Opinion ID: 209865
Heading Depth: 2
Heading Rank: 3

Heading: Mr. Pellegrini’s Motion for Sanctions

Text: Mr. Pellegrini claims that the district court abused its discretion in denying his request for sanctions against Analog. Mr. Pellegrini’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 (approximately 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 total settlement, calculated as forty percent of the remaining fifty percent of the settlement). Even assuming that Analog’s interpretation of Mr. 2008-1091 8 Pellegrini’s representation was erroneous, however, the district court did not abuse its discretion in deciding not to sanction Analog for this interpretation. We have considered the other legal and factual 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 infringement under 35 U.S.C. § 271(f) alleging that Analog supplied “software code” from the United States for 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 request as “futile.” In May 2007, Mr. Pellegrini requested permission to file an amended complaint 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 United States. In October 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 9 within 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 incorporated 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 partial summary judgment of non-infringement under § 271(f), Mr. Pellegrini failed to argue that the supply of software was among the actions allegedly taken by Analog in the United States that could result in liability under § 271(f) relating to the accused foreign-made chips. Analog argues that Mr. Pellegrini’s requests 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 Court 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 requested § 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 the 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 United States under 35 U.S.C. section 271(f). The issue of whether Analog’s “computer-readable software”, developed inside the United States, was supplied, or caused to be supplied, in or from the 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 the March 2005 request was “filed shortly after (fifteen days) the law came into effect in [Eolas Technologies Inc. v. Microsoft Corp., 2008-1091 10 399 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 whether 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 code made in the United States and exported abroad is a ‘component[] of a patented invention’ 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 construction.”). 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 court when he previously litigated his claim that Analog infringed under § 271(f) relating to the combination of its foreign-made ADMC chips with other components in a brushless motor. 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 piecemeal 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 stand 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 foregoing analysis, we conclude that the district court did not err in dismissing Mr. Pellegrini’s March 2005 request to supplement as “futile.” 2008-1091 11 Additionally, we conclude that the district court did not abuse its discretion in refusing Mr. Pellegrini’s May 2007 request to amend as “late.” Mr. Pellegrini’s May 2007 request to amend was filed over two and a half years after this court affirmed the district court’s grant of partial summary judgment of non-infringement 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 for 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 section 271(f).” We are not persuaded by Mr. Pellegrini’s argument that 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 two years after the district court rejected his attempt to add a similar software-related § 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.”