Court Opinion

ID: 4684065
Source: CourtListenerOpinion
Date Created: 2021-05-05 15:01:13.363147+00
Date Added: 2024-06-11T08:04:19.222501
License: Public Domain

Case: 20-2087     Document: 46     Page: 1   Filed: 05/05/2021

   United States Court of Appeals
       for the Federal Circuit
                   ______________________

                   CAP EXPORT, LLC,
        Plaintiff/Counterclaim Defendant-Appellee

                  ABRAHAM AMOUYAL,
                Third-Party Defendant-Appellee

                      4MODA CORP.,
                    Third-Party Defendant

                              v.

                     ZINUS, INC.,
  Defendant/Counterclaimant/Third-Party Claimant-Ap-
                        pellant

         DOES, 1 THROUGH 10, INCLUSIVE,
                     Defendants
               ______________________

                         2020-2087
                   ______________________

    Appeal from the United States District Court for the
 Central District of California in No. 2:16-cv-00371-SVW-
 MRW, Judge Stephen V. Wilson.
                  ______________________

                    Decided: May 5, 2021
                   ______________________

    DAVID BEITCHMAN, Beitchman & Zekian, PC, Encino,
 CA, argued for plaintiff/counterclaim defendant-appellee
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 2                              CAP EXPORT, LLC   v. ZINUS, INC.

 and third-party defendant-appellee. Also represented by
 MILORD A. KESHISHIAN, Milord & Associates, PC, Los An-
 geles, CA.

      DARIEN WALLACE, Imperium Patent Works LLP,
 Pleasanton, CA, argued for defendant/third party plain-
 tiff/counterclaimant-appellant. Also represented by T.
 LESTER WALLACE.
                  ______________________

     Before DYK, BRYSON, and HUGHES, Circuit Judges.
 DYK, Circuit Judge.
     Zinus, Inc. (“Zinus”) appeals the decision of the United
 States District Court for the Central District of California
 setting aside a judgment and injunction pursuant to Fed-
 eral Rule of Civil Procedure 60(b)(3). We affirm.
                        BACKGROUND
     Zinus is the owner of U.S. Patent No. 8,931,123 (“the
 ’123 patent”), which is directed to “[a]n assemblable mat-
 tress support” that “can be shipped in a compact state with
 all of its components compactly packed into the head-
 board.” ’123 patent, col. 1 ll. 49–51. The relevant claims
 are independent claims 1–3, which each claim “[a] mattress
 support comprising” “a headboard with a compartment”
 and other parts, such as “a longitudinal bar” and “a foot-
 board,” wherein the other parts “are contained” or “fit in-
 side the compartment.” Id. col. 6 l. 21–col. 7 l. 3. Claim 2
 additionally requires “headboard legs” that “are contained
 inside the compartment.” Id. col. 6 ll. 52–58. Claim 3 ad-
 ditionally requires that “the compartment is closed with a
 zipper.” Id. col. 7 ll. 2–3.
     On January 15, 2016, appellee Cap Export, LLC (“Cap
 Export”) filed a declaratory judgment action against Zinus,
 alleging that claims of the ’123 patent were invalid and not
 infringed. Zinus counterclaimed, alleging infringement of
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 CAP EXPORT, LLC   v. ZINUS, INC.                            3

 claims of the ’123 patent and unfair business practices un-
 der California state law, and added Abraham Amouyal and
 4Moda Corp. as third-party defendants. Appellee Abra-
 ham Amouyal is the chief executive officer of Cap Export.
 4Moda, which currently appears to be dissolved, is alleged
 to have sold Cap Export’s products in the United States. 1
     On May 16, 2016, Zinus filed a motion for partial sum-
 mary judgment of no invalidity of claims 1 and 3 of the ’123
 patent, relying on a declaration provided by Zinus’s then-
 president and “testifying technical expert,” Colin Lawrie.
 J.A. 279. 2 On August 29, 2016, the district court noted that
 Zinus had “present[ed] some testimony . . . that the patent
 was valid” in light of prior art raised by Cap Export, and
 the court allowed Cap Export sixty days to depose Lawrie
 and “present some contrary opinion” in the form of a surre-
 ply. Id. at 1312, 1317. Counsel for Cap Export deposed
 Lawrie on October 11, 2016, during which Lawrie denied
 knowledge of the existence of various prior art items.
      On November 29, 2016, the district court sua sponte
 granted summary judgment that claims 1 and 3 of the ’123
 patent were invalid as obvious over other prior art refer-
 ences that are not at issue in this appeal. Zinus appealed,
 and we vacated and remanded, in part because the district
 court had improperly granted summary judgment of inva-
 lidity sua sponte without proper notice to Zinus and had
 relied on a prior art reference (the “bed in a box” reference)

