Posts Tagged: "sanctions"

There is a reason many stakeholders believe the Patent Trial and Appeal Board (PTAB) has been weaponized against patent owners. From the very outset, the first Chief Judge of the PTAB famously, or infamously, stated that if the tribunal was not doing some “death squadding” they were not doing their jobs; a rebuke to then Federal Circuit Chief Judge Randall Rader’s observation that the PTAB was nothing more than a death squad for patents. But from those early days where patent owners were not even allowed to submit evidence to rebut a petition at the institution stage, to the unbelievable lapse in ethical judgment of one former PTAB judge, there have been numerous reasons to question the tribunal.

In June of this year, United States Patent and Trademark Office (USPTO) Director Kathi Vidal replied to a late April request by Senators Thom Tillis (R-NC) and Mazie Hirono (D-HI) for answers to a number of questions surrounding abuse of the inter partes review (IPR) system, explaining that she was working on the problem. Now, Vidal has sent a follow-up letter providing more detail on two of the questions raised in the letter, specifically with respect to the USTPO’s authority to issue sanctions for bad faith petitions. In addition to providing statistics on the Patent Trial and Appeal Board’s use of sanctions since the America Invents Act (AIA) was passed, Vidal also said she plans to seek stakeholder input to explore further options for addressing misconduct.

On Wednesday, August 3, the U.S. Court of Appeals for the Eleventh Circuit affirmed a district court’s ruling against Vital Pharmaceuticals, Inc. (VPX) in the form of sanctions for violating its discovery obligations in a trade dress dispute with Monster Energy Company. The Eleventh Circuit also denied Monster’s motion for sanctions in the form of attorney’s fees and double costs.

As horrifying images continue to flow from Ukraine, politicians in the United States and Europe find themselves increasingly pressured to expand economic sanctions against Russia. On April 6, 2022, the White House announced a prohibition on new investment in Russia by any U.S. person. This move has undoubtedly been a factor in the stunning exodus of U.S. companies from the region, as it leaves management teams in legal limbo as to whether maintaining current facilities—or even repairing equipment—could be considered a prohibited “investment.”

The U.S. Patent and Trademark Office today announced in an unpublished Federal Register Notice that it has established an administrative process for investigating submissions filed with the USPTO in trademark matters that appear to violate the Trademark Rules of Practice. The announcement comes as part of the USPTO’s broader effort to improve the integrity of the U.S. trademark register amid a surge in fraudulent filings, largely from China.

On Friday, December 10, the United States Patent and Trademark Office (USPTO) issued a “Show Cause Order” imposing sanctions against Huanyee Intellectual Property Co., Ltd. and its Executive Director, Yusha Zhang, for violations of the USPTO’s trademark rules of practice relating to improper trademark submissions. The 198-page Order, comprised mostly of an exhibit listing all of the company’s trademark filings, indicates that the Respondents named in the Order “have filed more than 15,000 trademark matters before the USPTO” and “engaged in the unauthorized practice of law, provided false domicile information for applicants, impermissibly entered the signature of the named signatory on declarations and verifications, and violated other USPTO Rules and the USPTO’s website terms of use.”

On August 22nd, an order was entered in the inter partes review (IPR) proceedings currently ongoing between between VoIP-Pal and Cupertino, CA-based consumer device giant Apple Inc. The order removed the panel of administrative patent judges (APJs) that had been adjudicating the IPR, replacing them with Deputy Chief APJ Scott Boalick and Vice Chief APJs Jacqueline Bonilla and Michael Tierney. This is the second time the panel of APJs has been completely changed in this particular IPR proceeding. Originally, the panel had consisted of APJs Barbara Benoit, Lynne Pettigrew and Stacy Beth Margolies. Although no explanation was provided (as is typical with the PTAB) the panel was changed a few weeks after we reported that APJ Margolies had previously represented Apple in patent infringement proceedings in U.S. district court.

