Trespass Tuesdays – February 20, 2018: Attempt to Blow Up Patent Backfires


 by: Patrick Anderson | February 20, 2018

Technology for Energy Corp. v Hardy

Trespass Tuesday is taking somewhat of a departure this week as we focus instead on a success story in a case of bad behavior. According to an order from the Eastern District of Tennessee, a company that attempted to destroy intellectual property created by a former employee will now have to reimburse the patent owner for their legal fees.

According to a complaint filed almost 2 years ago, Technology for Energy Corp (TEC) filed a declaratory judgment suit against former employee William Hardy, seeking to invalidate and/or render Hardy’s patent (U.S. Patent 9,020,771) unenforceable.

TEC pursued this course of action against Hardy despite the fact that he is not the owner of the ‘771 patent, and despite the fact that no one has accused TEC of infringement. Nevertheless, they persisted. Initial relief first arrived last March, over a year after the lawsuit was initially filed. District Judge Ronnie Greer dismissed TEC’s invalidity and unenforceability claims due to lack of standing and failure to plead with particularity, but only after Hardy and his employer incurred over $200,000 in attorney’s fees and related expenses, according to court records.

As the saying goes, the wheels of justice turn slowly, and nearly a year after TEC lost their misguided attempt at destroying a competitor’s intellectual assets, Judge Greer has now ruled that TEC must compensate Hardy et. al. for their legal fees. Greer first noted that TEC’s claim was dead on arrival, stating flatly that TEC “should have known from the inception of this litigation that its claim … lacked substantive and legal merit.” And even if ignorance were an excuse, Greer detailed how Hardy thoroughly and adequately made TEC aware of the meritless nature of its claims. Acting “in defiance of the … law” TEC not only persisted, but “aggressively litigated” the issues forcing Hardy “to develop their own expert testimony to address patent issues which should have never been present in this case.”

Leaving the precise amount of legal fees owed to Hardy to another day, Judge Greer concluded that they are nonetheless “entitled to a reasonable award of attorneys’ fees and costs associated with their defense” and defers the ruling until the completion of litigation on other claims.

Every Tuesday, IP Wire will highlight significant cases of intellectual trespass by some of the world’s the largest and most powerful companies. These illegal acts hamper commercialization efforts, as research and educational institutions simply lack the resources to compete with massive incumbents. In the case of public universities, public funds create technology and property rights, only to be stolen by massive incumbent organizations. In other cases, property rights stem from research by publicly subsidized, not-for-profit organizations. Companies who illegally use this technology without compensation are, in effect, stealing from the public, while entities that dare assert their rights are vilified in the media. IP Wire’s mission, and we choose to accept, is to get out in front of these stories and expose these actions for what they are: harmful and illegal.

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