     1    Zinus, Cap Export, Amouyal, and the district court
 seem to treat 4Moda as no longer party to the case.
      2   According to Lawrie, “throughout the entire period
 from 2006 up until the end of 2011, [he] was not a corporate
 officer of [Zinus], Zinus, Inc. (Xiamen), or Zinus, Inc. (Ko-
 rea).” J.A. 282. “In about 2012,” Lawrie became the “Vice
 President of Sales and Marketing” for Zinus, and then
 served as the “President” of Zinus from January 2014 up
 until March 2019. Id. at 283.
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 4                              CAP EXPORT, LLC   v. ZINUS, INC.

 when there was a factual dispute as to whether it predated
 the ’123 patent. Cap Exp., LLC v. Zinus, Inc., 722 F. App’x
 1004, 1007–09 (Fed. Cir. 2018).
      On September 11, 2018, Zinus filed another motion for
 partial summary judgment of no invalidity of claims 1, 2,
 and 3 of the ’123 patent. On January 24, 2019, the district
 court granted partial summary judgment that claims 1–3
 of the ’123 patent were not invalid, in part because Cap Ex-
 port had abandoned the “bed in a box” prior art reference
 that the district court had relied on in its previous deter-
 mination of invalidity. In determining validity, “the Court
 analyzed relevant evidence of ‘prior art’ references identi-
 fied by the parties and established that the ’123 patent was
 valid as a matter of law on that basis, because none of the
 ‘prior art’ references considered by the Court either antici-
 pated or made obvious the patent claims embodied in the
 ’123 patent.” J.A. 2 (citation omitted). Based on the dis-
 trict court’s ruling, Zinus, Cap Export, and Abraham
 Amouyal then stipulated to the entry of a final judgment in
 favor of Zinus for infringement, which included that claims
 1–3 of the ’123 patent were not invalid, $1.1 million in dam-
 ages to be paid by Cap Export and Amouyal, and a perma-
 nent injunction against Cap Export and Amouyal, which
 the district court entered on May 30, 2019.
     Thereafter, Cap Export discovered evidence that the
 October 2016 deposition testimony of Lawrie, the then-
 president of Zinus, had been false as to the prior art. The
 discovery of the falsity began when, on June 22, 2019, Zi-
 nus filed a lawsuit against Classic Brands, LLC (an unre-
 lated party), also in the Central District of California,
 alleging in part infringement of the ’123 patent. In support
 of a motion to transfer, Classic Brands filed a declaration
 that attached a letter with exhibits consisting of documents
 regarding beds manufactured by a company called Xiamen
 XinShunYang Industry and Trade Company (“XXITC”),
 which was located in Xiamen, China. One of the beds al-
 legedly had “all of the components of the bed (except the
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 CAP EXPORT, LLC   v. ZINUS, INC.                            5

 headboard) . . . packed inside of a zippered compartment in
 the headboard.” J.A. 4 (citation omitted). 3 The exhibits to
 the letter also included purchase invoices between XXITC
 and a Malaysian company called Woody Furniture.
     Cap Export, after learning of these documents, sent
 company representatives to Malaysia to meet with Woody
 Furniture’s representatives. Woody Furniture’s represent-
 atives provided a 2012 invoice (dated before the filing date
 of the ’123 patent, September 25, 2013) addressed to
 Jusama Group Consulting Inc. 4 and bearing Colin Lawrie’s
 signature for a purchase of 405 beds from Woody Furni-
 ture. According to a declaration from Agnes Tan, the mar-
 keting director for Woody Furniture, executed on
 September 24, 2019, the beds referenced in the invoice had
 “all components fitting in the headboard, including the
 footboard and the longitudinal bar, for shipping.” J.A. 303,
 305.
     On September 29, 2019, within a year of the entry of
 the final judgment and injunction, Cap Export and Abra-
 ham Amouyal filed a motion to vacate the judgment and
 injunction under Rule 60(b)(3), which provides grounds for
 relief for reason of “fraud . . . , misrepresentation, or mis-
 conduct by an opposing party.” Fed. R. Civ. P. 60(b)(3).

