Mangosoft v . Oracle 02-CV-545-SM 03/28/07
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Mangosoft, Inc. and
Mangosoft Corporation,
Plaintiffs
v. Civil N o . 02-cv-545-SM
Opinion N o . 2007 DNH 040
Oracle Corporation,
Defendant
O R D E R
This is a suit for patent infringement, in which Mangosoft,
Inc. and Mangosoft Corporation (collectively, “Mangosoft”) claim
that Oracle Corporation is selling software that infringes United
States Patent N o . 6,148,377 (“the ‘377 patent”). 1 By prior
order, the court held that the Oracle products identified by
Mangosoft do not infringe the ‘377 patent. As to Oracle’s
counterclaim of patent invalidity and/or inequitable conduct,
however, the court concluded that the existence of genuinely
disputed issues of material fact precluded the entry of judgment
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Mangosoft originally alleged that Oracle’s products
infringed two of its patents. Subsequently, however, it provided
Oracle with a covenant not to sue with respect to one of those
patents (United States Patent N o . 5,918,229). Consequently,
Oracle no longer has a reasonable apprehension of suit with
regard to that patent and there would not appear to be any case
or controversy as to its counterclaim that the ‘229 patent is
invalid and/or unenforceable.
as a matter of law in favor of either party. Accordingly, their
cross motions for summary judgment on those issues were denied.
Pending before the court is Mangosoft’s motion to “dismiss
the declaratory judgment counterclaim of defendant Oracle
Corporation (“Oracle”) without prejudice o r , in the alternative,
[for] entry of a separate judgment of non-infringement pursuant
to Fed. R. Civ. P. 54(b) and [a] stay [as to] Oracle’s remaining
counterclaim.” Plaintiff’s motion to dismiss (document n o . 103)
at 1 . Oracle objects. For the reasons set forth below, that
motion is granted to the extent it seeks dismissal, without
prejudice, of Oracle’s counterclaim.
Discussion
As the Court of Appeals for the Federal Circuit has
observed, a district court’s claim construction is frequently
determinative of either patent infringement or invalidity, but
seldom both. Nystrom v . TREX Co., 339 F.3d 1347, 1350 (Fed. Cir.
2003). In this case, it was determinative of the former. After
the court issued its claim construction order, see Markman v .
Westview Instruments, Inc.,
517 U.S. 370 (1996), it granted (at
least in part) Oracle’s motion for summary judgment, holding that
neither of the Oracle products identified by Mangosoft infringes
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the ‘377 patent. What remains unresolved, however, is Oracle’s
counterclaim, in which it seeks a declaratory judgment that the
‘377 patent is invalid and/or unenforceable. See generally 28
U.S.C. § 2201.
Of course, had Oracle asserted that the ‘377 patent is
invalid and/or unenforceable simply as affirmative defenses,
those affirmative defenses would now be moot in light of the
court’s holding that Oracle’s products do not infringe. But,
Oracle did not raise those claims merely as affirmative defenses.
Instead, it also asserted them in the context of a counterclaim
for declaratory judgment. Consequently, they have not
necessarily been rendered moot. See generally Cardinal Chem. C o .
v . Morton Int’l, 508 U.S. 8 3 , 93-94 (1993) (“An unnecessary
ruling on an affirmative defense is not the same as the necessary
resolution of a counterclaim for a declaratory judgment.”). See
also Altvater v . Freeman,
319 U.S. 359 (1943). Thus, it is at
least arguable that there remains an actual case or controversy
between the parties, and that Oracle’s counterclaim seeking
declaratory judgment remains alive and well, at least as to the
‘377 patent. Nevertheless, a question remains: whether, in the
exercise of its discretion, the court should assert jurisdiction
over that counterclaim.
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In circumstances such as this - when a district court has
held that the patent in issue is not infringed, but invalidity
and/or unenforceability counterclaims remain - the federal
circuit has observed that a district court has four options:
1. Proceed to trial on the defendant’s remaining
invalidity and unenforceability
counterclaim(s), thus resolving the
litigation on the merits;
2. Consider whether it is appropriate to hold
that there is “no just reason for delay” of
an appeal of the court’s finding of non-infringement and, if s o , direct the entry of
a final judgment on fewer than all of the
claims under Fed. R. Civ. P. 54(b);
3. If appropriate (and if sought by the
plaintiff), grant the plaintiff permission to
immediately appeal the court’s interlocutory
judgments and orders under 28 U.S.C. § 1292;
or
4. In the exercise of the court’s discretion,
dismiss the defendant’s pending
counterclaim(s) without prejudice. See
Nystrom, 339 F.3d at 1349-50.
