In a rare ruling in a patent case, the U.S. Court of Appeals for the Federal Circuit has upheld sanctions without a finding of inequitable conduct—i.e., fraud on the patent office. The court affirmed a finding that patent holding company Eon-Net “pursued baseless infringement allegations in bad faith and for an improper purpose.” The decision discussed the inequities involving companies that use their patents solely to demand licenses or bring suits, sometimes referred to as patent trolls.
The Federal Circuit’s July 29 unanimous panel ruling in Eon-Net v. Flagstar Bancorp, 2009-1308, affirmed an exceptional case finding by Judge Ricardo Martinez of the District of Washington, as well as his subsequent order for patent lawyer Jean-Marc Zimmerman and Eon-Net to pay $631,135 in sanctions and fees.