     3   The lawsuit against Classic Brands was trans-
 ferred to the District of Maryland. The parties then settled,
 and the case was dismissed on May 20, 2020.
     4   Jusama was a sales representative for Zinus, Inc.
 (Korea), “a parent holding company that owns, or at least
 partially owns, each of the other Zinus companies,” includ-
 ing the appellant in this case, and Zinus, Inc. (Korea)’s sub-
 sidiaries. J.A. 281–82. Colin Lawrie became part-owner of
 Jusama in 2005 and sold his share in Jusama “a few years
 ago,” according to his declaration executed in November
 2019. Id. at 282.
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 6                              CAP EXPORT, LLC   v. ZINUS, INC.

     The primary basis of the allegations of fraud and mis-
 representation was Lawrie’s testimony during the October
 11, 2016, deposition. During that deposition, “Cap Export
 asked [Colin Lawrie], repeatedly, about his knowledge of
 disassembled beds shipped in a single box with all compo-
 nents stored in the headboard.” J.A. 18. Below are exam-
 ples of such questioning:
     Q. What do you think the novelty or the invention
     is of the [’123 patent]?
     A. The ability to package an unassembled bed into
     a headboard and have it ship in one box.
 J.A. 262.
     Q. Prior to September 2013 had you ever seen a
     bed that was shipped disassembled in one box?
     A. No.
     Q. Not even—I’m not talking about everything
     stored in the headboard, I’m just saying one box.
     A. No, I don't think I have.
 Id. at 263.
     Q. So prior to 2013, September of 2013, the only
     piece of furniture that you can think of that
     shipped in one box, disassembled, and the compo-
     nents were contained in another component, was
     just a cabinet with shelves; is that accurate?
     ....
     Q. That would be then no, just the cabinet essen-
     tially?
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 CAP EXPORT, LLC    v. ZINUS, INC.                           7

     A. That I’m aware of.
 Id. at 265–66. 5
      The district court in the 60(b)(3) proceeding held an in-
 itial hearing on the motion and ordered a video deposition
 to be conducted of Colin Lawrie. Colin Lawrie also submit-
 ted a declaration executed on November 5, 2019, in which
 he admitted that his October 2016 deposition testimony
 that he had never seen “a bed that was shipped disassem-
 bled in one box” was “literally incorrect,” but he asserted
 that he did not “intend to answer falsely” because he
 “meant that [he] had not seen a bed shipped disassembled
 in one box with all of the components in the headboard.”
 Id. at 289. Colin Lawrie’s video deposition was thereafter
 taken in Toronto, Canada, on November 15, 2019, during
 which he “again acknowledged that his answer of ‘No’ to
 the question of whether he had ever seen a bed prior to
 September 2013 that was shipped disassembled in one box
 was ‘literally incorrect,’ but that he did not intend to an-
 swer falsely at the deposition.” Id. at 10–11 (citation omit-
 ted). The district court found Lawrie’s explanation to be

     5   In addition to the deposition testimony relied on by
 the district court, Cap Export asserts that Lawrie made un-
 truthful statements in a declaration filed in support of Zi-
 nus’s September 11, 2018, motion for partial summary
 judgment of no invalidity. For example, in his declaration,
 executed on August 17, 2018, Lawrie made the following
 statement:
     84.     There is no motivation expressed or sug-
     gested in any of the Whitford, Aspelund, the Ledge
     Headboard, or the Ledge Platform Bed to put a lon-
     gitudinal bar and/or a footboard into a headboard
     compartment. There is no such teaching in the
     prior art.
 J.A. 244.
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 8                               CAP EXPORT, LLC   v. ZINUS, INC.

 “wholly implausible given how counsel for Cap Export spe-
 cifically distinguishe[d] between those two concepts.” Id.
 at 12. 6
      In determining the falsity of Lawrie’s testimony, the
 district court also relied on other Woody Furniture docu-
 ments showing sales of these beds in a box to sales agents
 for the Zinus family of companies (Jusama and HQV), 7 in-
 cluding an invoice for Jusama from 2011 for a sale of 385
 beds and a purchase order for HQV for a sale of 415 beds
 with a shipment date in February 2013. Zinus itself con-
 cedes that “[d]ocumentary evidence of the alleged on-sale
 prior art beds was, throughout the entire course of the un-
 derlying litigation up until the day of entry of the final con-
 sent judgment, all the while sitting in email form in the
 possession of Zinus.” Appellant’s Br. 34.
     On May 11, 2020, the district court granted the motion
 to set aside the May 30, 2019, judgment under Rule
 60(b)(3) and vacated the injunction. The court found that

