Tuesday, February 12, 2008

Know When to Walk Away . . . And Know When to Run

Thomas & Betts Power Solutions v. Power Distribution, Inc., Civil Action No. 3:O7CV167-HEH, E.D. Va., February 8, 2008

Thomas & Betts (T&BPS) filed a declaratory judgment action against Power Distribution (PDI), claiming patent noninfringement and invalidity. The whole case rested on the construction of the term "circuit board." When the term was construed in T&BPS's favor, it was granted a summary judgment ruling of noninfringement.

Up to this point, the court already wasn't happy with PDI's litigation conduct. Nevertheless, fighting onward, PDI filed a motion for reconsideration, alleging that a wiring harness fell within the Court's interpretation of the term "circuit board," and raised, for the first time, a doctrine of equivalents infringement claim.

Sensing the court had enough, T&B moved for sanctions. The court cheerily complied:

This Court's claim construction, which interpreted "circuit board" as requiring an "insulated board," clearly determined the issue of infringement. Instead of recognizing this fact, PDI continued to assert infringement, first arguing that, contrary to this Court's clear claim construction, insulated sensors mounted on a bare metal strip were sufficient to create an "insulated board." This Court rejected that interpretation . . . Nonetheless, PDI continued to advance alternate theories of infringement well after this Court granted T&BPS's Motion for Summary Judgment, filing numerous requests for extensions as well as a Motion to Reconsider.

When presented with the opportunity to justify its conduct, PDI could not provide any ground upon which this Court could find that it had a good-faith basis for continuing to pursue its infringement claim. In fact, PDI's actions in response to this motion are equally unsettling. PDI attempts to justify its strategy by asserting that it disagrees with the Court's claim construction. . . . [H]owever, what PDI fails to explain why it continued to pursue an infringement claim in this Court instead of seeking a final order so that it could appeal this Court's claim construction. Instead, PDI needlessly prolonged this litigation for an additional five months.

PDI's representations to the Court during oral argument are equally disturbing. PDI represented to the Court that its pre-existing expert report supported its position and justified further pursuing its infringement claim following the Court's claim construction. The expert report submitted by PDI, even construed liberally in it's favor, did not provide any good-faith basis for continued litigation. PDI then provided a new expert opinion, dated January 28, 2008, four days after PDI's in-court representation. The new opinion offered tenuous and shallow belated support for PDI's theory and cannot justify PDI's conduct[].

PDI's actions throughout the course of this case indicate, by clear and convincing evidence, a vexatious, manifestly unreasonable, and disturbing litigation strategy. The Court finds that this case is "exceptional" and that an award of attorney's fees is warranted.
Read the entire opinion here (link)

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