In a recent decision, a California court granted sanctions against a patent owner, Action Star, for bringing an “unreasonable” suit, citing the U.S. Supreme Court's Octane Fitness ruling.
U.S. District Judge Beverly Reid O'Connell found that Action Star's withholding of discoverable information related to infringement from KaiJet was an “exceptional” case that merits sanctions of $365,444.
In this case, defendant, KaiJet, requested any evidence in support of its infringement claims, but Action Star responded that the evidence was in KaiJet’s control. During summary judgment, however, Action Star produced YouTube videos and a declaration of an Action Star employee in response to KaiJet's motion for summary judgment that were not in KaiJet’s control. This included testimony by the inventor saying KaiJet's products operate the same way as his invention and YouTube videos of KaiJet’s product that allegedly supported the inventor’s testimony.
The judge found that Action Star misrepresented that it did not have any evidence of infringement and failed to produce the YouTube videos in its possession. In response, Action Star argued that it withheld the evidence because the evidence was only going to be used defensively. The judge did not agree and noted that it was not proper to withhold evidence.
The judge found Action Star’s conduct unreasonable under Octane Fitness and awarded KaiJet fees. This was not a case of bad faith, which the Judge made clear when ruling that Action Star's attorneys should not be personally sanctioned.
Action Star Enterprise v. KaiJet Technology International, No. 12-CV-08074 BRO (MRWx) (C.D.Ca. July 7, 2014).