Microstrategy, Inc. v. Acacia Research Corp., C.A. No. 5735-VCP (Del. Ch. Dec. 30, 2010).

Issues Addressed

This 52-page decision by the Delaware Court of Chancery addressed competing claims regarding breach of a Settlement Agreement. The Court granted in part and denied in part Motions to Dismiss. In particular, the Court dismissed the breach of contract claim; declined to dismiss the breach of representation claim, and allowed the litigation to proceed as to only a limited portion of a fraudulent inducement claim. The court also notes that an integration clause will not bar claims made based on extra-contractual pre-agreement statements unless there is a robust anti-reliance clause as well. (See footnote 101 and related text.)

Very Short Overview

One noteworthy procedural “takeaway” from this case for purposes of this short blog blurb, is the standard used in the Motion to Dismiss. As indicated in the summary of the recent Narrowstep decision authored by the same Vice Chancellor, this decision applies the standard for a Motion to Dismiss that was announced by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Compare the use of that standard with the standard used by the Delaware courts prior to the U.S. Supreme Court’s Twombly decision, as discussed in connection with the recent Narrowstep decision here. See slip op. at 8-11. Note, however, that subsequent to this opinion, in late 2011, the Delaware Supreme Court decided that the “pre-Twombly” standard would apply in Delaware.