Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-00181/USCOURTS-casd-3_19-cv-00181-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:0271 Patent Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ELLISON EDUCATIONAL 

EQUIPMENT, INC., a California 

corporation,

Plaintiff,

v.

AVERY ELLE, INC., A California 

corporation; and DOES 1-10, inclusive, 

Defendants.

Case No.: 19-cv-00181-H-NLS

ORDER:

(1) DENYING DEFENDANT’S RULE 

11 MOTION; AND

[Doc. No. 28.]

(2) GRANTING DEFENDANT’S 

MOTION TO AMEND ITS REPLY 

BRIEF

[Doc. No. 36.]

On April 11, 2019, Defendant Avery Elle, Inc. filed a motion for sanctions under 

Federal Rule of Civil Procedure 11 against Plaintiff Ellison Educational Equipment, Inc. 

(Doc. No. 28.) On April 29, 2019, Plaintiff filed a response in opposition to Defendant’s 

Rule 11 motion. (Doc. No. 30.) On May 6, 2019, Defendant filed its reply.1

 (Doc. No. 

 

1 On May 8, 2019, Defendant filed a motion to amend its reply brief. (Doc. No. 36.) For good cause 

shown, the Court grants Defendant’s motion to amend its reply brief, and the Court considers pages 5 and 

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33.) On May 8, 2019, the Court took the matter under submission. (Doc. No. 35.) For the 

reasons below, the Court denies Defendant’s Rule 11 motion. 

Background

I. Procedural History

On January 25, 2019, Plaintiff Ellison filed a complaint for patent infringement 

against Defendant Avery Elle, alleging infringement of U.S. Patent No. 9,079,325. (Doc. 

No. 1.) Specifically, Plaintiff alleges that Defendant’s chemically etched dies directly and 

indirectly infringe the methods claimed by the ’325 patent. (Id. ¶¶ 25-33.) 

On March 6, 2019, Defendant filed an answer to Plaintiff Ellison’s complaint and 

counterclaims. (Doc. Nos. 10, 11.) On April 8, 2019, the Court issued a scheduling order 

for the action. (Doc. No. 26.) By the present motion, Defendant moves for sanctions 

against Plaintiff under Federal Rule of Civil Procedure 11. (Doc. No. 28 at 4-5.) 

II. The Patent-In-Suit

The ’325 patent is entitled “Chemical-etched die having improved registration 

means.” U.S. Patent No. 9,079,325, at (54) (filed Jul. 14, 2015). The invention disclosed 

in the ’325 patent “relates to a chemical-etched die of the kind to be used in combination 

with a (e.g., roller) press to produce die cut shapes from a sheet material. The die has a 

cutting edge which can be precisely registered by the user in alignment with a pattern that 

is printed on the sheet material from which the shapes are to be cut.” Id. at 1:13-18.

Claim 1 of the ’325 Patent claims:

1. A method for cutting out, by means of a first die, a shape that is printed on 

a sheet material, wherein the die includes an inside opening that corresponds 

to the shape to be cut from the sheet material, a flat outside border having first 

and opposite faces that surround said inside opening, and a cutting edge that 

projects from the first face of the flat outside border, such that said cutting 

edge surrounds the inside opening of said first die and corresponds exactly 

with the shape that is printed on the sheet material and none of the flat outside 

border of said die extends into the inside opening of said die past the interface 

 

8 in the reply brief as amended by Exhibit A to the May 8, 2019 motion for leave to amend in deciding 

Defendant’s Rule 11 motion for sanctions. (Id.)

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of said cutting edge with the first face of said flat outer border, said method 

comprising the steps of:

locating the shape printed on the sheet material to be cut therefrom;

placing the cutting edge which projects from the first face of the flat outside 

border of said first die directly against the sheet material, and looking through 

the inside opening of said first die so that the shape printed on the sheet 

material is located entirely within the inside opening of said first die and the 

cutting edge which projects from the first face of said flat outside border is 

automatically registered so as to surround the shape to be cut from the sheet 

material;

positioning said first die and the sheet material having the shape to be cut 

therefrom within a roller press; and

moving said first die and said sheet material through said roller press for 

causing a force to be applied to the opposite face of the flat outside border of 

said first die after said cutting edge has first been placed against the sheet 

material and said first die and said sheet material have been positioned in said 

roller press for pushing said cutting edge through said sheet material to cut the 

shape outwardly therefrom.

