1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CAPELLA PHOTONICS, INC., Case No. 14-cv-03348-EMC

8 Plaintiff,

ORDER DENYING DEFENDANTS’

9 v. MOTION FOR RELIEF AND

AWARDING COSTS

10 CISCO SYSTEMS INC, et al., Docket No. 227 11 Defendants.

12 13 14 I. INTRODUCTION 15 Plaintiff Capella Photonics, Inc. brought patent infringement claims against four 16 Defendants. In 2014, one of the Defendants filed a petition with the Patent Trial and Appeal 17 Board (“PTAB”) seeking institution of inter partes review on the challenged claims. After the 18 claims were cancelled by the PTAB (an outcome affirmed by the Federal Circuit), this Court 19 granted Plaintiff’s Motion to Dismiss Plaintiffs’ claims without prejudice and dismissed 20 Defendant Ciena’s counterclaims without prejudice (on September 6, 2019). The Court also 21 denied Defendants’ request to be declared prevailing parties and, as a result, declined to award 22 Defendants statutory costs. See Docket No. 226. Following a decision by the Federal Circuit on 23 October 9, 2019 (in which that court affirmed the award of prevailing party status and statutory 24 costs in a case factually similar to the instant case), Defendants filed a Motion for Relief from an 25 Order and a Renewed Request to Be Declared Prevailing Parties and Awarded Costs. See Docket 26 No. 227. 27 1 II. BACKGROUND 2 According to Plaintiff, “Capella is a pioneer of optical switching technology used in 3 optical transmission networks by the telephone, Internet, and cable television industries.” Motion 4 to Dismiss (“MTD”) at 3, Docket No. 221. The company has “an extensive of [sic] portfolio of 5 patents on optical switching devices.” Id. This case is a consolidated patent infringement case 6 that was originally filed as several cases in the Southern District of Florida in 2014. See Docket 7 No. 1; Docket No. 111. Plaintiff “alleged that each respective Defendant infringed U.S. Patent 8 Nos. RE42,368 (the ‘‘368 Patent’) and RE42,678 (the ‘‘678 Patent’).” Opposition to Motion to 9 Stay or in the Alternative to Amend at 6, Docket No. 209. Plaintiff served infringement 10 contentions on those patents, and Defendants served invalidity contentions. Id. On July 15, 2014, 11 one of the Defendants filed a petition with the PTAB seeking institution of inter partes review 12 (“IPR”) proceedings on the then asserted claims. Id. In July 2014, the case was transferred to this 13 Court from the Southern District of Florida. See Order Granting Defendants’ Motion to Transfer, 14 Docket No. 77. 15 In March 2015, the Court stayed this case pending the PTAB’s IPR Proceedings. Docket 16 No. 172. Between January 2016 and October 2016, the PTAB determined that all of Plaintiff’s 17 claims identified in its preliminary infringement contentions for the ‘368 and ‘678 patents were 18 invalid. Motion to Stay or in the Alternative to Amend at 7 (“MTS”), Docket No. 205. The 19 Federal Circuit affirmed that determination in February 2018. MTS at 7. Plaintiff then exhausted 20 its appeals on November 5, 2018 when the Supreme Court denied its petition for writ of certiorari. 21 Id. “On December 10, 2018, the PTO issued IPR certificates cancelling claims 1-6, 9-13 and 15- 22 22 of the ‘368 Patent and claims 1-4, 9, 10, 13, 17, 19-23, 27, 29, 44-46, 53 and 61-65 of the ‘678 23 Patent.” MTS at 17; Becker Declaration ¶ 11, Docket No. 205–1. This effectively eliminated all 24 the claims asserted by Plaintiff in the instant case. Other claims of the ‘368 and ‘678 patents were 25 not adjudicated by the PTAB. 26 Meanwhile, “[o]n June 29, 2018, before the PTO cancelled the challenged claims,” 27 Plaintiff filed reissue applications. MTS at 7. Plaintiff asserts that the “[c]laims in these newly 1 continuation of the original Reissue Patents-in-Suit and have effect continuously from their 2 original date of issuance.” Id. at 2. Plaintiff asked the Court to extend the imposed stay until after 3 a determination on the reissue application. On June 4, 2019, the Court denied Plaintiff’s