Boiler Plate Patent Infringement Allegations Are Basis for Rule 11 Sanctions Against Plaintiff

Case: Eon-Net, L.P. v. Flagstar Bancorp, Inc., No. C05-2123MJP (W.D. Wash. 10/04/2006)

The One Sentence Summary: Plaintiff was sanctioned under Rule 11 of the Federal Rules of Civil Procedure for having asserted and maintained frivolous claims of patent infringement in the hopes of a quick settlement.

What They Were Fighting About: Eon-Net sued Flagstar for patent infringement. At issue was an alleged similarity between Eon-Net’s ’697 Patent, which described and claimed an interface between “hard copy” documents and computer applications, and Flagstar’s website, which allowed potential customers to submit loan application documents online. Flagstar maintained that Eon-Net’s action was without merit and sought sanctions pursuant to Rule 11.

District Court Holdings:

• The Court found that Eon-Net failed to perform a reasonable pre-filing inquiry, thus exposing Eon-Net to Rule 11 sanctions. Specifically, Eon-Net failed to identify in its complaint the allegedly infringing technology, failed to investigate Flagstar’s products, and failed to reasonably evaluate the ’697 Patent claims.
  
• The Court granted the following sanctions against Eon-Net’s counsel: (1) reasonable attorneys’ fees and costs; and (2) service of its order on the other defendants that Eon-Net has sued for patent infringement.