Id. at 4:22-54.

Discussion

I. Legal Standards

In patent cases, a motion for sanctions pursuant to Federal Rule of Civil Procedure 

11 is governed by the law of the regional circuit. Intamin Ltd. v. Magnetar Techs., Corp., 

483 F.3d 1328, 1337 (Fed. Cir. 2007); Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 

1295, 1299 (Fed. Cir. 2004). Rule 11 provides in pertinent part:

(a) Signature. Every pleading . . . shall be signed by at least one attorney of 

record in the attorney’s individual name . . . .

(b) Representations to Court. By presenting to the court a pleading, written 

motion, or other paper--whether by signing, filing, submitting, or later 

advocating it--an attorney . . . certifies that to the best of the person’s 

knowledge, information, and belief, formed after an inquiry reasonable under 

the circumstances: . . . 

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(2) the claims, defenses, and other legal contentions are warranted by 

existing law or by a nonfrivolous argument for the extending, 

modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically 

so identified, will likely have evidentiary support after a reasonable 

opportunity for further investigation or discovery . . . .

Fed. R. Civ. P. 11. “[T]he fundamental purposes of Rule 11 is to ‘reduce frivolous claims, 

defenses or motions and to deter costly meritless maneuvers, . . . [thereby] avoid[ing] delay 

and unnecessary expense in litigation.’” Christian v. Mattel, Inc., 286 F.3d 1118, 1127 

(9th Cir. 2002) (quoting Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 

1537 (9th Cir. 1986)).

“An attorney is subject to Rule 11 sanctions, among other reasons, when he presents 

to the court ‘claims, defenses, and other legal contentions . . . [not] warranted by existing 

law or by a nonfrivolous argument for the extension, modification, or reversal of existing 

law or the establishment of new law[.]’” Holgate v. Baldwin, 425 F.3d 671, 675–76 (9th 

Cir. 2005) (quoting Fed. R. Civ. P. 11(b)(2)). “When, as here, a ‘complaint is the primary 

focus of Rule 11 proceedings, a 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.’” Id. at 676 (quoting Christian, 286 F.3d at 1127). “As 

shorthand for this test, we use the word ‘frivolous’ ‘to denote a filing that is both baseless 

and made without a reasonable and competent inquiry.’” Id. (quoting In re Keegan Mgmt. 

Co., Sec. Litig., 78 F.3d 431, 434 (9th Cir. 1996). A district court’s decision on a Rule 11 

motion is reviewed for abuse of discretion. Cooter & Gell v. Hartmarx Corp., 496 U.S. 

384, 409 (1990).

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II. Analysis

A. Adequate Legal Basis

Defendant argues that Plaintiff’s claims for infringement of the ’325 patent are 

frivolous because a cursory review of the accused products would demonstrate that the 

accused products are missing at least one claim limitation from patent, specifically the 

claim limitation “none of the flat outside border of said die extends into the inside opening 

of said die past the interface of said cutting edge with the first face of said flat outer border.” 

(Doc. No. 28 at 8-15.) But Defendant’s argument is premised on the Court adopting 

Defendant’s proposed claim construction for that claim term. (See id. at 13-15; Doc. No. 

33 at 2-5.) Plaintiff disputes Defendant’s proposed construction for that claim term and 

offers an alternative proposal. (Doc. No. 30 at 13-16.) Thus, in order for Defendant to 

demonstrate that Plaintiff’s claims for patent infringement are frivolous, Defendant must 

demonstrate that Plaintiff’s proposed construction for this claim term is baseless. 