Motion 4 to Extend Stay and its subsequent request to amend its infringement contentions to include claims 5 not brought in the IPR proceedings. Docket No. 219. The Court also denied Defendants’ motion 6 to dismiss for failure to prosecute pursuant to Federal Rule of Civil Procedure 41(b). Id. 7 Plaintiff then brought a Motion to Dismiss Actions Without Prejudice as Moot and for 8 Lack of Jurisdiction. See Docket No. 221. Plaintiff’s contention was that “[a]s a result of the 9 cancellation of all of Capella’s asserted patent claims and this Court’s subsequent rulings 10 prohibiting Capella from adding new infringement claims of the Patents-in-Suit that have not been 11 cancelled, these actions are moot and the Court no longer has subject matter jurisdiction.” Id. at 3. 12 Defendants argued that the matter should be dismissed with prejudice. Defendants’ Opposition to 13 Motion to Dismiss at 1, Docket No. 223. Defendants requested that the Court “deny Plaintiff’s 14 motion and enter summary and/or final judgment in Defendants’ favor on Plaintiff’s infringement 15 counts pursuant to Federal Rules of Civil Procedure 54, 56, and/or 58 and award statutory costs to 16 Defendants.” Id. On September 6, 2019, the Court granted Plaintiff’s Motion to Dismiss 17 Plaintiffs’ claims without prejudice and denied Defendants’ request to be declared prevailing 18 parties; as a result, it declined to award Defendants statutory costs. See Docket No. 226. 19 III. DISCUSSION 20 A. Legal Standard 21 Rule 60(b) permits a court to provide relief from final judgment, order, or proceeding on 22 several different grounds. Fed. R. Civ. P. 60(b). Rule 60(b)(6) specifically provides that a court 23 may grant relief from a final judgment, order, or proceeding for “any other reason that justifies 24 relief.” Fed. R. Civ. P. 60(b)(6). This catch-all provision has been narrowly construed. Hoffman 25 v. Lloyd, No. C-12-0198 EMC, 2012 WL 4857799, at *3 (N.D. Cal. Oct. 11, 2012). Moreover, 26 relief under Rule 60(b)(6) is reserved for cases in which there are extraordinary circumstances. 27 See Lal v. State of Cal., 610 F.3d 518, 524 (9th Cir. 2010) (stating that Rule 60(b)(6) is used 1 relief under the rule “a party must demonstrate ‘extraordinary circumstances which prevented or 2 rendered him unable to prosecute [his case]’”). 3 A change in law may sometimes “constitute[] a ground for re-opening a final judgment.” 4 Styers v. Ryan, 632 F. App’x 329, 331 (9th Cir. 2015); see also Henson v. Fid. Nat’l Fin., Inc., 5 943 F.3d 434, 444 (9th Cir. 2019) (“We have previously recognized that a change in the 6 controlling law can— but does not always—provide a sufficient basis for granting relief under 7 Rule 60(b)(6).”). However, “a subsequent change in the law cannot itself constitute an 8 extraordinary circumstance sufficient to entitle the district court to vacate a final judgment on its 9 own initiative.” Clifton v. Attorney Gen. of State of Cal., 997 F.2d 660, 665 (9th Cir. 1993). 10 Instead, a district court must weigh several factors:

11 To decide whether a change in law constitutes a ground for re- opening a final judgment, a court must find extraordinary 12 circumstances and may consider whether (1) the intervening change in law overruled an otherwise settled legal precedent in petitioner's 13 favor; (2) the petitioner was diligent in pursuing the issue; (3) the final judgment caused one or more of the parties to change his 14 position in reliance on the judgment; (4) there is delay between the finality of the judgment and the motion for Rule 60(b)(6) relief; (5) 15 there is a close connection between the original and intervening decisions at issue in the Rule 60(b) motion; and (6) relief from 16 judgment would upset the principles of comity governing the interaction between coordinate sovereign judicial systems. 