Defendant's Failure to Assert Counterclaims Undermines Request for Rule 11 Sanctions​

Following plaintiff's voluntary dismissal of its patent infringement action, the court denied defendant's motion for sanctions under Rule 11 on the ground that plaintiff's claims were baseless. "[Defendant's] underlying contentions -- that it did not infringe [plaintiff's] patent and the patent is invalid in any case -- are legal conclusions that must be proven on the merits. If [defendant] wanted a finding that [plaintiff's] case lacked merit, then it should have asserted a counterclaim for declaratory relief to keep the case alive. Instead, [defendant] now wants to use a sanctions motion as a vehicle to essentially litigate a voluntarily-dismissed civil action on the merits to establish that [defendant] would have won had the case gone the distance. Given our thin record, this could only be done after discovery on the merits and enormous satellite litigation. Life is too short for that kind of exercise."

Sentegra, LLC v. Asus Computer International, 3-16-cv-03136 (CAND December 29, 2016, Order) (Alsup, USDJ)