Niro Firm Sanctioned in Second Case for Filing Infringement Claims After Learning of False Declarations During Prosecution

The court granted defendant's motion to sanction plaintiff's counsel under 28 U.S.C. § 1927 and the court's inherent authority for pursuing an infringement action after the founder sent counsel an email stating that the actual functionality of his prototype did not match the information in his declarations to the PTO. "[Plaintiff's founder's] admissions, that his device 'did not actually receive caller id automatically from the telephone network,' and that the device 'did not operate,' are in direct conflict with [his] Rule 131 declaration. . . . Filing the complaint in the face of such troubling facts is not a path that a reasonably careful attorney would have followed. . . . [Counsel's] focus on whether [plaintiff's founder] himself believed there was an actual reduction to practice misses the point. The issue in this case is not what level of legal knowledge [plaintiff's founder] possessed about the intricacies of patent law; rather, the issue is whether [plaintiff's] attorneys knew that [his] Rule 131 Declaration contained false statements about having a 'working prototype,' and whether [counsel] filed and continued this case, despite knowing the patent had been procured through fraud on the PTO. . . . [W]hatever [the founder's] confusion was about the legal requirements for actual reduction to practice, it did not absolve [plaintiff's] attorneys, trained in patent law, to see that the Rule 131 Declarations were deceitful and would completely undermine [plaintiff's] ability to litigate patent infringement claims. . . . [Counsel] not only repeatedly misrepresented the functionality of [the founder's] prototypes, but have continued to make misleading statements about what [counsel] actually knew and when they knew it."

Intellect Wireless, Inc. v. Sharp Corporation et al, 1-10-cv-06763 (ILND March 31, 2015, Order) (Pallmeyer, J.)