Defendant’s Failure To Engage In Discovery Causes Defendant To Lose Motion To Dismiss

I PLAY. INC. v. D. CATTON ENTERPRISE, LLC, Dist. Court, WD North Carolina 2013 – Google Scholar.

This is a case where the sanction for the Rule 37 violations was appropriate and proportional. This is an intellectual property dispute. Plaintiff sued the Defendant and sought a declaration that it was not infringing Defendant’s patent or trademark rights.

This move – suing for a declaration that there was no infringement – is often done to win the race to the courthouse. The dispute starts when the defendant sends the plaintiff a letter demanding that the plaintiff cease infringing the patent or trademark. The plaintiff reasons that he will get sued anyway so he might as well start the litigation in a forum that the defendant (the party alleging infringement) does not want. I have worked with two veteran intellectual property lawyers who used this strategy in cases they litigated, with some success.

Here the Defendant moved to dismiss the case for lack of jurisdiction or to move the case to another venue. The plaintiff sought discovery from the defendant concerning the personal jurisdiction issues. The defendant refused to provide the information and was sanctioned by the District Court. The Court ruled that, by failing to provide the information, the Defendant had essentially waived its objections to jurisdiction and venue.

This is a fair and equitable solution in a case of this type. It sends the defendant the message that it is required to comply with discovery orders or it will face sanctions.

Edward X. Clinton, Jr.

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