Nearby Systems v. Penney OpCo: Location Patent Dispute Ends in Dismissal With Prejudice
Nearby Systems, LLC filed suit against Penney OpCo, LLC in the Eastern District of Texas, asserting two location-based mobile technology patents against the JC Penney App. After 473 days of litigation, the parties filed a joint stipulation under Rule 41(a)(1)(A)(ii), resolving the case with plaintiff’s claims dismissed with prejudice and defendant’s counterclaims dismissed without prejudice.
Location tech NPE targets JCPenney’s mobile app — resolves after 473 days
Nearby Systems, LLC filed this patent infringement action on August 28, 2023 in the Eastern District of Texas, asserting US10469980B2 and US9532164B2 against Penney OpCo, LLC — the operating entity behind JCPenney. Both patents cover location-based mobile technology, and the accused product was the JC Penney App, suggesting the suit targeted proximity-aware or geolocation features within the retailer’s consumer-facing mobile platform.
The case closed on December 13, 2024, via a Joint Stipulation of Dismissal under Rule 41(a)(1)(A)(ii). The court accepted the stipulation, dismissing all of Nearby Systems’ claims with prejudice and all of Penney OpCo’s counterclaims without prejudice. Critically, each party agreed to bear its own costs, expenses, and attorneys’ fees — a standard settlement-adjacent structure that avoids any public admission of liability or infringement.
At 473 days, the case ran longer than many pre-trial resolutions in E.D. Texas, suggesting substantive negotiations or claim construction activity preceded the settlement. The asymmetric dismissal terms — plaintiff’s claims with prejudice, defendant’s counterclaims without — are consistent with a confidential financial resolution favouring Penney OpCo, though the public record is silent on any monetary terms. The ‘each party bears own costs’ clause also suggests neither side achieved a dominant litigation position.
Filing to Dismissed with Prejudice in 473 days
473 days — above average for E.D. Texas patent cases resolved pre-trial
Dismissed with prejudice: what the joint stipulation means for both parties
Rule 41(a)(1)(A)(ii) joint stipulation explained
A dismissal under Rule 41(a)(1)(A)(ii) requires signatures from all parties who have appeared, making it a fully consensual exit from litigation. Unlike a court-ordered dismissal, this mechanism signals mutual agreement. The court’s role is administrative — it accepts and acknowledges the stipulation rather than adjudicating the merits. No findings of infringement or validity were made.
Consensual, no merits rulingClaims dismissed with prejudice — Nearby Systems cannot refile
Dismissal with prejudice of Nearby Systems’ claims is a permanent bar: the same patent claims cannot be reasserted against Penney OpCo for the same accused conduct. This is a meaningful concession by the plaintiff and is typically consistent with a financial settlement, licensing agreement, or recognition that litigation risk outweighed likely recovery. The public record does not disclose any compensation received.
Permanent bar on refilingCounterclaims dismissed without prejudice — Penney retains optionality
Penney OpCo’s counterclaims were dismissed without prejudice, meaning they could theoretically be reasserted in a future action. This asymmetric structure — plaintiff with prejudice, defendant without — is legally notable and suggests Penney OpCo retained some leverage in negotiations. In practice, however, counterclaims in resolved patent suits are rarely reactivated absent new triggering conduct.
Counterclaims preserved in theoryNo costs awarded: neither party achieved a dominant position
The ‘each party bears own costs’ clause is a hallmark of negotiated resolution rather than adjudicated outcome. For retail technology defendants facing location-patent assertions, this case illustrates that early-to-mid stage settlement remains a viable and common resolution path in E.D. Texas. The two asserted patents remain active in the portfolio and may be deployed against other mobile app operators in the retail sector.
Patents remain available for reuseFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Nearby Systems, LLC | Company | Location technology IP licensor — holder of US10469980B2 and US9532164B2Search in Eureka ↗ |
| Defendant | Penney OpCo, LLC | Company | Penney OpCo, LLC — retail operator of JCPenney stores and mobile app platformSearch 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 counsel | Jonathan R. Miller | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff counsel | Travis E. Lynch | 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 | Alexander Hale Martin | Attorney | Counsel for Penney OpCo, LLCSearch in Eureka ↗ |
| Defendant counsel | Ashu N. Balimba | Attorney | Counsel for Penney OpCo, LLCSearch in Eureka ↗ |
| Defendant counsel | Michael Alden Vincent | Attorney | Counsel for Penney OpCo, LLCSearch in Eureka ↗ |
| Defendant counsel | Neil J McNabnay | Attorney | Counsel for Penney OpCo, LLCSearch in Eureka ↗ |
| Defendant counsel | Ricardo Joel Bonilla | Attorney | Counsel for Penney OpCo, LLCSearch in Eureka ↗ |
| Defendant law firm | Fish & Richardson PC (Dallas) | Law Firm | Representing Penney OpCo, LLCSearch in Eureka ↗ |
| Defendant law firm | Fish & Richardson PC | Law Firm | Representing Penney OpCo, LLCSearch in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Texas Eastern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The court’s order reflects a purely procedural acceptance of a party-negotiated stipulation — no claim construction, infringement finding, or validity determination was reached. The asymmetric dismissal structure (plaintiff with prejudice, defendant without) is legally significant: it permanently extinguishes Nearby Systems’ right to reassert these specific claims against Penney OpCo for the same accused conduct, while leaving Penney’s counterclaims theoretically available. The cost-neutrality clause reinforces that this was a negotiated exit, not a litigated outcome.
