Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-01647/USCOURTS-cand-4_14-cv-01647-3/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court 

Northern District of Californi

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

BLUE SPIKE, LLC, 

Plaintiff, 

v. 

ADOBE SYSTEMS, INC., 

Defendant. 

Case No. 14-cv-01647-YGR 

ORDER RE: MOTION FOR VOLUNTARY 

DISMISSAL WITHOUT PREJUDICE; ORDER 

TO SHOW CAUSE

Re: Dkt. Nos. 61 

On February 6, 2015, plaintiff Blue Spike, LLC filed a motion for voluntary dismissal 

without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2). (Dkt. No. 61 (“Mot.”).) 

Defendant Adobe Systems, Inc. opposed the motion, arguing: (1) dismissal should be with 

prejudice; (2) judgment should be entered on the defendant’s counterclaims; and (3) the defendant 

should be permitted to seek recovery of its attorneys’ fees and costs. (Dkt. No. 62 (“Oppo.”).)1

Having carefully considered the papers submitted and the record in this case, and good 

cause shown, the Court hereby DISMISSES the plaintiff’s claims WITH PREJUDICE. 

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 The plaintiff’s reply brief was not properly before the Court, one example of the 

plaintiff’s disregard for local rules. By the deadline, the defendant had only publicly filed a 

redacted version of its brief with an accompanying motion to seal. (Dkt. Nos. 64, 65.) The Court 

thereafter denied the motion to seal without prejudice on March 27, 2015. (Dkt. No. 68.) 

Pursuant to Civil Local Rule 79-5(f)(2), “[i]f the Administrative Motion to File Under Seal is 

denied in its entirety, the document sought to be sealed will not be considered by the Court unless 

the Submitting Party files an unredacted version of the document within 7 days after the motion is 

denied.” The plaintiff filed neither a renewed motion to seal nor an un-redacted version of the 

document within that time frame. However, on April 24, 2015—nearly a month later—the 

defendant filed a renewed motion to seal, seeking to seal only limited portions of exhibits 

submitted in conjunction with the plaintiff’s reply containing the defendant’s proprietary financial 

information, disclosure of which would purportedly cause it competitive harm. (Dkt. No. 70.) 

Because the delay may have been, in part, due to the defendant’s conduct, the Court nevertheless 

considered the plaintiff’s reply brief (Dkt. No. 73) despite a technical violation of Civil Local Rule 

79-5(f)(2). Moreover, the Court finds compelling reasons to seal the substantially narrower 

selection of material identified in the defendant’s renewed motion (Dkt. No. 70) and therefore 

GRANTS that motion. See Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 

2006). 

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I. BACKGROUND 

The plaintiff initiated this action in the Eastern District of Texas on August 22, 2012, 

asserting four patents purportedly relating to “signal abstracting,” encompassing techniques such 

as “signal fingerprinting,” “acoustic fingerprinting,” or “robust hash functions.” (Dkt. No. 1 

(“Complaint”) ¶ 21.) According to the complaint, those methods are “among the most effective” 

available for “combating piracy” of intellectual property. (Id.) For instance, those techniques can 

enable “[c]ontent owners [to] monitor and analyze distribution channels, such as the Internet, radio 

broadcasts, television broadcasts, and other media sources, to determine whether any content from 

those sources has the same abstract as their catalogued works,” allowing ready identification of 

“unauthorized copies.” (Id. ¶ 23.) 

On March 13, 2014, the case was ordered transferred to this District. (Dkt. No. 14.) On 

September 14, 2014, the plaintiff filed an amended complaint, asserting infringement of a fifth 

patent. (Dkt. No. 43 (“FAC”).) The defendant’s answer to the amended complaint asserted 

counterclaims seeking declaratory judgment of non-infringement and invalidity as to all five 

patents. (Dkt. No. 45.) 

At the case management conference held on July 28, 2015, the parties discussed the initial 

set of infringement contentions (“ICs”) the plaintiff had served, prior to transfer, under the Eastern 

District’s local rules. The plaintiff acknowledged that the “kitchen sink approach” it had 

previously taken—asserting all 114 claims of each of the four patents then at issue—“won’t 

happen again.” (Dkt. No. 42 (Tr.) at 18:11-25.) The Court warned the plaintiff that it had to 

“comply with our rules.” (Id. at 15:13-15 (“If that means that you have to redo the infringement 

contentions, then so be it. . . . [Y]ou’re following our rules, not Texas’ rules.”) 

