Eleventh Hour Covenant Not To Sue Does Not Avoid Adverse Determinations or Fee Award

The court denied plaintiffs' motion to dismiss all patent claims and counterclaims following a jury trial, bench trial, the Federal Circuit's affirmance of a reexamination which invalidated the patent-in-suit, and plaintiffs' proposed covenants not to sue. "Plaintiffs acknowledge, as they must, that the reexamination is 'not technically "final’' until the USPTO issues the reexamination certificate. . . . [T]here has been no relevant change to the legal status of the [patent-in-suit]. Therefore, the status of the reexamination does not provide a basis to dismiss any portion of this case. . . . Plaintiffs’ covenants not to sue, issued after adverse rulings of invalidity and noninfringement, and after a bench trial determined that the [patent] is unenforceable for inequitable conduct, come far too late to avoid entry of judgment on those issues. . . . [C]ovenants not to sue do not allow parties to escape the consequences of their litigation choices, and specifically, do not provide a means of voiding adverse findings and precluding attorney fee awards. . . . Even if the reexamination were final, and even if Plaintiffs’ covenant not to sue had come prior to the Court’s determinations regarding infringement and invalidity, the Court would still have jurisdiction under 35 U.S.C. § 285 to determine inequitable conduct and make a fee award."

Kim Laube & Company, Inc., et. al. v. Wahl Clipper Corporation, et. al., 2-09-cv-00914 (CACD October 17, 2013, Order) (Kronstadt, J.)