Patent Troll Lawyer’s Turn to Pay-Up

We have all heard stories of abusive or extortion-like practices by patent trolls and how they can strike fear in the hearts of independent, start-up companies. But in a refreshing twist, Techdirt recently posted a story about how a patent troll’s lawyer was sanctioned by the Court. In Eon-Net v. Flagstar Bancorp, not only did the U.S.’ Court of Appeals for the Federal Circuit hold for the alleged patent infringer, they also approved of over $600,000 in sanctions again Eon-Net’s lawyer for filing a spurious lawsuit.

The court points out that through their lawyer, at the time of this case, Eon-Net had filed over 100 patent infringement lawsuits, each one quickly followed by an offer to settle at a much lower cost than it would to fight the claim. In this particular case, it was clear that Flagstar did not infringe on the patents in question. This behaviour, the court said, has the ‘indicia of extortion.’

What also makes such claims an act of bad faith, as the court also noted, is that “as a non-practicing entity, Eon-Net was generally immune to counterclaims for patent infringement, antitrust, or unfair competition because it did not engage in business activities that would potentially give rise to those claims.”

In the end, the court agreed and allowed the district court’s award of $141,984.70 for Rule 11 violations and another $489,150.48 in attorneys’ fees. Patent and copyright trolls, take note.