17 18 Styers, 632 F. App’x at 331 (citing Phelps v. Alameida, 569 F.3d 1120, 1135–40 (9th Cir.2009); 19 see also Henson, 943 F.3d at 440 (finding it appropriate to apply the Phelps factors in a non- 20 habeas context). The Ninth Circuit has also emphasized that, in addition to these factors, “courts 21 must consider all of the relevant circumstances surrounding the specific motion before the court in 22 order to ensure that justice be done in light of all the facts.” Henson, 943 F.3d at 440. 23 B. Motion for Relief 24 1. Change in Law 25 The threshold question is whether there has been a change in the law. Henson, 943 F.3d at 26 446 (“The first Phelps factor considers the nature of the intervening change in the law.”). The 27 Ninth Circuit has concluded that both a change in the law that settles a previously unsettled issue 1 instead of adopting a rote approach in which “any particular type of change in the law favors or 2 disfavors relief,” the Ninth Circuit has stated that “a district court should weigh whether the 3 specific nature of the change in the law in the case before it makes granting relief more or less 4 justified under all of the circumstances, and should support its conclusion with a reasoned 5 explanation grounded in the equitable considerations raised by the case at bench.” Id. 6 Defendants seek relief because of a recently issued decision from the Federal Circuit—B.E. 7 Technology, L.L.C. v. Facebook, Inc., 940 F.3d 675 (Fed. Cir. 2019). See Motion for Relief 8 (“Mot.”) at 1, Docket No. 227. In B.E. Technology, Plaintiff brought an infringement suit against 9 Facebook, which filed a petition for inter partes review of the asserted claims. B.E. Technology, 10 940 F.3d at 676. The PTAB found the claims unpatentable, and the Federal Circuit affirmed. Id. 11 Facebook then sought dismissal of the claims with prejudice at the district court, but the district 12 court dismissed for mootness in light of the cancellation of the claims by the Board. Id. at 676–77. 13 The district court then awarded costs to Facebook1 and affirmed a determination by the Clerk of 14 the Court that $4,424.20 in costs were to be taxed against B.E. Technology. Id. at 677. As the 15 Federal Circuit explained, in affirming the Clerk’s award of costs, the district court (relying on 16 CRST Van Expedited, Inc. v. E.E.O.C., 136 S. Ct. 1642 (2016)) held that “although the case was 17 dismissed for mootness, Facebook ‘obtained the outcome it sought: rebuffing B.E.’s attempt to 18 alter the parties’ legal relationship. The court thus held Facebook to be the prevailing party.’” Id. 19 (internal citations omitted) (quoting the district court’s opinion). 20 In affirming the district court’s decision, the Federal Circuit agreed with Facebook’s 21 contention that “the district court properly determined that it was the prevailing party because it 22 successfully rebuffed B.E.’s claims. . . . [and] the court’s dismissal of the case, albeit not on the 23 merits, provided the required judicial imprimatur.” Id. The Federal Circuit relied on CRST to 24 conclude that “a defendant can be deemed a prevailing party even if the case is dismissed on 25 procedural grounds rather than on the merits.” Id. at 678 (citing CRST, 136 S. Ct. at 1653). It also 26

27 1 “[T]he court initially declined to award Facebook costs because the request was lodged before 1 relied on CRST to reject B.E.’s argument that—because “mootness has no preclusive effect”—the 2 dismissal “could not alter the legal relationship between the parties.” Id. at 679. The Federal 3 Circuit concluded that Facebook was the prevailing party because “Facebook obtained the 4 outcome it sought via the mootness dismissal; it rebuffed B.E.’s attempt to alter the parties’ legal 5 relationship in an infringement suit. This is true even though the mootness decision was made 6 possible by a winning a battle on the merits before the PTO.” Id. 7 In this Court’s prior order declining to declare Defendants the prevailing party, the Court 8 explained: To be a prevailing party, a party must “at least . . . obtain a court 9 order materially changing the legal relationship of the parties.” Raniere v. Microsoft Corp., 887 F.3d 1298, 1304 (Fed. Cir. 2018). 