GLENN T. SUDDABY, Chief District Judge.
Currently before the Court in this patent infringement action are the following three motions: (1) Defendant Google's motion to dismiss the claims and cross-claims against it for lack of standing under Fed. R. Civ. P. 12(b)(1); (2) Defendant Grandeye's motion to amend its Amended Answer, Counter-Claims and Cross-Claims pursuant to Fed. R. Civ. P. 15(a)(2); and (3) Plaintiffs, Defendant Google and Defendant Minds-Eye-View's motion to voluntarily dismiss this action under Fed. R. Civ. P. 41(a)(2). (Dkt. Nos. 152, 172, 191.) For the reasons set forth below, the motion to voluntarily dismiss this action is granted in part and denied in part; Defendant Google's motion to dismiss is denied as moot; and Defendant Grandeye's motion to amend its amended pleading is denied.
Because this Decision and Order is intended primarily for the review of the parties, the Court will assume the reader's familiarity with the claims, counter-claims and cross-claims asserted in this action, and the legal standards governing the pending motions.
Generally, in their memorandum of law in support of their motion for voluntary dismissal, Plaintiffs, Defendant Google and Defendant Minds-Eye-View argue as follows: (1) their Settlement Agreement of June 5, 2015, has deprived the Court of subject-matter jurisdiction over Plaintiffs' infringement claims against Defendant Google and Defendant Google's declaratory judgment counterclaims against Plaintiffs; (2) in addition, the Settlement Agreement has deprived the Court of original jurisdiction over Defendant Google's declaratory judgment cross-claims against Defendant Grandeye and Defendant Grandeye's infringement crosscounterclaims against Defendant Google, because Defendant Google brought those cross-claims only "in the event [Plaintiff] View360 was dismissed from the case for lack of standing," and "[l]ikewise, [Defendant] Grandeye brought its infringement cross-counterclaims . . . in case View360 was dismissed from this case for lack of standing"-purposes that no longer apply (thus precluding Defendant Grandeye from pursuing its infringement cross-counterclaims pursuant to Fed. R. Civ. P. 11 at this time); (3) with regard to Defendant Google's declaratory judgment cross-claims, "[s]hould the Court dismiss Grandeye's cross-counterclaims against Google, Google moves to dismiss without prejudice its declaratory judgment cross-claims"; and (4) with regard to Defendant Grandeye's proposed state law claims against Defendant Minds-Eye-View and Plaintiff Oxaal, the Court may decline to exercise supplemental jurisdiction over those claims, which are in any event frivolous and should not be added to this case. (Dkt. No. 194.)
Generally, in its opposition memorandum of law, Defendant Grandeye argues as follows: (1) by its express language, Fed. R. Civ. P. 41(a)(2) cannot affect Defendant Grandeye's pending infringement cross-counterclaims against Defendant Google, because (a) Defendant Grandeye objects to the dismissal of the movant's claims, cross-claims and counter-claims, and (b) the Court possesses original subject-matter jurisdiction over Defendant Grandeye's crosscounterclaims against Defendant Google under 28 U.S.C. §§ 1331 and 1338;
Generally, in their reply memorandum of law, the movants argue as follows: (1) Defendant Grandeye's cross-counterclaims must be dismissed for lack of subject-matter jurisdiction under Fed. R. Civ. P. 12(h)(3) (which issue may be raised at any time), because "[t]here has never been a justiciable controversy between Grandeye and Google beyond the contingent, identical claims based on View 360's complaint, which have since been resolved through the Settlement Agreement"; (2) based on the factors set forth in Zagano, it is proper to dismiss Defendant Grandeye's cross-counterclaims without prejudice because, inter alia, the patents have been found to be invalid, Defendant Grandeye may bring its cross-counterclaims against Defendant Google in a separate lawsuit at a later time (if it discovers a basis to do so), and there is little if any chance that Defendant Grandeye will not be able to reassemble the parties in another proceeding; (3) there are no "alternative ways forward" because Defendant Grandeye has no objectively reasonable basis under Fed. R. Civ. P. 11 to proceed with its jurisdictionally defective infringement cross-counterclaims against Defendant Google, but merely has an interest in facilitating "a technology-based settlement" if not "increas[ing] the settlement value" of those claims, as referenced in its opposition memorandum of law; and (4) for all these reasons, the Court should dismiss Plaintiffs' infringement claims with prejudice, Defendant Google's declaratory judgment counterclaims without prejudice, Defendant Grandeye's cross-counterclaims without prejudice, and Defendant Google's declaratory judgment cross-claims without prejudice. (Dkt. No. 199.)
