Treble Attorneys’ Fees Recoverable for Defending Against Fraudulently-Obtained Patent

In Transweb, LLC v. 3M Innovative Properties Co., No. 14-1646 (Fed. Cir. Feb. 10, 2016), the Federal Circuit affirmed the district court’s finding that 3M was liable for a Walker Process antitrust violation because it had fraudulently obtained its patent through inequitable conduct and sought to enforce the patent. The court concluded that treble attorneys’ fees can serve as the basis for antitrust damages.

Reviewing the evidence from the district court, the Federal Circuit determined that 3M’s patent was invalid based on Transweb’s prior public distribution of a filter material at a trade show. It also found that 3M obtained its patent through inequitable conduct because the evidence showed that it knew of Transweb’s prior distribution, but did not properly disclose it to the USPTO. The court then determined that 3M’s enforcement of the patent against Transweb constituted a Walker Process antitrust violation under Section 2 of the Sherman Act as an abuse of the legal process. It held that Transweb’s attorneys’ fees for defending against 3M’s lawsuit were an appropriate antitrust remedy because they flowed directly from “3M’s unlawful act [of] bringing suit based on a patent known to be fraudulently obtained.” Treble attorneys’ fees were justified because the anticompetitive suit forced Transweb to either cease competition in the market or expend money to defend the suit.