Tuesday, July 22, 2008

Patentee's Litigation Deemed "A Collosal Waste of Time"; Sanctions Granted

Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., S.D.N.Y. (98 Civ. 7766), July 17, 2008

Adbanced Magnetic Closures (AMC) sued Rome Fastener ("Romag") in 1998 for infringing a patent on a magnetic snap fasteners commonly used in the fashion industry to secure the flaps on ladies’ handbags. Romag countered that (1) they did not infringe, and (2) they already held an earlier patent that covered the same concept. Additionally, Romag charged AMC with inequitable conduct, alleging that the inventor listed on AMC's patent (Bauer) was not the true inventor, and that material information was withheld from the PTO during prosecution. Furthermore, Romag alleged that AMC engaged in various litigation misconduct that warranted sanctions.

After viewing the record, the district court found inequitable conduct and misconduct throughout the litigation. Accordingly, the court unleashed its fury on AMC:

The primary thrust of this litigation was AMC’s claim that Romag had infringed Bauer’s ‘773 Patent—a patent that issued upon inequitable conduct. Thus, every aspect of this litigation that was connected in some way to the validity of the ‘773 Patent—from the fraudulent inventorship claim in the initial application to the use of a knowingly inaccurate expert report—was nothing more than a tissue of lies. Bauer made a strategic business decision to preserve his economic investment in the magnetic snap industry, concealed the true identity of the ‘773 snap inventor, and used AMC to bully the handbag industry with a sham patent. When one of AMC’s targets finally stood up and challenged the bona fides of the ‘773 Patent, AMC stubbornly persisted in litigation for almost ten years, burdening three separate district court judges with complex scientific arguments and concepts. Once engaged, AMC routinely obscured the origins of key documentary evidence and concealed that its expert’s analysis was without foundation. On the eve of trial, AMC was forced to withdraw the expert on whom it unjustifiably and exclusively relied for more than six years, after it became obvious that his opinion controverted both scientific evidence and its key argument at trial. In a brazen demonstration of willfulness, AMC proceeded to trial without an expert, empanelling a jury for three days without even the remotest possibility of success on its infringement claim. In short, AMC’s infringement claim was a colossal waste of time for everyone involved and it would be unfair to burden Romag with the costs of litigating this claim.
See a copy of the opinion here (link)

On a somewhat unrelated, but nevertheless fitting case for the "don't-let-this-happen-to-you-in-litigation" category, see Michael Smith's blog entry on Saffran v. Boston Scientific Corp., 2:05cv657-TJW (E.D. Tex. July 9, 2008), where BSC's motion for JMOL was denied with an exclamation point by Judge Ward, where he stated "[t]he court has never had counsel so recklessly disregard its orders before this trial. The court repeatedly warned BSC against violating its orders, but counsel for BSC paid little, if any, heed to the court’s instructions and warnings." (link)

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