The U.S. Court of Appeals for the Federal Circuit upheld the district court’s grant of summary judgment, finding that a moving party’s burden is discharged merely by the "filing of a summary judgment motion stating that the patentee had no evidence of infringement and [by] pointing to the specific ways in which accused systems did not meet the claim limitations." Exigent Tech., Inc. v. Atrana Solutions, Inc., Case No. 05-1338 (Fed. Cir. Mar. 22, 2006) (Dyk, J.).
Exigent is the owner of a patent direct to a "multi-function transaction processing system." After Exigent brought suit against Atrana, alleging infringement of its patent, Atrana filed a summary judgment motion on the issues of infringement, invalidity and unenforceability. Despite two extensions of time to respond to Atrana’s summary judgment motion, Exigent never filed a substantive response. While the motion was pending, the parties entered into mediation and signed an "Agreement In Principle Term Sheet," which specified that pending execution of a formal settlement agreement, the term sheet "would not affect any deadlines set by the Court." That same day the district court granted Atrana’s motion for summary judgment on the issue of infringement, concluding that the "record is devoid of evidence demonstrating that Atrana infringed the `885 patent." Exigent subsequently filed a motion requesting that the district court vacate its grant of summary judgment and enforce the settlement agreement reflected in the signed Term Sheet. The district court denied Exigent’s motion as moot and awarded fees and costs to Atrana. Exigent appealed.
On appeal, Exigent argued that the grant of summary judgment was in error because Atrana had "failed to sufficiently support [its] motion" with evidence of non-infringement. Exigent also argued that the district court’s claim construction of was flawed. The Federal Circuit rejected both arguments. Relying on Celotex, the Federal Circuit found that the "district court properly held that Atrana discharged its burden as the summary judgment movant." As the Supreme Court made clear in Celotex, the movant "need not produce evidence showing the absence of genuine issue of material fact in order to properly support its summary judgment motion." Rather, the "burden on the moving party may be discharged by ‘showing’ … that there is an absence of evidence to support the nonmoving party’s case."
The Federal Circuit did conclude, however, that the district court improperly denied as moot Exigent’s motion to vacate the summary judgment grant and enforce the alleged settlement agreement. Reversing and remanding in part for further proceeding, the Court reasoned that the district court retained jurisdiction over the action since final judgment had yet to be entered and thus could revisit its summary judgment decision. In other words, the settlement agreement issue was not moot, and if the agreement was enforceable, entry of the summary judgment was moot.
The Court also vacated the award of attorney fees and costs to Atrana in order for the district court to reconsider its award once the enforceability of the settlement agreement had been determined. Should the settlement agreement be enforceable, Atrana could not be a prevailing party, rendering an award of costs and fees improper.
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