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Pechman also found Eon-Net’s behavior tantamount to extortion:
“The Court is also very concerned with Eon-Net’s continuing conduct. The Court was shocked to learn at oral argument that during the pendency of Flagstar’s motion for Rule 11 sanctions, Eon-Net has filed 11 new identical complaints …
“Given the extraordinary cost of patent litigation, even the finest patent attorney would need to think carefully before advising a client to spend hundreds of thousands of dollars in litigation when a $25,000, $50,000, or $75,000 settlement was on the table. Indeed, in the two other Eon-Net cases before this court, and dozens before other courts, the plaintiffs have opted for the ‘cheap’ standard offer of settlement. An appropriate sanction is required to deter future bad conduct,” Pechman wrote.
Flagstar attorney Melissa Baily, an associate at Quinn Emanuel Urquhart Oliver & Hedges in San Francisco, said the company decided to challenge Eon-Net’s lawsuit precisely because of the egregious nature of the company’s conduct.
“The standard in the Ninth Circuit for getting Rule 11 is high, but we firmly believed that this was a case that demanded sanctions,” Baily said.
Baily got more than what she asked for. In addition to awarding Flagstar fees and costs, Pechman also ordered Eon-Net to notify all other defendants accused of infringing its patent of her ruling.
“This is the first time I played a lead role in a patent case,” Baily beamed. “This is a pretty good experience.”
� Xenia P. Kobylarz
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