A Turkey Day for Eon–Net

The National Law Journal brings us word of the latest developments in the lengthy saga of Eon–Net. Eon–Net, you’ll recall, has been filing patent infringement lawsuits for over a decade. In the run of the mill case, a defendant would settle with Eon–Net for a nuisance value amount of less than $100,000. Flagstar Bank, however, was no run–of–the–mill defendant—they put Eon–Net to its proof, and revealed that there was really nothing behind the curtain. Flagstar satisfied the district court that Eon–Net had not performed an adequate pre–filing investigation, had not retained relevant documents, and had based its infringement position on a claim as wide as the World Wide Web. Having seen enough, the district court ordered Eon–Net to pay Flagstar’s attorneys’ fees and additional sanctions for bad faith litigation conduct in an amount just over $631,000.

In an order issued this week, the Federal Circuit Court of Appeals turned a deaf ear to Eon–Net’s protestations that having to pay the sanctions would cause it (and its counsel) irreparable harm. Finding no evidence of such harm in the record, other than counsel’s statement to that effect, the appellate panel denied Eon–Net’s motion to stay enforcement of the judgment requiring it to pay Flagstar. The panel will now turn its attention to the merits of Eon–Net’s appeal.