Versata Software, Inc. v. Callidus Software, Inc. ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
VERSATA SOFTWARE, INC., VERSATA
DEVELOPMENT GROUP, INC., VERSATA, INC.,
Plaintiffs-Appellees
v.
CALLIDUS SOFTWARE, INC.,
Defendant-Appellant
______________________
2014-1468
______________________
Appeal from the United States District Court for the
District of Delaware in No. 1:12-cv-00931-SLR, Judge Sue
L. Robinson.
______________________
ON MOTION
______________________
Before CHEN, MAYER, AND LINN, Circuit Judges.
CHEN, Circuit Judge.
ORDER
On November 20, 2014, this court issued an opinion in
this interlocutory appeal. The opinion, reported at 771
F.3d 1368, reversed the order of the district court denying
a stay of trial court proceedings pending the outcome of
post-grant review of the asserted patents under the
2 VERSATA SOFTWARE, INC. v. CALLIDUS SOFTWARE, INC.
Patent Office’s Transition Program for Covered Business
Method (CBM) Patents. Late on November 19, 2014,
however, the parties filed with this court a joint request to
dismiss the appeal, noting that they had concurrently
filed a joint and unconditional stipulation of dismissal of
the underlying complaint with the district court pursuant
to Federal Rule of Civil Procedure (FRCP) 41(a). This
joint request was not presented to the judges until after
the release of the opinion.
Due to the unique timing and sequence of events, we
stayed issuance of the mandate and directed the parties
to respond whether the circumstances require that we
vacate our prior opinion. We have considered the parties’
responses. Because the parties’ voluntary and uncondi-
tional dismissal mooted the appeal before the release of
our prior opinion, we vacate the opinion and dismiss the
appeal.
We have yet to address this precise scenario but find
several orders from our sister circuits informative. For
example, as explained by the Ninth Circuit, the timing of
events in such situations is critical because:
There is a significant difference between a
request to dismiss a case or proceeding for
mootness prior to the time an appellate court
has rendered its decision on the merits and a
request made after that time. Different con-
siderations are applicable in the two circum-
stances. When we refrain from deciding a
case on grounds of mootness, we do so based
upon the limitations of our power. We do not
have the constitutional authority to decide
moot cases.
Armster v. U.S. Dist. Court for Cent. Dist. of Cal., 806
F.2d 1347, 1355 (9th Cir. 1986). Accordingly, when an
appeal is moot before issuance of the appellate court’s
opinion, it is appropriate to vacate that opinion. See, e.g.,
VERSATA SOFTWARE, INC. v. CALLIDUS SOFTWARE, INC. 3
Shokeh v. Thompson, 375 F.3d 351 (5th Cir. 2004) (vacat-
ing, in an immigration case, opinion issued after release
of appellant from custody, which rendered appeal moot);
Bouvagnet v. Bouvagnet, 45 F. App’x 535 (7th Cir. 2002)
(vacating opinion and dismissing appeal where parties
filed joint notice of settlement and motion to dismiss
appeal four days prior to issuance of opinion); In re Pat-
tullo, 271 F.3d 898, 902 (9th Cir. 2001) (vacating prior
non-precedential opinion when case became moot shortly
before issuance of the disposition, although the court of
appeals was not timely made aware of the mooting event);
Duran v. Reno, 197 F.3d 63 (2d Cir. 1999) (vacating prior
opinion as moot because appellant was deported prior to
issuance); Walker v. Warden, U.S. Penitentiary, Atl., 593
F.2d 21 (5th Cir. 1979) (vacating prior opinion as moot
because it was released after death of petitioner-
appellant). 1 A case or controversy must remain alive
during all stages of a case, including appellate review.
Steffel v. Thompson, 415 U.S. 452, 459 n.10 (1974).
Because the question of when the district court action
was dismissed is a procedural issue not unique to patent
law, we apply regional circuit law. See, e.g., Wilson Sport-
ing Goods Co. v. Hillerich & Bradsby Co., 442 F.3d 1322,
1 We note that, unlike the situation here, when par-
ties reach a settlement soon after a valid decision has
been rendered, courts have recognized that the proper
course of action is not so straightforward. See, e.g., Unit-
ed States v. Payton, 593 F.3d 881, 883 (9th Cir. 2010)
(denying vacatur of opinion where mootness occurred
after a decision issued but before the mandate and cata-
loguing other circuit cases); Humphreys v. Drug Enforce-
ment Admin., 105 F.3d 112, 115 (3d Cir. 1996) (drawing
distinction for vacatur purposes between mooting event
occurring before decision and mooting event after decision
but before mandate).
4 VERSATA SOFTWARE, INC. v. CALLIDUS SOFTWARE, INC.
1325–26 (Fed. Cir. 2006) (citing Panduit Corp. v. All
States Plastic Mfg. Co., 744 F.2d 1564, 1575 (Fed. Cir.
1984)) (“The Federal Circuit reviews procedural matters
that are not unique to patent issues under the law of the
particular regional circuit court where appeals from the
district court would normally lie.”). When the parties
filed the joint and unconditional stipulation to dismiss the
complaint in district court pursuant to FRCP
41(a)(1)(A)(ii), the complaint was automatically dismissed
with no further action of the district court required. In
First Nat’l Bank v. Marine City, Inc., 411 F.2d 674 (3d
Cir. 1969), the Third Circuit explained the effect of such a
stipulation. “The entry of such a stipulation of dismissal
is effective automatically and does not require judicial
approval.” Id. at 677. See also In re Bath & Kitchen
Fixtures Antitrust Litig., 535 F.3d 161, 165 (3d Cir. 2008)
(“[A] filing under [FRCP 41(a)(1)(A)(i)] is a notice, not a
motion. Its effect is automatic: the defendant does not file
a response, and no order of the district court is needed to
end the action.”).
Because the parties’ joint stipulation was filed in the
district court the day before the issuance of this court’s
opinion on November 20, 2014, the appeal was moot when
our opinion issued. 2 There was no longer a controversy
whether district court proceedings should be stayed
2 We note that the parties appeared to have reached a
settlement nearly a week prior to filing the joint stipula-
tion with this court. We stress the importance of parties
informing this court promptly and without delay when a
matter has been settled or otherwise may have become
moot. Arizonans for Official English v. Ariz., 520 U.S. 43,
68 n.23 (1997) (citing Bd. of License Comm’rs of Tiverton
v. Pastore, 469 U.S. 238, 240 (1985)) (“It is the duty of
counsel to bring to the federal tribunal’s attention, ‘with-
out delay,’ facts that may raise a question of mootness.”).
VERSATA SOFTWARE, INC. v. CALLIDUS SOFTWARE, INC. 5
pending disposition of the post-grant review, because the
matter was no longer extant.
Accordingly,
IT IS ORDERED THAT:
(1) The court’s opinion issued on November 20, 2014
is vacated.
(2) This appeal is dismissed. The previous stay of the
mandate is lifted. Each side shall bear its own costs.
FOR THE COURT
/s/ Daniel E. O’Toole
Daniel E. O’Toole
Clerk of Court
ISSUED AS A MANDATE: February 27, 2015