Preferred Utilities Mfg. Corp. v. ISP Automation: Waterproof Pump Enclosure Patent Dispute Settles

Case Overview

The Parties

The Patent at Issue

This case centered on **U.S. Patent No. 9,932,981 B2** (Application No. 14/633,364), covering a “Waterproof pump enclosure and system including same” — a commercially significant technology in industrial fluid management and HVAC infrastructure. The patent’s claims likely address structural and functional innovations in sealing, housing configuration, and system integration.

• • US 9,932,981 B2 — Waterproof pump enclosure and system including same

Litigation Timeline & Procedural History

The District of New Jersey is a moderately active patent litigation venue, offering plaintiffs access to experienced patent judges and a well-developed procedural framework. Venue selection here, rather than the District of Delaware or the Eastern District of Texas, may reflect the parties’ geographic nexus or specific strategic considerations tied to the defendant’s operations.

The 552-day timeline is consistent with pre-trial settlement patterns in district court patent cases, where the majority of disputes resolve before claim construction or summary judgment proceedings. No public record of Markman hearings, summary judgment motions, or trial scheduling orders was identified in the available case data, suggesting the parties reached resolution at an early-to-mid litigation stage.

The Verdict & Legal Analysis

Outcome

On April 15, 2025, the parties filed a joint stipulation of dismissal pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), effectuating dismissal with prejudice on all claims and counterclaims. The dismissal was expressly conditioned on the terms of a private settlement agreement, the contents of which were not disclosed in public filings.

Critically, each party agreed to bear its own attorney’s fees and costs — a standard feature of negotiated resolutions that signals neither party sought fee-shifting under 35 U.S.C. § 285, which permits awards of attorney’s fees in “exceptional cases.” The absence of a fee motion suggests the litigation was conducted without the kind of egregious misconduct or objectively unreasonable positions that typically trigger such requests. No damages amount was publicly disclosed. No injunctive relief was ordered by the court.

Legal Significance

The case was initiated as a direct patent infringement action, with ISP Automation asserting counterclaims against the plaintiff. The nature of those counterclaims — whether invalidity challenges, non-infringement declarations, or other affirmative defenses — was not detailed in available public records.

The mutual dismissal with prejudice is legally significant: both parties are permanently barred from relitigating the same claims and counterclaims. This finality, combined with a confidential settlement, suggests the parties reached a commercially negotiated resolution — potentially including licensing terms, design modifications, or market boundary agreements — rather than a pure walk-away.

The “dismissed with prejudice by settlement” outcome is the dominant resolution pattern in U.S. patent litigation, with studies consistently showing that 60–70% of patent cases settle before trial. This case follows that pattern and does not produce a published judicial opinion, limiting its direct precedential value.

However, the presence of counterclaims from the defendant is strategically notable. Defendants who assert counterclaims — particularly invalidity counterclaims — create settlement leverage by threatening the patent’s enforceability. This dynamic often accelerates resolution and shapes licensing economics.