United States District Court, N.D. Illinois, Eastern Division
October 5, 2005.
MOLD-MASTERS LIMITED, Plaintiff,
MELT DESIGN, INC., Defendant.
The opinion of the court was delivered by: CHARLES KOCORAS, District Judge
This matter comes before the court on the motion of Plaintiff
Mold-Masters Ltd. to voluntarily dismiss its claims pursuant to
Fed.R.Civ.Proc. 41(a)(2) and to dismiss the counterclaims of
Defendant Melt Design, Inc. pursuant to Fed.R.Civ.Proc.
12(b)(1) for lack of subject matter jurisdiction. For the reasons
set forth below, the motions are granted. Both the case and the
counterclaims are dismissed with prejudice.
Mold-Masters is the holder of U.S. Patent No. 5,299,928 ("the
`928 patent"), which involves a two-piece injection molding
nozzle seal. According to the complaint, filed in June 2004, Melt
Design infringed the `928 patent with products referred to as hot
runner nozzle components or systems. In responding to the
complaint, Melt Design asserted a counterclaim for a declaratory judgment that its
products did not infringe the `928 patent; that the patent was
invalid for failure to comply with 35 U.S.C. § 101, 102, 103, or
112, though the counterclaim gives absolutely no indication of
the basis for the claimed invalidity beyond this kitchen-sink
recitation of statutory authority; and that the patent was
unenforceable by virtue of alleged inequitable conduct by
Mold-Masters in connection with the filing and prosecution of the
application that ultimately resulted in issuance of the `928
The parties began the discovery process, which involved several
disputes that eventually led this court to refer the case to
Magistrate Judge Brown for supervision. Despite the time and
energy devoted to the case by both the litigants and two federal
judges for nearly a year, Mold-Masters moved in August 2005 to
voluntarily dismiss its complaint. In conjunction with this
motion, Mold-Masters represented to the court that it was willing
to unconditionally covenant not to sue Melt Design for any claim
of infringement based upon a product that has been or will be
manufactured, sold, or used by Melt Design. According to
Mold-Masters, this representation removes any apprehension Melt
Design could reasonably have of the prospect of suits arising
from the `928 patent, thus nullifying any real controversy that
could underpin the declaratory judgment counterclaim.
Consequently, Mold-Masters avers that we no longer have subject
matter jurisdiction over the counterclaim and moves for its
dismissal as well. LEGAL STANDARD
Rule 41(a)(2) provides that a plaintiff may voluntarily dismiss
a suit by obtaining an order of the court. A plaintiff pursuing
this route is subject to the terms and conditions the court deems
proper as a quid pro quo for the desired dismissal. See
McCall-Bey v. Franzen, 777 F.2d 1178, 1184 (7th Cir. 1985). In
considering whether to grant a motion under Rule 41(a)(2), a
court must look to whether a defendant will suffer undue
prejudice from the dismissal. Ratkovich v. SmithKline,
951 F.2d 155, 158 (7th Cir. 1991). The timing of and reasons for the
motion are also factors to be taken into consideration. Id.
Rule 12(b)(1) provides for dismissal of claims over which the
federal court lacks subject matter jurisdiction. Jurisdiction is
the "power to decide" and must be conferred upon the federal
court. See In re Chicago, Rock Island & Pac. R.R. Co.,
794 F.2d 1182, 1188 (7th Cir. 1986). In reviewing a 12(b)(1) motion
to dismiss, the court may look beyond the complaint and view any
extraneous evidence submitted by the parties to determine whether
subject matter jurisdiction exists. See United Transp. Union
v. Gateway Western Ry. Co., 78 F.3d 1208, 1210 (7th Cir. 1996).
Plaintiff bears the burden of establishing that the
jurisdictional requirements have been met. See Kontos v.
United States Dept. of Labor, 826 F.2d 573, 576 (7th Cir. 1987).
When a party moves for dismissal pursuant to Rule 12(b)(1), the
nonmoving party must support its allegations with competent proof of jurisdictional facts. See
Thomson v. Gaskill, 315 U.S. 442, 446, (1942). With these
principles in mind, we turn to the motions before us.
The first request Mold-Masters makes is easily dispensed with,
as Melt Design does not oppose a prejudicial dismissal of the
main case. In light of this agreement, the motion to voluntarily
dismiss the main complaint pursuant to Rule 41(a)(2) is granted;
the case embodied in the main complaint is dismissed with
The second portion of the motion is somewhat more thorny. Melt
Design does not oppose dismissal of its counterclaims, as long as
the dismissal is without prejudice. It contends that Federal
Circuit precedent requires that counterclaims for declaratory
relief in patent cases must be without prejudice. In support of
this proposition, Melt Design points to two cases: Intellectual
Property Development, Inc. v. TCI Cablevision of California,
Inc., 248 F.3d 1333, 1340-42 (Fed. Cir. 2001) and Amana
Refrigeration, Inc. v. Quadlux, Inc., 172 F.3d 852, 855-56 (Fed.
Cir. 1999). However, neither of these cases gives any indication
that a dismissal without prejudice is unconditionally required in
circumstances such as this one.
In Amana, the court's decision does not even reference
whether the dismissal was with prejudice or without, let alone
analyze which should apply or dictate a particular outcome. Intellectual Property merely affirms the
district court's decision to dismiss a declaratory judgment
counterclaim without prejudice; it does not require that result
in every case. Two of the district court cases Melt Design cites
granted dismissals without prejudice without explaining why. The
third reasoned that dismissals for lack of subject matter
jurisdiction are ordinarily without prejudice, and dismissal in
that case should not bar later consideration of the merits of the
counterclaim in a future suit.*fn1
It is certainly true that dismissals predicated on lack of
subject matter jurisdiction are usually without prejudice. This
is so because, in most instances, the fact that a federal court
does not have jurisdiction over the subject matter of a dispute
does not usually mean that no other court does, or that
jurisdiction will not be available in the federal court at a
later time. See, e.g., Shields Enterprises, Inc. v. First
Chicago Corp., 975 F.2d 1290, 1298 (7th Cir. 1992); Int'l
Harvester Co. v. Deere & Co., 623 F.2d 1207, 1217 (7th Cir.
1980). However, this case does not present a typical situation
for two reasons. First, 28 U.S.C. § 1338 specifies that federal
courts have exclusive jurisdiction over patent cases; if this
court does not and cannot have subject matter jurisdiction, no other forum is available to Melt Design to
pursue the dismissed claims. Second, Mold-Masters has given up
its right to assert infringement of the `928 patent against Melt
Design for past or future products, eliminating any chance that
jurisdiction would attach for this particular claim at a later
time. In essence, the covenant not to sue has negated any case or
controversy arising out of the assertion of the `928 patent
against Melt Design. This outcome is indistinguishable from the
effect of a decision on the merits of the claim, and any opinion
rendered on this specific scenario could only be impermissibly
advisory. As a result, there is no reason to keep the door ajar
for Melt Design's challenges to the `928 patent, and the
counterclaim is accordingly dismissed with prejudice.
Based on the foregoing discussion, this case and the asserted
counterclaim are dismissed with prejudice.
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