Judge Rakoff Orders Lab-Made Diamond Maker to Pay Fees for Manufacturing Fake Claims | Patterson Belknap Webb & Tyler LLP
On February 21, 2024, Judge Rakoff (SDNY) granted a defendant’s motion for attorney’s fees and costs in Carnegie Institute of Technology v. Fenix Diamonds.
The Carnegie Institution for Science and its patent licensee, the now-bankrupt M7D Corp., accused Fenix Diamonds of infringing on two patents (the ‘078 Patent and the ‘189 Patent) directed to producing laboratory-formed diamonds. Judge Rakoff granted summary judgment in favor of Fenix in June 2021. Carnegie and M7D appealed, but later withdrew their appeal, and the parties entered into an agreement not to sue. In September 2023, Fenix sought to declare the case “exceptional” under 35 USC Section 285 and moved for attorney’s fees and expenses. In response, Carnegie argued that the bankrupt M7D should be blamed for the alleged litigation misconduct.
Judge Rakoff recognized that Section 285 of the Patent Act authorizes courts to award fees in cases “presenting either subjective bad faith or exceptionally meritless claims.” Op. at 6 (citation omitted). Here, Judge Rakoff found attorney’s fees were warranted both because the plaintiffs’ claims were “objectively unreasonable,” and because the plaintiffs were “affirmatively misleading” in their dealings with the Court.
Discovery produced by Fenix’s production manufacturer on July 14, 2020 showed definitively that