On March 31, 2015, the United States District Court for the Northern District of Illinois awarded the defendants, Sharp, Dell, and Hewlett-Packard, attorney fees against plaintiff Intellect Wireless’ counsel, finding the lawyers’ conduct deserving of sanctions because they knew nearly a year before filing suit that inventor Daniel Henderson of Intellect Wireless had made false statements to the United States Patent and Trademark Office and “engaged in a campaign to paper over” evidence of that knowledge.
In 2010, Intellect Wireless filed a complaint against the defendants alleging infringement of two patents. Judge Pallmeyer stayed the case pending Judge William Hart’s ruling on an inequitable conduct defense asserted against Intellect Wireless in a related case asserting the same patents. Following a bench trial, Judge Hart concluded that Henderson had filed false declarations with the PTO and held the patents unenforceable based on inequitable conduct. The Federal Circuit affirmed. After the Federal Circuit’s affirmance, Judge Pallmeyer granted defendants’ motion for an award of attorney fees against Intellect Wireless under 35 U.S.C. § 285, finding the case to be “exceptional” based on Henderson’s pattern of deceit. After conducting additional discovery, the defendants asserted that Intellect Wireless’ attorneys were aware of the false declarations and knew or reasonably should have known that the patents were invalid, but nevertheless forged ahead with the litigation.
In a fifty-five page opinion, Judge Pallmeyer ordered that the attorneys be held jointly and severably liable for the defendants’ reasonable attorney fees. As the court explained, the record showed that Intellect Wireless’ attorneys “not only repeatedly misrepresented the functionality of Henderson’s prototypes, but . . . continued to make misleading statements about what [they] actually knew and when they knew it.” As a result, “their lack of candor unnecessarily prolonged the litigation as [the] defendants had to respond to those inaccurate statements, and required the court to expend unnecessary time and energy parsing the record.”
Intellect Wireless Inc. v. Sharp Corporation, 1:10-cv-06763 (N.D. Illinois, March 31, 2015).