     6    The district court also ordered a video deposition to
 be conducted of Agnes Tan, who testified that the Woody
 Furniture beds were shipped disassembled in one box and
 had all component parts stored within the headboard. The
 district court found that Tan’s declaration and deposition
 testimony weighed in favor of finding that Lawrie’s state-
 ments constituted affirmative misrepresentations.
     7    According to Lawrie, HQV was part owner of
 Jusama, and Jusama and HQV were “sales representa-
 tives” for “Zinus, Inc. (Korea) and its subsidiaries.”
 J.A. 282. Lawrie testified in the October 2016 deposition
 that HQV was his “own business,” id. at 1055–56, but he
 “[did not] have a part of it anymore,” id. at 1059, and then
 testified in his November 2016 declaration that HQV was
 wholly owned by someone named Ely Benzaquen, id. at
 282. According to Lawrie, “[s]ometimes Jusama did busi-
 ness under the name of HQV.” Id. at 282.
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 CAP EXPORT, LLC   v. ZINUS, INC.                               9

 the purchased Woody Furniture beds were “functionally
 identical in design to the claims in the ’123 patent.”
 J.A. 16. The district court found that Lawrie’s “repeated
 answer of ‘No’” to the questioning “regarding his knowledge
 of beds shipped disassembled in one box” “constituted an
 affirmative misrepresentation,” id. at 12, and that “Law-
 rie’s additional, repeated denials that he had knowledge of
 or experience with beds or other furniture shipped with
 components stored within another component constitute[d]
 affirmative misrepresentations of his knowledge based on
 the repeated purchases of such beds by Jusama from
 Woody prior to the filing of the ’123 patent in September
 2013,” id. at 14–15 (emphasis omitted). Zinus filed a mo-
 tion for reconsideration, which the district court denied.
     Zinus appeals. Because the district court’s May 11,
 2020, order vacated an injunction, we have jurisdiction un-
 der 28 U.S.C. §§ 1292(c)(1), 1295(a)(1).
                           DISCUSSION
                                    I
       Before turning to the law of Rule 60(b)(3), it is im-
 portant to understand the basis of the 60(b)(3) motion. In
 patent cases, “[a] person shall be entitled to a patent unless
 . . . the claimed invention was . . . on sale, or otherwise
 available to the public before the effective filing date of the
 claimed invention.”      35 U.S.C. § 102(a)(1) (emphasis
 added). This is referred to as the “on-sale bar” provision,
 which defines a type of “prior art.” Helsinn Healthcare S.A.
 v. Teva Pharms. USA, Inc., 139 S. Ct. 628, 631–32 (2019).
 Prior art under the on-sale bar can support a determina-
 tion that a patent claim is invalid as anticipated or obvious.
 35 U.S.C. §§ 102(a), 103. 8

     8   Because the application for the ’123 patent was
 filed after March 16, 2013, the current versions of 35
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 10                             CAP EXPORT, LLC   v. ZINUS, INC.

     Here, in October 2016, Cap Export attempted to deter-
 mine Lawrie’s knowledge of highly material prior art. At
 the time, Lawrie was Zinus’s president and testifying ex-
 pert witness. 9 Lawrie denied having knowledge of that
 prior art when asked, prior art that the district court de-
 termined to be “functionally identical in design to the
 claims in the ’123 patent.” J.A. 16. The district court con-
 cluded that Lawrie’s October 2016 deposition testimony
 “misrepresented his prior experience with and knowledge
 of bed frames that were shipped disassembled in a single
 box,” id. at 12, and of beds shipped with components stored
 within another component, id. at 14–15. Lawrie admitted
 that this testimony was “literally incorrect,” at least in

 U.S.C. §§ 102(a), 103, as amended by the Leahy-Smith
 America Invents Act, apply. See Pub. L. No. 112-29,
 § 3(n)(1), 125 Stat. 284, 293; see also In re Nuvasive, Inc.,
 842 F.3d 1376, 1380–81 nn.3–4 (Fed. Cir. 2016).
      9   Rule 60(b)(3) requires that the fraud, misrepresen-
 tation, or misconduct be by “an opposing party.” Fed. R.
 Civ. P. 60(b)(3); see also Latshaw v. Trainer Wortham &
 Co., 452 F.3d 1097, 1102 (9th Cir. 2006) (alleged fraud by
 60(b)(3) movant’s attorney could not satisfy the adverse
 party requirement).
      Zinus does not challenge the district court’s determina-
 tion that “Lawrie as president of Zinus can properly be con-
 sidered an ‘adverse party’ for the purposes of Rule
 60(b)(3).” J.A. 12; cf. In re ChinaCast Educ. Corp. Sec.
 Litig., 809 F.3d 471, 477 (9th Cir. 2015) (“In the context of
 Rule 10b–5 [of the Securities Exchange Act of 1934], [the
 Ninth Circuit has] adopted the general rule of imputation
 and held that a corporation is responsible for a corporate
 officer’s fraud committed ‘within the scope of his employ-
 ment’ or ‘for a misleading statement made by an employee
 or other agent who has actual or apparent authority.’”
 (quoting Hollinger v. Titan Cap. Corp., 914 F.2d 1564, 1577
 n.28 (9th Cir. 1990) (en banc))).
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 CAP EXPORT, LLC   v. ZINUS, INC.                               11

