the ground that Local Rule 6.3 prohibits submission of affidavits or
declarations in connection with a motion for reconsideration
absent permission by the court. Smarts concedes that it violated
Local Rule 6.3 by failing to seek permission to file the
Declaration and attached exhibits, but contends that these
materials should be considered because (1) most of the exhibits
attached to the declaration are excerpts from other evidentiary
material already in the record and (2) the sole item that is new
is responsive to the Defendants' motion for reconsideration.
A motion for reconsideration is not the proper avenue for the
submission of new material. See Local Rule 6.3; First Amer. Corp.
v. Price Waterhouse LLP, No. M8-85, 1999 WL 148460 (S.D.N.Y.
March 18, 1999). Such material should be stricken and
disregarded. See Quartararo v. Catterson, 73 F. Supp.2d 270, 273
(E.D.N.Y. 1999). To the extent the Stellabotte Declaration and
attached exhibits contain material that is already part of the
record, it is unnecessary to resort to these new documents in
deciding the motion for reconsideration.*fn1 Therefore, the
Stellabotte Declaration and attached exhibits are hereby
II. Legal Standards For A Motion For Reconsideration
Local Rule 6.3 provides in pertinent part: "There shall be
served with the notice of motion a memorandum setting forth
concisely the matters or controlling decisions which counsel
believes the court has overlooked." Thus, to be entitled to
reargument and reconsideration, the movant must demonstrate that
the Court overlooked controlling decisions or factual matters
that were put before it on the underlying motion. See Ameritrust
Co. Nat'l Ass'n v. Dew, 151 F.R.D. 237, 238 (S.D.N.Y. 1993); East
Coast Novelty Co. v. City of New York, 141 F.R.D. 245, 245
Local Rule 6.3 is to be narrowly construed and strictly applied
so as to avoid repetitive arguments on issues that have been
considered fully by the court. In deciding a reconsideration and
reargument motion, the Court must not allow a party to use the
motion as a substitute for appealing from a final judgment. See
Morser v. AT&T Info. Sys., 715 F. Supp. 516, 517 (S.D.N.Y. 1989);
Korwek v. Hunt, 649 F. Supp. 1547, 1548 (S.D.N.Y. 1986), aff'd,
827 F.2d 874 (2d Cir. 1987). Therefore, a party may not "advance
new facts, issues or arguments not previously presented to the
Court." Morse/Diesel, Inc. v. Fidelity & Deposit Co. of Md.,
768 F. Supp. 115, 116 (S.D.N.Y. 1991). The decision to grant or deny
the motion is within the sound discretion of the district court.
See Schaffer v. Soros, No. 92 Civ. 1233, 1994 WL 592891, at *1
(S.D.N.Y. Oct. 31, 1994).
Upon receiving such a motion, a court may do any of the
following. First, the motion may be denied, thereby leaving the
original decision unaltered. See Lehmuller v. Incorporated
Village of Sag Harbor, 982 F. Supp. 132, 135 (E.D.N.Y. 1997).
Alternatively, "the Court can grant a motion to reargue for the
limited purposes of considering the effect of an overlooked
matter," and after doing so may affirm and/or clarify the
original decision. Lehmuller, 982 F. Supp. at 135-36; see In re
First American Corp., No. M8-85, 1998 WL 148421, at *3 (S.D.N.Y.
Mar. 27, 1998), aff'd, 154 F.3d 16 (2d Cir. 1998); Violette v.
Armonk Assocs., L.P., 823 F. Supp. 224, 226-27, 231 (S.D.N.Y.
1993); Brignoli v. Balch Hardy & Scheinman, Inc., 735 F. Supp. 100,
102-03 (S.D.N.Y. 1990). Finally, having granted a motion to
reconsider, the Court may vacate the original decision. See Morin
v. Trupin, 823 F. Supp. 201, 203 (S.D.N.Y. 1993); Travelers Ins.
Co. v. Buffalo Reins. Co., 739 F. Supp. 209, 211-13 (S.D.N.Y.
The counterclaims at issue allege unfair competition under the
Lanham Act and the common law of New York, as well as violations
of GBL §§ 349 and 350. As discussed in Smarts I, the theory
behind these claims is that Smarts initiated this suit and
publicized incorrect information about it for strategic reasons,
namely, to thwart Avesta in its efforts to market a competing
software product. The counterclaims were dismissed on the ground
that in order to prevail Avesta would have to establish bad faith
on the part of Smarts, and the record is devoid of evidence to
The Defendants contend that this Court overlooked two of the
three types of allegedly false statements made by Smarts upon
which the relevant counterclaims were predicated, namely,
statements concerning Smarts' theft of trade secret allegation
and statements concerning the capabilities of Avesta's products.
