STANLEY WORKS v. ALLTRADE

3:02cv1468(PCD)

2004 | Cited 0 times | D. Connecticut | February 23, 2004

RULING ON DEFENDANT'S MOTION TO DISMISS CERTAIN COUNTERCLAIMS WITHOUT PREJUDICE AND MOTION TO AMEND

Pursuant to FED. R. Civ. P. 41 and 15, Defendant Olympia Group, Inc.("Olympia") moves (1) to dismiss certain of its counterclaims withoutprejudice and without costs and (2) to amend its answer to omit certainof its defenses. For the reasons stated herein, Olympia's motions aregranted.

I. Background

Plaintiff filed its complaint on August 21, 2002 [Doc. No. 1], andfiled an amended complaint on December 13, 2002, adding Olympia (amongothers) as an additional Defendant [Doc. No. 16]. On March 6, 2003,Olympia filed its answer, affirmative defenses, and counterclaims [Doc.No. 23]. Discovery closed on November 21, 2003 [Doc. No. 40].

Plaintiff is a worldwide manufacturer and marketer of tools, hardware,and specialty hardware for home improvement, consumer, industrial, andprofessional use. Pl. Opp. at 2. It owns U.S. Patent No. 6,324,769,entitled "Rule Assembly with Increased Blade Standout," which issued onDecember 4, 2001 (the "769 patent"). Plaintiff's initialPage 2complaint [Doc. No. 1] alleged infringement of the `769 patentagainst Defendant Alltrade, Inc., and its amended complaint [Doc. No. 16]added claims against Defendants Olympia and Gindas Industries Co.Olympia's First Counterclaim alleges that Plaintiff's `769 patent wasinvalid due to alleged on-sale and public-use bars under35 U.S.C. § 102(b). Olympia's Fourth Counterclaim alleges that Plaintiffviolated the Sherman Antitrust Act by bringing suit on a patent Plaintiffknew was invalid or unenforceable. Olympia's Fifth Counterclaim alleges thatPlaintiff violated the Connecticut Unfair Trade Practices Act ("CUTPA").

Olympia moves to dismiss without prejudice a portion of its FirstCounterclaim (paragraphs 7-15, 19-22, 23 sub-sections (a)-(d), and 24),and the Fourth and Fifth Counterclaims in their entirety. It also seeksleave to amend its answer to delete a portion of the Second AffirmativeDefense (sub-sections (a)-(d)), and the Fourth, Fifth, Eighth, Ninth, andTenth Affirmative Defenses in their entirety.

II. Motion to Dismiss Without Prejudice and Costs

A. Standard

Rule 41 provides that, except where all parties agree to a stipulationof dismissal, "an action shall not be dismissed at the plaintiff'sinstance save upon order of the court and upon such terms and conditionsas the court deems proper." FED. R. Civ. P. 41(a)(2). "A voluntarydismissal without prejudice under Rule 41(a)(2) will be allowed if the[non-movant] will not be prejudiced therein." D'Alto v. Dahon Cal.Inc., 100 F.3d 281, 283 (2d Cir. 1996) (citation and quotationomitted). "Voluntary dismissal without prejudice is thus not a matter ofright." Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990).Page 3Relevant factors to considering a motion to dismiss withoutprejudice include

the [moving party's] diligence in bringing the motion; any "undue vexatiousness" on [movant's] part; the extent to which the suit has progressed, including the [opposing party's] effort and expense in preparation for trial; the duplicative expense of re litigation; and the adequacy of [movant's] explanation for the need to dismiss.Id. (citations omitted). "[S]tarting a litigation all overagain does not constitute legal prejudice." D'Alto, 100 F.3d at283. These factors "are not exhaustive, and . . . do not exclude [other]factors particular to a specific case." Vosburgh v. Indem. Ins. Co.of N. Am., 217 F.R.D. 384, 386 (S.D. W. Va. 2003). Rule 41(c)instructs that "[t]he provisions of this rule apply to the dismissal ofany counterclaim."

