VideoShare, LLC v. YouTube, LLC, C.A. No. 12-12012- MLW, 2014 WL 458155 (D. Mass. Feb.1, 2014) (Wolf, D.J.) [Civil Procedure; Motion to Dismiss; Motion to Supplement].

The District Court (Wolf, D.J.) granted plaintiff’s motion to dismiss its patent infringement suit. It is still possible, however, that the Court will ultimately decide patent infringement issues between the two parties, as the District of Delaware is currently considering a motion to transfer a related case to the District of Massachusetts. The plaintiff VideoShare, LLC (“VideoShare”) brought a patent infringement suit against YouTube, LLC (“YouTube”), alleging that YouTube’s products use plaintiff’s patented technology and that YouTube induces its customers to infringe the patented technology. The patent-in-suit is United States Patent No. 7,987,492 (the “‘492 patent”), which is directed to sharing a streaming video. In its answer, YouTube asserted counterclaims including seeking a declaratory judgment of noninfringement and invalidity of the ‘492 patent.

After the suit was brought, two additional patents issued to VideoShare—U.S. Patent Nos. 8,438,608 and 8,464,302 (the “‘608 patent” and the “‘302 patent”). These patents were related enough to the ‘492 patent that during their prosecution, a terminal disclaimer was filed with respect to the ‘492 patent. After the ‘608 and ‘302 patents issued, VideoShare brought a patent infringement suit against YouTube and its parent company, Google, Inc. (“Google”), with respect to the newly issued ‘608 and ‘302 patents.

Shortly thereafter, VideoShare filed its motion to dismiss the suit in Massachusetts, relying on a covenant not to sue it provided YouTube for the ‘492 patent. YouTube opposed the dismissal, asserting that a controversy remained in view of the ‘608 and ‘302 patents, and also sought to add supplemental counterclaims related to the ‘608 and ‘302 patents.

The Court allowed the dismissal because it would be with prejudice and would not injure the rights of thirdparty intervenors. The case law indicates the denial of a voluntary dismissal in such instances is rarely, if ever, appropriate. While generally counterclaims are allowed to remain even after the plaintiff dismisses its claims, the pending counterclaims related to the ‘492 patent were no longer the subject of controversy in view of the covenant not to sue. The Court found the covenant to sue, which VideoShare clarified to include all YouTube products, including any future products, as well as all of YouTube’s customers and Google, extinguished any current or future case or controversy between the parties.

Further, because the Court did not have jurisdiction over the counterclaims, it did not have the power to permit YouTube to file supplemental counterclaims directed to the ‘608 and ‘302 patents. The Court noted that while supplemental pleadings should generally be liberally allowed, the considerations of comity, consistency, and efficiency each weighed against permitting the supplemental counterclaims in light of the pending suit in Delaware.

In reaching its decision, the Court explicitly stated that its decision should not be misconstrued as an expression of a view as to where the merits of the dispute should be litigated. The Court stated that the District of Delaware has the information and authority to ultimately decide whether the case should be transferred to the District of Massachusetts. Thus, while the present case was dismissed, the controversy could find its way back in the District of Massachusetts.