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

Heading: Analog’s Motion for Sanctions

Text: As previously discussed, the district court granted Analog’s motion for Rule 11 sanctions, concluding that Mr. Pellegrini “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 conduct a sufficiently reasonable pre-filing inquiry” in violation of Fed. R. Civ. P. 11(b)(3). Jan. 2006 Order, at. 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 fees and costs, arguing that they were both unreasonable and beyond that which he could afford. 1 The district court ordered Mr. Pellegrini to submit documentation regarding his financial circumstances and ability to pay the attorney fees and costs. Thereafter, upon the recommendation 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 . 2008-1091 4 magistrate judge who held an evidentiary hearing on the matter, the district court ordered Mr. Pellegrini to pay a sanction 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 sanctions to be timely and that it erred in determining that he failed to demonstrate any factual basis to support a claim of direct infringement in the United States and that he failed to perform 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 . Analog did not receive notice that Mr. Pellegrini intended to pursue the pending claims, despite being unsuccessful on appeal, until January 2005. Then, 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 filed its motion for sanctions when Mr. Pellegrini failed to do so within the agreed timeline. In light of the foregoing, we conclude that the district court did not abuse its discretion in finding that Analog’s motion for sanctions was timely. Second, as the district court noted, this court has explained that [i]n bringing a claim of infringement, the patent holder, if challenged, must be prepared to demonstrate to both the 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 5 the district court expressing its broad 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 determining that he failed to demonstrate a sufficient factual basis to support a claim of direct infringement in the United States and that he failed to perform a reasonable pre-filing inquiry. For example, Mr. Pellegrini argues that, inter alia, an article written by Analog representatives is “sufficient pre-filing evidence,” claiming that [t]he fact that this Article was available 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 practiced the EKE motor control described in the Article. In light of the record, we conclude that Mr. Pellegrini failed 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 6 evidence. 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 discretion 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 conduct a sufficiently reasonable pre-filing inquiry” in violation of Fed. R. Civ. P. 11(b)(3). Jan. 2006 Order, at -11. We defer to the district court’s discretion as to whether to sanction a litigant who continues to pursue claims without 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 district court’s analysis was flawed because, inter alia, the district court incorrectly stated that Analog’s article did not mention the ADMC chips. Analog acknowledges that the district court incorrectly stated that the Analog article did not mention the ADMC chips. Analog submits, however, that “[t]his oversight is immaterial” because “[t]he relevant aspect of the district court’s analysis— that the article does not evidence direct infringement by a third party in the United States—was based on the court’s determination that the article does not discuss any Analog customers or any activities of any such customer in the United States.” We note that the district court agreed with Analog that the article is “devoid of any reference to a brushless D.C. motor made, used, sold, offered for sale, or imported in the United States by one of Analog’s customers.” Jan. 2006 Order, at . Thus, we are not persuaded by Pellegrini’s arguments that the district court’s incorrect statement that the article did not mention the ADMC chips was material 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 claims if he did not prevail on the threshold issue in his first appeal. Mr. Pellegrini claims that the district court relied solely on Analog’s version of the facts as to this point. 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 the remainder of the case.” Jan. 2006 Order, at  (emphasis added). Thus, the district court did not rely solely on Analog’s version of the facts, as it appears that Mr. Pellegrini made the disputed representation directly to the court (in addition to Analog). We are not persuaded by Mr. Pellegrini’s arguments to the contrary. 2008-1091 7 peculiarly 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 conclude that Mr. Pellegrini failed to demonstrate that the district judge was “clearly not justified” in the sanction awarded.