B. Discussion

Olympia argues that, upon the close of discovery, it "has determinedthat it no longer needs to pursue all of the defenses and counterclaimsoriginally asserted." Def. Mem. at 2. Plaintiff responds Olympia's motionshould be denied, because discovery has completed and Plaintiff "hasfiled motions for partial summary judgment on the very counterclaims andissues that Olympia belatedly seeks to withdraw without prejudice," andthat it is prejudicial to allow Olympia an opportunity to relitigate suchclaims later on. Pl. Opp. at 1.

1. Diligence in Bringing Motion

Plaintiff argues that "Olympia has not shown diligence in bringing itsmotion, as it waited until after the close of discovery to seekdismissal." Pl. Opp. at 6. Olympia alleges that it bought its motion uponlearning, in light of various discovery, that it "no longer needs topursue all of these defenses and counterclaims originally asserted." Def.Page 4Mot. at 2. The record does not reflect that Olympia was dilatory inbringing its motion; rather it seeks dismissal of certain counterclaimsto facilitate the litigation. See Catanzano v. Wing,277 F.3d 99, 119 (2d Cir. 2001).

2. Undue Vexatiousness

Plaintiff contends that Olympia's conduct has been unduly vexatious,"as it brought claims that it apparently never intended to pursue." PLOpp. at 6. Plaintiff notes that while it conducted discovery regardingOlympia's counterclaims, "Olympia did not serve any written discovery,did not take a single deposition, and did not prepare an expert report onany subject." Pl. Opp. at 3. Olympia argues that because its sales of thealleged infringing tapes "were minuscule by the most liberal standards,"and because it soon arranged to sell a modified tape, it chose not tospend either parties' money nor the Court's resources to pursue a causethat could be avoided.

Although Plaintiff alleges that Olympia behaved vexatiously, there isno evidence to support this claim. Plaintiff initiated this actionagainst Olympia, and, to pursue its own claims, would have had toundertake discovery. The fact that Olympia did not conduct extensivediscovery does not support a conclusion that it has engaged in undulyvexatious behavior. Moreover, Olympia alleges that Plaintiff rejectedOlympia's attempts to reduce expenses by "stipulat[ing] with regard tocertain dispositive motions." Def. Reply at 8. Plaintiff points to noevidence to demonstrate that Olympia acted without justification, in badfaith, or to harass Plaintiff.Page 5

3. Extent to Which Suit Has Progressed (Including Expense)

Plaintiff contends that it has expended "substantial" time and moneyresponding to Olympia's counterclaims, researching the legal issues, andconducting discovery. Pl. Opp. at 5. Plaintiff argues that it has filed amotion for partial summary judgment "on the very claims and factualallegations Olympia seeks to have dismissed without prejudice" and thatdismissal would "prejudice [Plaintiff] as it spent a significant1amount of time preparing and filings its motions for partial summaryjudgment."2 Pl. Opp. at 6. Olympia responds that Plaintiff has notproduced any evidence to substantiate its claims of duplicative expenses,noting that when Plaintiff added Olympia as a defendant, it "for the mostpart . . . essentially produced the same discovery requests it hadsubmitted to Alltrade and sent them to Olympia." Def. Reply at 6. Itfurther states that Plaintiff's sole deposition of Olympia primarilyinvolved general background issues and infringement issues. Def. Reply at6. Olympia also argues that when it tried to stipulate with regard tocertain dispositive motions, Plaintiff was not interested, "resulting inthe multiplicity of motions that were ultimately filed," and consequentlymuch of the expenses incurred are due to Plaintiff's behavior. Def. Replyat 8.

