Packet Intel. LLC v. NetScout Sys
Authored by: Jeremy J. Gustrowsky
A recent decision highlights a critical risk for patent owners: even after winning a patent infringement lawsuit and being awarded damages, those awards can vanish if the underlying patents are later found invalid by the Patent Office. In this case, Packet Intelligence LLC had successfully sued NetScout Systems, Inc. for infringing several patents (U.S. Patent Nos. 6,665,725; 6,839,751; and 6,954,789), winning millions in damages and ongoing royalties. However, while the case was still being finalized, the Patent Trial and Appeal Board (PTAB) determined that all the asserted patent claims were unpatentable, and this decision was upheld on appeal.
The key issue was whether Packet Intelligence’s court victory was “final” before the patents were invalidated. The Federal Circuit explained that a judgment is only protected from later invalidity findings if the litigation is truly over—meaning there’s nothing left for the court to do except enforce the judgment. Here, the case was still active, with disputes over damages and royalty rates ongoing, and NetScout had filed a legitimate appeal. Because the case was not fully concluded, the court ruled that the later finding of unpatentability wiped out Packet Intelligence’s infringement claims and damages.
This decision follows a line of cases making clear that patent owners cannot collect damages for infringement if their patents are later found invalid, as long as the litigation is still pending in any way. Even if a court has already decided that the patents are valid and infringed, and even if a jury has awarded damages, those awards can be undone if the patents are subsequently invalidated before the case is completely finished.
For patent owners and accused infringers alike, this case is a reminder of the powerful impact of PTAB proceedings and the importance of timing in patent litigation. It also underscores the risk that a hard-fought court victory can be rendered moot by a later administrative decision, so long as the case is not truly final.