## United States Court of Appeals for the Federal Circuit

* Revision: March 24, 2009 2008-1144, -1145, -1146, -1470, -1471, -1472 E-PASS TECHNOLOGIES, INC., Plaintiff-Appellant,

v. 3COM CORPORATION (also known as 3COM, Inc.), PALM, INC., PALMONE, INC. and HANDSPRING, INC., Defendants-Appellees, and VISA INTERNATIONAL SER VICE ASSOCIATION and VISA U.S.A., INC., Defendants-Appellees, and ACCESS SYSTEMS AMERIC AS, INC. (formerly Pa lmsource, Inc.), Defendant-Appellee

. Daniel M. Cislo , Cislo & Thomas, LLP, of Santa Monica, California, argued for plaintiff-appellant. With him on the brief were Kelly W. Cunningham and Mark D. Nielsen

. Edward H. Sikorski , DLA Piper US LLP, of San Diego, California, argued for defendants-appellees 3Com Corpor ation, et al. With him on the brief were Vincent S. Lam ; and M. Elizabeth Day , of East Palo Alto, California. Madison C. Jellins , Alston and Bird LLP, of Pa lo Alto, California, argued for defendants-appellees Visa Internati onal Service Association, et al. With her on the brief was Julie J. Han , Townsend and Townsend and Crew LL P, of Palo Alto, California. Andrew T. Oliver , Townsend and Townsend and Crew LLP, of Palo Alto, California, argued for defendant-appellee Access Systems Americas, Inc. With him on the brief was Mark D. Rowland , Ropes & Gray LLP, of Palo Alto, California. Appealed from: United States District Cour t for the Northern District of California Senior Judge D. Lowell Jensen * Attorney law firm affiliation.

## United States Court of Appeals for the Federal Circuit
2008-1144, -1145, -1146, -1470, -1471, -1472 E-PASS TECHNOLOGIES, INC., Plaintiff-Appellant,

v. 3COM CORPORATION (also known as 3COM, Inc.), PALM, INC., PALMONE, INC. and HANDSPRING, INC., Defendants-Appellees, and VISA INTERNATIONAL SERVICE ASSOCIATION and VISA U.S.A., INC., Defendants-Appellees, and ACCESS SYSTEMS AMERICAS, INC. (formerly PalmSource, Inc.), Defendant-Appellee. Appeals from the United States District Court for the Norther n District of California in case nos. 00-CV-2255, 03-CV-4747 and 04-CV-0528, Senior Judge D. Lowell Jensen.

______ ____________________ DECIDED: March 20, 2009

______ ____________________ Before BRYSON, LINN, and PROST, Circuit Judges

. Opinion for the court filed by Circuit Judge LINN. Dissenting opinion filed by Circuit Judge BRYSON. LINN, Circuit Judge

. On the merits in this appeal, E-Pass Te chnologies, Inc. (“E-Pass”) challenges two final determinations of the U.S. District Court for the Northern District of California (i) concluding that three related cases filed by E-Pass were exceptional under35 U.S.C. § 285 and (ii) awar ding attorneys’ fees. E-Pass Techs., Inc. v. 3Com Corp. , Nos. 00-CV-2255, 03-CV-4747, 04-CV-05 28 (N.D. Cal. Nov. 21, 2006) (“ Decision ”); E-Pass Techs., Inc. v. 3Com Corp. , Nos. 00-CV-2255, 03-CV -4747, 04-CV-0528, 2007 WL 4170514 (N.D. Cal. Nov. 14, 2007). We affirm those rulings today in a separate Judgment under Federal Circuit Rule 36. This opinion addresses Access Systems Americas, Inc.’s (formerly known as Pa lmSource, Inc.) (“Pal mSource”) motion for sanctions, in which it argues that E-Pass’s appeal is frivolous as it pertains to PalmSource. We agree. Consequently, we grant the motion, but award a different sanction than the one requested. I. BACKGROUND E-Pass is the assignee of U.S. Patent No. 5,276,311 (“the ’311 patent”), which is directed to a “method and device for simplifying t he use of a plurality of credit cards, or the like.” This litigation commenced in February 2000, when E-Pass filed suit against 3Com Corporation and Palm, Inc. (c ollectively, “the Palm Defendants”), 1 alleging infringement of the ’311 patent. During the cour se of the litigation, the district court construed the term “electronic multi-function card” and granted summary judgment of non-infringement based on that constructi on. E-Pass appealed. We reversed the district court’s grant of summary judgment, s ubstituted a construction for the “electronic multi-function card” limitation, and remanded fo r further proceedings in light of the new construction. E-Pass Techs., Inc. v. 3Com Corp. , 343 F.3d 1364, 1365 (Fed. Cir. 2003) (“ E-Pass I ”).

