Authored by Michelle Carniaux and Michael E. Sander
We previously blogged about Iron Dome, a company which allegedly demands transferable patent licenses from patent assertion entities (“PAEs”) in exchange for forgoing their right to file an inter partes review petition. As discussed, one of the PAEs subject to this strategy, Chinook Licensing DE LLC, was not too happy, and sued Iron Dome on a variety of claims, including tortious interference with business relations, violations of the RICO Act, mail fraud, wire fraud, and conspiracy.
In a recent hearing on Iron Dome’s Motion to Dismiss, Judge Stark dismissed Chinook’s claims:
I’m also of the view that the defendants’ threat, even viewing it as such, to file an IPR cannot in this context be the basis for the claims the plaintiff is asserting. There are lots of cases, and they’re cited in the defendant’s briefing, that hold that the threat of litigation is not extortion. . . . So even if the 108 page draft IPR or the filed IPR was baseless and unfounded, the IPR process, through both the statute and regulation, has the means to deal with that. Therefore, the threat and indeed the filing of the IPR, even with all the other allegations, is not a plausible basis for asserting the causes of action that the plaintiff asserts here.
See Chinook Licensing DE LLC v RozMed LLC et al, 1:14-cv-00598 at 46:5-23 (D.Del. Dec. 17, 2014).
With victory in hand, Iron Dome could have simply walked away from the matter, and continued pursuing their novel business model against other PAEs.
However, last week Iron Dome went on the offensive by filing a motion to recoup the attorney’s fees incurred in defending Chinook’s lawsuit. In their briefing, Iron Dome stated that Chinook “sought to harass and intimidate Iron Dome and Steven Yu into withdrawing their IPR petition.” See 1:14-cv-00598, No. 29 at 2 (D.Del. Jan. 2, 2015). Iron Dome argued that Chinook’s claims were brought in bad faith because, among other things, Chinook “named Iron Dome’s own counsel, John Yim, as a defendant party[,] . . . an unprofessional and unprincipled tactical maneuver designed to immediately create a conflict of interest ‘between attorney and client’ and gain an unfair advantage by driving a wedge between Iron Dome and its counsel.” Id. In a related press release, Steven Yu, chief of patent surgery™ at Iron Dome, explained their recent filing, stating that “Chinook wrongly used its lawsuit to suppress our First Amendment constitutional right to petition the government.”