Automated Bus. Cos. v. NEC Am., Inc.

Automated Bus. Cos. v. NEC Am., Inc.

Opinion

 [***1601]   [*1353]  PLAGER, Circuit Judge.

Automated Business Companies, Inc. ("ABC") sued NEC America, Inc. ("NEC America") for patent infringement in the United States District Court for the Northern District of Texas. After summary judgment of non-infringement was granted, NEC America moved to sanction ABC. The district court awarded attorney fees to NEC America pursuant to 35 U.S.C § 285. See Automated Bus. Co. v. NEC Am., Inc., 1999 U.S. Dist. LEXIS 20962, No. 4: 98-CV-619-A (N.D. Tex. Feb. 8, 1999). ABC appeals  [*1354]  from the award of attorney fees. Because the district court did not abuse [***1602]  its discretion or otherwise reversibly err in granting the award for attorney fees, we affirm.

BACKGROUND

ABC is the owner of U.S. Patent No. 4,837,797 ("the '797 patent"), entitled [**2]  "Electronic Message Unit and Methods Using Same." The patent generally concerns facsimile machines that can distinguish between a voice call and a fax call. The ability to distinguish between voice and fax calls is a critical limitation of the claims of the patent. On July 17, 1998, ABC filed a complaint in district court against NEC America, alleging that NEC America infringed, induced infringement, and contributorily infringed at least claim 1 of the '797 patent by offering for sale, manufacturing, and selling NEC's NEFAX 790 facsimile machines.

The district court ordered the parties to prepare a joint status report and meet face-to-face to discuss settlement of the action before submitting the status report. As ordered, the parties met on October 20, 1998. Representatives of ABC, NEC America, and three representatives from NEC Corporation of Japan ("NEC Corp.") were in attendance. [A30A-B]. NEC Corp. is the parent company of NEC USA, Inc., which is the parent company of the defendant, NEC America. At the meeting, ABC's attorney asserted that the basis for ABC's allegation of infringement of the '797 patent was a description of the NEFAX 790 in the Buyers Laboratory, Inc.  [**3]  's facsimile specification guide. The guide indicated that the NEFAX 790 had the capability to distinguish between voice and fax calls. NEC's representatives responded by demonstrating that the information in the guide was incorrect. The NEFAX 790 machine, as well as the NEFAX 880 machine, had been replaced by the NEFAX 791 machine. NEC's representatives also demonstrated to the satisfaction of ABC that the replacement NEFAX 791 product did not have the ability to distinguish between voice and fax calls.

After the meeting, ABC stipulated that the NEFAX 790, 880 and 791 machines did not infringe the '797 patent. However, when asked by NEC America to dismiss the case with prejudice, ABC refused and proposed that the case either be dismissed without prejudice or that discovery should continue to determine whether other NEC products might infringe.

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