NOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2008-1091 GERALD N. PELLEGRINI, Plaintiff-Appellant,

v. ANALOG DEVICES, INC., Defendant-Appellee. Gerald N. Pellegrini , of Worcester, Massachusetts, pro se. Wayne L. Stoner , Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, Massachusetts, for defendant-appellee. With him on the brief were Richard W. O’Neill and Jordan L. Hirsch

. Appealed from: United States District C ourt for the District of Massachusetts Judge Rya W. ZobelNOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2008-1091 GERALD N. PELLEGRINI, Plaintiff-Appellant,

v. ANALOG DEVICES, INC., Defendant-Appellee. Appeal from the United States District Court for the District of Massachusetts in case no. 02-CV-11562, Judge Rya W. Zobel.

__________________________ DECIDED: June 5, 2008

__________________________ Before BRYSON and PROST, Circuit Judges , and ZAGEL, District Judge

. ∗

PER CURIAM. Gerald N. Pellegrini appeals the decisions of the United States District Court for the District of Massachusetts granting Analog Devices, Inc.’s (“Analog”) motion for sanctions, denying Mr. Pellegrini’s request for sanctions, and denying Mr. Pellegrini’s requests to amend the complaint. We affirm

. BACKGROUND In August 2002, Mr. Pellegrini sued Analog in the United States District Court for the District of Massachusetts alleging infr ingement of U.S. Pat ent No. 4,651,069 (“’069

∗ Honorable James T. Zagel, District J udge, United States District Court for the Northern District of Illi nois, sitting by designation.Patent”). Mr. Pellegrini alleged that some of Analog’s chips, its “ADMC chips,” infringe

the ’069 Patent claims directed to moto r drive circuits when combined with other components in a brushless motor. Pursuant to an agreement of the pa rties, the district court, early in the case, allowed limited disco very and cross-motions for partial summary judgment addressing the issue of whether Analog’s accused ADMC chips manufactured outside the United States and never shipped to or from the United St ates infringed the ’069 Patent under 35 U.S.C. § 271(f). The district court noted that [a]t the time, it was clear to both parties and the court that any ADMC chips manufactured outside of the United States but sold to customers inside the United States -- were minute in number and any possible recovery, even if infringement were proven, would be minuscule. Indeed, Pellegrini represented both to the court and to Analog that if Analog prevailed on the § 271(f) issue, he woul d voluntarily dismiss the remainder of the case. Pellegrini v. Analog Devices, Inc. , No. 02-CV-11562, 2006 U.S. Dist. LEXIS 726, at *2 (D. Mass. Jan. 11, 2006) (“ Jan. 2006 Order ”). In May 2003, the district court grant ed Analog’s motion for partial summary judgment of noninfringement, dismissing Mr. Pe llegrini’s claims under § 271(f) regarding Analog’s chips manufactured and sold entir ely outside of the Un ited States. In September 2003, final judgment was entered pursuant to Fed. R. Civ. P. 54(b), and the remaining claims were stayed pending appeal. In July 2004, this court affirmed. Pellegrini v. Analog Devices, Inc. , 375 F.3d 1113, 1118-19 (Fed. Cir. 2004). Thereafter, Mr. Pellegrini returned to the district court, but he did not voluntarily dismiss his remaining claims. Instead, he sought leave from the district court to amend his complaint in order to assert additional cl aims. At a status conference in January 2005, pursuant to an agreement of the parties, Mr. Pellegrin i was given until March 1, 2005 to “provide evidentiary support underlyi ng the good faith basis for his remaining

2008-1091 2allegations of patent infringement.” See Jan. 2006 Order , at *3. When he failed to do so, Analog filed a motion for sanctions, claimi ng that “Pellegrini violated Rule 11 by accusing Analog of inducing infringement under 35 U.S.C. § 271(b) without having ‘evidentiary support’ of direct infringement by Analog’s customers.” On January 11, 2006, the district court granted Analog’s moti on for Rule 11 sanctions and dismissed Mr. Pellegrini’s remaining claims. Jan. 2006 Order . Mr. Pellegrini appealed. We have jurisdiction pursuant to 28 U.S.C. §1295(a)(1).

