Sub Zero Franchising, Inc. v. Frank Nye Consulting LLC, d/b/a The Arctic Scoop et al, 2-15-cv-00821 (UTD April 27, 2018, Order) (Jenkins, SJ)
Tuesday, May 1, 2018
Counsel’s Failure to Investigate Plaintiff’s Ownership of Patent-in-Suit Justifies $360,000 Sanctions Award
The court granted defendants' motion for more than $360,000 in sanctions under Rule 11 and 28 U.S.C. § 1927 against plaintiff's counsel because plaintiff's standing allegations and pre-suit investigation were unreasonable. "[Counsel] disregarded any reasonable inquiry into the ownership or assignment of the [patent-in-suit], and asserted this claim for infringement without any objectively reasonable basis for the allegation that [plaintiff] was the owner of the right to enforce the [patent] by assignment. . . . [Counsel's] alleged reliance on its client does not absolve it of any of the violations of Rule 11. . . . [Counsel] improperly withheld the purported assignment documents, drafted in March 2016, until March 23, 2017. . . . [Plaintiff's] alleged oral, exclusive license, even if it had existed since prior to the original Complaint, would not have cured the standing defect or altered that [plaintiff's] claim for infringement of the [patent] was subject to dismissal. . . . [Counsel's] pattern of conduct demonstrates bad faith or a disregard of attorney obligations in filing and pursuing claims, which is akin to bad faith."