Judge Dismisses Patent Case Over 'Misconduct'

Judge Dismisses Patent Case Over 'Misconduct' Judge Keith P. Ellison of the U.S. District Court for the Southern District of Texas in Houston

In an extreme move, U.S. District Court Judge Keith Ellison of Houston recently dismissed a plaintiff’s case with prejudice after finding the litigant’s “counsel affirmatively misrepresented” the statements of key witnesses in a patent infringement dispute.

Ellison noted in the order that he could have awarded the defendant’s attorneys fees in the case, but “an award of attorney fees alone is insufficient to deter such conduct.”

Ellison’s Aug. 25 order dismissing Tesco Corporation v. Weatherford International Inc., a six-year-old patent infringement complaint, came after Tesco prevailed in a jury trial. But the victory later became tied up in post-verdict litigation over whether the plaintiffs had produced all of the discovery the defendants requested, according to the order.

Ellison denied Tesco’s motion for entry of judgment and allowed the parties to conduct limited discovery on whether Tesco’s conduct warranted a finding of an “exceptional case” under 35 U.S.C. § 285—which allows a trial judge to award attorney fees to a prevailing party in a patent infringement case if the opposing party has committed material misconduct or brought a case in bad faith.

Ultimately, Ellison dismissed numerous pending motions in the case including the defendants’ motions for an exceptional case finding based on inequitable conduct—a request Tesco argued in response motions was not warranted in the case—and dismissed Tesco’s case.

“The post-trial discovery conducted in this case surrounding allegations of inequitable conduct and litigation misconduct on the part of Tesco has revealed that Tesco’s counsel affirmatively misrepresented to the court during the trial statements of key witnesses regarding important evidence disclosed only during trial,” Ellison wrote in the order dismissing Tesco’s case as well as defense motions that Ellison terminated for mootness.

An award of attorney fees was not enough, Ellison noted later in his order.

“Lesser sanctions will not suffice here. While the court still may award attorney fees as a sanction in addition to this dismissal, an award of attorney fees alone is insufficient to deter such conduct, … ” Ellison wrote. “ Awarding attorney fees—even if they were to be paid by Tesco’s counsel alone—is insufficient. Such serious misrepresentations cannot be excused as simply the cost of doing business. Attorney fees also may be appropriate, but such an affront to this court, to the other parties, and to judicial integrity can only be answered with dismissal.”

“The court reaches its decision with great reluctance. The court is entirely confident that the conduct that it finds so troubling is entirely out of character for the attorneys,” Ellison wrote. “However, the conduct is serious and has had significant and costly ramifications to the court and defendants.”

Ellison did not specifically name Tesco’s counsel, other than referring to a lawyer’s argument in a trial transcript. Glenn A. Ballard Jr. and John F. Luman III, partners in Houston’s Bracewell & Guiliani who represent Tesco in the post-verdict briefing in the case, did not return calls for comment.

Michelle McCormick, communications director for Bracewell & Guiliani, said in an emailed statement that the firm takes “this order very seriously.”

“We are reviewing and considering all aspects of this matter. It would be inappropriate for us to comment further at this time,” McCormick said.

Bobby Bowick, a partner in Houston’s Raley & Bowick who represents defendant National Oil Well Varco which had filed an exceptional case finding motion in the case calling for the award of attorney fees for Tesco’s alleged litigation misconduct, is pleased with the order.

“The court’s ruling champions honesty and fair dealing in our justice system,” Bowick said in an emailed statement.

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