DISCUSSION

A. Standard of Review We apply the law of the regional circuit in wh ich the district court sits in review of the court’s decisions regarding s anctions and requests to amend. See Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc. , 381 F.3d 1111, 1124 (Fed. Cir. 2004) (providing that a district court’s denial of a motion to amend a complaint “is a nonpatent matter where we apply the law of the circui t in which the district court sits”); Phonometrics, Inc. v. Economy Inns of Am. , 349 F.3d 1356, 1361 (Fed. Cir. 2003) (“We apply regional circuit law when reviewing t he imposition of Rule 11 sanctions.”). Applying the standard that would be applied in the First Circuit, we review for an abuse

of discretion the district court’s decisi ons granting Analog’s motion for sanctions, denying Mr. Pellegrini’s request for sanctions , and denying Mr. Pellegrini’s requests to amend the complaint. See Torres-Alamo v. Puerto Rico , 502 F.3d 20, 25 (1st Cir. 2007) (“We review the district court’s denial of Appellant’s motion to amend for abuse of discretion.”); Anderson v. Beatrice Foods Co. , 900 F.2d 388, 393 (1st Cir. 1990) (“It is axiomatic that, ‘absent abuse of discretion, we will not disturb a district court’s choice of

2008-1091 3sanctions.’” (quoting Fashion House, Inc. v. K Mart Corp. , 892 F.2d 1076, 1081 (1st Cir. 1989))). The First Circuit has explained that “[a]buse [of discretion] occurs when a material factor deserving signi ficant weight is ignored, w hen an improper factor is relied upon, or when all proper and no improper factors are assess ed, but the court makes a serious mistake in weighing them.” Anderson , 900 F.2d at 394 (quoting Fashion House , 892 F.2d at 1081). B. Analog’s Motion for Sanctions As previously discussed, the district court granted Analog’s motion for Rule 11 sanctions, concluding that Mr. Pellegrini “fa iled to demonstrate any factual basis upon which to claim direct infringement of the ’ 069 by Analog customers in the United States,”

and that he “failed to conduct a sufficiently reasonable pre-fili ng inquiry” in violation of Fed. R. Civ. P. 11(b)(3). Jan. 2006 Order , at*11. The district court directed Analog to submit a bill of reasonable attorney fees and costs accrued since January 2005, for determination of an appropriate award of sanctions. In February 2006, Analog requested $217,503.14 in attorney fees and costs. Mr. Pellegrini, who appeared pro se in the case, opposed the requested amount of f ees and costs, arguing that they were both unreasonable and beyond that which he could afford. 1 The district court ordered Mr. Pellegrini to submit doc umentation regarding his financ ial circumstances and ability to pay the attorney fees and costs. Thereafter, upon the re commendation of the

1 The district court noted that, “[ a]lthough Pellegrini may be appearing pro se, he has apparently received assistance from law firms throughout the litigation. ( See Appearance of Thomas C. O’Konski, Esq ., Docket No. 63, June 22, 2005; Def.’s Mot., at 7 n.4).” Jan. 2006 Order , at *10.

2008-1091 4magistrate judge who held an evidentiary hear ing on the matter, the district court ordered Mr. Pellegrini to pay a sanc tion in the amount of $20,000. On appeal, Mr. Pellegrini claims that the district court made several errors in granting Analog’s motion for sanctions. His arguments include claims that the district court erred in finding Analog’s motion for sanc tions to be timely and that it erred in determining that he failed to demonstrate any fa ctual basis to support a claim of direct infringement in the United St ates and that he failed to per form a reasonable pre-filing inquiry. First, as to the timeliness of Analog’s motion for sanctions, the district court noted that “Analog had no reason to challenge the good-faith basis of Pellegrini’s pending claims while the extraterritorial infringement claims were being separately litigated and appealed, since Pellegrini maintained throughout that he would voluntarily dismiss the pending claims if Analog prevailed.” Jan. 2006 Order , at *10. Analog did not receive notice that Mr. Pellegrini intended to pursue the pending claims, despite being unsuccessful on appeal, until January 2005. T hen, pursuant to an agreement of the parties, Mr. Pellegrini was given until March 1, 2005 to demonstrate an evidentiary basis for the pending claims. Analog f iled its motion for sanctions when Mr. Pellegrini failed to do so within the agreed timeline. In light of the foregoing, we concl ude that the district

court did not abuse its discretion in findi ng that Analog’s motion for sanctions was timely. Second, as the district court not ed, this court has explained that [i]n bringing a claim of infringement, the patent holder, if challenged, must be prepared to demonstrate to both t he court and the alleged infringer exactly why it believed before filing the claim that it had a reasonable chance of proving infringement. Failure to do so should ordinarily result in

