Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-01806/USCOURTS-cand-4_05-cv-01806-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SHARPER IMAGE CORPORATION, a Delaware

corporation, and ZENION INDUSTRIES,

INC., a California corporation,

Plaintiffs,

v.

SHANGHAI NEO.TEC ELECTRON CO., LTD.,

Defendant.

 /

No. C 05-1806 CW

ORDER DENYING

DEFENDANT'S

MOTION FOR

SANCTIONS

Defendant Shanghai Neo.Tec Electron Co., Ltd., moves for

sanctions pursuant to Federal Rule of Civil Procedure 11. 

Plaintiff Sharper Image Corporation opposes the motion. The matter

was taken under submission on the papers. Having considered all of

the papers filed by the parties, the Court DENIES Defendant's

motion.

Defendant alleges that Plaintiff's claim for infringement of

U.S. Design Patent No. 434,483 (the '483 patent) by Defendant's XJ202 product was brought in violation of Rule 11. Federal Rule of

Civil Procedure 11 requires a court to impose sanctions on an

attorney, a represented party, or both, when the attorney has

signed and submitted to the court a pleading, motion or other paper

that is not, to the attorney's knowledge and belief after

reasonable inquiry, "well grounded in fact" and "warranted by

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United States District Court

For the Northern District of California

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existing law or a good faith argument for the extension,

modification, or reversal of existing law." Fed. R. Civ. P. 11. 

An attorney's signature also constitutes a warranty that the paper

is not "interposed for any improper purpose, such as to harass or

to cause unnecessary delay." Id.

In a patent case, regional circuit law is applied to the

imposition of Rule 11 sanctions. Antonious v. Spalding & Evenflo

Cos., Inc., 275 F.3d 1066, 1072 (Fed. Cir. 2002). The standard for

determining whether a pleading, motion or other paper is either

frivolous or interposed for an improper purpose is one of objective

reasonableness at the time of the attorney's signature. Conn v.

Borjorquez, 967 F.2d 1418, 1421 (9th Cir. 1992) (citing Woodrum v.

Woodward County Okla., 866 F.2d 1121, 1127 (9th Cir. 1989). In

assessing whether the filing of a particular paper was frivolous

under Rule 11, the court should not consider the ultimate failure

on the merits or the subjective bad faith of the signer, but rather

whether the position taken was "legally unreasonable" or "without

factual foundation." Zaldivar v. City of Los Angeles, 780 F.2d

823, 831 (9th Cir. 1986). Before imposing Rule 11 sanctions, the

district court "must conduct a two-prong inquiry to determine

(1) whether the complaint is legally or factually 'baseless' from

an objective perspective, and (2) if the attorney has conducted 'a

reasonable and competent inquiry' before signing and filing it." 

Christian v. Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir. 2002)

(quoting Buster v. Greisen, 104 F.3d 1186, 1190 (9th Cir. 1997)). 

In the context of patent infringement actions, the Federal

Circuit has construed Rule 11 "to require that an attorney

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interpret the pertinent claims of the patent at issue before filing

a complaint alleging patent infringement." Antonious, 275 F.3d at

1072. The attorney's proposed claim construction is "subject to

the Rule 11(b)(2) requirement that all legal arguments be

nonfrivolous." Id. Rule 11 then requires that the attorney

compare the accused device with the construed patent claims; this

is a question of fact and must therefore comply with Rule

11(b)(3)'s requirement that all allegations and factual contentions

have evidentiary support. Id. at 1073-74. 

Here, the Court finds no basis for imposing Rule 11 sanctions

against Plaintiff or its counsel. Accordingly, Defendant's motion

for sanctions (Docket No. 16) is DENIED. Further, at this stage in

the lawsuit, the Court does not find it efficient to resolve

specific disputes over selected dispositive issues related to claim

construction or infringement. 

IT IS SO ORDERED.

Dated: 10/26/05

 

CLAUDIA WILKEN

United States District Judge

Case 4:05-cv-01806-CW Document 36 Filed 10/26/05 Page 3 of 3