 some respect. Id. at 289. The question is whether these
 misrepresentations support relief under Rule 60(b)(3).
                                    II
     Rule 60(b) provides:
     (b) Grounds for Relief from a Final Judgment, Or-
     der, or Proceeding. On motion and just terms, the
     court may relieve a party or its legal representative
     from a final judgment, order, or proceeding for the
     following reasons:
     ...
     (3) fraud (whether previously called intrinsic or ex-
     trinsic), misrepresentation, or misconduct by an
     opposing party[.]
 Fed. R. Civ. P. 60(b). A motion under Rule 60(b)(3) “must
 be made within a reasonable time,” and “no more than a
 year after the entry of the judgment or order or the date of
 the proceeding.” Fed. R. Civ. P. 60(c)(1). The motion here
 satisfied the one-year requirement.
     “Relief under [Rule 60(b)(3)] is a procedural issue on
 which we apply regional circuit law.” Schreiber Foods, Inc.
 v. Beatrice Cheese, Inc., 402 F.3d 1198, 1204–05 (Fed. Cir.
 2005). “Motions for relief from judgment pursuant to Rule
 60(b) are addressed to the sound discretion of the district
 court and will not be reversed absent an abuse of discre-
 tion.” Casey v. Albertson’s Inc., 362 F.3d 1254, 1257 (9th
 Cir. 2004). “A district court abuses its discretion if it does
 not apply the correct law or if it rests its decision on a
 clearly erroneous finding of material fact.” Id.
     “To prevail [under Rule 60(b)(3)], the moving party
 must prove by clear and convincing evidence that the ver-
 dict was obtained through fraud, misrepresentation, or
 other misconduct and the conduct complained of prevented
 the losing party from fully and fairly presenting the
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 12                              CAP EXPORT, LLC   v. ZINUS, INC.

 defense.” De Saracho v. Custom Food Mach., Inc., 206 F.3d
 874, 880 (9th Cir. 2000).
     The Ninth Circuit has held that “Federal Rule of Civil
 Procedure 60(b)(3) require[s] that fraud . . . not be discov-
 erable by due diligence before or during the proceedings.”
 Casey, 362 F.3d at 1260 (alterations in original) (quoting
 Pac. & Arctic Ry. & Navigation Co. v. United Transp. Un-
 ion, 952 F.2d 1144, 1148 (9th Cir. 1991)). The Ninth Cir-
 cuit’s additional due diligence requirement appears
 contrary to the text of Rule 60(b)(3), which does not men-
 tion diligence. 10 The parties cite no cases from other courts
 of appeals adopting this additional requirement, nor are we
 aware of any other courts of appeals that have adopted it. 11

      10   By contrast, Rule 60(b)(2) provides grounds for re-
 lief for reason of “newly discovered evidence that, with rea-
 sonable diligence, could not have been discovered in time
 to move for a new trial under Rule 59(b).” Fed. R. Civ. P.
 60(b)(2) (emphasis added).
      11   See Anderson v. Cryovac, Inc., 862 F.2d 910, 923–
 26 (1st Cir. 1988); State St. Bank & Tr. Co. v. Inversiones
 Errazuriz Limitada, 374 F.3d 158, 176 (2d Cir. 2004);
 Stridiron v. Stridiron, 698 F.2d 204, 206–07 (3d Cir. 1983);
 Green v. Foley, 856 F.2d 660, 661 n.1, 665 (4th Cir. 1988)
 (noting that Rule 60(b)(2) (but not Rule 60(b)(3)) requires
 due diligence); Hernandez v. Results Staffing, Inc., 907
 F.3d 354, 364 (5th Cir. 2018); Abrahamsen v. Trans-State
 Express, Inc., 92 F.3d 425, 428–29 (6th Cir. 1996); Fields v.
 City of Chicago, 981 F.3d 534, 558 (7th Cir. 2020); In re
 Levaquin Prods. Liab. Litig., 739 F.3d 401, 404 (8th Cir.
 2014); Thomas v. Parker, 609 F.3d 1114, 1119–20 (10th Cir.
 2010); Jenkins v. Anton, 922 F.3d 1257, 1270 (11th Cir.
 2019); In re Hope 7 Monroe St. Ltd., 743 F.3d 867, 875 (D.C.
 Cir. 2014); see also 11 Charles Alan Wright, Arthur R. Mil-
 ler, et al., Federal Practice and Procedure § 2860 (3d ed.
 Oct. 2020) (listing requirements for Rule 60(b)(3)); 12
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 CAP EXPORT, LLC   v. ZINUS, INC.                                13

