Thursday, May 19, 2011

Government's Approval of False Marking Settlement Precludes Later Challenge That Settlement was "Staged" and Therefore Lacks Preclusive Effect

The court dismissed plaintiff's qui tam false marking action on the basis of the settlement of an earlier filed false marking case involving the same patents and products and rejected plaintiff's argument that the settlement "was 'staged' and lacks transparency" because the settlement terms weren't publicly available. "While it is unclear if public disclosure is required to finalize a qui tam settlement and voluntary dismissal with prejudice . . . [d]istrict courts in the Southern District of New York and Northern District of Illinois have determined that the government maintains a sufficient level of control over qui tam actions brought under Section 292(b). . . . [Plaintiff] refuses to acknowledge that the government received the settlement documents, which included the amended complaint alleging false marking of the [patents-in-suit], reviewed them, and then approved the . . . settlement. . . . The dismissal with prejudice [of the earlier-filed case] precludes this case."

Champion Laboratories, Inc. v. Parker-Hannifin Corp., et. al., 1-10-cv-02371 (CAED May 17, 2011, Order) (Wanger, J.)

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