In)valid Patents

3. Extension The Federal Circuit's most recent decision in this line of cases, ePlus v. Lawson, (240) extended the absolute finality rule by allowing an infringer to rely on a PTO decision of invalidity to abrogate a court order holding the infringer in contempt. In that case, ePlus sued Lawson for infringement of U.S. Patents No. 6,023,683 (the '683 patent) and 6,505,172 (the T72 patent). (241) The patents claim methods and systems of using electronic databases to search for product information and to order products from third-party vendors. (242) The allegedly infringing software sold by Lawson was modular, meaning that Lawson's customers could choose to buy particular software components depending on their needs. (243) ePlus alleged infringement by five different configurations of Lawson's software, referred to by the Federal Circuit as "Configurations 1-5." (244) The jury found that Configurations 3 and 5 infringed both claim 1 of the T72 patent and claims 3, 26, 28, and 29 of the '683 patent and that Configuration 2 infringed claim 1 of the T72 patent. (245) The jury found that Configurations 1 and 4 did not infringe any of ePlus's asserted patent claims. (246) The Federal Circuit reversed in part, ruling that claim 1 of the T72 patent and claim 3 of the '683 patent were invalid and that claims 28 and 29 of the '683 patent were not infringed. (247) The Federal Circuit, however, affirmed the district court's finding that claim 26 of the '683 patent was infringed. (248) Because only Configurations 3 and 5 infringed that claim, the Federal Circuit "remand[ed] for the district court to consider what changes are required to the terms of the injunction, consistent with this opinion." (249) On remand, the district court deleted from the injunction Configuration 2, which infringed only a patent claim that the Federal Circuit had ruled to be invalid. (250) The court also found Lawson in contempt, ruling that its redesigned software continued to infringe claim 26 of the '683 patent. (251) The court ordered Lawson to pay a compensatory fine of roughly $18.2 million and coercive daily fines of roughly $62,000 until it complied with the injunction. (252) From that contempt order, Lawson again appealed to the Federal Circuit. Meanwhile, claim 26 had been undergoing ex parte reexamination at the PTO in proceedings instituted by SAP, who was a defendant in a previous infringement suit filed by ePlus. (253) The Board of Patent Appeals and Interferences eventually issued a final decision invalidating claim 26, (254) and, while Lawson's appeal from the contempt order was pending, the Federal Circuit affirmed the Board's decision. (255) On Lawson's appeal from the contempt order, the Federal Circuit panel unanimously vacated the injunction prospectively because the PTO had invalidated the patent claim on which the injunction was based. (256) The court then confronted the sanctions the district court had awarded for Lawson's past violations of the injunction, that is, for the violations that occurred before the PTO invalidated the patent in reexamination. The majority (Judge Dyk, joined by Chief Judge Prost) relied on Fresenius to vacate the sanctions order. (257) In Fresenius, the court explained, "We held ... that even if this court has rejected an invalidity defense to infringement, an 'intervening decision invalidating the patents unquestionably applies' as long as 'the judgment in [the infringement case] is not final.'" (258) As to finality, the court explained that "where the scope of relief remains to be determined, there is no final judgment." (259) In the court's view, its remand in the first appeal meant that the propriety of an injunction was still an open question at the time the PTO invalidated claim 26. (260) Thus, over the dissent of Judge O'Malley, the court held that Fresenius mandated vacatur of the sanctions award. (261) The Federal Circuit denied ePlus's petition for rehearing en banc by a vote of five to five, one vote shy of the majority needed to grant review. …