In Patent Infringement Lawsuit, Sanctions Claims Fall Flat


The case is Dynamic Applet Technologies, LLC v. Mattress Firm, Inc. 17-cv-860 (E.D. Texas March 26, 2019).  Dynamic sued Mattress Firm for patent infringement. Mattress Firm filed counterclaims. Both sides moved for sanctions. Mattress Firm argued that Dynamic’s patent infringement claims were frivolous and brought in bad faith and merited Rule 11 sanctions. Dynamic moved for sanctions against Mattress Firm.

The Court, noting that it had not issued any dispositive rulings on any motions, denied both sanctions motions. The court found that there were non-frivolous claims of patent infringement asserted in the complaint. The explanation follows:

With respect to Defendants’ Motion for Sanctions (Dkt. 90) and Plaintiff’s Responsive Motion for Sanctions (Dkt. 96), there is nothing before the Court to indicate that sanctions under Federal Rule of Civil Procedure 11 are justified here. Rule 11 is inappropriate if there is a good faith basis to assert even a single claim of a patent. View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000) (“Rule 11 . . . must be interpreted to require the law firm to . . . apply the claims of each and every patent that is being brought into the lawsuit to an accused device and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent so asserted.”). The Court finds that Plaintiff’s overall pre-suit inquiry was reasonable and its conduct does not cross the Rule 11 sanctions threshold whereby “no reasonable litigant could believe it would succeed” on the merits. Raylon, LLC v. Complus Data Innovations, Inc., 700 F.3d 1361, 1368 (Fed. Cir.2012)iLor, LLC v. Google, Inc., 631 F.3d 1372, 1378 (Fed. Cir. 2011). Applying the same standard to Plaintiff’s Responsive Motion for Sanctions (Dkt. 96), the Court finds that Defendants have likewise not violated Rule 11. The Court is not charged with determining which party’s position is correct, but rather, is charged with determining whether a motion crosses the threshold of frivolousness such that no reasonable litigant could believe it would succeed. See Raylon v. Complus Data, 700 F.3d at 1368. Accordingly, no sanctions will be awarded to either party at this time. If appropriate, the parties may refile a motion for sanctions after the Court rules on the pending dispositive motions.

In other words, one party would have to obtain dismissal of one of the other party’s claims before it could move for sanctions. The sanctions motions here may prove meritorious at a later date if the court actually finds that one of the claims is frivolous or unfounded.

Ed Clinton, Jr.

The Clinton Law Firm

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