict damages for infringement of the ’ 434 patent.” Fresenius II , 721 F.3d at 1333. The district court declined to enter an injunction as the relevant patent had expired, awarded Baxter new post

- verdict damages at a reduced royalty, and denied Fresenius’s motion for a new pre

verdict damages trial. Id. While Fresenius’s second appeal was pending, we affirmed a decision of the PTO cancelling the remaining claims of the ’ 434 patent in an ex parte reexamination proceeding. In re Baxter Int’l, Inc. , 678 F.3d 1357, 1366 (Fed. Cir. 2012). The Fresenius II panel concluded that, because we vacated the injun ction and the royalty award

, and remanded for “further proceedin gs consistent with this opinion ” in Fresenius I

, 582 F.3d at 1304, the litigation was not final as we left the district court with more to do than simply “execute the judgment.” Fresenius II , 721 F.3d at 1341. Because the “scope of relief remain[ed] to be determined,” there was “no final judgment binding the parties,” the reexam ination “extinguishe[d] the underl ying basis for suits based on the patent

, ” and we vacated the pre

- verdict damages award. Id. at 1341, 1344. The facts of the present appeal differ markedly from those presented in Fresenius II

. At trial in this case , the jury found that Configurations 1 and 4 were not infrin ging; Configurations 2, 3, and 5 infringed system claim 1 of the ’ 172 patent; Configurations 3 and 5 infringed system claim 3 of the ’ 683 patent and method claims 26, 28, and 29 of the ’ 683 patent; and Lawson did not infringe the ’5 16 patent. ePlus, Inc. v. Lawson Software, Inc. , No. 3:09

- cv

620, 2011 WL 2119410, at *4 (E.D. Va. May 23, 2011). T he jury also concluded that none of the asserted claimsEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 5

were invalid. Id. T he district court entered a permanent injunction against Lawso n, preventing Lawson from making, using, selling, or offering to sell, Configurations 2, 3, or 5. Id. at *19

. 2 ePlus then initiated contempt proceedings against Lawson, arguing that the design

around RQC module was not more than colorably diffe rent from the infringing RSS module. ePlus, Inc. v. La wson Software, Inc. , 946 F. Supp. 2d. 472, 475

- 76 (E.D. Va. 2013).
Lawson appealed the validity of the two system claims, the jury’s infringement findings as to all claims, and the district court’s entry of an injunction. ePlus I , 700 F.3d at 516

- 17. Importantly, Lawson did not appeal the validity determinations regarding claims 26, 28, and 29 of the ’ 683 patent. We concluded that the system claims were invalid as indefinite, and reversed the district court’s denial of judgment as a matter of law for noni nfringement of claims 28 and 29 of the ’ 683 patent. Id. at 523. We affirmed, however, the jury’s finding of i nfringement of claim 26 of the ’ 683 patent. 3 We returned

2 Prior to entering the injunction, the district court excluded ePlus’s expert report regarding damages, and did not permit ePlus to present evidence of damages due to prior discovery sanctions. ePlus, Inc. v. Lawson Software, Inc. , 700 F.3d 509, 515 (Fed. Cir. 2012) (“ ePlus I ”). Thus, ePlus’s only available remedy was an injunction.

3 The majority claims that, in ePlus I

, we upheld the finding of induced infringement of claim 26 based solely on “Lawson providing customer services

, ” and not due to sales. Maj. Op. at 6

. That is not accurate, as the language the majority omits from the same paragraph of ePlus I proves. Maj. Op. at 6 n. 4

. In ePlus I , we held that “there remains no serious dispute that Lawson’s custo mers in fringe claim 26.” 700 F.3d at 520. After finding that Lawson directly infringed through its customer services,EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 6

the case to the distr ict court with a very limited remand instruction : “We remand to the district court to consider what changes are required to the terms of the injunction, consistent with this opinion. In all other respects, we affirm.” Id. Our remand instruction merely recognized the district court’s inherent continuing equitable powers over the scope of its injunction. Important ly, neither our opinion nor our remand instruction vacated the injun ction. The judgment that claim 26 was valid and i nfringed