On September 26, 2015, Magistrate Judge Corley granted the defendant’s motion to strike 

the plaintiff’s new set of ICs for failure to comply with this District’s Patent Local Rules in a 

number of important respects. (Dkt. No. 57.) Due to the various deficiencies detailed in that 

order, the plaintiff’s contentions were stricken in their entirety. (Id.) The ICs were stricken 

without leave to amend as to: (1) all but one accused product, (2) the doctrine of equivalents, (3) 

any claimed priority date earlier than September 7, 2000, (4) indirect infringement, and (5) 

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willfulness. (Id.) The plaintiff was given until February 6, 2015 to submit amended infringement 

contentions addressing solely “its claims of direct infringement by [the] Adobe Auditude” product. 

(Id.) Instead of doing so, on February 6, 2015, the plaintiff filed the instant motion for voluntary 

dismissal. 

II. LEGAL STANDARD 

Federal Rule of Civil Procedure 41(a)(2) provides in pertinent part: 

[A]n action may be dismissed at the plaintiff’s request only by court 

order, on terms that the court considers proper. If a defendant has 

pleaded a counterclaim before being served with the plaintiff’s 

motion to dismiss, the action may be dismissed over the defendant’s 

objection only if the counterclaim can remain pending for 

independent adjudication. Unless the order states otherwise, a 

dismissal under this paragraph . . . is without prejudice. 

Thus, the rule “allows a plaintiff, pursuant to an order of the court, and subject to any 

terms and conditions the court deems proper, to dismiss an action without prejudice at any time.” 

Westlands Water Dist. v. United States, 100 F.3d 94, 96 (9th Cir. 1996). 

In ruling on a motion under Rule 41(a)(2), the Court must determine: (1) whether to grant 

dismissal; whether dismissal should be with, or without, prejudice; and (3) “what terms and 

conditions, if any, should be imposed.” Williams v. Peralta Cmty. Coll. Dist., 227 F.R.D. 538, 

539 (N.D. Cal. 2005). The Court addresses each in turn. 

III. DISCUSSION 

A. Whether to Allow Dismissal 

A motion for voluntary dismissal should be granted absent a showing by the defendant that 

it will suffer resulting “legal prejudice,” which is “prejudice to some legal interest, some legal 

claim, [or] some legal argument.” See Optimal Markets, Inc. v. FTI Consulting, Inc., No. 08-5765 

SC, 2009 WL 1704665, at *2 (N.D. Cal. June 17, 2009). Here, both parties agree that the 

plaintiff’s claims should be dismissed—the only disputes relate to whether the dismissal should be 

with or without prejudice, whether judgment should enter on the defendant’s counterclaims, and 

whether the defendant should be awarded attorneys’ fees and costs. Therefore, the Court finds 

that dismissal of the plaintiff’s claims is warranted. 

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B. Whether the Dismissal Should Be With Prejudice 

The plaintiff moved to dismiss its claims without prejudice.2 “Dismissal with prejudice 

may be appropriate where ‘it would be inequitable or prejudicial to defendant to allow plaintiff to 

refile the action,’” such as where the plaintiff waits until the defendant “is on the verge of 

triumph” before moving for voluntary dismissal. Williams, 227 F.R.D. at 539-40 (emphasis 

added). The Court may consider the following factors in addressing this question: “(1) the 

defendant’s effort and expense in preparing for trial, (2) excessive delay and lack of diligence on 

the part of the plaintiff in prosecuting the action, [and] (3) insufficient explanation of the need to 

take a dismissal.” Id. 

Here, the Court finds that dismissal should be with prejudice. The plaintiff’s motion, filed 

in lieu of complying with the deadline for amending its infringement contentions, is a transparent 

attempt to circumvent the impact of Judge Corley’s ruling. The plaintiff seeks to avoid the 

imminent consequences of its failure to comply with the local rules, despite previous 

admonishment by the Court to do so. As to the first factor, while this case has yet to proceed 

through discovery or claim construction, it has been pending for almost three years and the 

defendant has engaged in substantial motion practice. Second, the plaintiff’s conduct in 

connection with this case has been the antithesis of diligent. The plaintiff failed to serve proper 

infringement contentions in a case that it filed back in August of 2012 and that was transferred to 

this district more than a year ago. The plaintiff also failed to move for voluntary dismissal in a 

timely fashion once it became apparent that it would be unable to serve sufficient infringement 

contentions.3

 Finally, the plaintiff has failed to provide a sufficient explanation for the basis for its 

request. The plaintiff argues it moves for dismissal because it “just received instruction from the 

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 The plaintiff also perfunctorily requested dismissal of the defendant’s counterclaims. 