1 The Palm Defendants also include palmOne, Inc. and HandSpring, Inc., which were later sued in the action involving PalmSource. 2008-1144,-1145,-1146,-1470, 1471,-1472 2E-Pass filed two new related suit s in the same court following E-Pass I . In October 2003, it filed su it against Visa International and Visa U.S.A. for infringement of the ’311 patent. In February 2004, it also filed suit against PalmSource for infringement of the ’311 patent. The district court gr ouped these cases together as related, and subsequently granted summary judgment of non-infringement for all defendants. E-Pass again appealed the distri ct court’s grant of summary judgment. This time we affirmed, agreeing with the district court t hat E-Pass failed to provide evidence showing that any defendant practi ced all the steps of the claimed method. See E-Pass Techs., Inc. v. 3Com Corp. , 473 F.3d 1213, 1221 (Fed. Cir. 2007) (“ E-Pass II ”). Following entry of j udgment but prior to E-Pass II , the district court, on the defendants-appellees’ motions, deemed each of the three actions exceptional under 35 U.S.C. § 285 and awarded attorneys’ f ees. Although the district court analyzed separately why each of the three acti ons filed and maintained by E-Pass was exceptional, its ultimate rationale c entered on the adequacy of E-Pass’s pre-filing investigations and its repeated misconduct throughout the litigati on. E-Pass’s appeal on the merits challenged the district court’s exc eptionality findings and aw ards of attorneys’ fees. PalmSource argues that E-Pass’s appeal is frivolous as it relates to PalmSource based on E-Pass’s failure to identify a revers ible error of the di strict court and its repeated misrepresentations to this court. II. DISCUSSION “If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or not ice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee.” Fed. R. App. P. 38.

2008-1144,-1145,-1146,-1470, 1471,-1472 3An appeal can be “frivolous as filed” and/or “frivolous as ar gued.” An appeal is frivolous as filed “when an appellant gr ounds his appeal on arguments or issues that are beyond the reasonable contempl ation of fair-minded people, and no basis for reversal in law or fact can be or is even arguably shown.” Abbs v. Principi , 237 F.3d 1342, 1345 (Fed. Cir. 2001) (internal quotations omitt ed). An appeal is frivolous as argued “when an appellant has not dealt fairly with the court, [or] has sign ificantly misrepresented the law or facts.” Id. We consider this appeal, as it relates to PalmSource, frivolous. Although there is a host of reasons that collect ively support our reaching this conclusion, we focus our discussion on two. First, E-Pass “fail[s] to expl ain how the trial court erred or to present cogent or clear arguments for reversal.” See id. at 1345; see also Refac Int’l, Ltd. v. Hitachi, Ltd. , 921 F.2d 1247, 1256 (Fed. Cir. 1990) (sanct ioning party that failed to point to any basis for reversal in the lower co urt’s decision). Second, E-Pass has made significant misrepresentations of t he record and the law to the court. See Abbs , 237 F.3d at 1345; see also Romala Corp. v. United States , 927 F.2d 1219, 1224 (Fed. Cir. 1991) (sanctioning party for, among other things, distorting t he lower court’s decision). We address each in turn. We begin by noting E-Pass’s failure to cl early or cogently identify a ground for reversal of the district court’s decision as to PalmSource. The dist rict court found, after concluding that there was no evidence to support E-Pass’s case against the Palm Defendants, see Decision at 40-41, that E-Pass’s case against PalmSource was even weaker:

