Court Opinion

ID: 210715
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:15:38+00
Date Added: 2024-06-11T17:28:02.649918
License: Public Domain

Error: Expected the default config, but wasn't able to find it, or it isn't a Dictionary
                         NOTE: This order is nonprecedential.

 United States Court of Appeals for the Federal Circuit
                                       2007-1132

                                    EON-NET, L.P.,

                                                Plaintiff-Appellant,

                                          and

                    ZIMMERMAN, LEVI & KORSINSKY, L.L.P. and
                          JEAN-MARC ZIMMERMAN,

                                                Sanctioned Parties-Appellants,

                                           v.

                             FLAGSTAR BANCORP, INC.,

                                                Defendant-Appellee.

                                     ON MOTION

Before BRYSON, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and PROST, Circuit
Judge.

PROST, Circuit Judge.

                                       ORDER

       Eon-Net, L.P. et al. move for a stay, pending appeal, of execution of the

$141,984.70 sanctions judgment entered by the United States District Court for the

Western District of Washington, pending appeal. Flagstar Bancorp, Inc. opposes. Eon-

Net replies.

       Eon-Net sued Flagstar for infringement of its patent for an information processing

methodology. The district court granted Flagstar’s motion for summary judgment of

noninfringement, holding that “Eon-Net failed to come forward with any facts
demonstrating infringement, failed to properly identify products that might infringe its

‘697 Patent, failed to proffer a reasonable construction for its ‘697 Patent, and failed to

apply its construction to the allegedly infringing products.”

         Flagstar moved for sanctions, arguing that Eon-Net failed to conduct an

adequate prefiling investigation and that its claim for infringement was baseless. The

district court granted the motion and awarded Flagstar its reasonable attorneys fees and

costs.       The district court entered judgment against plaintiff’s counsel, Jean-Marc

Zimmerman, and the law firm of Zimmerman, Levi & Korsinsky, LLP in the amount of

$141,984.70. Eon-Net appealed and Zimmerman and the law firm filed an amended

notice of appeal to add their names as appellants. *

         Zimmerman and the law firm assert that they are unable to post a supersedeas

bond and request that this court grant a stay, pending appeal, of execution of the

judgment without requiring a bond. To obtain a stay, pending appeal, a movant must

establish a strong likelihood of success on the merits or, failing that, nonetheless

demonstrate a substantial case on the merits provided that the harm factors militate in its

favor. Hilton v. Braunskill, 481 U.S. 770, 778 (1987). In deciding whether to grant a stay,

pending appeal, this court "assesses the movant's chances of success on the merits and

weighs the equities as they affect the parties and the public." E. I. du Pont de Nemours &

Co. v. Phillips Petroleum Co., 835 F.2d 277, 278 (Fed. Cir. 1987). See also Standard

Havens Prods. v. Gencor Indus., 897 F.2d 511 (Fed. Cir. 1990).

         *
             Based upon the papers submitted with Eon-Net’s motion, this court
previously questioned whether Zimmerman and the law firm had timely appealed.
Because the district court’s judgment was “entered” on December 20, 2006,
Zimmerman and the law firm timely appealed by filing an amended notice of appeal on
January 19, 2007.

2007-1132                                   -2-
       In its order granting summary judgment of noninfringement, the district court held

that Eon-Net’s complaint was virtually identical to numerous other complaints “filed

against parties with greatly disparate business operations.” The district court noted that

“Eon-Net followed service of the complaint with a cheap offer of settlement.” After

Flagstar showed Eon-Net that its software was from a licensee to Eon-Net’s patent, and

after Flagstar moved for summary judgment of noninfringement, Eon-Net identified

other allegedly infringing software that was not identified in its complaint. Indeed, the

district court held, no infringing product was identified in the complaint. The district

court held that Eon-Net based its infringement allegation on an investigation of

Flagstar’s website but that “[c]ounsel did not obtain copies of the allegedly infringing

software, was unable to determine how the web page worked, and did not evaluate the

code; nevertheless, he concluded that the ‘website’ infringed.”         Regarding the new

assertion of infringement by additional software, the district court held that Eon-Net

presented no evidence or argument to support its position.

       In its order granting Flagstar’s motion for sanctions, the district court held that

Eon-Net failed to conduct an adequate prefiling investigation and that Flagstar’s post-

complaint investigation did not cure the failure to investigate before filing. The district

court held that not only did Eon-Net fail to obtain or inspect copies of the software, it

failed to even identify the software. The district court also found insufficient Eon-Net’s

evaluation of claim construction and stated that Eon-Net did not “explain how it

concluded that the ‘697 Patent could be construed to cover web-based forms.” The

district court held that “Eon-Net’s general identification of a web site and its HTML forms

is insufficient to constitute the identification of infringing technology as it relates to the

2007-1132                                   -3-
‘697 Patent.” The district court also found that “indicia of extortion are present in this

case” and that “Eon-Net offers a nuisance settlement at the outset to avoid a hard look

at the merits of its infringement claims.”

        Based upon the papers submitted, and without prejudicing the ultimate

disposition of this case by a merits panel, Eon-Net has not met its burden of

establishing a strong likelihood of success or that the harm factors weigh in its favor.

Hilton, 481 U.S. at 778. Concerning any harm to itself, the movants assert without

support that there has been damage to counsel’s reputation and that “Eon-Net’s

counsel will suffer irreparable harm absent a stay because the monetary sanction of

$141,984.70 is substantial and Eon-Net’s Counsel and his relatively small law firm will

endure significant financial hardships if the imposition of monetary sanctions is not

stayed pending appeal.” Thus, the movants have failed to meet their burden to obtain a

stay.

        Accordingly,

        IT IS ORDERED THAT:

        (1)   The motion is denied.

        (2)   The revised official caption is reflected above.

                                                   FOR THE COURT

        March 19, 2007                              /s/ Sharon Prost
            Date                                   Sharon Prost
                                                   Circuit Judge

cc:     Jean-Marc Zimmerman, Esq.
        Charles K. Verhoeven, Esq.

s8

2007-1132                                    -4-