3M Gets Stuck with Attorneys' Fees in Patent Case

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In Transweb LLC v. 3M Innovative Properties Company & 3M Company, the Federal Circuit Court of Appeals affirmed the district court’s finding that 3M was liable for antitrust violations in that 3M was found to have obtained its patent through inequitable conduct and subsequently sought to enforce the patent. As a result of 3Ms behavior in both acquiring and enforcing the patent, the appellate court awarded treble attorneys’ fees which came to about $26 million.

The patents at issue focus on filter material used in respirators for construction workers etc.  Transweb had developed a new filter material similar to the 3M subject patents. The Federal Circuit found the 3M patents were invalid based on evidence indicating that Transweb’s president distributed samples of their new filter material at a trade show more than a year before 3M filed patent applications covering their new filter material. The finding of inequitable conduct was confirmed because the evidence indicated 3M knew of Transweb’s prior distribution, and did not properly disclose it to the US Patent and Trademark Office as required.

The court then found that 3M’s enforcement of their patent against Transweb constituted an antitrust violation as an abuse of the legal process and awarded Transweb’s attorneys’ fees for defending against 3M’s lawsuit.  In justifying the award, the court stated that the attorneys fees were appropriate because they flowed directly from “3M’s unlawful act [of] bringing suit based on a patent known to be fraudulently obtained.” In awarding treble attorneys’ fees, the court indicated that the enhanced award was justified because the suit brought by 3M forced Transweb to either cease competition in the market or expend money to defend itself.

What’s the take away here?  When preparing and prosecuting a patent application, ensure that your organization meets all requirements with regarding to disclosure to the US Patent Office.  This requires diligence and educating all involved in the process.  Sometimes that can include sales, marketing, and business development personnel as well as R&D and manufacturing. 

Protecting your innovative developments is critical to any organization.  Having the right person to help you make that decision is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.

Chinese Patent Troll Takes on Apple

For years now western countries have been complaining about the lack of enforcement of intellectual property laws in China.  Well, that may be changing if this recent case is any indicator.  A Chinese company has recently sued Apple for patent infringement on a number of different patents it has amassed in its patent portfolio.

Chinese company BYD has sued Apple and five other companies in the Shenzhen Intermediate People’s Court for patent infringement related to the antennae in the iPhone 6 as well as other technology.  BYD has asked the court to order Apple to stop manufacture and assembly of the iPhones as a result of the alleged infringement.

BYD has stated that it owns over 12,000 patents in China and roughly 8000 internationally.  This infringement suit against Apple could be critical to Apple’s ability to manufacture phones and other Apple products in China.  China is where a significant majority of Apple products are made.  This action may seriously hamper Apple’s manufacturing and supply chain and may force it to diversify its manufacturing and assembly sites worldwide.

What’s the take away here?  BYD has managed to create a significant patent portfolio and is positioned itself to challenge Apple.  Any intellectual property portfolio must be managed in a strategic way so as to meet the business goals of the organization.  

Protecting your innovative developments is critical to any organization.  Having the right person to help you make that decision is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.

Patent Demand Letter Response: Do Nothing?

There was an interesting article yesterday in the Wall Street Journal about patent demand letters.  These are letters sent alleging patent infringement and demanding a cessation in all infringing activity usually followed by a request for a payment.  The author, Colleen Chien, proposes that sometimes the best thing to do is nothing at all.

The article discusses the tactics of patent trolls, competitors and “patent bullies” and how they may strategically pursue one or more parties for infringement.  In some cases, where a patent troll or patent owner trying to test the waters may send out demand letters to obtain settlements from a number of parties.  However, Ms. Chien also points out that there are times that a patent holder may want to litigate in an effort to obtain a large damage award in a jury trial.

One thing Ms. Chien doesn’t address is the merits of the demand letter.  When you receive a letter alleging patent infringement, do the allegations have any merit?  A “do nothing” response may set you up for a patent infringement suit that may have been avoidable. 

What’s the take away here?  You are better off having a patent demand letter reviewed by patent counsel to address the merits of the accusation.  Then you can make an informed decision as to whether the substantive allegations in the letter deserve a response.   

Protecting your innovative developments is critical to any organization.  Having the right person to help you make that decision is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.