2008-1144,-1145,-1146,-1470, 1471,-1472 4The direct case against the Palm OS software[ 2 ] has the same failures [as the case against Palm Defendants]. Any notion that Palm OS’[s] role as an enabler provides indirect evidence as to its indi rect infringement is an even greater failure as it has nev er been suggested that Palm OS software somehow enables the instru ction materials for the PalmOne devices. Id. at 41. After summarizing th e litigation record, the distri ct court found that “[t]he nonexistence of any direct infr ingement evidence to be presented at the time of summary judgment leads inexorably to the conclusion that there was no such evidence known to [E-Pass] at the time t hese cases were filed.” Id. at 44. The district court also found, as it did with respect to each of the case s on appeal, that E-Pass engaged in litigation misconduct. Among other things, the district court found E-Pass guilty of misconduct in the case against PalmSource based on it s ever-changing allegations of infringement, id. at 29, its refusal to supplem ent infringement contentions, id. at 30-31, and its opposition to summary judgment on the basis of lack of discovery and its subsequent failure to take the discovery it had requested and received, id. at 32; see also id. at 40 (“Reviewing the entire history of the litigation, it is clear to this Court that E-Pass’s strategy was to delay and obfuscate in an a ttempt to keep the case alive as long as possible and to stave off summary judgment.” ). The totality of these circumstances— i.e., the inadequacy of E-Pass’ s pre-filing investigati on and misconduct during the ensuing litigation—led the district court to find the action against PalmSource exceptional and award attorneys’ fees. Despite appealing the district court’ s exceptionality det ermination as to PalmSource, E-Pass virtually ig nores PalmSource on appeal. Its brief focuses almost

2 Palm OS is software owned by PalmSource and licensed for use in the Palm handheld devices alleged to infringe the ’311 patent. 2008-1144,-1145,-1146,-1470, 1471,-1472 5entirely on the other defendant s-appellees, and in particular, whether the district court erred in finding that infringem ent did not occur by virtue of two events—i.e., the January 2001 CES demonstration and t he March 2001 Visa in-house demonstration—both of which occurred before PalmSour ce existed, and neither of which were asserted in E-Pass’s brief to apply to PalmSource. 3 Indeed, E-Pass’s brief leaves the inescapable conclusion that its strategy is to impugn PalmSource by association. It repeatedly makes generalized accusations against the “Defendants” or “Appellees” without acknowledging, as the district court correct ly did, that the in fringement allegations against these parties were different. Mor eover, nowhere does E-Pass specifically challenge any finding of the district court relating to litigation misconduct in the case against PalmSource. Notably, even after Pa lmSource put E-Pass on notice of the alleged frivolousness of E-Pass’s appeal by r equesting sanctions in its brief, E-Pass still failed to clearly or cogently explain in its repl y brief why the district court’s findings in the PalmSource litigation were clearly erroneous or an abuse of discretion. The dissent finds that E-Pass raised at least one reasonable ground for appeal against PalmSource—the award of fees for periods pr ior to litigation misconduct. With all due respect to our colleague in dissent, we view the record differently. E-Pass failed to challenge any of the district court’s factual findings, and identified no other basis for

3 In response to PalmSource’s motion for sanctions, E-Pass argued, for the first time, that “the 2001 CES demonstration relates to PalmSource since PalmSource admits that, upon its formation in 2001, it obtai ned from Palm ‘substantially all’ of the liabilities related to Palm’s then-exist ing operating system and software business.” E-Pass’s Resp. to PalmSource’s Mot. for Sanctions at 5. It is not entirely clear how this helps E-Pass, nor why if it wa s so important, E-Pass failed to raise it in its briefs. Because E-Pass failed to raise it in its opening brief, we deem the issue waived. SmithKline Beecham Co rp. v. Apotex Corp. , 439 F.3d 1312, 1319 (Fed. Cir. 2006) (“[A]rguments not raised in t he opening brief are waived.”). 2008-1144,-1145,-1146,-1470, 1471,-1472 6finding an abuse of discretion in calculat ing fees. Those findings included the conclusion that E-Pass’s case against PalmSource had “a litigation history of questionable pre-fili ng investigation,” Decision at 45, which supports an award of fees from the beginning of the case. We next note E-Pass’s mult iple misrepresentations to the court. The first significant misrepresentation rela tes to the record. As we discussed above, the district court’s determination that the case against PalmSource wa s exceptional was based in part upon its finding that t here was at least “a serious ques tion” as to E-Pass’s pre-filing investigation. See Decision at 40-41; see also id. at 44 (“The non-existence of any direct infringement evidence to be presented at the time of summary judgment leads inexorably to the conclusion that there wa s no such evidence known to [E-Pass] at the time these cases were filed.”). Nevert heless, in its opening brief E-Pass boldly contended that “[t]he District Court specif ically found that E- Pass’s pre-filing investigation was sufficient to avoid making the case exceptiona l.” E-Pass’s Opening Br. at 19; see also id. at 25, 29 (repeating this asserti on). This particular statement appears in the “Statement of Fa cts” section in a discussi on that does not distinguish between any of the defendants-appell ees, but collectively refers to them all as the “Defendants.” Notwithstanding E- Pass’s representations to t he contrary, the district court did not, in fact, find that E-Pass’s pr e-filing investigation was sufficient as to PalmSource—or for that matter, the Palm De fendants, or even Visa U.S.A. Rather, the district court found, solely with respect to Visa International (one of seven defendantsappellees), in a section of t he decision entitled “Visa Inter national,” that “[w]hile EPass’[s] minimalist pre-filing investigation in and of itself, may not make the case

