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Stay of District Court Proceedings Followed by a Voluntary Dismissal Is Not a Final Court Decision Under 35 U.S.C. § 285

| Sean S. KimAndrea Cheek

O.F. MOSSBERG & SONS, INC. v. TIMNEY TRIGGERS, LLC

Before Lourie, Reyna, and Hughes. Appeal from the United States District Court for the District of Connecticut.

Summary: A stay, followed by a voluntary dismissal, is not a final court decision capable of establishing the judicial imprimatur required for a litigant to emerge as the prevailing party under 35 U.S.C. § 285.

Mossberg & Sons, Inc. (Mossberg) sued Timney Triggers, LLC and Timney Manufacturing Inc. (Timney) for patent infringement. Timney filed for a series of reexamination proceedings (an inter partes reexamination and three ex parte reexaminations) of the asserted patent and filed for a stay of district court proceedings. The district court granted the stay. Throughout the reexamination proceedings, the district court maintained the stay despite Mossberg’s several attempts to lift it. In the end, the Patent Trial and Appeal Board (PTAB) affirmed the invalidity of all claims of the asserted patent, and Mossberg filed a notice of voluntary dismissal without prejudice under Rule 41(a)(1)(A)(i). The district court subsequently entered an order stating that the case was dismissed. Following the dismissal, Timney filed a motion to declare the case exceptional in order to pursue attorney’s fees under 35 U.S.C. § 285. The district court denied the motion, noting that Timney was not a prevailing party because the district court’s dismissal without prejudice was not a decision on the merits and therefore was not a judicial declaration altering the legal relationship between the parties. Timney appealed.

The Federal Circuit affirmed. The Federal Circuit acknowledged that a district court final decision rejecting a plaintiff’s claim for nonmerits reasons may be sufficient to find a defendant is a prevailing party. Here, however, the Federal Circuit found that the district court’s dismissal order had no legal effect as Mossberg’s voluntary dismissal under Rule 41(a)(1)(A)(i) became effective immediately upon the filing of notice of voluntary dismissal. Accordingly, there was no final court decision in this case. The Federal Circuit also rejected Timney’s argument that the staying of the district court proceedings provided the necessary judicial imprimatur, noting that it was the PTAB’s invalidity decision and Mossberg’s voluntary dismissal that changed the legal relationship of the parties, not the stay entered by the district court.

Editor: Paul Stewart