                                    III
     On appeal here, Zinus contests the district court’s de-
 termination that Cap Export “met its burden of establish-
 ing by clear and convincing evidence that it [was] entitled
 to relief under Rule 60(b)(3).” J.A. 21. Zinus focuses pri-
 marily on the due diligence requirement, seeming to blame
 the victim’s so-called “incompetent lawyers” for the adverse
 consequences it suffered as a result of the fraud. Appel-
 lant’s Br. 33. Zinus argues that “emails relating to the
 Woody shipments would have been discovered if Cap Ex-
 port’s lawyers had exercised due diligence and propounded
 standard document production requests for a patent case.”
 Id. at 38. 12 Cap Export does not dispute that its written
 discovery served on Zinus did not specifically seek prior
 art; that it did not depose the inventor of the ’123 patent;
 and that although a deposition of Lawrie was taken, it was
 not taken under Federal Rule of Civil Procedure 30(b)(6).
      Even though the Ninth Circuit’s requirement for Rule
 60(b)(3) that the “fraud” not be discoverable through due
 diligence seems questionable, we follow it here. Casey, 362
 F.3d at 1260. The question is what constitutes due dili-
 gence in discovering fraud. Ninth Circuit cases applying
 Rule 60(b)(3) do not elaborate on the due diligence require-
 ment, but Ninth Circuit decisions in other contexts provide
 guidance.
     In other contexts, due diligence in discovering fraud
 does not require investigation unless there is reason to sus-
 pect fraud. For example, “[i]n order to assess whether [a]
 petitioner exercised due diligence” in discovering fraud (or
 error) that is the basis for equitable tolling of the deadline

 James Moore et al., Moore’s Federal Practice – Civil § 60.43
 (2021) (same).
     12  Zinus used the term “Cap Export” to refer to Cap
 Export, LLC and Abraham Amouyal collectively.
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 14                              CAP EXPORT, LLC   v. ZINUS, INC.

 to file a motion to reopen removal proceedings, the Ninth
 Circuit first “determine[s] if (and when) a reasonable per-
 son in petitioner’s position would suspect the specific fraud
 or error underlying her motion to reopen,” and, only if this
 is the case, second, “ascertain[s] whether petitioner took
 reasonable steps to investigate the suspected fraud or er-
 ror, or, if petitioner is ignorant of counsel’s shortcomings,
 whether petitioner made reasonable efforts to pursue re-
 lief.” Avagyan v. Holder, 646 F.3d 672, 679 (9th Cir. 2011).
 Similarly, though not specifically limited to fraud, the An-
 titerrorism and Effective Death Penalty Act allows a sec-
 ond or successive claim for habeas corpus if “the factual
 predicate for the claim could not have been discovered pre-
 viously through the exercise of due diligence.” 28 U.S.C.
 § 2244(b)(2)(B)(i). “[T]he due diligence inquiry is a function
 of whether [a petitioner] had some indication before filing
 his initial petition that the alleged exculpatory evidence ex-
 isted. If he had no reason to investigate [the exculpatory
 evidence], then he could not have been dilatory in failing to
 investigate further.” Solorio v. Muniz, 896 F.3d 914, 920
 (9th Cir. 2018). In securities fraud, “[w]hile an investor
 need not have full knowledge of fraud in order reasonably
 to be expected to investigate worrisome allegations con-
 cerning his investments, he will not be presumed to have
 done so unless the allegations are sufficient to ‘excite in-
 quiry’ into the possibility of fraudulent conduct.” Berry v.
 Valence Tech., Inc., 175 F.3d 699, 705–06 (9th Cir. 1999)
 (holding that a particular magazine article “would not have
 led a reasonable investor to investigate the possibility of
 fraud”).
     The issue thus is not whether the conduct of Cap Ex-
 port’s counsel fell below the standard of care for attorneys
 practicing patent litigation, but whether a reasonable
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 CAP EXPORT, LLC   v. ZINUS, INC.                             15