2008-1144,-1145,-1146,-1470, 1471,-1472 7exceptional, when comb ined with its litigation misconduc t, this case becomes one which is meritorious of an award of attorney fees.” Decision at 26. This misrepresentation of the distri ct court’s decision—exacerbated by repetition—speaks for itself. It is worth obs erving, however, that not only does E-Pass attempt to paint the district court’s finding as applying to all defendants-appellees when it clearly does not, it also mischaracterizes t he finding itself. The district court did not, as E-Pass argues, “specifically f[i]nd” that E- Pass’s pre-filing investigation was sufficient
as to any defendant-appellee, including Visa International. Rather, the district court merely found that whether or not the “minimalist pre-filing investigation” conducted was sufficient, any question as to its sufficiency was overcome by E-Pass’s numerous acts of litigation misconduct. Another misrepresentation relates to the legal standard for exceptionality identified by E-Pass. In it s opening brief, E-Pass argued that the cases it filed against the defendants-appellees were not exceptional because its clai ms of infringement were “at least reasonably disputable.” E.g. , E-Pass’s Opening Br. at 29. In its reply brief, however, E-Pass went further, arguing that t he cases were not exceptional because it did not bring the litigation in bad faith and the litigat ion was not objectiv ely baseless. In support of its argument, E-Pass stated unequ ivocally that “[t]he standard for an exceptional case finding is whether the case was brough t in subjective bad faith and the litigation was objectively baseless.” E-Pass’s Reply Br. at 29 (citing Serio-US Indus., Inc. v. Plastic Recovery Techs. Corp. , 459 F.3d 1311, 1322 (Fed. Cir. 2006)); see also id. at 30 (“Therefore, any shift in legal theory itself does not make this case exceptional since it was not done in subjective bad faith nor was it objectively baseless.”). This is

