Sharp and HP among fee-shifting winners against NPE

A group of technology companies including Sharp and HP has won attorneys’ fees in a dispute against a “deceitful” non-practising entity.

A judge in Illinois ruled on May 30 that the group, which also includes Palm, Dell and Garmin, should recover the costs from Intellect Wireless (IW).

IW had sued the companies in October 2010 at the US District Court for the Northern District of Illinois Eastern Division.

It said they infringed two patents, issued in 2007, covering a “wireless portable communications device to receive caller identification information and a picture over a telephonic communications network”.

In 2012 the court granted partial summary judgment in the companies’ favour, but stayed the case pending a decision from a separate but related dispute where IW was accused of engaging in “inequitable conduct”.

The judge in that case—which was filed by IW against HTC in the same court—said IW had made false statements to the US Patent and Trademark Office (USPTO) in 2007 in order to obtain the disputed patents.

Evidence also showed that IW knew the declarations were false when it made them in 2007.

Both the district court and (later) the US Court of Appeals for the Federal Circuit said this inequitable conduct helped to show IW’s “pattern of deceit”.

The judge in the HTC case said both patents were therefore unenforceable, rendering them invalid.

As a consequence, Sharp, HTC and their remaining co-defendants argued that, due to this finding, their case should be seen as “exceptional” and attorneys’ fees awarded.

IW said the issue of inequitable conduct was not argued in this case and that its suit was not frivolous.

But Judge Rebecca Pallmeyer disagreed, finding IW’s arguments unpersuasive and that its conduct had made the case “exceptional”.

After failing to correct the false declarations with the USPTO, she noted, and after obtaining the patents, IW sued 24 companies within the wireless industry, including the defendants in this case, for infringing patents that were obtained based on declarations that it “knew to be false”.

Most of those cases have been settled privately. In the first deal, with Motorola, IW received $5 million, although it later had to re-pay the money because it successfully licensed the patents to other companies.

The attorneys’ fees have yet to be decided.