The cases Plaintiff cites to support its proposition aredistinguishable. In Zagano, the plaintiff moved for dismissalwithout prejudice the week before trial was to begin. Zagano,900 F.2d at 12. The trial court denied her motion because "it had beenmade tooPage 6late, . . . [the plaintiff] had used the federal action as `aninstrument of vexation,' and . . . defendants would be prejudiced becauseof the time spent preparing the case for the scheduled trial and thediminishing availability and recollection of witnesses." Id. at13. The plaintiff refused to proceed with trial, and the trial courtgranted the defendants' motion for dismissal with prejudice. In Andesv. Versant Corp., 788 F.2d 1033 (4th Cir. 1986), the defendantsargued that they that "incurred significant expenses, not only inresponding to [the plaintiff's] complaint and filing motions andmemoranda in support of summary judgment, also by incurring substantialcosts of discovery, through depositions, production of documents, andobtaining of expert opinions." Andes, 788 F.2d at 1036. Theappeals court found that "[a]lthough this is not a case of extremeprejudice to defendants, . . . there was a sufficient basis for [the trialcourt's] denying [the plaintiff's] Rule 41(a)(2) motion and thus wecannot say that the district court abused its discretion in refusing todismiss without prejudice." Id. at 1036-37 (internal citationsomitted). The court cited cases where dismissal without prejudiceoccurred when the cases were already at trial. Id. at 1036(citing Rollison v. Washington National Ins. Co., 176 F.2d 364(4th Cir. 1949) (dismissal without prejudice not proper where plaintiffsought to dismiss after complaint had been amended three times, a trialdate set, and a jury sworn, and the trial judge had decided thatplaintiff had not stated a claim); Young v. John McShain, Inc.,130 F.2d 31 (4th Cir. 1942) (proper to deny motion to dismiss made whencase was already at trial and plaintiff had admitted that the claimssought to be dismissed were without merit)). In contrast, although thiscase is approximately eighteen months old and summary judgment motionsare being filed, it is not the eve or middle of trial. Moreover,Page 7the present case does not involve a plaintiff seeking last minutedismissal, but instead involves a defendant seeking to withdraw some ofits counterclaims.

Although discovery has ended and the parties are in the process offiling partial motions for summary judgment, this case most likely wouldhave progressed to a similar degree based on Plaintiff's own complaint(e.g. Plaintiff would have conducted discovery even in the absence ofOlympia's counterclaims), and Plaintiff makes no showing of extremeprejudice. It is within the Court's discretion to dismiss withoutprejudice in these circumstances.

4. Duplicate Expenses of Relitigation

As noted, the mere threat of relitigation is not dispositive because"starting a litigation all over again does not constitute legalprejudice." D'Alto, 100 F.3d at 283. If at some time Olympiaasserts the same or similar claims in another lawsuit, Plaintiff's workregarding the counterclaims would not be wasted. Plaintiff makes noshowing that having to defend against such claims in a different lawsuitwould be more difficult.

5. Adequacy of Explanation

Olympia contends when its defenses and counterclaims were based on "agood faith belief that they were necessary for the proper defensesagainst the claims brought against it." Def. Reply at 2. Plaintiff arguesthat "Olympia has had a full and fair opportunity to litigate the claimsraised in its counterclaims, but chose not to do so," and that Olympia"hopes to avoid entry of an adverse judgment on these claims." Pl. Opp.at 3-4.

Olympia states that the following factors led to its decision to notpursue presentlyPage 8the counterclaims it wishes to dismiss without prejudice: (1) thelevel of sales of the alleged infringing tape measure was low, and evenPlaintiff's own damages expert estimated the sales to be minimal, andthat consequently the cost of pursuing these counterclaims would outweighany benefit to Olympia; (2) Olympia decided to market another measuringtape to avoid allegations of patent infringement. Def. Reply at 3.Olympia notes that it is in the best interest of the parties and tojudicial economy to seek dismissal of these counterclaims, and allegesthat "Olympia simply wants to fairly compete with Stanley and others inthe trade, to sell a tape measure that does not infringe any valid claimof the `769 patent. . . ." Def. Reply at 9. Whereas Plaintiff contendsthat "Olympia hopes to avoid entry of an adverse judgment on theseclaims," Pl. Opp. at 4, Olympia asserts that it should not be foreclosedfrom later being able to "defend itself and assert any causes of actionagainst [Plaintiff] that addresses [Plaintiff's] anti-competitiveconduct," Def. Reply at 10. In Catanzano, the court found that"[the plaintiffs'] explanation, that they have brought the motion inorder to facilitate an end to the litigation but that they wish to avoidpreclusive effects of the district court's ruling on this claim, isadequate." Catanzano, 277 F.3d at 110. Here, the record does notreflect that Olympia is trying to improperly manipulate the legalprocess, and its explanation for seeking dismissal is credited and deemedadequate. Plaintiff will retain its cause of action with a fullentitlement to its adjudication.