Here, having considered the procedural posture of the case, the
pleadings and papers filed by the parties, and the fact that the
‘377 patent’s invalidity is not “plainly evident,” the court
concludes that the most prudent way to resolve this matter, and
the most cost-effective way for the parties, is to dismiss
Oracle’s counterclaim, without prejudice. See Phonometrics, Inc.
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v . Northern Telecom Inc., 133 F.3d 1459, 1468 (Fed. Cir. 1998)
(holding that it is not always necessary for a district court to
resolve both the validity and infringement issues and noting that
when “noninfringement is clear and invalidity is not plainly
evident it is appropriate to treat only the infringement issue”)
(citation omitted). See also Liquid Dynamics Corp. v . Vaughan
Co.,
355 F.3d 1361, 1371 (Fed. Cir. 2004) (“A district court
judge faced with an invalidity counterclaim challenging a patent
that it concludes was not infringed may either hear the claim or
dismiss it without prejudice, subject to review only for abuse of
discretion.”).
In its Markman order, the court construed several disputed
terms in Mangosoft’s patent, including the term “local.” The
court then applied that construction in ruling that the two
Oracle products identified by Mangosoft do not infringe the ‘377
patent. Next, the court held that the existence of genuinely
disputed material facts precluded it from granting either of the
parties’ cross-motions for summary judgment on the issues of
patent invalidity and unenforceability; resolution of Oracle’s
counterclaim would require a trial. Mangosoft takes issue with,
among other things, the court’s construction of the term “local.”
And, before the court resolves Oracle’s counterclaim, Mangosoft
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wishes to obtain review of the court’s patent construction,
anticipating that it will persuade the Federal Circuit to
construe that term (and possibly others) in a manner more to
Mangosoft’s liking.
Ordinarily, a party’s desire to obtain immediate appellate
review of an interlocutory ruling would be of little moment.
Federal appellate courts typically discourage piecemeal
litigation of parties’ disputes. See, e.g., Pause Tech. LLC v .
TiVo Inc., 401 F.3d 1290 (Fed. Cir. 2005). Here, however, it is
apparent that the proper construction of the ‘377 patent
(including the term “local”) is central to resolving Oracle’s
invalidity counterclaim. That is because, in order to address
Oracle’s assertion that Mangosoft’s ‘377 patent is invalid, the
court must determine whether it was anticipated by any prior art.
And, needless to say, whether prior art anticipated the ‘377
patent will depend, in substantial measure, on precisely what
that patent teaches. In short, if this court has incorrectly
construed the term “local” (or any other material terms) as used
in Mangosoft’s patent, it is unlikely that application of those
same terms will properly resolve Oracle’s invalidity
counterclaim.
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The court, then, is persuaded that allowing Mangosoft to
appeal its patent construction and non-infringement rulings to
the Court of Appeals for the Federal Circuit represents the most
efficient use of judicial resources, as well as those of the
parties. Mangosoft intends to appeal this court’s claim
construction and non-infringement rulings to the Federal Circuit.
By allowing Mangosoft to promptly obtain the definitive ruling it
seeks, this court will avoid dedicating time and resources to
resolve Oracle’s invalidity counterclaim based on what might
prove to be an erroneous construction of the patent.
Conclusion
For the foregoing reasons, Mangosoft’s motion to dismiss
Oracle’s counterclaim (document n o . 103) is granted. In the
exercise of its discretion, the court hereby dismisses Oracle’s
counterclaim for declaratory judgment, without prejudice. In all
other respects, Mangosoft’s motion is denied.
The Clerk of Court shall enter judgment in favor of Oracle
on the issue of patent infringement, in accordance with the
court’s order of March 1 4 , 2006 (document n o . 101) (resolving
Mangosoft’s patent infringement claims in favor of Oracle and
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holding that Oracle’s products in issue do not infringe claims 1 ,
5 , and/or 9 of the ‘377 patent) and close the case.
SO ORDERED.
Steven J./McAuliffe
:hief Judge
March 2 8 , 2007
cc: Alexander J. Walker, Esq.
Paul J. Hayes, Esq.
Robert R. Gilman, Esq.
Danielle L . Pacik, Esq.
Eugene Y . Mar, Esq.
Leeron G. Kalay, Esq.
Martha Van Oot, Esq.
Matthew D. Powers, Esq.
Matthew M . Sarboraria, Esq.
Paul T . Ehrlich, Esq.
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