Princeton Digital Image Corporation v. Office Depot Inc., et al., C.A. Nos. 15-239 – LPS; 15-287 – LPS; 15-288 – LPS; 15-289 – LPS; 15-326 – LPS; 15-330 – LPS; 15-331 – LPS; 15-404 – LPS: 15-408 - LPS, March 28, 2016. (redacted)

Stark, C. J. Defendant’s motion to dismiss counterclaim is granted; plaintiff’s motion for leave to file amended complaint is denied; defendant’s cross-motion for judgment on the pleadings is denied; plaintiff’s motion to dismiss claims in intervention is granted in part and denied in part; defendant’s renewed motion for sanctions is denied. Briefing on the contested motions was completed October 8, 2015 and oral argument took place on March 8, 2016.

Previously defendant had filed a motion for sanctions based on inadequate pre-suit investigation which the court denied without prejudice.  Defendant’s motion to dismiss based on breach under New Jersey law of the covenant of good faith and fair dealing regarding a license is granted. Plaintiff has not pled bad faith.  Plaintiff’s motion to dismiss patent misuse claims is granted. Monetary damages may not be awarded for patent misuse because the remedy is to render the patent unenforceable. The court denies defendant’s motion to dismiss with respect to a breach of contract claim. Although the underlying patent disputes have been dismissed, it is appropriate to use the court’s supplemental jurisdiction to resolve the state law claims.  The court denied defendant’s motion for judgment on the pleadings because the pleadings are not yet closed. The court cannot determine yet whether defendant is the prevailing party and denies defendant’s request for sanctions.  Under the totality of circumstances this case is exceptional due to inadequate pre-suit investigation.  However, the court declines to award attorney fees.  There is no evidence of bad faith or otherwise sanctionable conduct.