University of Pittsburgh v. Varian Medical (Fed. Cir. 2009)
The district court dismissed Pitt’s infringement action for lack of standing because Carnegie Mellon is a co-owner. Ordinarily all co-owners must join as plaintiffs in an infringement suit, and here Carnegie Mellon did not join. Notably, the district court dismissed the case with prejudice – barring Pitt from later re-filing the lawsuit once Carnegie is on-board.
On appeal, the Federal Circuit took a minimalist approach – holding only that the district court abused its discretion in dismissing with prejudice rather than without prejudice.
Federal Rule of Civil Procedure 12(b)(7) allows a district court to dismiss an action for failure to join a party under Rule 19. However, it is clear that a dismissal for failure to join a party is not an adjudication on the merits, and thus, should not have preclusive effect—i.e. such a dismissal should be without prejudice. See Hughes v. United States, 71 U.S. (4 Wall.) 232, 237 (1866).
Fieldturf, Inc. v. Sw. Recreational Indus., 357 F.3d 1266, 1269 (Fed. Cir. 2004) (“Ordinarily, dismissal for lack of standing is without prejudice. On occasion, however, a dismissal with prejudice is appropriate, especially where it is plainly unlikely that the plaintiff will be able to cure the standing problem.”).