88 Indiana Law Journal 919 (2013)
When parties jointly move to vacate otherwise proper rulings as part of a settlement agreement, district courts often oblige. While the general practice of vacating rulings to facilitate settlement has been criticized in the academic literature as depriving the public of the benefit of judicial precedents, there are hardly any empirical studies on the prevalence of this practice and its effects, particularly at the district court level where the efficiencies arising from settlement—and the resulting pressure on the court to grant vacatur—are much greater compared to the appellate level. This Article endeavors to add an empirical study to the literature on settlement-related vacatur, focusing on district courts in the specific context of patent litigation. In patent cases, the impact of vacating rulings on the public interest is most acute where the affected ruling pertains to the scope, validity, or enforceability of a patent because the cost of relitigating those issues—without the economy of collateral estoppel—may dissuade potential challenges to suspect patents or unmeritorious infringement claims.
The empirical study analyzes a dataset of 79 patent cases in which settlementrelated motions for vacatur were filed over a five-year period (January 2006 to January 2011) that targeted certain rulings adverse to patentees. In those 79 cases, motions for vacatur were granted in 62 cases (78.5%), denied in 15 cases (19%), and withdrawn by the parties in 2 cases (2.5%). The data reveal that district courts appear to prioritize near-term docket management concerns when granting vacatur—even when it would undermine judicial economy and the public interest. Indeed, district courts routinely granted vacatur without providing a reasoned explanation, without regard to the litigation history of the patent or the litigiousness of the patentee, and with a degree of alacrity that would effectively prevent interested third parties from filing timely motions to intervene to oppose vacatur. Overall, the data suggest that granting settlement-related vacatur is a false economy: it leaves the judiciary vulnerable to manipulation, and burdens the public with the anticompetitive effects of weak patents.
"An Empirical Study of Certain Settlement-Related Motions for Vacatur in Patent Cases,"
Indiana Law Journal:
3, Article 3.
Available at: http://www.repository.law.indiana.edu/ilj/vol88/iss3/3