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.