Several weeks ago, the House Small Business Committee held a hearing titled ZTE: A Threat to America’s Small Businesses to explore the economic and national security threats posed by the Chinese telecommunications equipment and systems firm ZTE. The day’s discussion focused on ways that American small businesses could protect themselves from ZTE specifically and Chinese-backed entities more generally as well as the mixed signals being sent by the administration of President Donald Trump regarding ZTE.

And yet, despite this apparent vindication of VoIP-Pal’s patents against the strongest of odds in an executive branch tribunal where APJ panels are stacked in the interest of achieving policy objectives, VoIP-Pal and its current CEO Emil Malak still find themselves to be stuck in patent purgatory over a sanctions motion which the PTAB hasn’t decided for more than half a year… The fact that ex parte communications have caused such a stir in Apple’s IPRs against VoIP-Pal is very interesting given how the PTAB has reacted to allegations of such communications in the past. Anyone who followed the St. Regis Mohawk Tribe’s case at the PTAB will likely remember that the agency revoked the tribe’s ability to file motions in response to a request for discovery on the potential of political pressure caused by ex parte communications between APJs assigned to the case and their superiors at the PTAB. The PTAB denied that motion and restricted the St. Regis tribe’s ability to file motions within a month of St. Regis’ discovery request. That the PTAB has dragged its feet for more than six months on Apple’s request for sanctions on ex parte communications without the same level of punitive response is very telling.

On December 1st, Niwot, CO-based shoe manufacturer Crocs, Inc. (NASDAQ:CROX) filed a motion for sanctions against Las Vegas, NV-based rival firm USA Dawgs Inc., which outlined a series of harassing legal moves in which Dawgs has engaged in recent years. Crocs is asking the District of Nevada to award Crocs costs and attorneys’ fees incurred by a lawsuit which Crocs alleges that Dawgs has pursued in bad faith.

Congressman Lamar Smith (R-TX), has sponsored a bill to amend Rule 11 — H.R. 720. The changes are made to remove the safe harbor provision and make sanctions mandatory. This bill has passed the House. A companion bill — S. 237 — has been introduced in the Senate with no action yet being taken… The proposed changes to Rule 11, if enacted, will have an impact of keeping unrepresented parties out of courts, and make the U.S. courts even more inefficient. It will have an adverse impact on patent owners in patent cases… Given the nature of patent litigation, experience teaches that it is inevitable that whenever a case is disposed of the winner will almost certainly try to shift litigation fees by any means possible, including by invoking Rule 11 sanctions. The parties with strong financial powers will have better chances to get sanction awards.

The Court upheld the district court’s award of attorneys’ fees and costs, finding ample support in the record for Walker’s vexatious conduct, and no legitimate reason for Walker to continue litigating after the Agreement. Further, Walker’s arguments on appeal mischaracterized clear authority on the courts’ ability to award attorneys’ fees. The Court also sanctioned Walker and his attorneys for pursuing a frivolous appeal and awarded attorneys’ fees and costs.

After much public comment and debate, new changes to rules for post-grant administrative trials before the Patent Trial and Appeal Board (PTAB) go into effect on May 2, 2016. These final rule changes, which are the second set of changes since the America Invents Act (AIA) went into effect, are the culmination of a series of PTAB listening tours and public comments to the rule change proposals published in August 2015. Among other things, the new rules are intended to address concerns that patent owners were at a disadvantage in responding to patent challenges, particularly during the pre-institution stage of a PTAB proceeding. The rule changes also introduce certification requirements for documents filed with the PTAB, confirm the broadest reasonable interpretation (BRI) standard, as well as exceptions to the BRI standard for expiring patents, and adopt an appellate-style word count limit for major briefs.

How does one deal with a public shaming? Nothing I learned in school or during 35 years of practice prepared me for this. But I had to take affirmative action to preserve my sanity and some modicum of dignity. The first thing I did was to take steps to avoid awkward encounters. In that vein, I withdrew from the Linn Inn of Court and the Union League Club, and skipped my law school reunion. Some friends criticized those decisions, but I needed to retreat and lick my psychic wounds.