SAN FRANCISCO — An inventor found to have committed inequitable conduct before the U.S. Patent and Trademark Office has conceded that his patent case against HTC Corp. was exceptional and warrants an award of attorney fees. But his litigation counsel at Niro, Haller & Niro appear to be off the hook, at least for now.
Niro Haller partner Raymond Niro Sr. said Thursday’s order from U.S. District Judge William Hart of the Northern District of Illinois in Intellect Wireless v. HTC confirms what he has said all along: There’s “absolutely no evidence, zero, none” that anyone at his firm knew about a false declaration filed with the PTO to support Daniel Henderson’s picture phone patent.
HTC’s attorney, Sheppard, Mullin, Richter & Hampton partner Stephen Korniczky, said he’s pleased with Henderson’s concession but intends to continue seeking sanctions and fees against Niro and his firm.
“I’ve never seen a situation where the losing party stipulated to the finding of an exceptional case,” Korniczky said. “We’re obviously pleased with Judge Hart’s order.”
Niro said he won’t be surprised if Korniczky and HTC continue to pursue sanctions, even though, he said, it should be crystal clear by now that his firm played no role in the inequitable conduct.
“This guy is trying to promote himself as the dragon slayer,” said Niro, one of the country’s most-renowned lawyers for patent holders. “They’re not being driven by logic and reason and fairness. They’re trying to get us.”
The U.S. Court of Appeals for the Federal Circuit ruled last fall that Henderson submitted a declaration to the PTO containing false statements, and that neither he nor patent prosecutor Robert Tendler had cleared up the inaccuracies. That ruling knocked out a patent that had helped generate tens of millions in licensing revenue and led to Tendler’s suspension.
Emails surfaced in January showing that Henderson had warned Tendler the declaration was factually inaccurate and urged him to consult litigation counsel at Niro Haller.
“I want to address what I perceive is a potentially lethal blow to the integrity and validity of my patent portfolio from the incorrect declaration faxed to the PTO on Friday,” Henderson wrote to Tendler on Feb. 10, 2007, instructing him to “contact Cliff Kraft at Niro’s office to see what their take is on this development.”
Korniczky and HTC argue that it’s inconceivable that neither Henderson nor Tendler would have failed to follow up with the Niro firm under those circumstances. They subsequently teamed up to “shake down” the wireless industry for tens of millions in licensing revenue, Korniczky has argued.
Niro and his firm have maintained they had no inkling of Henderson’s concerns, and Tendler has sworn that he didn’t share them. But Hart ordered the Niro firm to turn over a broad array of discovery related to the issue.
Just as those documents were being produced earlier this month, Henderson and his new counsel moved to withdraw his opposition to HTC’s motion for an exceptional-case finding under Section 285 of the Patent Act. Between the U.S. Supreme Court’s new standard for fee shifting in patent cases, an exceptional-case finding by U.S. District Judge Rebecca Pallmeyer in a similar Northern District of Illinois case May 30, and the cost of litigating the issue, Henderson elected to concede, according to his June 4 motion.
Following a hearing Thursday, Hart accepted the concession. HTC’s “motion for attorneys’ fees and to declare case exceptional is granted as to plaintiff Intellect Wireless, Inc. and is denied as to the Niro Firm,” Hart wrote in a minute order.
Niro said in an interview Friday that Hart had reviewed his firm’s billing records in camera and was satisfied the firm had no knowledge of the misconduct. Tendler, he said, “never called us. He never wrote to us. He never asked for our help.”
Had Henderson expressed his concerns to the Niro firm, “we would have told him to fix it. Go back to the patent office and fix it.”
Korniczky knows that, he contends, but is determined “to carry our scalp away” in order to generate more business.
Dell Inc., Palm Inc. and Hewlett-Packard Co. are continuing to pursue fees in the case before Pallmeyer, with the next hearing scheduled July 1.
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