In ePlus Inc. v. Lawson Software, Inc.,790 F.3d 1307 (Fed. Cir. 2015) (Nos. 2013-1506, 2013-1587), the Federal Circuit, after briefing on a petition for rehearing and rehearing en banc, declined to take the case en banc and concluded that a PTO reexamination decision that the claims of ePlus’s patent were invalid voided both the injunction and contempt sanctions against Lawson Software. The injunction and sanctions were awarded on remand after a 2012 Federal Circuit opinion that affirmed a district court judgment that Lawson infringed claim 26 of ePlus’s patent and that the claim had not been proven invalid. However, the Federal Circuit reversed the judgment as to other patent claims and remanded the case for the district court to reconsider the injunction. The district court reentered an injunction on remand and awarded ePlus contempt sanctions in excess of $18 million. In parallel, in 2013, the Federal Circuit affirmed the PTO’s determination on reexamination that claim 26 was invalid. The panel held that, once claim 26 was cancelled, the injunction should be terminated. However, the panel was split as to the question of whether the sanctions award, which resulted from sales made in violation of the injunction and prior to the cancellation of claim 26, should also be vacated. The majority vacated the contempt sanctions, finding that because the injunction determination was not sufficiently final, the contempt sanctions were similarly not final relying on Worden v. Searls, 121 U.S. 14 (1887), and Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2014).
Judge O’Malley dissented and would have upheld the contempt sanctions. Judge O’Malley reasoned that the Court’s 2012 opinion affirmed liability and merely remanded for reconsideration of the scope of the injunction. The dissent noted that Lawson appreciated that the injunction had not been overturned and had sought relief under Rule 60. The dissent would have found that Fresenius did not apply because Lawson could not challenge invalidity after the 2012 decision and Fresenius never held that cancellation of claims in reexamination could impact a final judgment. The dissent likewise found Worden distinguishable because the appeal deciding the validity of the claims and the contempt sanctions were part of the same appeal. In dissents from the denial of the petition for rehearing en banc, four other judges agreed with Judge O’Malley’s reasoning.