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October 5, 2007

Not Extortion

Judge Marsh Pechman in the Western District of Washington sanctioned Eon-Net for its swing at Flagstar and others for infringing 6,683,697. "The Court was shocked to learn" that Eon-Net had an enforcement campaign going, Pechman diddled. She then got hammered for her naiveté by the CAFC: Eon-Net deserves some respect.

Eon-Net v. Flagstar Bancorp (CAFC 07-1132)

District Court Judge Elaine Bucklo, writing for a unanimous CAFC panel, chided Pechman for ignoring facts in blithely slapping down Eon-Net.

In this circuit as in other circuits, a court may not sua sponte grant summary judgment on a particular ground without giving the non-moving party notice and an opportunity to present evidence and argument in opposition. Pandrol USA, LP v. Airboss Ry. Prods., Inc., 320 F.3d 1354, 1365 (Fed. Cir. 2003) (citing Fin. Control Sys. Pty, Ltd. v. OAM, Inc., 265 F.3d 1311, 1321 (Fed. Cir. 2001)); see also In re Rothery, 143 F.3d 546, 549 (9th Cir. 1998) (citing Fed. R. Civ. P. 56(c)).

Eon-Net also did not have an opportunity to raise evidence of infringement and claim construction in its motion to reconsider, as Flagstar argues it should have done; its motion to reconsider properly argued that the district court’s grant of summary judgment was without notice and appropriately requested an opportunity to present its arguments. The district court should have given Eon-Net an opportunity to fully present its arguments on these issues, even if the district court ultimately would have reached the same conclusion.

We agree that the district court erred in granting sanctions to Flagstar without allowing Eon-Net the opportunity to present arguments on claim construction.

Eon-Net is represented by Zimmerman Levi & Korsinsky, Jean-Marc Zimmerman lead counsel, steering the turnaround appeal. Flagstar Bancorp is represented by Quinn Emanuel Urquhart Oliver & Hedges.

Posted by Patent Hawk at October 5, 2007 1:58 AM | Litigation

Comments

Thanks. But you might also have mentioned that the C.A.F.C. found support in the patent specification for the claims infringed by Flagstar. Pechman simply closed her eyes to this evidence, which was repeatedly adduced.

Her "sanctions" were based on the alleged fact that Eon-Net's counsel "must not have" conducted a proper pre-suit investigation, since in Pechman's blinkered view, there was no support in the spec for the claims applied against Flagstar's website.

I have been in the patent enforcement business for 25 years. I have never seen a worse judgment than Pechman's: wrong on the facts, wrong on the law, and wrong on procedure. Basically, the C.A.F.C. agreed.

Mitchell Medina, President
Eon-Net, L.P.

Posted by: Mitchell Medina at October 5, 2007 9:12 PM