Judge Kathleen Cardone granted the defendants’ motions to dismiss the plaintiff’s patent claims for lack of standing, finding defects in the chain of title for the patents in suit. Although noting that it was a “close call” and that this was the attorney’s second case dismissed on this ground this year, she did not award sanctions under FRCP 11, although she did admonish the plaintiff’s attorney for his conduct.
The court concluded that the plaintiff had not carried its burden to demonstrate by preponderance of the evidence that there were valid assignments of the patents at identified points in the chain of title. “Because Plaintiff has not shown that it ever obtained exclusionary rights to the Patent, it has not demonstrated that it has standing to sue for infringement of those Patents …. The Court therefore does not have subject matter jurisdiction over these lawsuits.”
Two of the defendants also requested that the court order the plaintiff to pay the costs and fees associated with filing their motion to dismiss. Judge Cardone denied the request for sanctions under FRCP 11, noting failure to comply with the requirements of that rule. However, although noting that “it is a close call” the court also found that monetary sanctions were not warranted, although she did admonish the plaintiff’s attorney regarding his duty to conduct a diligent investigation prior to initiating any lawsuit, and that he may not knowingly persist with cases that he learns to be baseless. She went on to note one particular fact that she concluded “evinces either an egregious lack of competence or, more likely, a troubling lack of candor” and noted that this was the plaintiff’s second patent infringement case this year, in this district, dismissed for lack of standing due to defects in the chain of title.
The Rule 11 request made by the defendants was indeed facially defective – the question is whether its failure might adversely affect the motion that should have been filed after the dismissal – and might still be filed – for a finding of “exceptional” and awarding fees under Section 285.
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