After careful consideration of the Zagano factors and thecontext of the motion to dismiss, there is no finding that Plaintiff willsuffer legal prejudice if the counterclaims are dismissed. Olympia'smotion to dismiss without prejudice and costs is granted.Page 9

III. Motion to Amend

Olympia also moves to amend its answer pursuant to FED. R. Civ. P. 15.

A. Standard

Federal Rule of Civil Procedure 15(a) provides that once a responsivepleading has been served, litigants may amend a pleading only "by leaveof court or by written consent of the adverse party." FED. R. Civ. P.15(a). As a general matter, "[l]eave to file an amended complaint `shallbe freely given when justice so requires.'" Milanese v. Rust-OleumCorp., 244 F.3d 104, 110 (2d Cir. 2001) (quoting FED. R.Civ. P. 15(a)). Leave should not be denied in the absence of undue delay,bad faith, undue prejudice to the non-movant, or futility. Id.The propriety of granting a motion to amend remains within the districtcourt's discretion. See Zenith Radio Corp. v. Hazeltine Research,Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971).

B. Discussion

Olympia seeks leave to amend its answer to delete a portion of theSecond Affirmative Defense (sub-sections (a)-(d)), and the Fourth, Fifth,Eighth, Ninth, and Tenth Affirmative Defenses in their entirety. Def.Mot. at 2. Although Defendant contests the motion to dismiss, it does notmake any specific arguments regarding the motion to amend. In light ofthe resolution of Olympia's motion to dismiss, its motion to amend [Doc.No. 60] is granted.Page 10

IV. Conclusion

For the reasons stated herein, Olympia's motion to dismiss certain ofits counterclaims without prejudice [Doc. No. 60] is granted.Olympia's motion to amend [Doc. No. 60] is granted.

SO ORDERED.

1. Plaintiff does not quantify the time spent.

2. To date, Plaintiff's motion for summary judgment has not beenfiled. Plaintiff filed a certificate of service, compliant with theSupplemental Order [Doc. No. 3], stating that the motion was served onOlympia on December 29, 2004.

RULING ON DEFENDANT'S MOTION TO DISMISS CERTAIN COUNTERCLAIMS WITHOUT PREJUDICE AND MOTION TO AMEND

Pursuant to FED. R. Civ. P. 41 and 15, Defendant Olympia Group, Inc.("Olympia") moves (1) to dismiss certain of its counterclaims withoutprejudice and without costs and (2) to amend its answer to omit certainof its defenses. For the reasons stated herein, Olympia's motions aregranted.

I. Background

Plaintiff filed its complaint on August 21, 2002 [Doc. No. 1], andfiled an amended complaint on December 13, 2002, adding Olympia (amongothers) as an additional Defendant [Doc. No. 16]. On March 6, 2003,Olympia filed its answer, affirmative defenses, and counterclaims [Doc.No. 23]. Discovery closed on November 21, 2003 [Doc. No. 40].

Plaintiff is a worldwide manufacturer and marketer of tools, hardware,and specialty hardware for home improvement, consumer, industrial, andprofessional use. Pl. Opp. at 2. It owns U.S. Patent No. 6,324,769,entitled "Rule Assembly with Increased Blade Standout," which issued onDecember 4, 2001 (the "769 patent"). Plaintiff's initialPage 2complaint [Doc. No. 1] alleged infringement of the `769 patentagainst Defendant Alltrade, Inc., and its amended complaint [Doc. No. 16]added claims against Defendants Olympia and Gindas Industries Co.Olympia's First Counterclaim alleges that Plaintiff's `769 patent wasinvalid due to alleged on-sale and public-use bars under35 U.S.C. § 102(b). Olympia's Fourth Counterclaim alleges that Plaintiffviolated the Sherman Antitrust Act by bringing suit on a patent Plaintiffknew was invalid or unenforceable. Olympia's Fifth Counterclaim alleges thatPlaintiff violated the Connecticut Unfair Trade Practices Act ("CUTPA").

