Monday, March 09, 2009

Defendant's Knowledge of Reexamination Certificate May Constitute "Objective Recklessness"

Ultratech International Inc. v. Swimways Corp., 3-05-cv-00134 (FLMD March 3, 2009, Order)

Plaintiff sued defendant in 2005 alleging patent infringement, but the plaintiff did not plead willful infringement. Defendant filed a reexamination soon after, which the PTO granted. The district court stayed the litigation. While the PTO rejected claims during reexamination, the patentee/plaintiff successfully argued around the rejections, and the reexamination certificate issued in June 2008, holding all claims patentable.

After the district court agreed to reopen the case, the plaintiff sought an order allowing them to amend their initial Complaint to add a claim for willful patent infringement. The district court agreed with the plaintiff:

Plaintiffs allege they had no reason to believe Defendant even knew of the ‘437 Patent at the time the initial Complaint was filed and thus, they lacked a good faith basis upon which to claim willful infringement. The Court agrees. The Court finds before the Reexamination Certificate issued, allegations that Defendant’s actions were deliberate or reckless would not have provided sufficient factual or legal grounds because the validity of the ‘437 Patent remained questionable. However, once the USPTO had made its final decision, Defendant’s continued use of the ‘437 Patent could reasonably be considered “objectively reckless.” Therefore, it is only since the USPTO’s certification that Plaintiffs could in good faith consider bringing a claim of willful infringement. Additionally, the Court finds although the Reexamination Certificate was issued almost eight months before Plaintiffs sought leave to amend, there has been no undue delay because this case was only reopened on December 18, 2008, approximately one month before the instant Motion was filed. As such, the Court will not deny Plaintiffs’ proposed addition of a claim for willful infringement on the grounds of undue delay.

(from Docket Navigator)

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