After carefully considering the matter, the Court finds that this motion should be
First, for purposes of whether the Court possesses subject-matter jurisdiction over Defendant Grandeye's infringement cross-counterclaims against Defendant Google, the Court finds it to be of little if any relevance what the original purpose of Defendant Grandeye's assertion of its cross-counterclaims was or how similar Defendant Grandeye's crosscounterclaims are to Plaintiff View 360's infringement claims. Of more relevance appears to be whether Defendant Grandeye currently has a basis to maintain infringement cross-counterclaims against Defendant Google. As a result, the issue would appear to be better briefed and decided squarely on a motion to dismiss for lack of subject-matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) or perhaps a motion for sanctions under Fed. R. Civ. P. 11(c)(2) than on a motion for voluntary dismissal pursuant to Fed. R. Civ. P. 41(a)(2). The parties are advised that, during consideration of any such a motion, should it appear to the Court that grounds exist to sanction Defendant Grandeye pursuant to Fed. R. Civ. P. 11(c)(2), the Court will consider doing so at that time.
Second, Defendant Google's argument that it will move to dismiss its declaratory judgment cross-claims against Defendant Grandeye only if the Court dismisses Defendant Grandeye's infringement cross-counterclaims against Defendant for lack of subject-matter jurisdiction appears to undermine its argument that the Court lacks subject-matter jurisdiction over Defendant Grandeye's infringement cross-counterclaims. If the Court lacks subject-matter jurisdiction over Defendant Grandeye's infringement cross-counterclaims (because the Settlement Agreement vitiated the purpose of those cross-counterclaims, which was to permit Defendant Grandeye to stand in the shoes of Plaintiff View360 if necessary), then the Court also must lack subject-matter jurisdiction over Defendant Google's declaratory judgment crossclaims against Defendant Grandeye (because the Settlement Agreement would have also vitiated the purpose of those cross-claims, which was to permit Defendant Google to stand in the shoes of Plaintiff View360 if necessary); and, if the Court lacks subject-matter jurisdiction over Defendant Google's declaratory judgment cross-claims against Defendant Grandeye, then Defendant Google would not need—or even be able-to move for the dismissal of those crossclaims.
Third, in addition to the cases cited by Defendant Grandeye in support of its ancillary jurisdiction argument (see Dkt. No. 195, Attach. 1, at 12, n.10 [attaching page "10" of Def. Grandeye's Opp'n Memo. of Law]), the Court relies on the case of Bosteve Ltd. v. Marauszwki, in which the Eastern District of New York noted, "[i]n further support of the decision to deny plaintiffs' the motion to [voluntarily] dismiss [the action], . . . that it must retain jurisdiction over defendant's compulsory counterclaims, even if plaintiffs' action were dismissed." Bosteve Ltd. v. Marauszwki, 110 F.R.D. 257, 259 (E.D.N.Y. 1986).
For all of these reasons, the motion for voluntary dismissal is granted in part and denied in part.
Defendant Google filed its motion to dismiss for lack of standing on January 30, 2015. (Dkt. No. 152.) Generally, the motion sought the dismissal of all claims and cross-claims asserted against Defendant Google by Plaintiffs and Defendant Minds-Eye-View. (Dkt. No. 153.) Approximately six months later, on June 5, 2015, Plaintiffs, Defendant Google and Defendant Minds-Eye-View entered into a Settlement Agreement, dismissing the abovereferenced claims. (Dkt. No. 194, Attach. 1.) In its memorandum of law in support of its motion to voluntarily dismiss this action, Defendant Google argues that "[t]he parties' Settlement Agreement and joint motion for dismissal has mooted Google's motion to dismiss the case for lack of standing." (Dkt. No. 192, at 6, n.3 [attaching page "5" of Def. Google's Memo. of Law].) For all of these reasons, Defendant Google's motion to dismiss for lack of standing is denied as moot.