— one of the judgm ents upon which the injunction was predicated

— remained intact, as did the injunction.
On remand, Lawson moved to modify or vacate the injunction under Federal Rule of Civil Procedure 60(b). T he district court concluded that “the injunction must be modifi ed so as to no longer apply to Configuration No. 2. The injunction shall remain in effect in all other respects.” ePlus, Inc. v. Lawson Software, Inc. , 946 F. Supp. 2d 459, 471 (E.D. Va. 2013) (also holding that aspects of the injunction related to Confi guration Nos. 2 and 5 “remain undisturbed by the Federal Circuit decision”) . Thus, the only modification necessary under our remand instruction “consistent with [our] opinion” was that Configuration 2 had to be removed from the scope of the injunction as claim 1 of the ’ 172 patent, the sole basis for infringement

we held that “[f]inally, we have reviewed the record and

are satisfied that it contains sufficient evidence of La wson’s intent and knowledge to allow a reasonable jury to conclude that Lawson induced its customers to infringe claim 26.” Id. at 521. We also affirmed the district court’s finding that there was suff icient evidence that Lawson was a contributory infringer. Id. at 523 n.2. We thus affirmed that Lawson induced infringement , in part, through “selling and offering to sell the infringing sy stems,” without limiting our analysis to just the system claims. See ePlus, 2011 WL 3584313, at *4

.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 7

by Configuration 2, was held invalid. Id. Lawson never contended that the number of claims of the ’683 patent that were infringed would or should impact the scope of the products enjoined, or ev en that the number of patents infringed by the same products was material to the n ature of the inju nctive relief. Id. at 466

- 70 (noting that Lawson sought to alter the scope of the injunction only on the basis that just method claims remained infringed after ePlus I , and “only 150 Lawson customers would be affected by the injunction”). Thus, while reference to Configuration 2 was removed from the injunction, the activities enjoined did not change. Id. at 471. Separately,
t he district court concluded t hat Lawson had been in contempt of the injunction since soon after it was entered, and awarded ePlus disgorgement of Lawson’s profits. ePlus, Inc. v. Lawson Software, Inc. , 946 F. Supp. 2d 472, 489

- 93 (E.D. Va. 2013). Lawson appealed the district court’s contempt order and ruling on the Rule 60(b) m otion

. T here are crucial differences between the se facts and the facts in Fresenius II . First, Fresenius failed to appeal the pre

- verdict damages judgment from the district court, but did appeal the validity of all relevant claims

- at

- issue. As the PTO’s reexamination determination involved the validity of some of the claims

- at

- issue, Fresenius at least continued to press the validity of the patents in its first appeal. Further , while Fresenius did not directly appeal the pre

- verdict damages award in Fresenius I , it did move for a new trial on damages on remand premised on the “further proceedings” language in our remand instruction

, which it then appealed in Fresenius II . In the present appeal, Lawson never appeal ed the validity of claim 26 of the ’ 683 patent and never sought to press the issue again, either before the trial court or this one

. The judgment that claim 26 of the ’ 683 patent was valid became final when the district court entered final judgment and La wson chose not to appeal that judgment to this court

.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 8

While the PTO did find claim 26 of the ’ 683 patent to be invalid through ex parte reexamination proceedings, and we affirmed that decision in In re ePlus, Inc. , 540 F . App’x 998 (Fed. Cir. 2013) , t he validity of claim 26 of the ’ 683 patent as between ePlus and Lawson with regards to the continuing injunction (at least until the decision in In re ePlus mandated) was final well before that point in time

. See Function Media, L.L.C. v. Kappos , 508 F . App’x 953, 956 (Fed. Cir. 2013) (holding that a party’s failure to appeal from a district court’s judgment of no invalidity barred that party from seeking reexamination of those claims) ; Odectics, Inc. v. Storage Tech. Corp. , 185 F.3d 1259, 1275 (Fed. Cir. 1999) (holding that failure of a party
to cross

- appeal the issue of validity “preclud[ed] further consideration of the issue”) ; cf