10 This change must be marked by “judicial imprimatur,” such that there has been “a judicially sanctioned change in the legal 11 relationship of the parties.” CRST Van Expedited, Inc. v. E.E.O.C., 136 S. Ct. 1642, 1646 (2016) (internal quotations omitted) (quoting 12 Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't of Health & Human Res., 532 U.S. 598, 604–05 (2001)). 13 14 Docket No. 226 at 7. Because dismissal without prejudice was not a court order that changed the 15 legal relationship between the parties, the Court concluded that its “ruling [was] insufficient to 16 confer prevailing party status.” Id. It appears the Court’s conclusion is inconsistent with B.E. 17 Technology. 18 While Plaintiff contends that B.E. Technology does not represent a change in the law 19 (because it relied on precedent and affirmed the lower court’s decision), see Plaintiff’s Opposition 20 to Motion for Relief (“Opp.”) at 3, Docket No. 230, several factors suggest that it does represent a 21 clarification of previously unsettled law, if not a change in law. The Federal Circuit’s decision in 22 B.E. Technology would likely have persuaded the Court to rule differently; at the time, there was 23 no appellate authority on point. See Transcript of Proceedings from December 4, 2019 (“Relief 24 Hearing”) at 15, Docket No. 237-2 (“[H]aving a Federal Circuit decision that’s very close on 25 point, except for the reissuance factor, is pretty convincing.”). In addition, at the hearing on the 26 Motion to Dismiss, Plaintiff’s counsel could only point to a decision from the Central District of 27 California which held that there could be no prevailing party when a case was dismissed as moot. 1 (referring the Court to Transp. Techs., LLC v. Los Angeles Metro. Transportation Auth., No. CV 2 15-6423-RSWL-MRW, 2019 WL 2058630, at *3 (C.D. Cal. May 8, 2019) (“Defendant fails to 3 cite any case, nor was the Court able to find any case, where a court granted prevailing party status 4 to a defendant when the case was dismissed on jurisdictional grounds without prejudice.”)). 5 Under Henson, this factor favors granting relief. 6 2. Diligence in Pursuing Relief 7 “The second Phelps factor is the petitioner’s exercise of diligence in pursuing his claim for 8 relief.” Henson, 943 F.3d at 449. Here, Defendants contend that they were diligent in pursuing 9 relief because they filed their Motion for Relief less than two weeks after the B.E. Technology 10 decision. Mot. at 3. However, Henson found that the petitioner in Phelps was diligent because 11 “he had pursued ‘all possible avenues’ in advocating for his legal position, including securing a 12 certificate of appealability, filing petitions for rehearing en banc and certiorari, and filing motions 13 for reconsideration.” Henson, 943 F.3d at 449 (citing Phelps, 569 F.3d at 1136–37). Defendants 14 in this case did not request leave to file a motion for reconsideration, did not file an appeal, and 15 did not notify the Court of the district court’s decision in B.E. Technology or the pendency of its 16 appeal. Opp. at 4–5. 17 While it is true the Defendants moved shortly after the Federal Circuit’s decision, 18 Defendants did not pursue “all possible avenues” in pursuit of their legal goals. See Henson, 943 19 F.3d at 449 (citing Phelps, 569 F.3d at 1136–37); see also Ackermann v. United States, 340 U.S. 20 193, 198 (1950) (“Petitioner cannot be relieved of such a choice [not to appeal] because hindsight 21 seems to indicate to him that his decision not to appeal was probably wrong . . . . There must be an 22 end to litigation someday, and free, calculated, deliberate choices are not to be relieved from.”). 23 Accordingly, this factor weighs slightly against granting relief. 