2008-1091 5the district court expressing its br oad discretion in favor of Rule 11 sanctions, at least in the absence of a sound excuse or considerable mitigating circumstances. View Eng’g, Inc. v. Robotic Vision Sys., Inc. , 208 F.3d 981, 986 (Fed. Cir. 2000). On appeal, Mr. Pellegrini points to several pieces of evidence that he claims the district court either misunderstood or ignored in det ermining that he failed to demonstrate a sufficient factual basis to support a claim of di rect infringement in t he United States and that he failed to perform a reasonable pre-fili ng inquiry. For example, Mr. Pellegrini argues that, inter alia, an articl e written by Analog representativ es is “sufficient pre-filing evidence,” claiming that [t]he fact that this Article was avail able worldwide is itself circumstantial evidence of direct infringement since: (1) it is specifically intended to induce customers worldwide to use its EKE sensorless motor control with its ADMC chips, and (2) there is more than a “reasonable chance” that someone in the United States practi ced the EKE motor control described in the Article. In light of the record, we conclude that Mr. Pellegrini fa iled to demonstrate that the district court applied an incorrect legal test or made a serious mistake regarding a material factor in determining that the Analog article was not sufficient pre-filing

2008-1091 6evidence. 2 Likewise, we have considered all of Mr. Pellegrini’s other arguments regarding the purported factual basis for his claims and we conclude that the district

court did not abuse its discret ion in finding that he “failed to demonstrate any factual basis upon which to claim direct infringement of the ’069 by Analog customers in the United States,” and that he “failed to conduc t a sufficiently reasonable pre-filing inquiry” in violation of Fed. R. Civ. P. 11(b)(3). Jan. 2006 Order , at *10-11.

We defer to the district court’s discreti on as to whether to sanction a litigant who continues to pursue claims wit hout an evidentiary basis, particularly where said litigant previously told the district court that he would voluntarily dismiss these claims after his first unsuccessful appeal to this court. 3 “Because the imposition of sanctions is

2 Mr. Pellegrini argues that the distri ct court’s analysis was flawed because, inter alia, the district court incorrectly st ated that Analog’s article did not mention the ADMC chips. Analog acknowledges that the district court incorre ctly stated that the Analog article did not mention the ADMC chip s. Analog submits, however, that “[t]his oversight is immaterial” because “[t]he relev ant aspect of the dist rict court’s analysis— that the article does not evi dence direct infringement by a third party in the United States—was based on the court’s determinati on that the article does not discuss any Analog customers or any activities of any such customer in the Unit ed States.” We note that the district cour t agreed with Analog that the article is “devoid of any reference to a brushless D.C. motor made, used, sold, offe red for sale, or impor ted in the United States by one of A nalog’s customers.” Jan. 2006 Order , at *6. Thus, we are not persuaded by Pellegrini’s arguments that the district court’s in correct statement that the article did not mention the ADMC chips was ma terial to its conclusion that he failed to demonstrate any factual basis upon which to claim direct infringement by Analog customers in the United States.

3 On appeal, Mr. Pellegrini denies that he ever represented to the court that he would voluntarily dismiss his remaining cl aims if he did not pr evail on the threshold issue in his first appeal. Mr. Pe llegrini claims that the district court relied solely on Analog’s version of the facts as to this poin t. We note, however, that the district court stated that, “Pellegrini represented both to the court and to Analog that if Analog prevailed on the § 271(f) issue, he would voluntarily dismiss t he remainder of the case.” Jan. 2006 Order , at *2 (emphasis added). Thus, the dist rict court did not rely solely on Analog’s version of the facts, as it appears that Mr. Pellegr ini made the disputed representation directly to the court (in addi tion to Analog). We are not persuaded by Mr. Pellegrini’s arguments to the contrary.