2008-1144,-1145,-1146,-1470, 1471,-1472 8not the law. Serio-US Industries , cited by E-Pass for this erroneous proposition, actually begins with an important condition: “ Absent misconduct in the litigation or in securing the patent , a trial court may only sanction th e patentee if both th e litigation is brought in subjective bad faith and the litigation is objective ly baseless.” 459 F.3d at 1322 (emphasis added). E-Pass made this sa me misrepresentation earlier, in its opening brief, by citing Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc. , 393 F.3d 1378, 1384 (Fed. Cir. 2005), for th e proposition that an infringement action is not exceptional so long as the infri ngement “can reasonably be disputed.” EPass’s Opening Br. at 28. However, E-Pass omits Brooks ’ recitation of the same condition stated in Serio-US Industries , of “[a]bsent misconduct in conduct of the litigation.” Brooks , 393 F.3d at 1381. E-Pass’s omission of this condition might be of lesser consequence if litigation misconduct were not at issue in this case. But litigation misconduct is a central issue— the district court specifically concluded t hat E-Pass had eng aged in repeated litigation misconduct, including, in particular , its shifting legal theories. See, e.g. , Decision at 29 (“E-Pass’s allegations of induc ing infringement against Palm Source have also changed over time.”); id. at 33 (“Throughout the litigation, defendants were forced to expend resources merely to attempt to have E-Pass clear ly define its claims.”). It is difficult to view E-Pass’s omission of the cr itical portion of the legal standard applicable to it as anything other than an attempt to mislead the court. Like E-Pass’s misrepresentation of the district court’s findings, this selective cita tion of the law is exacerbated by repetition. For all of the reasons set forth above, taken collectively, we conclude that EPass’s appeal as to PalmSource is frivolous. Assuming for the sake of argument that E2008-1144,-1145,-1146,-1470, 1471,-1472 9Pass did make a non-frivolous (yet ultimate ly unmeritorious) ar gument, it would not change our determination that th e appeal as a whole is friv olous. “We have held that even the presence of a few non-frivolous arguments does not prevent an appeal as a whole from being deemed frivolous.” Romala , 927 F.2d at 1224 (citing In re Perry , 918 F.2d 931, 934-35 (Fed. Cir. 1990) (“When an appeal is a ‘complete loser,’ most of which is ‘patently groundles s,’ sanctions should be imposed under Rule 38.”)). The tactics employed by E-Pass in this appeal, includin g both the misrepresentations made and the failure to cogently identify any reversible erro r of the district court, far outweigh any nonfrivolous argument that may be lurking in its briefs. Consequently, we grant Pa lmSource’s motion for sanctions, although not the amount requested by PalmSource. 4 Rather, we impose a s anction equal to the amount of fees PalmSource incurred in defending this appeal, including the filing of the motion for sanctions. Accordingly, PalmSource is directed to file with this court a claim for reasonable attorneys’ fees incurred in the def ense of this appeal, including the motion for sanctions, together with supporting document ation, within fifteen (15) days of the date of this opinion. E-Pass shall have five (5) days from the date PalmSource files its submission with the court to file any objection thereto. “[S]ince our conclusion of frivolity rests not only on the filing of the appeal but also on the frivolous nature of the advocacy

4 PalmSource requests “an amount equal to the amount that E-Pass has paid its attorneys since the date upon whic h PalmSource’s judgment would have become final and unappealabl e absent this appeal.” PalmSource’s Motion for Sanctions at 3-4. Whatever the motivation might have been for PalmSource to make such an unusual request, we see no valid r eason here to award a sanction based on fees paid to opposing counsel. See State Indus., Inc. v. Mor-Flo Indus., Inc. , 948 F.2d 1573, 1581 (Fed. Cir. 1991) (not ing amount of sanction under Rule 38 is within our discretion). 2008-1144,-1145,-1146,-1470, 1471,-1472 102008-1144,-1145,-1146,-1470, 1471,-1472 11 in support of it, we consider the attorney who wrote and signed the briefs to be equally responsible.” State Indus., Inc. v. Mor-Flo Indus., Inc. , 948 F.2d 1573, 15 82 (Fed. Cir. 1991). As a result, we hold E-Pass’s couns el jointly and severally liable for the sanctions. III. CONCLUSION PalmSource’s motion for sanctions is GRANTED , and a sanction of PalmSource’s reasonable atto rneys’ fees is awarded agai nst E-Pass and its counsel, jointly and severally.

## United States Court of Appeals for the Federal Circuit

2008-1144, -1145, -1146, -1470, -1471, -1472 E-PASS TECHNOLOGIES, INC., Plaintiff-Appellant, v. 3COM CORPORATION (also known as 3COM, Inc.), PALM, INC., PALMONE, INC. and HANDSPRING, INC., Defendants-Appellees, and VISA INTERNATIONAL SERVICE ASSO CIATION and VISA U.S.A., INC., Defendants-Appellees, and ACCESS SYSTEMS AMERICAS, INC. (f ormerly Palmsource, Inc.), Defendant-Appellee.

Appeals from the United States District Cour t for the Northern District of California in case nos. 00-CV-2255, 03-CV-4747 and 04-CV-0528, Senior Judge D. Lowell Jensen

