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Ninth Circuit Refuses to Vacate Lower Court’s Ruling After Settlement During Appeal

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By Rachael Peters Pugel and David G. Barker

On Tuesday, the Ninth Circuit declined to vacate a district court’s ruling at the request of the parties after they reached a settlement of their trademark dispute.

In Reserve Media, Inc. v. Efficient Frontiers, Inc., Efficient Frontiers alleged that Reserve Media, a restaurant technology startup, infringed its trademarks.  After the parties failed to resolve their dispute, Reserve Media filed a complaint seeking a declaratory judgment of noninfringement.  Efficient Frontiers responded with a counterclaim for trademark infringement and unfair competition.

The Central District of California granted Reserve Media’s motions for summary judgment, holding that most of the alleged trademarks were not protectable as a matter of law and that the remaining marks had not been infringed.  The district court entered judgment for Reserve Media on its declaratory judgment claim.

Efficient Frontiers appealed to the Ninth Circuit.  On the “eve” of oral argument, the parties reached a settlement, and Reserve Media filed a motion to withdraw its answering brief and concede the appeal.  Reserve Media further asked the Ninth Circuit to “vacate the Judgment and Orders of the District Court with prejudice.”

The Ninth Circuit dismissed the appeal, but, citing Supreme Court precedent, declined to vacate the trial court’s judgments. The court remanded the case for the trial court to “consider whether to vacate its judgment in light of ‘the consequences and attendant hardships of dismissal or refusal to dismiss’ and ‘the competing values of finality of judgment and right to relitigation of unreviewed disputes.’”  Should the trial court decline to vacate its prior judgments on remand, Efficient Frontiers may have waived its right to appeal and gained nothing by way of its settlement with Reserve Media.