2008-1091 7peculiarly within the province of the court in which the challenged conduct occurs, a party complaining to an appellate tribunal in respect to trial-level sanctions ‘bears a heavy burden of demonstrating that the trial judge was clearly not justified in entering [the] order.’” Anderson , 900 F.2d at 393 (quoting Spiller v. U.S.V. Labs., Inc. , 842 F.2d 535, 537 (1st Cir. 1988)). We c onclude that Mr. Pellegrini fail ed to demonstrate that the district judge was “clearly not ju stified” in the sanction awarded. C. Mr. Pellegrini’s Motion for Sanctions Mr. Pellegrini claims that the district court abused its discretion in denying his request for sanctions against Analog. Mr. Pell egrini’s request for sanctions is primarily based on what he views to be legally and factually erroneous arguments made by Analog in pleadings to the district court. For example, one of the factual disputes involves the following representation made by Mr. Pellegrini to the district court: “The payment to Plaintiff from the settlement with Texas Instruments . . . was used to pay litigation costs (approx imately fifty percent) and forty percent of the remainder went to Mr. Herring.” Characterizing the foregoing representation, Analog argued to the district court that Mr. Pellegrini misrepresented his financial status to the court by, inter alia, “represent[ing] to the Court that he received only ten percent of the TI settlement money.” On appeal, Analog submits that it read the statement “forty percent of the remainder” to refer to forty percent of the total settlement, rather than forty percent of the amount remaining after paying litigation fees (i.e., twenty percent of the to tal settlement, calculated as forty percent of the remaining fifty percent of the settlement). Even a ssuming that Analog’s interpretation of Mr.

2008-1091 8Pellegrini’s representation was erroneous, howev er, the district court did not abuse its discretion in deciding not to sanction Analog for this interpretation. We have considered the other legal and fact ual disputes cited in support of Mr. Pellegrini’s request for sanctions and, even though he may have ultimately prevailed in many of the cited factual and legal disagreements, he has not shown that the district court abused its discretion in refusing to sanction Analog for its contrary positions. D. Mr. Pellegrini’s Request to Amend his Complaint In March 2005, Mr. Pellegrini requested permission to supplement his pleadings

to include a claim of infri ngement under 35 U.S.C. § 271(f) alleging that Analog supplied

“software code” from the United States fo r combination outside the United States. Essentially, Mr. Pellegrini sought to claim that Analog infringed the ’069 Patent under § 271(f) by allegedly supplying software from the United States to be downloaded on foreign-made chips and then combined with other components in a brushless motor. In April 2005, the district court denied this reques t as “futile.” In May 2007, Mr. Pellegrini requested permission to file an amended complain t to include a claim of infringement under § 271(f) alleging that Analog supplied “computer-readable software” from the

United States for combination outside of the Un ited States. In Oct ober 2007, the district court denied this request as both “futile and late.” Analog argued to the district court, as it does on appeal, that Mr. Pellegrini’s requests to amend to add software-based § 271(f) claims are “futile ” because they are barred by issue preclusion, claim preclusion, and the law of the case doctrine. We have previously stated that

the court is entitled to assume that an appellant has raised all issues it deems important against a judgment appealed from. An issue that falls

