CHECKPOINT VS. ALL TAG

AUSTIN PATENT ATTORNEY’S OVERVIEW OF CHECKPOINT VS. ALL TAG

The subject matter in this lawsuit relates to security tags that are attached to merchandise in retail stores to limit/prevent shoplifting. If the tags are not deactivated by a salesperson of the retail store, then an alarm will be triggered if the tags move past sensors located at the store’s exit. Specifically, the patented technology in this case was directed towards tags that had 3 layers, a middle dielectric layer that was sandwiched between two conductive layers. Checkpoint’s 4,876,555 patent deactivated the tag by passing a current through a through hole between one of the conductive layers though the dielectric layer to provide a short circuit path. The issue in the case was whether All-Tag’s tags had a through hole.

At the district court level a jury found that Checkpoint’s 4,876,555 patent was not infringed by All-Tag, and that the patent was invalid and unenforceable. Further, the district court held that the defendants were entitled to attorney’s fees, costs and interest for approximately $6.6 million. On appeal, Checkpoint successfully argued that they should not be held liable for All-Tag’s attorney’s fee (only point appealed) because the case was not exceptional under 35 USC §285. Accordingly, the court of appeals reversed the district court’s holding.

The attorney’s fee award was based on Checkpoint’s presentation of expert testimony where the expert had not reviewed the All-Tag’s Tags that were excused. Specifically, Checkpoint’s expert witness only reviewed tags that were previously manufactured in Switzerland, but not the accused tags that were manufactured in Belgium. Initially, Checkpoint’s expert witness reviewed All-Tag’s previous tags, and All-Tag’s patents and pending applications, and his opinion was that All-Tag’s tags and patents/applications did infringe the ‘555 patent.

Before trial, All-tag supplied evidence that Checkpoint’s expert witness did not review the accused tags, but instead had reviewed other tags. During pre-trial procedures, Checkpoint asked All-Tag to admit that All-Tag’s tags included a through hole. All-Tag responded that its tags were made “generally in accordance with” All-Tag’s ‘466 patent and pending application for a ‘343 patent, which both had a through hole. However, All-Tag’s expert witness did not review the accused tags before making this statement.

The district court granted attorney’s fees to All-Tag reasoning that Checkpoint’s expert witness did not inspect the accused tags despite having ample opportunity to do so. The court here reversed the district court’s ruling based on the fact that All-Tag did not tell checkpoint that the tags that Checkpoint’s witness were not the wrong tags and stating that the tags were generally the same under the ‘466 patent and the ‘343 pending application. Further, the court of appeals reasons that All-State never clarified that the accused products were different than those stated in the ‘466 patent and the ‘343 application. Accordingly, the court of appeals reasoned that Checkpoint’s expert witness not reviewing the accused products was not objectively baseless.

AUSTIN PATENT ATTORNEY’S TAKE-A-WAYS FROM CHECKPOINT VS. ALL TAG

1)      My main takeaway from this case is if a case goes to litigation, you should know exactly what your accused products are. I am pretty sure that there was documentation regarding each type of tag that All-Tag produced. Although, I am not sure why Checkpoint only decided to review certain products. If All-Tag had multiple tags that were found to infringe, then Checkpoint would have been able to recover (assuming that their patent wasn’t invalidated).

2)      Do not trust the opposing party. If you are spending several thousand hundred thousand dollars on a patent lawsuit, it is important to review each of the products that are actually accused. Instead of spending a couple thousand more dollars reviewing the other parties products, you may end up paying much more in attorney’s fees.

3)      In a patent lawsuit for a party to have to pay the other parties attorney’s fees it is likely that that the party willfully accused or deceived the other party. To this extend, I can see cases where that emails were brought to light where a party members may have discussed that they were not likely to succeed in a suit or other information showing willful ignorance would meet this standard.  To this extend, if you are not sure of a matter just say that you are not completely sure, and do not make stuff up, especially on the record or in writing.

By | 2013-03-26T20:48:32+00:00 March 26th, 2013|Blog, Patent Attorney Takeaways|Comments Off on CHECKPOINT VS. ALL TAG