(In)voluntary Dismissal: Virginia Court Invalidates Patent; Florida Court Leaves Door Open To Fee Award

It should go without saying that a defendant cannot infringe a patent claim that has been ruled invalid. In a recent ruling from the Middle District of Florida, that court addressed one of the consequences of this truism: what happens when one court invalidates a patent that has been asserted in a different court. In Peschke Map Technologies v. Miromar Development Corp., a Virginia court ruled that the asserted patent was invalid because it claimed patent–ineligible subject matter (under the Alice test). The Florida defendant moved for judgment on the pleadings, arguing that the Virginia invalidity ruling should control in the Florida case. Rather than contesting that outcome, the patent–owner tried to pull the plug by filing a motion for voluntarily dismissal.  So the Florida judge faced competing motions: a defense motion for judgment on the pleadings; and a patent–owner’s motion to voluntarily dismiss.

One question that might naturally occur: What difference does it make? Either way, the case will be dismissed, right?

The answer: Attorneys’ fees. A prevailing defendant can pursue attorneys’ fees if it can show the case was “exceptional.” In this example, if the defense motion was granted, the defendant would be the prevailing party. If the plaintiff’s motion was granted, the defendant would not, because a defendant is not considered to have “won” a case that the plaintiff voluntarily withdraws. The answer provided by the Florida court was both very technical and very significant. So bear with us.

Federal Rule of Procedure 41 allows two kinds of voluntary dismissal. If a dismissal notice is filed before the defendant files an answer or summary judgment motion, a voluntary dismissal is automatic, and does not require judicial approval to become effective. If a dismissal motion is filed after the defendant files an answer or summary judgment motion, the voluntary dismissal is only effective if ordered by the court. Because this case was in the second posture—the defendant had filed an answer—the court had the authority to deny the motion for voluntary dismissal, and did so. The court ruled that the potential availability of attorneys’ fees would be a significant loss to the defendant if voluntary dismissal entered, and so denied the plaintiff’s motion, granted the defense motion for judgment on the pleadings, and invited a motion for fees. That invitation does not guarantee a fee award, of course. But it does prevent the patent–owner from escaping a potential fee award by pulling the plug on its own case when its patent was shown to be invalid.

Hat–tip to Docket Navigator for calling this case to our attention.