2008-1091 9within the scope of the judgment appealed from but is not raised by the appellant in its opening brief on appeal is necessarily waived. Unless remanded by this court, all issues within the scope of the appealed judgment are deemed inco rporated within the mandate and thus are precluded from further adjudication. Engel Indus., Inc. v. Lockformer Co. , 166 F.3d 1379, 1383 (Fed. Cir. 1999). In his prior appeal of the district court’s grant of par tial summary judgment of non-infringement under § 271(f), Mr. Pellegrini fa iled to argue that the supply of software was among the actions allegedly taken by Analog in the United States that could resu lt in liability under § 271(f) relating to the accused foreign-made chips. Analog argues that Mr. Pellegrini’s reques ts were futile because his “proposed amendments sought to allege § 271(f) infringement with respect to the same software residing on the same chips already found by this Cour t and the district court to not infringe as a matter of law under the same statutory provision.” It also argues that Mr. Pellegrini’s attempt to distinguish its request ed § 271(f) claims relating to software from those relating to the accused foreign-made chips “does not make sense” because “[t]he Analog software referenced by Pellegrini is intended for use with Analog’s ADMC chips.” Mr. Pellegrini argues that his requests to amend were not futile because [t]he only issue that was adjudicated by t he district court and this Court was whether Analog’s generic (i .e., non-application specific and programmable) ADMC chips that were manufactured outside the United States were supplied in or from the Un ited States under 35 U.S.C. section 271(f). The issue of whether Anal og’s “computer-readable software”, developed inside the United States , was supplied, or caused to be supplied, in or from t he United States is clearly a completely separate issue and is the issue raised in Pellegrini’s amended complaint. Additionally, Mr. Pellegrini seemingly attempts to justify his failure to raise this argument during his prior appeal by stating that t he March 2005 request was “filed shortly after (fifteen days) the law came into effect in [ Eolas Technologies Inc. v. Microsoft Corp. ,

2008-1091 10399 F.3d 1325 (Fed. Cir. 2005)] that ‘software code’ may be a ‘proper subject of relief’ under section 271(f).” Contrary to Mr. Pellegrini’s suggestion, however, the Eolas decision did not change the law regarding whet her software qualifies as a “component” under § 271(f); rather, it interpreted what § 271(f) has always meant. See id. at 1338-40 (interpreting § 271(f) to “decide whether software c ode made in the United States and exported abroad is a ‘component[] of a patented in vention’ under section 271(f)”); cf. Rivers v. Roadway Express , 511 U.S. 298, 312-13 (1994) (“A judicial construction of a statute is

an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construc tion.”). While Mr. Pellegrini may not have previously thought that a copy of software may, in some circumstances, be considered a “component” for purposes of § 271(f), that does not excuse his failure to make that argument to the district court or this cour t when he previously litigated his claim that Analog infringed under § 271(f) relating to t he combination of its foreign-made ADMC chips with other components in a brushless mo tor. As we have previously explained, [t]he scope of the issues presented to this court on appeal must be measured by the scope of the judgment appealed from, . . . not by the arguments advanced by the appellant. To hold otherwise would allow appellants to present appeals in a pi ecemeal and repeated fashion, and would lead to the untenable result that “a party who has chosen not to argue a point on a first appeal should st and better as regards the law of the case than one who had argued and lost.” Fogel v. Chestnutt , 668 F.2d 100, 109 (2d Cir. 1981). Engel Indus. , 166 F.3d at 1382. In light of the fo regoing analysis, we conclude that the district court did not err in dismissing Mr. Pellegrini’s March 2005 request to supplement

as “futile.”

2008-1091 112008-1091 12 Additionally, we conclude that the distri ct court did not abus e its discretion in refusing Mr. Pellegrini’s May 2007 request to amend as “late.” Mr. Pellegrini’s May 2007 request to amend was filed ov er two and a half years after this court affirmed the district court’s grant of partial summary judgment of non-infri ngement under § 271(f), and over two years after the district court denied his first request to bring a new § 271(f) claim alleging that Analog supplied software fo r the accused foreign-made chips. Mr. Pellegrini attempts to justify his failure to make the request to amend sooner by arguing that it was filed “immediately after (three days) when the law came into effect in [ Microsoft v. AT&T Corp. , 127 S. Ct. 1746 (2007)] that ‘computer-readable software’ may be a ‘proper subject of relief’ under sect ion 271(f).” We are not persuaded by Mr. Pellegrini’s argument t hat the timing of the Microsoft decision excuses his delay in making his May 2007 request to amend to add a new software-related § 271(f) claim, particularly where this request was made over tw o years after the district court rejected his attempt to add a similar software-relat ed § 271(f) claim. Because we affirm the

district court’s denial of the May 2007 request to amend as “late,” we need not address its finding that this request was also “futile.”

CONCLUSION For the aforementioned reasons, we conclude that the district court did not abuse its discretion by granting Analog’s motion fo r sanctions, denying Mr. Pellegrini’s request for sanctions, and denying Mr. Pellegrini’s requests to amend the complaint. Accordingly, we affirm.