 company in Cap Export’s position 13 should have had reason
 to suspect the fraud—here, that Lawrie had testified
 falsely—and, if so, took reasonable steps to investigate the
 fraud.
      At least in other contexts, the Ninth Circuit reviews a
 finding of due diligence (or lack thereof) for clear error. See,
 e.g., DRK Photo v. McGraw-Hill Glob. Educ. Holdings,
 LLC, 870 F.3d 978, 989 (9th Cir. 2017); Gilder v. PGA Tour,
 Inc., 936 F.2d 417, 423 (9th Cir. 1991); Hasbro Indus., Inc.
 v. M/S St. Constantine, 705 F.2d 339, 342 (9th Cir. 1983)
 (per curiam). Other circuits have similarly applied clear
 error review. See, e.g., Wilson v. Beard, 426 F.3d 653, 660
 (3d Cir. 2005); Berman v. U.S. Forest Serv., 408 F.3d 945,
 964 (7th Cir. 2005); Drew v. Dep’t of Corrections, 297 F.3d
 1278, 1283, 1287 n.2 (11th Cir. 2002), overruled on other
 grounds as recognized in Jones v. Sec’y, Fla. Dep’t of Corr.,
 906 F.3d 1339, 1351 (11th Cir. 2018).
     On this record, there has been no showing that there
 was reason to suspect that Lawrie’s statements were fraud-
 ulent. Cap Export deposed Lawrie, as a person claiming
 knowledge of the relevant facts, “asked him, repeatedly,
 about his knowledge of disassembled beds shipped in a sin-
 gle box with all components stored in the headboard,” and
 “Lawrie then repeatedly misrepresented his knowledge of
 such bed designs.” J.A. 18. Cap Export had no reason to
 suspect fraud. Cap Export “undertook numerous prior art
 searches that failed to reveal evidence of the Woody Furni-
 ture purchases.” Id. at 26–27. Nor was “[t]he material ev-
 idence concealed by Lawrie’s misrepresentation . . . widely
 available, a matter of public record, or information already
 in Cap Export’s possession.” Id. at 20. We see no clear

     13 Zinus does not argue that the due diligence re-
 quirement should be analyzed separately for Abraham
 Amouyal or 4Moda.
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 16                                CAP EXPORT, LLC   v. ZINUS, INC.

 error in the district court’s determination that the Ninth
 Circuit’s due diligence requirement was satisfied. 14
                              IV
     With respect to the other prongs of the test for Rule
 60(b)(3), we conclude that the district court also did not
 abuse its discretion in finding them satisfied.
      The district court found that Lawrie’s “repeated an-
 swer of ‘No’” to the questioning “regarding his knowledge
 of beds shipped disassembled in one box” “constituted an
 affirmative misrepresentation,” and that Lawrie’s explana-
 tion that he misunderstood the question was “wholly im-
 plausible.” J.A. 12. The court also found that “Lawrie’s
 additional, repeated denials that he had knowledge of or
 experience with beds or other furniture shipped with com-
 ponents stored within another component constitute[d] af-
 firmative misrepresentations,” id. at 14–15 (emphasis

      14 This is unlike the situation in Casey, a case in
 which the plaintiff alleged that the defendant, her em-
 ployer, had violated California’s Fair Employment and
 Housing Act. The basis for the Rule 60(b)(3) motion in Ca-
 sey was that the defendant had “failed to respond to a dis-
 covery request [for employment records] made two and a
 half weeks before the close of discovery,” which the plaintiff
 argued was fraud. 362 F.3d at 1260.
     The Ninth Circuit determined that the defendant’s
 “discovery recalcitrance [did] not constitute fraud.” Id.
 The court found it “significant” “that this [was] not a case
 in which it [was] alleged that [the defendant] possessed
 [the] employment records but falsely denied having them,
 or the like.” Id. “This [was] a run-of-the-mill discovery
 problem for which the rules provide remedies, had they
 been sought,” and the plaintiff “failed to file a motion to
 compel production of [the] employment records.” Id. at
 1260–61.
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 CAP EXPORT, LLC   v. ZINUS, INC.                           17