. Volvo Trademark Holding Aktiebolaget v. Clark Mach. Co. , 510 F.3d 474, 481 (4th Cir. 2007) (the mandate rule “forecloses litigation of issues decided by the district court but foregone on a ppeal”) ; Bullen v. De Bretteville , 239 F.3d 824, 829 (9th Cir. 1956), overruled on other grounds, Lacey v. Maricopa Cnty. , 693 F.3d 896 (9th Cir. 2012) (“A case remanded for further hearing or over which jurisdiction is retained for some purposes may nonetheless be final as to other issues determined. ”)

. Second, the remand instruction s in ePlus I and Fresenius I were different in important, material respects . In Fresenius I , we vacated the injunction and the post

verdict royalty awards, instructed the district court to “revise or reconsider” the injunction, and remanded “for further proceedings consistent with this opinion.” Fresenius I

, 582 F.3d at 1304. By vacating the injunc tion, we required the district court to analyze the injunction anew

. Further, in Fresenius II we found that

, by remanding “for further proceedings consistent with this opinion,” the district court was free to consider other aspects of the case, including Fresenius’s motion for a new trial regar ding pre

- verdi ct damages. Here, w e did not vacate theEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 9

injunction, which was the only form of remedy available to ePlus. By not vacating the injunction, the injunction remained in force and any on

- going infringing a ctivity by Lawson would be potential contemptible conduct. We did no more than suggest that the district court “consider” any necessary changes to the injunction, consistent with the district court’s equitable powers; we did not direct the district court to “revise or reconsider” the injunction. Finally, we conspicuously did not remand for “any further proceedings consistent with this opinion.” As the majority in Fresenius II recognized in distinguishing Qualcomm, Inc. v. FCC , 181 F.3d 1370, 1380 (D.C. Cir. 1999), the scope of the appellate remand instruction is crucial to the preclusive effect of an intervening PTO reexamination determination. Fresenius II , 721 F.3d at 1346 n.12.

The Fresenius II majority concluded that the remand instruction in Qualc omm was for “specific, immediate relief for a party,” while it found the remand instruction in Fresenius I more open -ended— “for further procee dings.” Id. The remand instruction in ePlus I , like that in Qualcomm , did contemplate “specific, immediate relie f for a party”

— Configuration 2 should be removed from the scope of the injunction, but the injunction remains in force subject only to the district court ’ s continuing equitable
power over it

. And

, the remand instruction in ePlus I noticeably does not incl ude an order for the district court to undertake “further proceedings.” Fresenius I, 582 F.3d at 1304. Thus, as the Fresenius II majority contemplated when attempting to distinguish the United States Court of Appeals for the District of Columbia’s (“D.C. Circuit”) apparently contrary ruling in Qualcomm , the more li mited scope of the remand order from ePlus I differentiates the present appeal from that in Fresenius II

. Finally, the nature of the remedies at issue on appeal distinguishes the two cases. In Fresenius II , the majority determined that both pre

- verdict and post

- verdict dama ges would be vacated in light of the PTO reexaminationEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 10

results because the scope of mon etary remedies was not yet final. That is not the case here. As noted

, I agree with the majority that the injunction should be vacated prospectively from the date when In re ePlus mandated

, and that any coercive civil remedies should be vacated since it would be inappropriate to force Lawson to comply with an injunction that is no longer enforceable

. As the majority correctly states, an injunction is a “continuing decree” that must not be enforced prospectively if the right underlying the decree is abrog ated. Maj. Op. at 9- 11 (quoting P ennsylvania

. v. Wheeling & Belmont Bridge Co.

