United States: Dismissal With Prejudice And Sanctions For NPE Seeking Dismissal On Eve Of Markman Submissions

A non-practicing entity requesting dismissal (with prejudice) will also be on the hook for at least some of the defendant's legal fees in defending the case, the Court ruled in Lamina Packing Innovations, LLC v. Monsieur Touton Selection, Ltd., No. 12-CV-05039 (S.D.N.Y. Apr. 4, 2013) (McMahon, J.).

Plaintiff Lamina is a non-practicing entity that filed four patent infringement cases last year, two of which were before this Court.  The Court denied Lamina's request for a protracted discovery schedule and instead ordered an expedited Markman proceeding.  On the day after the parties submitted their disputed claim terms to the Court, Lamina moved for dismissal of the case with prejudice.

Defendant Touton opposed the motion, seeking conditions to protect it against future litigations and seeking attorneys' fees.  In particular, Touton was concerned about two other patent infringement actions that Lamina had filed in other jurisdictions against a party that Touton is in privity with.  The Court granted the dismissal with prejudice and clearly explained that such a dismissal on the merits binds plaintiff as against the defendant and all those in privity with the defendant.  The Court left it to Touton to establish such privity before the other courts.

The Court also granted Touton leave to apply for an award of attorneys' fees, stating that at the very least the Court would award fees for preparation of the claim construction papers that Lamina unnecessarily forced Touton to file.

This case is one of many recent examples in which courts are cracking down on "patent trolls" and putting pressure on them to put up their proofs quickly.  Since the strategy of NPEs/trolls is generally to make defendants choose between paying legal fees or relatively modest settlement amounts, working with the court to set an expedited schedule and force plaintiff's hand early is usually to the defendant's benefit.

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