24 3. Reliance Interest in the Finality of the Case 25 “The third factor . . . considered in Phelps is whether granting the Rule 60(b) motion for 26 relief from judgment would upset ‘the parties’ reliance interest in the finality of the case.’” 27 Henson, 943 F.3d at 450 (quoting Phelps, 569 F.3d at 1137). This factor examines not some 1 more of the parties to change his legal position in reliance on that judgment’ such that granting the 2 motion for relief would ‘undo the past, executed effects of the judgment.’” Id. (quoting Phelps, 3 569 F.3d at 1137–38) (noting the installation of pipes upon land conveyed by judgment or release 4 from custody after a new trial as examples of reliance interests that might qualify). On the one 5 hand, Defendants contend that granting relief “would not impact the finality of dismissal” or 6 “disrupt the merits of the case.” Mot. at 3. On the other hand, Plaintiff argues that it would be 7 “severely and unfairly” prejudiced because it believes that “the present motion can only be driven 8 by Defendants’ desire to seek attorney’s fees” rather than “whatever modest amount of money 9 they might seek to extract as litigation costs”; Plaintiff speculates that such efforts could result in 10 years of additional briefing and appeals. Id. at 5–6. However, neither party indicates that it has 11 changed its legal position in reliance on the Court’s earlier order. Henson, 943 F.3d at 450. Thus, 12 the third factor weighs in favor of granting relief. 13 4. Delay Between the Judgment and the Rule 60(b) Motion 14 “The fourth Phelps factor ‘examines the delay between the finality of the judgment and the 15 motion for Rule 60(b)(6) relief.’” Henson, 943 F.3d at 451–52 (quoting Phelps, 569 F.3d at 16 1138). The key idea is that “a change in the law should not indefinitely render preexisting 17 judgments subject to potential challenge.” Id. (quoting Jones v. Ryan, 733 F.3d 825, 840 (9th Cir. 18 2013)). Defendants note that their Motion for Relief was filed “only six weeks after the Court’s 19 September 6, 2019 dismissal.” Mot. at 3. Plaintiff does not contest this point, and it, too, weighs 20 in favor of granting relief. See, e.g., Lawson v. Grubhub, Inc., No. 15-CV-05128-JSC, 2018 WL 21 6190316, at *6 (N.D. Cal. Nov. 28, 2018) (finding “no significant delay” where six months 22 elapsed between judgment and the filing of the Rule 60(b) motion and noting that other cases have 23 accepted four- and nine-month delays). However, the Henson court emphasizes that the correct 24 analysis focuses on the length of time between the time when the original judgment became final 25 after appeal (as opposed to when it was originally entered) and the filing of the Rule 60(b) motion. 26 See Henson, 943 F.3d at 452. Although no appeal was taken here, under the Federal Rules of 27 Appellate Procedure, the parties had 30 days from September 6, 2019 to appeal the Court’s 1 closing of the appellate window and the filing of the Motion for Relief, the time elapsed prior to 2 the filing of the motion would be even shorter than the six weeks indicated by Defendants. 3 5. Relationship Between the Original Judgment and the Change in the Law 4 “The fifth Phelps factor ‘looks to the closeness of the relationship between the decision 5 resulting in the original judgment and the subsequent decision that represents a change in the 6 law.’” Henson, 943 F.3d at 452 (quoting Jones, 733 F.3d at 840). This factor recognizes that 7 “legal rules and principles inevitably shift and evolve over time, but the mere fact that they do so 8 cannot upset all final judgments that have predated any specific change in the law.” Id. (quoting 9 Phelps, 569 F.3d at 1139); see also Budget Blinds, Inc. v. White, 536 F.3d 244, 255 (3d Cir. 2008) 10 (“Th[e] [extraordinary circumstances] requirement exists in order to balance the broad language of 11 Rule 60(b)(6), which allows courts to set aside judgments for ‘any’ reason justifying relief, with 12 the interest in the finality of judgments.”). As the Ninth Circuit explained in Phelps, “if there is a 13 close connection between the two cases, the court will be more likely to find the circumstances 14 sufficiently extraordinary to justify disturbing the finality of the original judgment.” Phelps, 569 15 F.3d at 1139 (internal brackets and quotation marks omitted). 