CAFC Dismisses Appeal Against Trustpilot as Moot Following Settlement

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision today in Linfo IP, LLC v. Trustpilot, Inc., dismissing an appeal brought by Linfo IP, LLC as moot. The dismissal followed Linfo and Trustpilot, Inc.’s settlement of their dispute while the appeal was still pending.

Linfo owns the U.S. Patent No. 9,092,428, titled “System, Methods and User Interface for Discovering and Presenting Information in Text Content.” On April 12, 2024, Linfo filed a lawsuit against Trustpilot in the U.S. District Court for the Southern District of New York. Linfo alleged that Trustpilot’s business review website directly and indirectly infringed claims 1 through 20 of the ‘428 patent. TrustPilot then moved to dismiss on the grounds that the claims were invalid as ineligible under Section 101. The district court applied the two-step framework from Alice Corp. Pty. v. CLS Bank International, found the claims invalid, and dismissed Linfo’s infringement suit.

Linfo appealed the district court’s eligibility ruling, but while the appeal was pending, Trustpilot notified the CAFC that it would no longer participate in the case because it had entered into a settlement agreement with Linfo. The CAFC then ordered Linfo to produce the agreement and submit supplemental briefing addressing whether the appeal had become moot.

The CAFC explained that Article III of the Constitution limits federal jurisdiction to live cases and controversies. This requirement must apply at every stage of review, not only when a complaint is filed, as in Genesis Healthcare Corp. v. Symczyk. An appeal becomes moot when the issues are no longer live or when neither side retains a legally cognizable interest in the outcome, citing Already, LLC v. Nike, Inc.

Reviewing the settlement agreement, the CAFC found its terms had resolved the dispute. Section 2.1 granted “Trustpilot a worldwide and irrevocable license” to make use, and sell products covered by the ‘428 patent. Section 3.1 required Trustpilot to pay a settlement fee within 45 business days of the agreement’s effective date. That payment was made “[i]n consideration of the settlement of all claims in the Lawsuits.” The agreement’s term runs from its effective date, March 8, 2025, until the expiration of the last Licensed Patent under Section 8. The CAFC also noted that Section 4(b) required Linfo to file a stipulated dismissal with prejudice if the district court litigation were to resume or if the CAFC were to remand.

The CAFC relied on its earlier decision in Aqua Marine Supply v. AIM Machining, Inc., where it held that “the case has become moot as a result of the voluntary act of the patentee.” That happens when the settlement causes the opposing side to lose its interest in defending an invalidity finding. The CAFC found the facts here comparable to Aqua Marine, where a settlement provision resolving “all the claims now pending” led to dismissal of that appeal.

In its supplemental briefing, Linfo raised three arguments for why the appeal remained live. First, Section 2.1(d) preserved Trustpilot’s right to fully participate in the appeal. Second, Section 4(b) addressed what would happen if the district court litigation resumed. Third, a recital in the agreement acknowledged the parties disagreed over the validity, enforceability, and infringement of the ‘428 patent. Linfo also relied on the CAFC’s decision in Avid Identification Systems, Inc. v. Crystal Import Corp., arguing that Trustpilot’s freedom to participate in the appeal alone showed a live controversy.

The CAFC rejected each argument, finding Linfo’s position undermined by Section 3.1’s language tying the settlement payment to “the settlement of all claims in the Lawsuits,” which the court said closely resembled the provision that led to dismissal in Aqua Marine. The court also found the validity recital unpersuasive, reasoning that it “defies logic” for Trustpilot to retain a stake in the patent’s validity after receiving a license to practice it, particularly given its withdrawal from the appeal.

The CAFC distinguished Crystal Import on the ground that the settlement consideration in that case was tied directly to the litigation’s outcome, whereas the agreement here contained no such link. The court, citing Allflex USA, Inc. v. Avid Identification Systems, Inc., explained that a one-sided appeal survives only when the settlement arrangement “reflect[] the existence of a legitimate, continuing case or controversy.” The CAFC concluded that Linfo failed to make that showing and dismissed the appeal as moot, with no costs awarded.

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