Nearby Systems v. Subway: Patent Infringement Dismissed With Prejudice in 118 Days
Nearby Systems, LLC brought a three-patent infringement action against Franchise World Headquarters LLC — the entity behind the Subway restaurant chain — targeting the Subway mobile app in the Eastern District of Texas. The case resolved in just 118 days via joint stipulation, with dismissal entered with prejudice and each party bearing its own costs.
Subway’s App Patents: A Fast-Track Texas Dismissal With Finality
Filed on 5 December 2024 in the Eastern District of Texas, Nearby Systems, LLC asserted three US patents — US11937145B2, US10469980B2, and US9532164B2 — against Franchise World Headquarters LLC, operating as Subway, along with affiliated entities Doctor’s Associates LLC and Subway US IP Holder LLC. The asserted patents relate to location-based mobile application technology, with the Subway App identified as the accused product. Nearby Systems was represented by Rozier Hardt McDonough PLLC, while Subway retained Holland & Knight, LLP.
The case closed on 2 April 2025 via a Joint Stipulation of Dismissal under Rule 41(a)(1)(A)(ii), signed by both parties. The court accepted and acknowledged dismissal with prejudice of all claims and causes of action. The with-prejudice designation is legally significant: Nearby Systems is permanently barred from reasserting the same claims on these three patents against these Subway entities. Each party was ordered to bear its own costs, expenses, and attorneys’ fees.
The 118-day timeline from filing to closure is notably short for a multi-patent infringement action in the Eastern District of Texas, and is consistent with a negotiated resolution reached before substantive motion practice or claim construction. The absence of any fee-shifting award and the mutual cost-bearing arrangement may suggest a settlement in which financial terms were not publicly disclosed. The public record does not reveal whether any licence, covenant not to sue, or other commercial arrangement underlies the dismissal.
Filing to Dismissed with Prejudice in 118 days
118 days — well below the median EDTX patent case resolution timeline, suggesting early negotiated resolution
Dismissed with prejudice: what the joint stipulation means for both parties
Rule 41(a)(1)(A)(ii) dismissal with prejudice — permanent bar on re-filing
A joint stipulation under Rule 41(a)(1)(A)(ii) requires consent of all parties and takes effect upon court acceptance. Dismissal with prejudice carries the force of a final judgment on the merits: Nearby Systems cannot refile the same patent claims — US11937145B2, US10469980B2, and US9532164B2 — against these Subway entities in any federal court. This is the most final form of voluntary dismissal available under the Federal Rules.
Final — no re-filing permittedNearby Systems loses the right to pursue Subway on these three patents
By agreeing to dismissal with prejudice, Nearby Systems permanently surrenders its infringement claims against Franchise World Headquarters, Doctor’s Associates LLC, and Subway US IP Holder LLC on all three asserted patents. The patents themselves remain in force and are not invalidated, meaning Nearby Systems may still assert them against unrelated third parties — but the Subway litigation avenue is permanently closed. This outcome is consistent with either a confidential settlement or a decision not to continue.
Patents intact; Subway claims extinguishedSubway secures permanent resolution — no ongoing infringement exposure on these patents
For Franchise World Headquarters and the affiliated Subway entities, the with-prejudice dismissal provides maximum certainty: Nearby Systems cannot return on these patent claims. The mutual cost-bearing arrangement means Subway avoids any fee award obligation, and the absence of any admitted liability in the public record preserves its legal position. The swift resolution — 118 days — suggests Subway’s counsel achieved a clean exit without protracted litigation.
Full finality for Subway entitiesLocation-based app patents remain active — broader enforcement risk persists for mobile commerce platforms
The three patents covering location-based mobile application technology are not invalidated or licensed on any public record by this outcome. Other restaurant chains, retail apps, and mobile commerce platforms using proximity-based features — geofencing, location-triggered offers, app check-in technology — should note that Nearby Systems retains these patents and may pursue enforcement against other defendants. The EDTX venue remains plaintiff-friendly for NPE-style patent assertions of this type.
Ongoing risk for mobile app operatorsFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Nearby Systems, LLC | Company | Location-based mobile technology patent holder — asserting US11937145B2, US10469980B2, and US9532164B2Search in Eureka ↗ |
| Defendant | franchise world headquarters LLC | Company | Franchise World Headquarters LLC — operator and IP entity for Subway restaurant chain mobile appSearch in Eureka ↗ |
| Plaintiff counsel | Carey Matthew Rozier | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff counsel | James Francis McDonough , III | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff counsel | Jonathan Lloyd Hardt | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Rozier Hardt McDonough PLLC | Law Firm | Representing Nearby Systems, LLCSearch in Eureka ↗ |
| Defendant counsel | Morgan Delabar | Attorney | Counsel for franchise world headquarters LLCSearch in Eureka ↗ |
| Defendant counsel | Robert Sean Hill | Attorney | Counsel for franchise world headquarters LLCSearch in Eureka ↗ |
| Defendant law firm | Holland & Knight, LLP | Law Firm | Representing franchise world headquarters LLCSearch in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Texas Eastern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The court’s acceptance of the joint stipulation under Rule 41(a)(1)(A)(ii) reflects a purely procedural endpoint — no merits determination was made. The phrase ‘all claims and causes of action… are DISMISSED WITH PREJUDICE’ operates as a final judgment barring re-litigation, while the mutual cost-bearing order eliminates any fee-shifting leverage. The inclusion of three named Subway entities — Franchise World Headquarters, Doctor’s Associates LLC, and Subway US IP Holder LLC — in the dismissal suggests comprehensive release across the corporate structure.