16 Here, there is a close relationship between this Court’s decision about prevailing party 17 status and the B.E. Technology decision. B.E. Technology is directly on point. Had it been 18 decided earlier, B.E. Technology would have been the circuit authority for which this Court was 19 searching. Consequently, this factor also weighs in favor of granting relief. 20 6. Concerns of Comity 21 “The sixth Phelps factor considers concerns of comity.” Henson, 943 F.3d at 453 (citing 22 Jones, 733 F.3d at 840). However, the Henson court explained that “considerations of comity 23 between the independently sovereign state and federal judiciaries that we discussed in Phelps do 24 not apply . . . [where a] case does not involve a federal habeas petition that challenges a state 25 conviction.” Id. at 453 (internal quotation marks omitted). Where that is the case, the district 26 court should “skip[] the Phelps comity factor as inapplicable.” Id.; see also Opp. at 3 n.1 (“comity 27 is plainly not a factor where a federal court is deciding issues related to patent infringement”). As 1 7. Other Considerations 2 Although the Phelps factors weigh in favor of relief, the Phelps factors “were not intended 3 to be a rigid or exhaustive list.” Henson, 943 F.3d at 446. Instead, Henson invited consideration 4 of additional factors that may be relevant to the individual circumstances of the case. See id. at 5 453–54. Rule 60(b)(6) gives the district court power to vacate judgments “whenever such action 6 is appropriate to accomplish justice. Id. (citing United States v. Sparks, 685 F.2d 1128, 1130 (9th 7 Cir. 1982)). Here, Defendants seek relief for a non-merits reason and say very little about why 8 such relief is critical to “accomplish justice” in this instance. Being declared prevailing parties 9 would simply enable Defendants to seek statutory costs and potentially recover attorneys’ fees. 10 See Mot. at 1; see also Transcript at 10 (“Well, obviously, being declared prevailing party also 11 would entitle the defendants to file a motion for attorneys’ fees.”). Neither party has identified 12 any other legal consequence were relief granted. Defendants themselves characterize the request 13 for relief as one merely seeking a “minor correction that we believe is an injustice,” Transcript at 14 12, and as simply the “proper closure to this case.” Defendants’ Supplemental Brief at 1, Docket 15 No. 237. But minor corrections do not normally rise to the level of “extraordinary circumstances” 16 warranting relief from finality under Rule 60(b). See, e.g., Cohen v. United States, No. CR-03- 17 0342-PHX-JAT, 2010 WL 1962059, at *1 (D. Ariz. May 14, 2010) (“Movant does not argue any 18 extreme hardship or injustice that would warrant consideration. Accordingly, his motion should 19 be denied.”). Thus, this factor strongly weighs against granting relief. 20 8. Conclusion 21 In addition to the Phelps factors, the Court must consider whether granting relief under 22 Rule 60 is appropriate to “accomplish justice” in this case. As Defendants have characterized the 23 relief sought as a “minor correction” and have not explained how the Court’s prior order has 24 caused or will cause them any “extreme hardship” other than being denied statutory costs, the 25 circumstances of this case are therefore not sufficiently extraordinary “that granting relief from 26 judgment here ‘is appropriate to accomplish justice.’” Henson, 943 F.3d at 455 (quoting Phelps, 27 569 F.3d at 1135). 1 C. Statutory Costs 2 Since the Court declines to provide relief under Rule 60(b)(6), it declines to award 3 prevailing party status or statutory costs to Defendants. 4 IV. CONCLUSION 5 For the foregoing reasons, the Court DENIES Defendant’s Motion for Relief and declines 6 || to award statutory costs. 7 This order disposes of Docket No. 227. 8 9 IT IS SO ORDERED. 10 11 Dated: December 31, 2019 12

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