US10469980B2 & US9532164B2 — location-based mobile technology patents
US10469980B2 (App. No. 15/346599) and US9532164B2 (App. No. 13/987520) both sit within the location-based mobile services technology domain. The patents appear to cover methods and systems by which mobile applications detect, process, or act upon a device’s proximity to physical locations — capabilities central to in-store retail app experiences such as aisle navigation, proximity notifications, and location-triggered content delivery. US9532164 as the earlier-issued patent likely forms the foundational claim set, with US10469980 representing a continuation or extension of that coverage.
For the retail technology sector, these patents carry meaningful competitive relevance. Any mobile application incorporating geofencing, beacon integration, in-store location services, or proximity-based push notifications may fall within their claim scope. With no invalidity ruling issued in this case, both patents remain enforceable. Nearby Systems, as a non-practising entity, has demonstrated a willingness to assert these patents in high-volume patent venues, suggesting that other retail app operators with similar feature sets face residual enforcement risk.
Should your product team run an FTO against US10469980B2 and US9532164B2?
If your organisation operates a retail mobile application with in-store location features — including proximity notifications, geofencing, beacon-based triggers, or location-aware content delivery — these two patents warrant an FTO review. The JCPenney App was accused on what appears to be standard retail location functionality, suggesting the claims may be drafted broadly enough to capture widely-deployed implementations. The absence of any invalidity ruling means both patents remain in full force.
PatSnap Eureka’s FTO Search Agent can map the claim scope of US10469980B2 and US9532164B2 against your product architecture, identify prior art that may support an IPR petition, and surface related Nearby Systems portfolio patents that could signal future assertion targets. For in-house teams and R&D leads building or scaling location-based retail features, proactive FTO analysis is a materially lower-cost intervention than defending an E.D. Texas infringement action.
Run a freedom-to-operate analysis on US10469980B2 to assess your product’s exposure
Run FTO in Eureka →Similar location-technology patent cases in E.D. Texas federal court
Cases involving location-based mobile patent assertions against retail app operators in the Eastern District of Texas, including NPE-driven infringement actions and Rule 41 resolutions.
What this case signals for the retail mobile technology IP landscape
Location-based patent assertions against retail apps are rising. This case illustrates the typical lifecycle and resolution dynamics in E.D. Texas.
E.D. Texas remains a high-risk venue for retail app defendants
The Eastern District of Texas continues to attract location-technology patent assertions against consumer-facing mobile platforms. Defendants in this venue face significant pre-trial costs and scheduling pressure. Penney OpCo’s use of Fish & Richardson — a top-tier patent litigation firm — signals that defending against Nearby Systems required serious resource commitment.
Dismissal with prejudice on plaintiff’s side typically signals a paid resolution
When a patent assertion entity agrees to dismiss its own claims with prejudice while costs are split, the commercial inference is that a licensing payment or covenant was exchanged. Retail technology companies facing similar demands should model the cost of early settlement against the cost of full defence before committing to a litigation strategy.
Nearby v Penney — key questions answered
Nearby Systems asserted two patents: US10469980B2 and US9532164B2, both covering location-based mobile technology. The accused product was the JC Penney App. No claim construction or infringement ruling was issued — the case resolved by joint stipulation of dismissal.
Dismissal with prejudice permanently bars Nearby Systems from reasserting the same patent claims against Penney OpCo for the same accused conduct. The company cannot refile in any court. However, the patents themselves remain active and can be asserted against other defendants. No admission of infringement or invalidity was made by either party.
This asymmetric structure is consistent with a negotiated resolution in which the defendant retained some leverage. Dismissal without prejudice on counterclaims means Penney OpCo theoretically retains the right to reassert those claims in a future action. In practice this is rare post-settlement, but the structure signals that Penney OpCo’s litigation position was relatively strong at the time of resolution.
Nearby Systems was represented by Rozier Hardt McDonough PLLC, with attorneys including Carey Matthew Rozier, James Francis McDonough III, Jonathan Lloyd Hardt, Jonathan R. Miller, and Travis E. Lynch. Penney OpCo was represented by Fish & Richardson PC (Dallas), with attorneys including Neil J McNabnay, Ricardo Joel Bonilla, Alexander Hale Martin, Ashu N. Balimba, and Michael Alden Vincent.
Yes. Because the case resolved by joint stipulation without any merits adjudication, no invalidity finding was made. Both US10469980B2 and US9532164B2 remain valid and enforceable against third parties. Retail app operators using location-based features should consider conducting an FTO review against these patents, as Nearby Systems has demonstrated willingness to assert them in E.D. Texas.
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