, 59 U.S. (18 How.) 421, 422 (1855)). I disagree, however, that the results of In re ePlus require that we vacate the compensatory civil contempt order. Lawson’s conduct givi ng rise to the contempt order o ccurred while the injunction

, with regards to Configur ations 3 and 5

, was valid under ePlus I . While we remanded to allow the district court to use its inherent equitable powers to remove Configuration 2 from the scope of the injunction, we retained the jury’s infring ement finding with regards to claim 26 of the ’ 683 patent
, Lawson did not appeal the validity o f claim 26 , and we did not vacate the injunction . I n a contempt proce eding, the putative contemnor may not challenge the correct ness of the underlying order or attack the validity of the underl ying basis for an injunction unless the court issuing the injunction had no jurisdiction to do so

. 4 Maggio v. Zeitz

,

4 The cases the majority relied upon , such as McLean v. Central States, S. & S. Areas Pension Fund

, 762 F.2d 1204 (4th Cir. 1985); Scott & Fetzer Co. v. Dile

, 643 F.2d 670 (9th Cir. 1981); ITT Comm ittee Development Corp. v. Barton , 569 F.2d 1351 (5th Cir. 1978); Blaylock v. Cheker Oil Co. , 547 F.2d 962 (6th Cir. 1976); LaTrobe Steel Co. v. United Steelworkers of Am erica , AFL

- CIO , 545 F.2d 1336 (3d Cir. 1976); all involved both the underlyingEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 11

333 U.S. 56, 6 8- 69 (1948) ; Proveris Scientific Corp. v. Innovasystems, Inc. , 739 F.3d 1367, 1370 (Fed. Cir. 2014) (“‘ In a contempt proceeding to enforce [an] injunction . . ., the only available defense for anyone bound by the injun ction was that the [newly accused product] did not infringe. . . . Validity and infringement by the original device were not open to challenge.’” (quoting Additive Controls &

injunction and the conte mpt order simultaneously on direct appeal. Here, Lawson failed to appeal the validity of claim 26 of the ’683 patent, we affirmed the jury’s finding of infringement on that patent, and we did not vacate the injunction. While a district court retains the equitable power to revise an injunction prospectively, we did not vacate the injunction, and the injunction was final
at the time of the allegedly contemptible conduct. The majority further relies on Worden v. Searls , 121 U.S. 14 (1887). Like the cases noted above

, Worden involved an injunction and contempt order which were simultaneously on direct appeal. Worden stand s for “the proposition that the right to fines for violation of a preli minary injunction is found ed on that injunction which in turn is p redicated on the validity of the patent.” Fresenius II , 733 F.3d at 1376 n.5 (O’Malley, J., dissenting from denial of petition for rehearing en banc)

. Worden thus permits prospective challenges to an injunction and prevents a contempt finding predicated upon an injun ction after the predicate for it no longer exits

. Id. (“Thus, while the PTO’s cancellation of the patent renders it prospectively invalid, the cancellation cannot render a prior judgment for damages invalid.”)

. W e affirmed t he underlying injunction in ePlus I , rendering the injunction retrospectively final

. Thus, because the contemptible conduct occurred before the PTO invalidated the patent upon which the retrospectively final injunction was pred icated, it is not “curious” that Worden d oes not apply to these facts

.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 12

Measurement Sys., Inc. v. Flowdata, Inc. , 154 F.3d 1345, 1350 (Fed. Cir. 1998))

. All that remained available for revi ew in the current appeal was the prospective va lidity of the injunction and the propriety of findings made during the contempt proceeding , not the underlying basis for the injunction at issue in the contempt proceeding. Thus , the underlying basis of the con tempt award, which is the only aspect of the contempt proceeding that could be influenced by the results of In re ePlus , was not at issue during the district court contempt proceedings

, and is not at issue in this appeal

. For these reasons, I believe that the majority inco rrectly holds that Fresenius II re quires that we to vacate the compensatory contempt award in light of In re ePlus. 5

II

I f the majority is correct that Fresenius II requires us to vacate the compensatory contemp t award

, even though Lawson failed to appea l the judgment finding c laim 26 of the ’ 683 patent valid and even though we did not vacate the injunction or remand for open

- ended proceedings, then Fresenius II is even more concerning than I first believed. I co ntinue to believe that we wrongly decided Fresenius II

. As detailed in my dissent to the denial of the petition for rehearing en banc

, Fresenius II , 733 F.3d
at 1373

- 81 (O’Malley, J., dissenting from denial of petition for rehearing en banc) , the majority in Fresenius II err oneously ana lyzed both the finality of the issues on appeal and the scope of our appellate remand instruction in Fresenius I . The se argument s apply with even greater force and urgency here.

