Facts

In April 2000, Dow Chemical sued Mee Industries for patent infringement. Dow had two patents issued in 1999 dealing with power boost and power augmentation for gas turbines.

Mee Industries, located in Monrovia, manufactured and sold fogging systems for greenhouse cooling and for special effects. It began selling fogging systems to power companies operating gas turbines to provide evaporative cooling for the turbines. The cooler air provided more efficient operation of the turbines.

Dow obtained two patents in 1999. Dow wanted Mee to license its technology. Mee refused, telling Dow that Mee's operation of evaporative cooling and wet compressions was old technology. The Dow patent covered this, but also required substantial amounts of water being inserted into the turbines to avoid destructive thermal stresses (as stated in the patents). Mee did not require this step, rather, its systems had companies select the amount of water to be injected into the turbines.

Dow then sued Mee for infringing 126 claims of the two patents, even though outside counsel suggested that only one claim was infringed from each patent. Dow immediately filed an application for preliminary injunction, which was denied. The court advised Dow it would probably not prevail on the merits at trial. The case was not dismissed.

After trial, Mee was fully exonerated. The court held that Mee did not infringe any claim of either patent and that the majority of claims were invalid (due to "on sale bar" and "prior art").

Mee sued Dow for malicious prosecution in Florida state court. Dow removed the action to federal court. It was assigned to the same judge that ruled in the infringement action.

PLAINTIFF'S CONTENTIONS:
Mee contended that Dow did not conduct an adequate investigation into the Mee syMee contended that Dow did not adequately investigate Mee's systems or the products. Rather, Dow knew Mee did not infringe the patents as Dow had told the patent office examiner that the patent did not cover the old technology, specifically, the use of wet compression to avoid destructive thermal stresses. Dow knew Mee did not offer any system that was not old technology or any system that would to come within the claims of the patent. Yet Dow asserted the patent broadly against Mee.

Mee asserted the infringement lawsuit lacked probable cause. To support this, among other things, Mee pointed to Dow's interrogatory responses served over one year after the infringement lawsuit was filed, which stated Dow did not know which claims (of the 126) were infringed or how Mee infringed. It was "premature" to respond to that question.

Dow's purpose for the infringement lawsuit was to coerce Mee into taking a license for the Dow patent. Should Mee not take a license, Dow was determined to drive Mee out of the industry. It filed suit believing Mee could not afford to defend the infringement lawsuit. Dow sued Florida Power Co. along with Mee, in Orlando, Florida, choosing the location furthest away from the Mee offices for the suit to add hardship. Mee, in accordance with their agreement with Florida Power, was required to indemnify and defend that entity in the infringement suit.

Mee also contended that the in-house patent attorney collected only selected information to give to Dow's patent litigation counsel and outside counsel. Each testified they relied on the materials only from the in-house patent counsel. Mee asserted the "advice of counsel" defense was not available to Dow.

DEFENDANT'S CONTENTIONS:
Dow asserted the lawsuit was filed with probable cause. Defendant felt it was sufficient to look at a couple of Mee's User Guides to determine how the systems operated. It also asserted the claims were valid and not obvious.

Dow asserted that it relied on counsel's advice that the two in-house patent attorneys reviewed the matter, that they presented the case to a litigation review committee to obtain authority to sue, and also obtained the opinion of outside counsel.

Settlement Discussions

Dow offered $40,000 at mediation.

Result

Verdict for plaintiff for $2,850,000. Prejudgment interest to be added.

Other Information

FILING DATE: Oct. 10, 2005.