Olympia moves to dismiss without prejudice a portion of its FirstCounterclaim (paragraphs 7-15, 19-22, 23 sub-sections (a)-(d), and 24),and the Fourth and Fifth Counterclaims in their entirety. It also seeksleave to amend its answer to delete a portion of the Second AffirmativeDefense (sub-sections (a)-(d)), and the Fourth, Fifth, Eighth, Ninth, andTenth Affirmative Defenses in their entirety.

II. Motion to Dismiss Without Prejudice and Costs

A. Standard

Rule 41 provides that, except where all parties agree to a stipulationof dismissal, "an action shall not be dismissed at the plaintiff'sinstance save upon order of the court and upon such terms and conditionsas the court deems proper." FED. R. Civ. P. 41(a)(2). "A voluntarydismissal without prejudice under Rule 41(a)(2) will be allowed if the[non-movant] will not be prejudiced therein." D'Alto v. Dahon Cal.Inc., 100 F.3d 281, 283 (2d Cir. 1996) (citation and quotationomitted). "Voluntary dismissal without prejudice is thus not a matter ofright." Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990).Page 3Relevant factors to considering a motion to dismiss withoutprejudice include

the [moving party's] diligence in bringing the motion; any "undue vexatiousness" on [movant's] part; the extent to which the suit has progressed, including the [opposing party's] effort and expense in preparation for trial; the duplicative expense of re litigation; and the adequacy of [movant's] explanation for the need to dismiss.Id. (citations omitted). "[S]tarting a litigation all overagain does not constitute legal prejudice." D'Alto, 100 F.3d at283. These factors "are not exhaustive, and . . . do not exclude [other]factors particular to a specific case." Vosburgh v. Indem. Ins. Co.of N. Am., 217 F.R.D. 384, 386 (S.D. W. Va. 2003). Rule 41(c)instructs that "[t]he provisions of this rule apply to the dismissal ofany counterclaim."

B. Discussion

Olympia argues that, upon the close of discovery, it "has determinedthat it no longer needs to pursue all of the defenses and counterclaimsoriginally asserted." Def. Mem. at 2. Plaintiff responds Olympia's motionshould be denied, because discovery has completed and Plaintiff "hasfiled motions for partial summary judgment on the very counterclaims andissues that Olympia belatedly seeks to withdraw without prejudice," andthat it is prejudicial to allow Olympia an opportunity to relitigate suchclaims later on. Pl. Opp. at 1.

1. Diligence in Bringing Motion

Plaintiff argues that "Olympia has not shown diligence in bringing itsmotion, as it waited until after the close of discovery to seekdismissal." Pl. Opp. at 6. Olympia alleges that it bought its motion uponlearning, in light of various discovery, that it "no longer needs topursue all of these defenses and counterclaims originally asserted." Def.Page 4Mot. at 2. The record does not reflect that Olympia was dilatory inbringing its motion; rather it seeks dismissal of certain counterclaimsto facilitate the litigation. See Catanzano v. Wing,277 F.3d 99, 119 (2d Cir. 2001).

2. Undue Vexatiousness

Plaintiff contends that Olympia's conduct has been unduly vexatious,"as it brought claims that it apparently never intended to pursue." PLOpp. at 6. Plaintiff notes that while it conducted discovery regardingOlympia's counterclaims, "Olympia did not serve any written discovery,did not take a single deposition, and did not prepare an expert report onany subject." Pl. Opp. at 3. Olympia argues that because its sales of thealleged infringing tapes "were minuscule by the most liberal standards,"and because it soon arranged to sell a modified tape, it chose not tospend either parties' money nor the Court's resources to pursue a causethat could be avoided.

