University of Pittsburgh v. Varian Medical (Fed. Cir. 2009)
The district court dismissed Pitt's infringement action for lack of standing because Carnegie Mellon is a co-owner. Ordinarily all co-owners must join as plaintiffs in an infringement suit, and here Carnegie Mellon did not join. Notably, the district court dismissed the case with prejudice - barring Pitt from later re-filing the lawsuit once Carnegie is on-board.
On appeal, the Federal Circuit took a minimalist approach - holding only that the district court abused its discretion in dismissing with prejudice rather than without prejudice.
Federal Rule of Civil Procedure 12(b)(7) allows a district court to dismiss an action for failure to join a party under Rule 19. However, it is clear that a dismissal for failure to join a party is not an adjudication on the merits, and thus, should not have preclusive effect—i.e. such a dismissal should be without prejudice. See Hughes v. United States, 71 U.S. (4 Wall.) 232, 237 (1866).
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Fieldturf, Inc. v. Sw. Recreational Indus., 357 F.3d 1266, 1269 (Fed. Cir. 2004) (“Ordinarily, dismissal for lack of standing is without prejudice. On occasion, however, a dismissal with prejudice is appropriate, especially where it is plainly unlikely that the plaintiff will be able to cure the standing problem.”).
Though it was dicta, also note that the Federal Circuit found Varian's cross-appeal arguments unpersuasive. One major theme in Orrick's representation of Varian was an astonishingly relentless effort to sanction pursuant to Rule 11. That the court addressed Varian's counsel in an annoyed way at the beginning of his argument about that theme, coupled with that dicta finding, should not be overlooked by those who seek to employ such overblown techniques.
Posted by: an observer | Jun 11, 2009 at 11:54 AM