The Software IP Report

Plaintiff Stuck with Collateral Judgment of Patent Invalidity Under Alice in More Ways Than One

Not only did collateral estoppel apply from a prior finding of patent invalidity under 35 U.S.C. § 101, but a plaintiff was denied a motion to voluntarily dismiss its claim of patent infringement, the court expressly leaving open the specter of a fee award to the defendant as a prevailing party under 35 U.S.C. § 285.  Peschke Map Technologies LLC v. Miromar Development Corp., No: 2:15-cv-173-FtM-38MRM (M.D. Fla. April 15, 2016).  At this point, one may not need further evidence of the unfriendly climate for patent plaintiffs.  Nonetheless, this case presents an interesting twist.

Another district court had dismissed a plaintiff’s action alleging infringement of U.S. Patent No. 6,397,143 (“Layout Based Method for Map Navigation”) finding that its claims failed “the two part test laid out by the Supreme Court in Mayo and Alice.” Peschke Map Techs. LLC v. Rouse Properties Inc., No. 1:15-cv-1365, (E.D. Va. Mar. 8, 2016).  There was no question that collateral estoppel applied here, because the validity question was fully litigated in the prior case, and essential to the prior court’s decision to dismiss that action.

In fact, the plaintiff here made no attempt to argue that collateral estoppel did not apply. Instead, the plaintiff focused its energies on arguing that the defendant’s motion to dismiss need not be considered because the plaintiff had voluntarily moved to dismiss its complaint.  Not so fast, said the court.  A voluntary dismissal can be made without court approval only before a complaint is served, prior to summary judgment, or upon stipulation.  Otherwise, the court has broad discretion.

Further, under Eleventh Circuit law, “[i]n most cases, a voluntary dismissal should be granted unless the defendant will suffer clear legal prejudice, other than the mere prospect of a subsequent lawsuit, as a result.”  Here, the defendant, if a “prevailing party,” could move for fees under 35 U.S.C. § 285.  The law is unsettled as to whether “a Rule 41(a)(2) [voluntary] dismissal, by itself, is enough for a defendant to qualify as the prevailing party.” The Federal Circuit case finding that a defendant was a “prevailing party” after a Rule 41(a)(2) dismissal did so in part based on a covenant not to sue.  There was no such covenant here.  Therefore, the court thought that “dismissing this action pursuant to Rule 41(a)(2) might prohibit Defendant from achieving prevailing party status under 35 U.S.C. § 285.

Accordingly, the court granted the defendant’s motion to dismiss, and denied the plaintiff’s.