The Court has reviewed the claim construction positions and arguments presented 

in the briefing on Defendant’s Rule 11 motion. Although the Court might not ultimately 

adopt Plaintiff’s proposed construction for the claim term at issue after full claim 

construction briefing and a Markman hearing, Plaintiff’s proposed claim construction is 

not frivolous or baseless. See Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 

1335, 1347 (Fed. Cir. 2012) (“This court has recognized that as a general rule preamble 

language is not treated as limiting.”); Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 

1336, 1346 (Fed. Cir. 2002) (“Generally, the preamble does not limit the claims.”). As 

such, Defendant has failed to demonstrate that Plaintiff’s theory of infringement is 

frivolous. See Q-Pharma, 360 F.3d at 1301 (affirming the denial of a motion for Rule 11 

sanctions where the plaintiff’s “claim interpretation, while broad, followed the standard 

canons of claim construction and was reasonably supported by the intrinsic record”).

Defendant also argues that Plaintiff’s claims for infringement of the ’325 patent are 

frivolous because the ’325 patent is invalid in light of the QuicKutz and Spellbinders 

YouTube video prior art references and the other prior art references cited in the patent. 

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(Doc. No. 28 at 16-19.) But Defendant fails support this contention with an actual 

anticipation or obviousness analysis under the proper standards. (See id.) Cf. In re 

Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 2002) (“In order to prove that a 

claim is anticipated under 35 U.S.C. § 102(b), defendants must present clear and 

convincing evidence that a single prior art reference discloses, either expressly or 

inherently, each limitation of the claim.”); PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 

1186, 1193 (Fed. Cir. 2014) (“A party asserting that a patent is obvious “must ‘demonstrate 

by clear and convincing evidence that a skilled artisan would have had reason to combine 

the teaching of the prior art references to achieve the claimed invention, and that the skilled 

artisan would have had a reasonable expectation of success from doing so.” (internal 

quotation marks omitted)). Moreover, the Federal Circuit has explained that a patentee 

may “reasonably believe[] its patent to be valid in light of the statutory presumption of 

validity.” Q-Pharma, 360 F.3d at 1303 (citing 35 U.S.C. § 282). As such, Defendant has 

failed to demonstrate that Plaintiff’s assertion that the ’325 patent is valid is frivolous. See

id. In sum, Defendant has failed to demonstrate that Plaintiff’s claims for patent 

infringement are objectively baseless.

B. Reasonable Inquiry

“The reasonable inquiry test is meant to assist courts in discovering whether an 

attorney, after conducting an objectively reasonable inquiry into the facts and law, would 

have found the complaint to be well-founded.” Holgate, 425 F.3d at 677. The Federal 

Circuit has explained that in the context of a claim for patent infringement, “the key factor 

in determining whether a patentee performed a reasonable pre-filing inquiry is the presence 

of an infringement analysis.” Q-Pharma, 360 F.3d at 1302. “And an infringement analysis 

can simply consist of a good faith, informed comparison of the claims of a patent against 

the accused subject matter.” Id.

In its motion, Defendant speculates that Plaintiff failed to perform a basic pre-filing 

investigation prior to filing the complaint in this action. (Doc. No. 28 at 19.) In response 

to this contention, Plaintiff has presented the Court with evidence in the form of a 

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declaration from its counsel stating that prior to filing the present action, Plaintiff’s counsel 

purchased the accused products, reviewed information about the accused products on 

Defendant’s website and in videos, construed the ’325 patent’s claims, compared his

constructions to the accused products, and concluded that the accused products infringe 

claim 1 of the ’325 patent. (Doc. No. 30-2, Hahn Decl. ¶¶ 3-14.) Defendant has failed to 

provide the Court with anything to contradict or otherwise rebut Plaintiff’s evidence 

regarding its pre-filing investigation. As such, Plaintiff has demonstrated that it conducted 

a reasonable and competent pre-filing investigation. See Q-Pharma, 360 F.3d at 1302-03

(finding the patentee’s pre-filing investigation reasonable where the patentee “obtained a 

sample of the accused product, reviewed [the defendant’s] statements made in the 

advertising and labeling of the accused product, and, most importantly, compared the 

claims of the patent with the accused product”).

Conclusion

For the reasons above, the Court denies Defendant Avery Elle’s Rule 11 motion.

IT IS SO ORDERED.

DATED: May 13, 2019

 

MARILYN L. HUFF, District Judge

UNITED STATES DISTRICT COURT

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