Although Plaintiff alleges that Olympia behaved vexatiously, there isno evidence to support this claim. Plaintiff initiated this actionagainst Olympia, and, to pursue its own claims, would have had toundertake discovery. The fact that Olympia did not conduct extensivediscovery does not support a conclusion that it has engaged in undulyvexatious behavior. Moreover, Olympia alleges that Plaintiff rejectedOlympia's attempts to reduce expenses by "stipulat[ing] with regard tocertain dispositive motions." Def. Reply at 8. Plaintiff points to noevidence to demonstrate that Olympia acted without justification, in badfaith, or to harass Plaintiff.Page 5

3. Extent to Which Suit Has Progressed (Including Expense)

Plaintiff contends that it has expended "substantial" time and moneyresponding to Olympia's counterclaims, researching the legal issues, andconducting discovery. Pl. Opp. at 5. Plaintiff argues that it has filed amotion for partial summary judgment "on the very claims and factualallegations Olympia seeks to have dismissed without prejudice" and thatdismissal would "prejudice [Plaintiff] as it spent a significant1amount of time preparing and filings its motions for partial summaryjudgment."2 Pl. Opp. at 6. Olympia responds that Plaintiff has notproduced any evidence to substantiate its claims of duplicative expenses,noting that when Plaintiff added Olympia as a defendant, it "for the mostpart . . . essentially produced the same discovery requests it hadsubmitted to Alltrade and sent them to Olympia." Def. Reply at 6. Itfurther states that Plaintiff's sole deposition of Olympia primarilyinvolved general background issues and infringement issues. Def. Reply at6. Olympia also argues that when it tried to stipulate with regard tocertain dispositive motions, Plaintiff was not interested, "resulting inthe multiplicity of motions that were ultimately filed," and consequentlymuch of the expenses incurred are due to Plaintiff's behavior. Def. Replyat 8.

The cases Plaintiff cites to support its proposition aredistinguishable. In Zagano, the plaintiff moved for dismissalwithout prejudice the week before trial was to begin. Zagano,900 F.2d at 12. The trial court denied her motion because "it had beenmade tooPage 6late, . . . [the plaintiff] had used the federal action as `aninstrument of vexation,' and . . . defendants would be prejudiced becauseof the time spent preparing the case for the scheduled trial and thediminishing availability and recollection of witnesses." Id. at13. The plaintiff refused to proceed with trial, and the trial courtgranted the defendants' motion for dismissal with prejudice. In Andesv. Versant Corp., 788 F.2d 1033 (4th Cir. 1986), the defendantsargued that they that "incurred significant expenses, not only inresponding to [the plaintiff's] complaint and filing motions andmemoranda in support of summary judgment, also by incurring substantialcosts of discovery, through depositions, production of documents, andobtaining of expert opinions." Andes, 788 F.2d at 1036. Theappeals court found that "[a]lthough this is not a case of extremeprejudice to defendants, . . . there was a sufficient basis for [the trialcourt's] denying [the plaintiff's] Rule 41(a)(2) motion and thus wecannot say that the district court abused its discretion in refusing todismiss without prejudice." Id. at 1036-37 (internal citationsomitted). The court cited cases where dismissal without prejudiceoccurred when the cases were already at trial. Id. at 1036(citing Rollison v. Washington National Ins. Co., 176 F.2d 364(4th Cir. 1949) (dismissal without prejudice not proper where plaintiffsought to dismiss after complaint had been amended three times, a trialdate set, and a jury sworn, and the trial judge had decided thatplaintiff had not stated a claim); Young v. John McShain, Inc.,130 F.2d 31 (4th Cir. 1942) (proper to deny motion to dismiss made whencase was already at trial and plaintiff had admitted that the claimssought to be dismissed were without merit)). In contrast, although thiscase is approximately eighteen months old and summary judgment motionsare being filed, it is not the eve or middle of trial. Moreover,Page 7the present case does not involve a plaintiff seeking last minutedismissal, but instead involves a defendant seeking to withdraw some ofits counterclaims.

Although discovery has ended and the parties are in the process offiling partial motions for summary judgment, this case most likely wouldhave progressed to a similar degree based on Plaintiff's own complaint(e.g. Plaintiff would have conducted discovery even in the absence ofOlympia's counterclaims), and Plaintiff makes no showing of extremeprejudice. It is within the Court's discretion to dismiss withoutprejudice in these circumstances.

4. Duplicate Expenses of Relitigation

As noted, the mere threat of relitigation is not dispositive because"starting a litigation all over again does not constitute legalprejudice." D'Alto, 100 F.3d at 283. If at some time Olympiaasserts the same or similar claims in another lawsuit, Plaintiff's workregarding the counterclaims would not be wasted. Plaintiff makes noshowing that having to defend against such claims in a different lawsuitwould be more difficult.

