The Federal Circuit made its second foray into the Mavexar (I think) saga on Friday when it ruled on a new petition for Mandamus is In re: Swirlate IP LLC.
The plaintiff in Swirlate filed a petition for mandamus on November 30, seeking to stop a scheduled December 6 hearing.
I should note at the outset the while the Swirlate case seems to mimic the M.O. of a Mavexar entity—a Texas LLC with a single managing partner with no apparent connection to the patent—the Court has not yet held a hearing on the issue, so we can't say conclusively that the matter is related. It was, however, scheduled for a hearing in December that that sole partner was ordered to attend, just like the Nimitz cases. Perhaps fearing a similar in-depth hearing, Swirlate's mandamus petition attempts to stop the hearing from taking place at all.
Swirlate was also positioned differently from Nimitz in that it had actually already filed a stipulation to dismiss the action back in September. The text of that dismissal is below:
Pursuant to FED. R. CIV. P. 41(a)(2) and (c), Plaintiff Swirlate LLC and defendant Lantronix, Inc., hereby stipulate, subject to the approval and order of the Court, that all claims and counterclaims asserted between Plaintiff and Defendant be dismissed WITHOUT PREJUDICE, with each Party to bear its own costs, expenses, and attorneys’ fees
Swirlate IP LLC v. Lantronix, Inc., C.A. No. 22-249-CFC, D.I. 27 (D. Del. Sept. 14, 2022).
Judge Connolly, however, never so-ordered the stipulation and instead appeared ready to move forward with the hearing when Plaintiff filed its mandamus petition on November 30.
In its petition, Swirlate argued that the Delaware Court lacked Article III jurisdiction to hold the hearing after the stipulation of dismissal was filed. The Federal Circuit disagreed:
[A]lthough Swirlate contends that this case has been dismissed, it has not substantiated the contention. The parties filed a stipulation to dismiss the claims with prejudice, and the counterclaims without prejudice, “subject to the approval and order of the” district court, under Fed. R. Civ. P. 41(a)(2) and (c). Appx. 134 (D. Ct. Dkt. # 28). But neither approval by the district court nor entry of a dismissal order has been shown.
In Re SWIRLATE IP LLC , No. 23-107 (Fed. Cir. 2022).
Interestingly, the opinion suggests that the result was due, at least in part, to the wording of the stipulation of dismissal. Rule 41(a)(1)(A)(ii) allows the parties to dismiss an action via "a stipulation of dismissal signed by all parties who have appeared," but does not explicitly require the Court to order or approve that stipulation (as opposed to Rule 41(a)(2) which governs dismissals "by court order"). Thus, it seems like the plaintiff could potentially have avoided the hearing simply by removing the usual language requesting the "approval" of the Court.
Alas, the Delaware Court has stayed the hearing regardless, pending the outcome of the petition in Nimitz. We'll keep you updated on the issue.
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