Eon–Net To Pony Up The (Real) Cost Of Defense

Good news for those exasperated by the Hobson’s choice between cost–of–defense settlements and meritless patent infringement lawsuits:

In the latest development in the ongoing saga of Eon–Net’s war with Flagstar, the Federal Circuit issued a precedential opinion last week affirming the lower court’s exceptional case finding and award of sanctions. With a colorful recount of Eon–Net’s many instances of litigation misconduct (including destruction of relevant documents, failure to participate in good faith in the claim construction process, and flippant attitude of its principal in discovery) as well as record evidence that Eon–Net acted in bad faith by exploiting the high cost to defend complex litigation to extract a nuisance value settlement from Flagstar—the opinion concludes with a recognition by the panel that meritless cases may require an exceptional case finding, where, as here, disproportionate discovery burdens and risk factors (since Eon–Net was a non–practicing entity) drive nuisance value settlements.