The Defendants further contend that the rule stated in Zenith
Elec. Corp. v. Exzec., Inc., 182 F.3d 1340, 1353, 1355 (Fed. Cir.
1999) and applied by this Court that, absent bad faith,
marketplace activity in support of a patent will not subject a
patentee to liability under the Lanham Act (or state law claims
based on the same activity), does not apply to these statements.
This argument was raised orally at the proceedings on October
13, 1999. Both the argument and the relevant factual matters were
considered in determining that the counterclaims should be
dismissed, although the Court declined in Smarts I to summarize
all of the evidence before it. As was explained therein, a
comprehensive summary of all the evidence, much of it of doubtful
worth and admissibility, was not warranted although the parties
skirmished over every last item. Nor is such a summary warranted
here even though the parties continue to spar ad infinitum over
this material. Some additional comments on why the counterclaims
cannot be sustained, however, are appropriate.
The Defendants' theory, enunciated in their answer and
counterclaims, is that Smarts engaged in anti-competitive
behavior by, first, "filing an objectively baseless patent
infringement litigation" and then by "repeat[ing] . . . the false
and highly damaging allegations in the complaint to Avesta's
existing and/or potential investors and customers." These acts
allegedly constituted "false and misleading representations of
fact in commercial advertising that misrepresent the nature,
characteristics and qualities of the Avesta products." Thus, the
allegedly false statements as to trade secret misappropriation
and the capabilities of Avesta's products were part and parcel of
the filing of this patent infringement suit and dissemination of
information about it.
As noted above, the Defendants claim that they need not show
bad faith with respect to the bringing of a "baseless" suit
itself, at least insofar as it concerns matters other than patent
infringement per se. This theory if correct would mean that
Smarts could be liable if it ultimately turned out that the suit
was without merit, or "baseless," even though it was initiated in
good faith. If that were the case a plaintiff could not allege
patent infringement — or trade secret misappropriation
— without gambling that it would be automatically liable on
a counterclaim if it failed to prevail in its claim.
With respect to the claim that Smarts is liable for
disseminating information about the suit including information
about the trade secret misappropriation allegations as well as
the patent infringement allegations, no distinction between these
allegations is practical. Cf. Zenith, 182 F.3d at 1354 (declining
to distinguish between claim based on publication of infringement
allegations and claim based on publication of allegations
infringer could not "design around" relevant patent because "such
line drawing would unnecessarily complicate
the law, creating [an] issue as to whether a particular statement falls
in the former or latter category.") It should also be noted that Smarts
I already found that there is no evidence that Smarts provided
incorrect information about the lawsuit to market participants.
A defendant in a spurious patent infringement action is not
without recourse. As discussed in Smarts I, where there was bad
faith in bringing such a suit or disseminating information about
it then the defendant may bring a counterclaim under the Lanham
Act or under state laws that include a bad faith requirement.
Although not mentioned in Smarts I, it is also the case that a
prevailing defendant in such a suit may seek attorneys' fees and
disbursements. See 35 U.S.C. § 285 (providing for award in
patent infringement suits of reasonable attorneys' fees to
prevailing party in exceptional cases); Encomp Inc. v. L-Com,
Inc., 999 F. Supp. 264, 266 (D.Conn. 1998) (prevailing accused
infringer can seek attorneys' fees where patentee acted in bad
faith by engaging in misconduct during litigation, vexatious or
unjustified litigation, or patentee knew or should have known
suit was baseless). This statutory remedy "serves as a deterrent
to `improper bringing of clearly unwarranted suits' for patent
infringement.'" Automated Business Companies, Inc. v. NEC
America, Inc., 202 F.3d 1353, 1355 (Fed. Cir. 2000) (citation
As explained in Smarts I, the Defendants have failed to produce
evidence that this suit and the conduct around it are simply a
strategy by Smarts to stifle its competition. The Defendants may
at the end of the litigation seek to establish that the suit was
frivolous, and the way Smarts conducted itself was wrongful, and
to recover their attorneys' fees and disbursements. See
35 U.S.C. § 285. The counterclaims, however, cannot be sustained and
must be dismissed.
For the reasons set forth above, the motion for reconsideration
is denied and the motion requesting that the Court strike is
It is so ordered.