5. Adequacy of Explanation

Olympia contends when its defenses and counterclaims were based on "agood faith belief that they were necessary for the proper defensesagainst the claims brought against it." Def. Reply at 2. Plaintiff arguesthat "Olympia has had a full and fair opportunity to litigate the claimsraised in its counterclaims, but chose not to do so," and that Olympia"hopes to avoid entry of an adverse judgment on these claims." Pl. Opp.at 3-4.

Olympia states that the following factors led to its decision to notpursue presentlyPage 8the counterclaims it wishes to dismiss without prejudice: (1) thelevel of sales of the alleged infringing tape measure was low, and evenPlaintiff's own damages expert estimated the sales to be minimal, andthat consequently the cost of pursuing these counterclaims would outweighany benefit to Olympia; (2) Olympia decided to market another measuringtape to avoid allegations of patent infringement. Def. Reply at 3.Olympia notes that it is in the best interest of the parties and tojudicial economy to seek dismissal of these counterclaims, and allegesthat "Olympia simply wants to fairly compete with Stanley and others inthe trade, to sell a tape measure that does not infringe any valid claimof the `769 patent. . . ." Def. Reply at 9. Whereas Plaintiff contendsthat "Olympia hopes to avoid entry of an adverse judgment on theseclaims," Pl. Opp. at 4, Olympia asserts that it should not be foreclosedfrom later being able to "defend itself and assert any causes of actionagainst [Plaintiff] that addresses [Plaintiff's] anti-competitiveconduct," Def. Reply at 10. In Catanzano, the court found that"[the plaintiffs'] explanation, that they have brought the motion inorder to facilitate an end to the litigation but that they wish to avoidpreclusive effects of the district court's ruling on this claim, isadequate." Catanzano, 277 F.3d at 110. Here, the record does notreflect that Olympia is trying to improperly manipulate the legalprocess, and its explanation for seeking dismissal is credited and deemedadequate. Plaintiff will retain its cause of action with a fullentitlement to its adjudication.

After careful consideration of the Zagano factors and thecontext of the motion to dismiss, there is no finding that Plaintiff willsuffer legal prejudice if the counterclaims are dismissed. Olympia'smotion to dismiss without prejudice and costs is granted.Page 9

III. Motion to Amend

Olympia also moves to amend its answer pursuant to FED. R. Civ. P. 15.

A. Standard

Federal Rule of Civil Procedure 15(a) provides that once a responsivepleading has been served, litigants may amend a pleading only "by leaveof court or by written consent of the adverse party." FED. R. Civ. P.15(a). As a general matter, "[l]eave to file an amended complaint `shallbe freely given when justice so requires.'" Milanese v. Rust-OleumCorp., 244 F.3d 104, 110 (2d Cir. 2001) (quoting FED. R.Civ. P. 15(a)). Leave should not be denied in the absence of undue delay,bad faith, undue prejudice to the non-movant, or futility. Id.The propriety of granting a motion to amend remains within the districtcourt's discretion. See Zenith Radio Corp. v. Hazeltine Research,Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971).

B. Discussion

Olympia seeks leave to amend its answer to delete a portion of theSecond Affirmative Defense (sub-sections (a)-(d)), and the Fourth, Fifth,Eighth, Ninth, and Tenth Affirmative Defenses in their entirety. Def.Mot. at 2. Although Defendant contests the motion to dismiss, it does notmake any specific arguments regarding the motion to amend. In light ofthe resolution of Olympia's motion to dismiss, its motion to amend [Doc.No. 60] is granted.Page 10

IV. Conclusion

For the reasons stated herein, Olympia's motion to dismiss certain ofits counterclaims without prejudice [Doc. No. 60] is granted.Olympia's motion to amend [Doc. No. 60] is granted.

SO ORDERED.

1. Plaintiff does not quantify the time spent.

2. To date, Plaintiff's motion for summary judgment has not beenfiled. Plaintiff filed a certificate of service, compliant with theSupplemental Order [Doc. No. 3], stating that the motion was served onOlympia on December 29, 2004.

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