Federal Circuit Sanctions Patent Troll EON-NET

By Robyn Hagan Cain on August 10, 2011 | Last updated on March 21, 2019

You may have friends who are intellectual property attorneys. They're super-smart, enjoy their jobs, and make bank. We don't know how they do it.

For those of us with liberal arts backgrounds, reviewing a 50-page patent opinion necessitates full brainpower, two cups of coffee, and (legally obtained) Ritalin. At least it did before we learned about patent trolls.

Judicially reprehensible patent trolls.

The Federal Circuit Court of Appeals recently slapped a patent troll with over $600,000 in sanctions and fees for extorting settlements through baseless lawsuits.

For those like us, who were unaware that trolls existed outside of fairy tales and Charlie Sheen's Warner Brothers lawsuit, Geekosystem explains that a patent troll is "a company that acquires patents and then uses them to sue as many companies as possible for patent infringement, not in any hopes that they might win, but instead to quickly offer a settlement that cost less than the cost of going to court."

EON-Net, the patent troll in this case, may have classified its business model as entrepreneurial; but the Federal Circuit Court of Appeals ruled that its actions had "indicia of extortion." EON-Net's practices were so egregious that the Circuit Court upheld the district court's imposition of $141,984.70 in Rule 11 sanctions against EON-NET's attorney, Jean-Marc Zimmerman, for filing "legally or factually baseless" lawsuits.

The Federal Circuit Court of Appeals noted that EON-NET had lodged over 100 nearly-identical lawsuits, and immediately offered to settle each claim within a $25,000 to $75,000 offer range. Realizing that it was cheaper to settle early than to pay an IP attorney - sorry, but your time isn't cheap - most of EON-Net's targets chose to settle.

Patent trolls? Extortion? Really, IP attorneys? You're supposed to be our friends and you've been withholding these entertaining trolls the entire time? While we ruminate on this betrayal, here's something for you to think about: if you or an attorney you know is aiding and abetting patent trolls, dig yourself out before you get sanctioned with a six-figure fine.

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