Court Opinion

ID: 626491
Source: CourtListenerOpinion
Date Created: 2012-04-02 18:55:51+00
Date Added: 2024-06-11T09:14:21.050021
License: Public Domain

NOTE: This order is nonprecedential
United States Court of AppeaIs
for the Federal Circuit
ACTIVEVIDEO NETWORKS, INC.,
Plain,tiff-Cross Appellant, -
V.
VERIZON COMMUNICATIONS, INC., VERIZON
SERVICES CORP., VERIZON VIRGINIA INC., AND
VERIZON SOUTH INC.,
Defendants-Appellants.
w
2011-1538, -1567, 2012-1129, -1201
Appea1S from the United StateS DiStrict C0urt for the
Eastern District of Virginia in case n0. 10-CV»0248, Judge
Raym0nd A. Jacks0n.
ON MOTION
Bef01'e BRYSON, MAYER, and LINN, Circuit Judges.
P1:R CUR1AM.
0 R D E R

ACTIVEVIDEO V. VERlZON COMMUNICATIONS 2
These appeals stem from an action brought by Ac-
tiveVideo Networks, lnc. in the United States District
Court for the Eastern District of Virginia charging Veri-
zon Communications, Inc. et al. (Verizon) with infringe-
ment of four patents. The jury returned a verdict that
two of Verizon’s video-on-demand systems infringed
ActiveVideo’s patents and awarded $115,000,000.00 in
damages The court permanently enjoined Veri_zon from
making using, selling, and offering for sale its infringing
systems but delayed the injunction’s effective date for six
months, until l\/lay 23, 2012, to allow Verizon to imple-
ment a non-infringing system ("sunset period").
During the sunset period, the court agreed with
ActiveVideo that Verizon should pay a court-imposed
royalty payment ln reaching its $2.75 per subscriber
rate, the district court rejected a lower rate~requested by
Verizon set forth in an prior agreement with a third party
on the basis that "ActiveVideo was [now] in`a stronger
bargaining position after the jury’s verdict.”
VeriZ0n filed a motion to stay the portion of the in-
junction order imposing a royalty rate payment upon the
posting of a supersedeas bond. When the district court
denied that motion, Verizon appealed and asked us for a
stay.
This court applies the procedural law of the relevant
regional circuit when reviewing a district court’s decision
to grant or deny a motion for a stay under Rule 62(d) of
the Federal Rules of Civil Procedure. In the Fourth
Circuit, the appellate court reviews de novo whether the
district court’s order was one for injunctive or monetary
relief See Solis v. Malkani, 638 F.3d 269, 275 (4th Cir.
2011).
Ordinarily, an appellant may obtain a stay of a judg-
ment "as a matter of right” by posting a supersedeas

3 ACTIVEVIDEO V. VERIZON COMMUNICA'l‘IONS
bond. See Fed. R. Civ. P. 62(d). The district court denied
the motion for a stay on the ground that the royalty
payments it ordered Verizon to make during the sunset
period were a condition of the temporary stay of the
injunction and not an award of damages that would be
subject to a stay under Rule 62(d).
That characterization of the monetary award for the
sunset period does not render Rule 62(d) inapplicable.
The general rule is that when a judgment includes both a
monetary award and an injunction, a supersedeas bond
stays the monetary aWard. 11 Charles Alan Wright et al.,
Federal Practice and Procedure § 2905 (2d ed. 1995). The
form of the order to pay money does not matter; what
matters is "whether the judgment involved is monetary or
nonm0netary." Herbert v. Exxon Corp., 953 F.2d 936, 938
(5th Cir. 1992) (even though district court’s judgment was
in the form of a declaratory judgment, Rule 6Q(d) applied
because the declaratory judgment bound the appellant "to
pay a specific sum of money").
The fact that the district court regarded the require-
ment that Verizon make royalty payments during the six-
month sunset period as a necessary condition for tempo-
rarily staying the injunction does not alter the fact that
the royalty payments constitute monetary relief that is
normally subject to Rule 62(d). Although the effect of a
stay is to deprive ActiveVideo of immediate access to the
royalty payments, the supersedeas bond ensures that
those payments will be readily available to ActiveVideo if
it should prevail on appeal, At the same time the bond
ensures that if Verizon should prevail on appeal, it will
not run the risk of being unable to recoup the payments
made during the sunset period.
ln opposing the stay of the monetary relief, ActiveVi-
de0 relies on the Fourth Circuit’s decision in S0lis. In

ACTIVEVIDEO V. VERlZON COMMUNICATIONS 4
that unusual case, the district court found that a pension
plan administrator had violated its obligations to the
plan. The court then granted the Labor Department’s
request to appoint an independent fiduciary to run the
plan and ordered the defendants to pay the independent
fiduciary’s costs and retainer fee. The defendants failed
to pay the retainer fee, and the independent fiduciary
sought to withdraw. The court accepted the fi_duciary’s
withdrawal, but only on the condition that the defendants
pay an upfront fee to a new fiduciary that would operate
the plan. At that point, the defendants sought a stay of
the payment requirement conditioned on a bond. 'The
district court and the court of appeals denied that request
on the ground that the court’s prepayment order was part
of an "affirmative injunction" directed at ensuring that
the plan would have a fiduciary to operate it and because
the payment obligation ran not in favor of the opposing
party, but in favor of the non-party fiduciary ln this
case, by contrast, the royalty payments are a form of
damages to the prevailing party in the case, designed to
compensate the prevailing party for the infringing con-
duct during the sunset period when an injunction is not in
effect. This case, unlike S0lis, thus involves a more
traditional assessment of monetary relief in favor of the
party who prevailed on the merits before the trial court,
and it is therefore within the scope of the general rule
authoring a stay under Rule 62(d).
Accordingly,
IT ls ORDERED THAT:
The motion is granted, conditioned on Verizon’s post-
ing a bond with the district court for the payment of
sunset royalties that became due during the sunset pe-
riod.

5
ACTIVEVIDEO V. V`ERIZON COMMUNICATIONS
APR 02 2I]12
Date
cc: Michael J. Lyons, Esq.
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Michael K. Kellogg, Esq.
FOR THE COURT
/s/ J an Horbaly
J an Horbaly
Clerk
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