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Judge Robinson orders plaintiff to show cause why it should not be sanctioned for prosecution of allegedly frivolous, eventually withdrawn infringement claim.

Judge Robinson recently granted a motion to dismiss a § 285 counterclaim for attorneys’ fees relating to an allegedly frivolous and eventually withdrawn claim, but ordered the plaintiff to show cause why it should not be sanctioned under Rule 11 for its prosecution of that claim. Technology Innovations, LLC v., Inc., Civ. No. 11-690-SLR (D. Del. Aug. 15, 2013). The plaintiff alleged infringement of two patents, one of which (the ‘407 patent) previously had been asserted in the Southern District of Texas. The defendant claimed that during the course of the litigation in Texas, the plaintiff agreed not to pursue the ‘407 infringement claim because of the “high unlikelihood of infringement.” Id. at 1-2. As a result, when the plaintiff asserted the ‘407 infringement claim in Delaware, the defendant moved for Rule 11 sanctions. Id. The Court denied that motion without prejudice as premature (previously discussed here). Almost a year later, after the defendant answered, filed counterclaims, and engaged in discovery regarding the ‘407 patent, the plaintiff amended its complaint to remove allegations relating to the ‘407 patent and to provide an affirmative statement of non-liability with respect to that patent. Id. at 2. The defendant answered and asserted a counterclaim under § 285 for attorneys’ fees in connection with the plaintiff’s continued prosecution of the withdrawn allegations. The plaintiff then moved to dismiss that counterclaim.

The Court reviewed the history of § 285, and cases applying it, and concluded that § 285 attorneys’ fees “can only be awarded after the substantive issues in the case have been resolved and the prevailing party has been determined.” Id. at 7. The Court therefore granted the motion to dismiss the § 285 counterclaim, since the “prevailing party” could not be determined until the claims relating to the other asserted patent were tried. Id. at 8. However, the Court noted that “Rule 11 is not circumscribed by the time-oriented limitations of § 285.” Id. at 8. Because the plaintiff continued to assert the ‘407 patent for nearly a year after the Court denied without prejudice the original motion for Rule 11 sanctions, the defendant was forced to respond to the complaint, file counterclaims, and engage in discovery during that time. As a result, Judge Robinson ordered the plaintiff to show cause why its filing of the eventually withdrawn ‘407 patent infringement claim was not sanctionable under Rule 11. Id at 9.

UPDATE:  In an October 22, 2014 order on a motion for reconsideration, Judge Robinson clarified that the analytical framework for the award of fees should have been 35 U.S.C. 285, rather than Rule 11.  A link to that order appears below.

Technology Innovations, LLC v., Inc., Civ. No. 11-690-SLR (D. Del. Aug. 15, 2013).


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