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 For instance, in its reply brief, the plaintiff represents that it first offered to dismiss this 

case as early as August 2013—perhaps realizing its case lacked merit. (See Dkt. No. 73 at 1.) The 

primary sticking point in the negotiations may have been whether the plaintiff would reimburse 

the defendant’s attorneys’ fees and costs. (Id.) While the plaintiff argues the defendant is to 

blame for its continued prosecution of this case since then, the plaintiff could have unilaterally 

moved for voluntary dismissal at any time, as evidenced by the present motion. 

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Court that it must maintain the standards of the Patent Local Rules for the Northern District of 

California . . . .” (Mot. at 4.) To the contrary, the Court explicitly noted this obligation at the 

initial case management conference on July 28, 2015. Again, the instant motion is merely an 

obvious effort by the plaintiff to escape the inevitable consequences of its own failures. 

C. Terms of Dismissal 

The defendant seeks the right to seek attorneys’ fees and costs in connection with this 

dismissal. “[A] defendant is entitled only to recover, as a condition of dismissal under Fed. R. 

Civ. P. 41(a)(2), attorneys fees or costs for work which is not useful in continuing litigation 

between the parties.” Optimal Markets, Inc., 2009 WL 1704665, at *4 (quoting Koch v. Hankins, 

8 F.3d 650, 652 (9th Cir. 1993).) Because the defendant’s counterclaims remain pending, the 

Court makes no award of attorneys’ fees and costs at this time. 

IV. ORDER TO SHOW CAUSE 

In its opposition brief to the motion for voluntary dismissal, the defendant persuasively 

argues the Court should enter judgment on its counterclaims of non-infringement in light of the 

facts outlined above—namely, the preclusive effect of Judge Corley’s September 26, 2015 Order, 

now preventing the plaintiff from introducing any evidence of infringement as to the asserted 

patents and accused products at issue in this case. See Shared Memory Graphics, LLC v. Apple 

Inc., No. C 10-2475, 2011 WL 5320749, at *3 (N.D. Cal. Nov. 2, 2011) (finding an order striking 

infringement contentions without leave to amend, such that the plaintiff cannot introduce evidence 

of infringement by the accused products, “goes beyond the ordinary scope of discovery orders and 

becomes dispositive”). However, a separate motion has not been filed. 

Accordingly, the parties are hereby ORDERED TO SHOW CAUSE why (1) judgment should 

not enter in favor of the defendant on the defendant’s counterclaims for a declaratory judgment of 

non-infringement as to each of the five patents-in-suit, and (2) the counterclaims for declaratory 

judgment of invalidity should not be dismissed without prejudice. A hearing on this Order to 

Show Cause shall be held on Friday, May 15, 2015, on the Court’s 9:01 a.m. Calendar in the 

Federal Courthouse located at 1301 Clay Street, Oakland, California, in Courtroom 1. Any 

objections to entry of (1) judgment on the counterclaims for declaratory judgment of nonCase 4:14-cv-01647-YGR Document 74 Filed 05/04/15 Page 5 of 6
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infringement in favor of the defendant and (2) dismissal without prejudice on the counterclaims 

for declaratory judgment of invalidity must be filed by no later than May 11, 2015. Any such 

objection shall not exceed ten (10) pages. If no objection is filed by that date, the hearing shall be 

taken off calendar and the parties shall submit proposed orders and proposed forms of judgment 

by May 15, 2015. 

V. CONCLUSION 

For the foregoing reasons, plaintiff’s claims in this action are DISMISSED WITH 

PREJUDICE. 

This Order terminates Docket Numbers 61 and 70. 

IT IS SO ORDERED. 

Dated: May 4, 2015 

______________________________________ 

 YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT COURT JUDGE

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