BRYSON, Circuit Judge , dissenting. While I do not take issue wit h most of the majority’s cr iticisms of the appellant’s presentation in this court, I would not impose sanctions. It is true that E-Pass did not do a good job of identifying those issues on appeal that apply to Palmsource or explaining why particular issues apply to Palmsource despite its seeming lack of involvement in the underlying transactions. However, there is at least one issue as to which E-Pass specifically named Palmsource and as to wh ich it is reasonable for E-Pass to pursue anappeal against Palmsource. That is the issue of whether the district court abused its discretion in awarding fees for periods pr ior to the alleged misconduct by E-Pass on which the fee award was based. On page 37 of its opening brief, E-Pass asserted that “[t]he District Court’s award of PalmSource’s and the Visa Defendants’ attorneys’ fees starting from the inception of their respective cases was unreasonable and an abuse of discretion.” Instead of t hat fee award, E-Pass argued ( page 38), “[t]he District Court should have apportioned the fees and awarded onl y those fees incurred after E-Pass should have dropped the suit, presumably once E-Pass failed to uncover instances of direct infringement.” I disagr ee with the majority to the ext ent that it charges that EPass failed to identify any reasonable ground fo r appeal as to Palmsource. As the above-quoted passage indicates, E-Pass i dentified one such ground. Although we ultimately rejected that argument on the merits, I do not regard it as so frivolous that it warrants the imposition of sanctions. As to the misrepresentations in E-Pass’s brief, I agree that certain statements in the brief strayed beyond the limit s of fair advocacy and into t he realm of falsehood. In particular, the district court’s comment, with re spect to Visa International, that “E-Pass’ minimalist pre-filing investigation in and of it self, may not make this case exceptional” cannot fairly be characterized as a finding by the court that, as E-Pass puts it, “E-Pass’s pre-filing investigation was sufficient to av oid making the case exceptional.” The mischaracterization is particularly problemat ic because, even though t he district court’s statement applied only to Visa Internat ional, E-Pass at one point included its characterization of the district court’s st atement in a passage that references both Palmsource and the Visa defendants.

2008-1144,-1145,-1146,-1470 1471,-1472 2The other instances of mi sleading conduct pointed out by the majority are not as serious. The majority faults E-Pass for providing the cour t with a truncated version of the standard to be used in determining whether a district court may sanction a party by imposing attorney fees. It is true that at page 29 of its reply brief E-Pass used a shorthand version of the standard that omitted an important condi tion. But earlier in the same reply brief (page 15) E-Pass cited the sa me authority, and in that reference it set forth the standard with the condition expressl y included. It plainly would have been preferable to include the condition in both plac es, but the inclusion of the condition in connection with the first reference to the cited authority mitigates the e ffect of omitting it in the later reference. The majority asserts that E-Pass m ade the same mistak e on page 28 of its opening brief when it argued that “[s]o l ong as the infringem ent ‘can reasonably be disputed,’ the infringement acti on is not exceptional in terms of section 285.” That proposition was included in a portion of E-Pa ss’s opening brief that was directed to the question whether litigation wa s brought in bad faith, and E-Pass cited a case that addressed that issue. See Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc. , 393 F.3d 1378, 1381 (Fed. Cir. 2005). In the portion of t hat case cited by E-Pass, we stated: “Bringing an infringement action does not bec ome unreasonable in terms of [section] 285 if the infringement c an reasonably be disputed.” Id. at 1384. Although it is true that the Brooks Furniture case articulated the comple te exceptional case standard— including the “[a]bsent misconduct in the lit igation” condition—a few pages before the passage quoted by E-Pass, I do not consider E-Pass’s citation to Brooks Furniture in the context of the issue being discussed at that point in the brief to be misleading. That

2008-1144,-1145,-1146,-1470 1471,-1472 32008-1144,-1145,-1146,-1470 1471,-1472 4 is particularly so inasmuch as E-Pass’ s opening brief elsewhere (pages 24 and 37) acknowledged that litigation misconduct is a proper basis for an exceptional case determination and cited anot her one of our cases, Beckman Instruments, Inc. v. LKB Produktor AB , 892 F.2d 1547 (Fed. Cir. 1989), for that proposition. As I see it, then, the question for us is whether sanctions should be imposed because of an unduly aggressive characterization of a comment by the district court, a failure to provide the full text of an applicable legal test on the second occasion that the test was set forth, and a failure to ex plain whether only one issue on appeal was applicable to Palmsource, or if more than one issue was applicable to Palmsource, what the legal basis for Palmsource’s liability woul d be. Accepting that in those regards EPass’s briefs on appeal fell short of the standards we expect of counsel in this court, I nonetheless conclude that the shortfall is not so egregious as to call for the imposition of sanctions.