 omitted). Zinus contests whether these misrepresenta-
 tions were intentional. The district court found it “highly
 improbable” that Lawrie, “at the time of his 2016 deposi-
 tion,” “had completely forgotten about” the purchases at is-
 sue, which occurred between 2011 and 2013. J.A. 14. “As
 an appellate court, we defer to such credibility judgments,”
 Pac. & Arctic Ry., 952 F.2d at 1148, and we see no clear
 error in the district court’s determination. 15
     Lastly, the district court found that the evidence of the
 purchases of the beds “would have been material to Cap
 Export’s arguments against the ’123 patent’s validity,”
 J.A. 16, and that “Lawrie’s misrepresentations regarding
 his knowledge of those beds ‘prevented [Cap Export] from
 fully and fairly presenting [its] defense,’” id. at 16–17 (al-
 terations in original) (quoting Casey, 362 F.3d at 1260).
 Although Zinus contests whether the Woody Furniture
 beds “qualify as invalidating prior art,” Appellant’s Br. 32,
 Zinus raises no argument (separate from its due-diligence
 argument) that the prior art sales were not highly material
 or that Cap Export could have fully and fairly presented its
 case despite Lawrie’s misrepresentations. Nor could it.
     “[W]hen the case involves the withholding of infor-
 mation called for by discovery, the party need not establish
 that the result in the case would be altered.” Jones v.

     15  The court also found that Lawrie made affirmative
 misrepresentations in discussing his business relation-
 ships during his deposition in October 2016 by omitting
 mention of Jusama. The district court found the omission
 of Jusama was a misrepresentation “in light of . . . the pur-
 chases made from Woody by Jusama, . . . and . . . [Lawrie’s]
 later testimony regarding the structure of his business.”
 J.A. 16, 27. We conclude that the district court did not
 clearly err in determining that Lawrie made affirmative
 misrepresentations during his October 2016 deposition, in-
 cluding by omitting mention of Jusama.
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 18                             CAP EXPORT, LLC   v. ZINUS, INC.

 Aero/Chem Corp., 921 F.2d 875, 879 (9th Cir. 1990) (per
 curiam) (quoting Bunch v. United States, 680 F.2d 1271,
 1283 (9th Cir. 1982)) (applying the Rule 60(b)(3) standard
 to a Rule 59 motion). The Ninth Circuit has suggested that
 “showing ‘the material’s likely worth as trial evidence or by
 elucidating its value as a tool for obtaining meaningful dis-
 covery’” could establish that the withholding of the mate-
 rial deprived the movant of a full and fair opportunity to
 present its case. Id. at 879 (quoting Anderson, 862 F.2d at
 926).
      According to the district court, the Woody Furniture
 beds were “functionally identical in design to the claims in
 the ’123 patent,” and “[i]f Lawrie had fully disclosed his
 prior experience and knowledge of the Woody beds, the ev-
 idence Cap Export present[ed] now regarding purchases
 made in advance of the filing of the ’123 patent would have
 been available for the Court to consider during its prior
 analysis on obviousness and anticipation, which led to par-
 tial summary judgment for Zinus with regard to the ’123
 patent’s validity.” J.A. 16. We conclude that the district
 court did not abuse its discretion in determining that that
 the misrepresentations prevented Cap Export from fully
 and fairly presenting its case.
                        CONCLUSION
     “It is the public interest which is dominant in the pa-
 tent system.” Mercoid Corp. v. Mid-Continent Inv. Co., 320
 U.S. 661, 665 (1944). “The far-reaching social and eco-
 nomic consequences of a patent . . . give the public a para-
 mount interest in seeing that patent monopolies spring
 from backgrounds free from fraud or other inequitable con-
 duct and that such monopolies are kept within their legiti-
 mate scope.” Precision Instrument Mfg. Co. v. Auto. Maint.
 Mach. Co., 324 U.S. 806, 816 (1945). The functioning of the
 patent system requires that “everything that tends to a full
 and fair determination of the matters in controversy should
 be placed before the court.” Keystone Driller Co. v. Gen.
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 CAP EXPORT, LLC   v. ZINUS, INC.                          19

 Excavator Co., 290 U.S. 240, 244 (1933) (quoting 1 Joseph
 Story, Commentaries on Equity Jurisprudence § 98 (W.H.
 Lyon, Jr. ed., 14th ed. 1918)).
     Here, Lawrie, Zinus’s president and expert witness,
 misrepresented his knowledge of highly material prior art.
 The district court properly declined to condone such con-
 duct. The district court did not abuse its discretion in
 granting the motion to vacate the judgment under Rule
 60(b)(3), and we affirm.
                           AFFIRMED