Honeywell International Inc. has taken a proactive stance against what it describes as "unwarranted and unfounded" patent litigation by filing a declaratory judgment action in the Western District of North Carolina against Patent Armory Inc., a Canadian entity known for mass-asserting patents. The move includes claims under North Carolina’s Abusive Patent Assertions Act (APAA) — a statute designed to curb bad-faith patent litigation.

At issue are five patents that Patent Armory initially asserted against Honeywell in the Eastern District of Texas. Patent assertion is when a patent holder takes action against a party they believe is infringing on their patent. Rather than simply defend the Texas case, Honeywell has decided to launch an offensive strategy that seeks not just a declaration of non-infringement in its preferred jurisdiction of North Carolina but also damages and attorneys' fees under state law. Patent Armory has been filing a number of these patent claims across the country, though the Honeywell case is the first time Patent Armory may have to defend its tactics and patents in the Carolinas.

Background: A Familiar 'Patent Troll' Pattern

Patent Armory, described in the complaint as a classic non-operating entity or "patent troll," has filed at least 189 lawsuits asserting the same group of patents, typically settling before any substantive rulings are reached. Honeywell contends that Patent Armory offers quick settlements ($95,000 in Honeywell’s case) that are deliberately calculated to fall well below the cost of defense. "Patent Armory’s demand tactics, including the demand to Honeywell, are designed to extract payments from targets, knowing that the payment would be significantly less expensive than actually litigating against even a very questionable patent case," court records state.

Honeywell further alleges that Patent Armory failed to conduct a reasonable pre-suit investigation and has used expired patents, unsupported claim charts, and third-party technology (such as NICE’s CXone platform) to make its infringement allegations.

Key Issues Raised by Honeywell

1. Venue and Jurisdictional Defects in Texas Case: Honeywell has filed a motion to dismiss in Texas, arguing lack of personal jurisdiction and improper venue. Simultaneously, Honeywell’s North Carolina complaint attempts to establish personal jurisdiction over Patent Armory based on its repeated targeting of North Carolina companies.
    
2. APAA Claims: Honeywell claims that Patent Armory’s actions violate the North Carolina Abusive Patent Assertions Act. Notably, Honeywell alleges that Patent Armory is not an "operating entity" under the statute and has sent demand letters and filed lawsuits with no good-faith basis for infringement claims.
    
3. Substantive Non-Infringement: Honeywell’s complaint details the deficiencies in Patent Armory’s claim charts. In several instances, certain claim limitations were met by third parties (e.g., NICE’s hosted platforms), not Honeywell, which is counter to its claim of direct patent infringement.
    
4. Expired Patents and Misleading Allegations: At least two of the five asserted patents — the ’253 and ’979 patents — had expired before Patent Armory’s complaint was filed. Nonetheless, Patent Armory included post-expiration conduct in its infringement allegations.

Strategic Considerations for Businesses and Litigators

This case is a clear reminder that companies do not have to simply settle when faced with questionable assertions from non-practicing entities:

• File First, Fight Smart: Filing in your home jurisdiction under declaratory judgment statutes, or leveraging state laws like North Carolina’s APAA, can shift the litigation dynamic and increase the potential for attorneys’ fees and sanctions against bad actors.
   
• Check for Expired Patents: Businesses and counsel should scrutinize asserted patents for expiration dates. While the statute of limitations for patents is six years, demanding payment for infringing conduct after a patent expires can support claims of abusive assertion.
   
• Demand Specificity in Claim Charts: Vague or conclusory infringement allegations — particularly those that rely heavily on third-party systems — may not withstand scrutiny under Iqbal/Twombly or Rule 11 standards.
   
• Reevaluate Settlement Decisions: While quick settlements may seem practical, they can incentivize repeat targeting. A more aggressive stance, like Honeywell’s, may deter future suits and provide industry-wide benefit.

Conclusion

The Honeywell v. Patent Armory suit signals an aggressive strategy for companies facing serial patent assertions by non-practicing entities. Businesses in North Carolina and beyond should take note of how strategic use of venue, state statutes, and thorough invalidity/infringement analysis can turn the tables on opportunistic litigants.

If your company has been targeted by similar assertions, you can consider partnering with outside counsel. We can advise on the best forum, evaluate potential counterclaims under abusive assertion laws, and prepare a defensive litigation plan designed not just to minimize exposure — but to make the other side think twice.

For more information, please contact us or your regular Parker Poe contact. Click here to subscribe to our latest alerts and insights.