5 As noted, given the grounds for our decision here, I express no opinion on the merits of Lawson’s objections to the contempt findings.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 13

The majority’s approach to finality will further di splace the critical role of district courts in patent infring ement suits. According to the majority, a decision of the PTO, an administrative agency under a coordinate branch of government, can displace a judgment of an Article III
court . Validity of claim 26 became final when Lawson failed to appeal the issue in ePlus I and our disposition did not reopen the judgment for any further proceedings regarding the validity of any of the claims

- at

- issue , nor did it leave the remedy open in the sense Fresenius II said Fresenius I did

. By extending Fresenius II to these mat erially different circumstances , the majority assumes that
any determination made during an infringement case, even if that specific issue is never appealed, can be null ified by the action of an administrative agency as long as anything

— even a fully discretionary “consideration” of an intact remedy

— remains available. T he majority’s a pproach essentially allows an executive agency action to render both the panel opinion in ePlus I and the district court’s judgment regarding validity a dvisory opin ions. That result ignores the role of Article III courts in our constitutional structure. See Hayburn’s Case , 2 U.S. (2 Dall.) 409, 411 (1792) ( Chief Justice Jay and Justice Cushin g writing, in an opinion for the Circuit Court for the District of New York, that the executive branch may not “sit as a court of errors on the judicial acts or opi nions” of the federal courts) ; Qualcomm

, 181 F.3d at 1379

- 80 (discussing Plaut v. Spendthrift Farm, Inc. , 514 U.S. 211, 240 (1995)

, and the protection granted to final jud gments of Article III courts from invalidation by coordinate branch activity under the separation of powers doctrine).

T he majority’s approach is contrary to the well

establi shed law of finality when the merits of an issue are conclusively decided. Fresenius II , 733 F.3d at 1375

- 77 (O’Malley, J., dissenting from denial of petition for rehea ring en banc)

. And, that decision further deepens the circuit split between our court’ s approach to finality andEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 14

that of our sister circuits , as identified by Judge Newman in her dissent in Fresenius II

. 721 F.3d at 1355

- 59 (Ne wman, J., dissenting). While it is true that a district court, in its equitable powers, retains the ability to alter the scope of an injunction prospectively , the district court here lacked the power to vacate the merits underlying our finding of infringement once the Supreme Court denied certiorari after ePlus I . Even further, we lacked the power in ePlus I to alter the jury’s finding regardi ng the validity of claim 26 of the ’ 683 patent because Lawson did
not appeal that issue. The majority, nevertheless, breaks away from well- established notions of finality to hold that the jury’s final determinatio n that claim 26 was not invalid

— a judgment justifying the injunction that led to the compensa tory civil contempt order

— must be vacated in light of a later determination by an exe cutive agency. The majority opinion also creates uncertainty for any future compensatory contempt awards due to the unique nature of injunctions , a point not contemplated in Fresenius II . D istrict courts always retain the equitable power to revise injun ctions prospectively in li ght of changed circumstance . D oes this mean that, where an injunction is entered, the “scope of relief remains to be determined” in perpetuity? Maj. Op. at 16

. Even if we had affirmed all grounds in ePlus I and did not remand, Lawson could still have file d a Rule 60(b) motion and argue d that

, as long as the contempt p roceedings were on appeal the “scope of relief remains to be determined” under the district court’s continuing power over the injunction

. Would we have to vacate every civil contempt award where a later PTO decision invali dates the patent at issue in those contempt proceedings ? 6

6 Indeed, parties have begun reading Fresenius II broadly, arguing that the policies and rationales underl ying that decision justify reopening even admittedly finalEPLUS , INC

. v. LAWSON SOFTWARE , INC

. 15

The major ity decision today exacerbates the circuit split between the Federal Circuit and the D.C. Circuit . As noted, t he Fresenius II majority distinguished Qualcomm by arguing that the D.C. Circuit ordered “specific” relief on remand, while our order for remand in Fresenius I was not sufficiently specific. Fresenius II

, 721 F.3d at 1346 n.12. Here, our remand order was significantly more specific than in Fresenius II