Generally, in its memorandum of law in support of its motion to amend its amended pleading, Defendant Grandeye argues as follows: (1) there is no delay or prejudice concerning the requested amendments, because (a) Defendant Grandeye did not have a need to file the amendments until it learned that the other parties would settle their claims against each other, and (b) Plaintiff View 360 and Defendant Google stayed the proceedings prior to significant discovery on infringement of the asserted patents for a determination of who had the right to assert the Asserted Patents; (2) as a result, leave should be granted to correct the inadvertent omission of the Prayer for Relief to protect Defendant Grandeye's interests in the asserted patents; (3) in addition, leave should be granted to seek judicial declarations of Defendant Grandeye's ownership rights in the asserted patents, specifically through adding (a) Count I requesting a judgment declaring that Plaintiff Oxaal Defendant Minds-Eye-View had and have no ownership rights in the asserted patents nor any powers to license them, (b) Count Il requesting a judgment declaring that Plaintiff Oxaal and Defendant Minds-Eye-View had and have no contract rights to any share of any recovery by Defendant Grandeye for an action for infringement of the asserted patents, and (c) Count III requesting a judgment declaring that Plaintiff Oxaal and Defendant Minds-Eye-View had and have at most an equitable claim to the power to license only non-surveillance-video "360° × 360° (fully spherical)" uses of the asserted patents, but are barred by their unclean hands from making that claim in equity; (4) finally, leave should be granted for Defendant Grandeye to seek damages and restitution for Plaintiff Oxaal and Defendant Minds-Eye-View's unfair competition and unjust enrichment in misrepresenting their rights in the asserted patents and thereby damaging Defendant Grandeye's ownership rights in the asserted patents, specifically through adding (a) Count IV asserting a claim against Plaintiff Oxaal and Defendant Minds-Eye-View for violation of the Lanham Act by false advertising, and (b) Count V asserting a claim against Plaintiff Oxaal and Defendant Minds-Eye-View for common law unjust enrichment. (Dkt. No. 175.)
Generally, in their opposition memorandum of law, Plaintiffs and Defendant Minds-Eye-View argue as follows: (1) the five new counts against Plaintiff Oxaal and Defendant Minds-Eye-View that Defendant Grandeye seeks to add to the current case are vexatious, frivolous, futile, and/or moot; (2) for example, Count I's allegation that Defendant Grandeye is the sole owner of the patents-in-suit and that Defendant Minds-Eye-View never received the right to sublicense the patents-in-suit is rendered implausible by the 2008 Term Sheet between Defendant Grandeye and Defendant Minds-Eye-View, which explicitly grants Defendant Minds-Eye-View the right to sublicense its exclusive field of use;
After carefully considering the matter, the Court finds that Defendant Grandeye's motion to amend should be denied for the reasons stated above in Plaintiffs and Defendant Minds-Eye-View's opposition memorandum of law. To those reasons, the Court adds the following analysis.
The Court has carefully weighed the permissible grounds upon which it may base a denial of a motion for leave to amend.
As a result, the Court finds that the delay is undue,
With regard to whether there has been a repeated failure to cure deficiencies by amendments previously allowed, the Court finds that there has been such a failure. Not only did Defendant Grandeye twice previously request leave to amend (see Dkt. No. 119 [Def. Grandeye's Letter-Request to Amend, filed Nov. 6, 2014]; Dkt. No. 129 [Def. Grandeye's Formal Motion to Amend, filed Nov. 24, 2014]), it was granted that leave (Text Order filed Dec. 15, 2014), and it twice filed Amended Answers, Counter-Claims and Cross-Claims (see Dkt. No. 136 [Am. Answer, filed Dec. 17, 2014]; Dkt. No. 144 [Corr. Am. Answer, filed Jan. 5, 2015]). However, as explained in the preceding paragraph, Defendant Grandeye does not adequately explain why it did not previously cure the purported deficiencies in its currently pending pleading.
With regard to whether there will be any undue prejudice to the opposing party by virtue of allowance of the amendment, the Court finds that there will be such prejudice. Because this action has been pending since August 31, 2012, and concerns events occurring as far back as 2008
For all of these reasons, Defendant Grandeye's motion to amend is denied.
