Challenge

Harness IP client, conTeyor, offers the automotive manufacturing industry innovative, state-of-the-art and tailored returnable packaging solutions.  Based in Europe, conTeyor wanted to expand their presence to America, and partnered with U.S. based Bradford Company to achieve this end.  Both companies entered into agreements cross-licensing each other’s technology.  However, the partnership ultimately did not work out, and the two companies went their separate ways.

Unable to expand into the U.S. market through partnership with Bradford, conTeyor opened its own operations in the U.S.  Unhappy with conTeyor’s decision, Bradford instigated both a U.S. district court case and an arbitration proceeding accusing conTeyor of both infringement and breach of the license agreement.  Having its own grievances related to the failed partnership, conTeyor instigated its own infringement and breach of contract actions against Bradford.

Solution

A far larger company than conTeyor with far deeper pockets, it soon became apparent that Bradford’s strategy was to make participating in the legal proceedings so expensive that conTeyor would be forced to withdraw completely or to settle on grossly unfavorable terms. Indeed, Bradford’s actions made the legal proceedings so costly for conTeyor that conTeyor decided to drop its own claims against Bradford and to do whatever it could to minimize its costs in defending against Bradford’s allegations.  Unfortunately, this only emboldened Bradford.

After battling Bradford for 9 years in arbitration, the Harness IP team was victorious in completely exonerating conTeyor.  The arbitrator wholly denied each and every one of Bradford’s claims, and awarded Bradford nothing.  In most arbitration proceedings, this is as good as it gets for a defendant, but the Harness IP team knew more was necessary.

Throughout the arbitration proceeding, the Harness IP team laid the ground work that ultimately successfully proved Bradford pursued its allegations in an expressly abusive way, and with the goal of driving up costs in order prevail through financial bullying of conTeyor.  The arbitrator found that Bradford “… deliberately extended this arbitration process by several years, with apparently the only goal of increasing the disruption to the business operations of conTeyor and to significantly increase conTeyor’s legal expenses in this arbitration proceeding.”  As a result, the arbitrator awarded conTeyor more than $1.2 million in attorney fees.  Such a staggering award of attorney fees is a highly unusual result in patent arbitration.

A Detroit Legal News article from March 13, 2014 noted that “… some cases cry out for a champagne celebration.  A patent license arbitration decision awarding a defendant more than $1.2 million in attorney fees is one.”  Harness IP principal Michael Hilton said, “We’re happy we were able to completely exonerate conTeyor, but we’re even more pleased we were able to get a large chunk of conTeyor’s attorney fees put back in conTeyor’s pocket.”  He continued, “An award of attorney fees is rare — and rarer still that attorney fees are awarded to a defendant in an arbitration at such a high level.”

Fellow Harness IP principal Bob Lenihan further commented, “This is in the highest strata of such awards, possibly one of the largest for an award of arbitration attorney fees in the nation.”  Very happy with the result, the conTeyor team flew into town from Belgium just to celebrate the notable victory.  Lenihan finished by stating, “We’ll drink a bottle of champagne to mark the occasion.  Our client is relieved to have this over… it’s good to have this one in the rear view mirror.”

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