— only allowing the district court to alter the scope of the injunction within its inhe rent equitable powers, but not permitting the district court to upset the final determinations on the me rits or allo wing t he district court to undertake further proceedings. T he majority here argues, however, that Fresenius II applies, despite our more specific remand instruction in ePlus I

. I t ap pears that no remand instruction would ever be specific enou gh to protect the integrity of an Article III court’s judgment as long as any “remand” occurs. That view strains concepts of finality beyond all recognition.
Finally , as I noted in my dissent from denial of r ehearing en banc in Fresenius II , 733 F.3d at 1 380

- 81 (O’Malley, J., dissenting from denial of petition for rehea ring en banc)

, the view of finality we espouse in these two

cases is a view of finality which is wildly divergent from that employed by this very court in other contexts. In Robert Bosch, L LC v. Plyon M anufacturing Corp. , 719 F.3d 1305 (Fed. Cir. 2013) (en banc), this court held, en

judgments to give effect to later PTO decisions. See, e.g.

, Versata Software, Inc. v. SAP Am., Inc. , No. 2:07

- cv

- 153

- RSP, 2014 WL 1600327, at *2 (E.D. Tex. Apr. 21, 2014) ( dis missing infringer ’s argu ment that its Rule 60(b)(6) motion to reopen a final judgment of validity should be granted in light of a later Board determination of invalid ity)

, aff’d sub nom. Versata Computer Indus. Solution v. SAP Am., Inc. , No. 14

- 1430, 2014 WL 2765230 (Fed. Cir. June 18, 2014) (per curiam)

.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 16

banc, that liability determinations in patent cases are final for purposes of immediate appeal under 28 U.S.C. § 1292 (c), even when a jury trial on damages and w illfulness remains. See id. at 1316, 1319

- 20. There, we co ncluded that damages and willfulness determinations are sufficiently “ministerial” to constitute no more than an “accounting” within the meaning of § 1292(c), thus rende ring the liability determin ation a “final” judgment for purposes of appeal. Despite the very liberal view of finality we employed in that context, we continue to declare that we must employ the stingiest view of that concept when deciding at what point parties may rely on litigated determinations of their rights. This chasm between the sweeping rule laid down both in Fresenius II and here and the one the court established in Bosch is confusing. Notably, finality often may be applied less strictly for preclusion purposes than for purposes of appeal, not more so

. See Miller Brewing Co. v. Joseph Schlitz Brewing Co., 605 F.2d 990, 996 (7th Cir. 1979) ( “To be ‘final’ for purposes of collateral estoppel the decision need only be immune, as a practical matter, to reversal or amendment. ‘Finali ty’ in the sense of 28 U.S.C. § 1291 is not required.”); see also Syverson v. Int’ l Bus. Mach. Corp., 472 F.3d 1072, 1079 (9th Cir. 2007) ; Henglein v. Colt Indus. Operating Corp., 260 F.3d 201, 209

– 10 (3d Cir. 2001) (“[W]e commented that finality fo r purposes of issue preclusion is a more ‘pliant’ concept than it would be in other contexts.”); Swentek v. USAIR, Inc., 830 F.2d 552, 561 (4th Cir. 1987)

, abrogated on other grounds, Mikels v. City of Durham, N.C., 183 F.3d 323 (4th Cir. 1999) (“Finality for purposes of collateral esto ppel is a flexible con cept. . . . ”); Pye v. Dep’t of Transp. of Georgia, 513 F.2d 290, 292 (5th Cir. 1975) (“To be final a judgment does not have to dispose of all matters involved in a proceeding.”) ; Zdanok v. Glidden Co.

, 327 F.2d 944, 955 (2d Cir. 1964) . Thus, it would seem that our juri sprudence should be the reverse of what it has become.EPLUS , INC

. v. LAWSON SOFTWARE , INC

. 17

I see no way to reconcile the liberal view of finality for appeal purposes we adopted in Bosch with today’s view that finality almost never exists for preclusion purposes. I dissent from the majority’s decision. I would proceed to consider the merits of Lawson’s appeal from the trial court’s civil contempt findings.