US11937145B2, US10469980B2 & US9532164B2 — location-based mobile application technology
The three patents asserted in this case — US11937145B2 (application US16/570298), US10469980B2 (application US15/346599), and US9532164B2 (application US13/987520) — cover location-based mobile application technology, a domain encompassing geofencing, proximity-triggered notifications, location-aware service delivery, and mobile check-in functionality. The application lineage spans multiple generations, with the earliest application number (US13/987520) suggesting foundational priority claims and the later applications potentially representing continuation or continuation-in-part filings that extend the protected claim scope. This multi-patent, multi-generation structure is characteristic of a purposefully built enforcement portfolio.
Location-based mobile app technology sits at the intersection of retail, food service, logistics, and consumer mobile platforms — making these patents strategically relevant to a broad range of potential defendants beyond Subway. Any application that uses a mobile device’s GPS, Bluetooth, or network signals to deliver location-contingent functionality — store finders, proximity offers, geofenced loyalty rewards, or app-based check-ins — may overlap with the claimed technology. The patents’ continued enforceability post-dismissal means that operators in QSR, grocery, retail, and delivery verticals should treat this portfolio as an active commercial risk warranting FTO assessment.
Should you run an FTO against US11937145B2, US10469980B2, and US9532164B2?
Any product team developing or operating a location-aware mobile application — particularly in food service, retail loyalty, or proximity marketing — should consider a freedom-to-operate assessment against all three patents and their broader family. The Subway case demonstrates active enforcement in the Eastern District of Texas, a plaintiff-favoured venue. The with-prejudice dismissal does not narrow the patents’ claim scope, and continuation filings may extend coverage further. R&D leads designing geofencing, check-in, or location-triggered notification features should prioritise FTO review before market launch or feature expansion.
PatSnap Eureka’s FTO Search Agent enables IP and R&D teams to map claim language from US11937145B2, US10469980B2, and US9532164B2 against their product architecture in minutes. Eureka identifies the full patent family — including continuations and divisionals — surfaces prior art relevant to invalidity analysis, and flags claim elements most likely to present infringement risk. For mobile commerce and location-tech teams operating under litigation pressure from NPE portfolios like Nearby Systems’, Eureka provides the rapid, defensible analysis needed to make confident product decisions.
Run a freedom-to-operate analysis on US11937145B2 to assess your product’s exposure
Run FTO in Eureka →Similar location-based mobile app patent cases in EDTX and federal courts
Explore comparable NPE enforcement actions involving location-based mobile application patents filed in the Eastern District of Texas and related federal venues.
What this case signals for the mobile location technology IP landscape
A fast voluntary resolution in EDTX on location-based app patents leaves three active patents in play and signals continued NPE enforcement risk for mobile commerce operators.
Fast dismissal in EDTX signals likely pre-trial settlement — not a defence win
A 118-day closure in the Eastern District of Texas — before any Markman hearing or substantive motion practice — is strongly consistent with a confidential monetary or licensing settlement. Defendants and their insurers should not read the with-prejudice dismissal as a vindication on the merits. The speed and mutual cost structure suggests commercial resolution rather than patent invalidity or non-infringement findings.
Three location-based patents remain enforceable — mobile app operators face continued exposure
US11937145B2, US10469980B2, and US9532164B2 were not challenged through IPR or invalidated in this proceeding. Any operator of a location-aware mobile application — especially in retail, food service, or loyalty programme verticals — should assess their exposure to these patent families. The EDTX venue preference and NPE-style plaintiff profile suggest further assertion campaigns are plausible.
Nearby v franchise — key questions answered
Nearby Systems LLC filed a patent infringement action against Franchise World Headquarters LLC (Subway) in the Eastern District of Texas on 5 December 2024, asserting three patents covering location-based mobile app technology against the Subway App. The case was dismissed with prejudice on 2 April 2025, 118 days after filing, via a joint stipulation under Rule 41(a)(1)(A)(ii). Each party bore its own costs.
Nearby Systems asserted three patents: US11937145B2 (application US16/570298), US10469980B2 (application US15/346599), and US9532164B2 (application US13/987520). All three relate to location-based mobile application technology and were asserted in connection with the Subway App as the accused product.
Dismissal with prejudice operates as a final judgment on the merits under US federal procedural law. Nearby Systems is permanently barred from refiling the same patent infringement claims — on US11937145B2, US10469980B2, and US9532164B2 — against Franchise World Headquarters, Doctor’s Associates LLC, and Subway US IP Holder LLC in any federal court. The patents themselves remain valid and enforceable against other parties.
No. A dismissal with prejudice under Rule 41(a)(1)(A)(ii) does not adjudicate patent validity or claim scope. The three patents — US11937145B2, US10469980B2, and US9532164B2 — were not invalidated, cancelled, or limited by this proceeding. They remain in force and Nearby Systems retains the right to assert them against third parties other than the named Subway entities.
The 118-day closure is shorter than typical for a multi-patent infringement case in the Eastern District of Texas, suggesting the parties reached a negotiated resolution before any claim construction hearing, summary judgment motion, or substantive court ruling. The mutual cost-bearing arrangement and absence of any public settlement terms are consistent with a confidential commercial agreement. The public record does not confirm whether any licence or payment was exchanged.
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