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Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Tag Archives: Rule 11

Rule 11 Sanctions for Failing to Purchase the Accused Product

Posted in Trial

Smart Options, LLC c. Jump Rope, Inc., No. 12 C 2498, Slip Op. (N.D. Ill. Feb. 11, 2013) (St. Eve, J.).

Judge St. Eve granted defendant Jump Rope’s Fed. R. Civ. P. 11 motion for sanctions in this patent case.  The Court previously granted Jump Rope summary judgment of noninfringement and plaintiff Smart Options appealed to the Federal Circuit.  As an initial matter, the Court held that while Smart Options’ notice of appeal divested the Court of jurisdiction generally, the Court retained jurisdiction over Jump Rope’s Rule 11 motion.

The Court previously held that Jump Rope did not infringe because it did not sell options to purchase items at a later date.  Instead, Jump Rope sold the immediate ability to go to the front of a line for an event or location.  Smart Options could have ascertained that inexpensively by downloading Jump Rope’s free app and purchasing a jump.  Instead, Smart Options provided generalized descriptions of it investigations, including reviewing Jump Rope’s website Terms of Use.  And Smart Options’ patent claims require paying an “option fee” to acquire an “option” to purchase something.  Furthermore, faced with Jump Rope’s explanation that it did not infringe at the outset of the case via Jump Rope’s Rule 11 motion, Smart Options continued to prosecute its case and still did not buy a “jump.”

Smart Options’ reliance upon Judge Lefkow’s constructions in a similar case did not protect Smart Options.  Lefkow did not construe “option.”  And the construction of “option” Smart Options allegedly used as part of its Rule 11 investigations was inexplicably different than the construction Smart Options advanced before the PTO and before Judge Lefkow.

The Court, therefore, granted Jump Rope’s Rule 11 motion and awarded Jump Rope its reasonable attorney’s fees and costs for defending the case and for the Rule 11 motion giving Jump Rope leave to file a petition setting out and supporting its fees and costs.


Case Dismissed for Rule 22 Violations

Posted in Trial

Brown-Younger v. LULU Press, Inc., No. 12 C 1979, Slip Op. (N.D. Ill. various dates) (Shadur, Sen. J.).

Judge Shadur issued a series of opinions in this copyright case.  The following were of particular note:

  • Plaintiff’s motion for criminal sanctions was denied for failure to comply with LPR 5.2 because plaintiff’s motion was singlespaced.  Furthermore, it was the U.S. Attorney’s role to seek criminal sanctions, not the Court’s.
  • The Court ordered plaintiff to show cause why plaintiff’s complaint should not be dismissed for Rule 11 violations.
  • Because plaintiff did not meet the Court’s deadline to show cause why Rule 11 had not been violated, the Court dismissed the case.  The Court also invited defendants to seek other sanctions that they may believe were appropriate.
  • The Court would not recuse itself and was not required to by plaintiff’s request.

Repeated Improper Filings May Lead to Dismissal

Posted in Jurisdiction

Brown-Younger v. Lulu.com, No. 12 C 1979, Slip Op. (N.D. Ill. June 19, 2012) (Shadur, Sen. J.).

Judge Shadur sua sponte issued an order requiring pro se plaintiff to appear and answer the Court’s questions regarding whether plaintiff’s filings met the Fed. R. Civ. P. 11(b) requirement of objective good faith based upon a series of events in the case including:

  • Plaintiff brought her copyright infringement claims despite an arbitration clause in its publishing agreement with defendant Lulu.com.  And plaintiff failed to squarely answer why the arbitration claim did not govern the case.
  • Plaintiff “lash[ed]” out at Lulu.com seeking a stay pending an FBI investigation and plaintiff’s appointed counsel which counsel refuted “chapter and verse.”
  • Plaintiff improperly sought continued sanctions against defendant Apple.



Court Reminds Plaintiff of Rule 11 Obligation in Adult Movie Download Case

Posted in Discovery

Hard Drive Prods. v. Does 1-48, No. 11 C 9062, Slip Op. (N.D. Ill. June 14, 2012) (Kim, Mag. J.).

Judge Kim denied two Doe defendants’ motions to quash subpoenas to their Internet service providers in this copyright case involving BitTorrent downloads of adult movies as part of a “swarm.”  The first motion was denied because it was filed anonymously by a pro se person identified by an IP address and signed with an “X.”  The anonymous filing did not meet the Fed. R. Civ. P. 11 requirement for a signed pleading.  The motion was, therefore, dismissed with leave to refile either using the Doe’s name or anonymously via counsel.

The second Doe defendant argued that its First Amendment rights to anonymous internet speech were being violated.  But there was no First Amendment right to copyright infringement.  Furthermore, there was no reasonable expectation of privacy in Doe’s subscriber information.  Finally, in light of the evidence that Doe did not commit infringing acts and the Court’s concern about Hard Drive Productions’ (“HDP”) tactics having filed 118 lawsuits against 15,000 Does the Court cautioned HDP to be “mindful” of Doe’s evidence and to consider “long and hard” before moving forward against this Doe so as to comport with Rule 11(b).

Congress Considers Changes to Rule 11 Sanctions

Posted in Federal Rules

Congress is currently considering revision Rule 11 sanctions, including:

  1. Removing the existing 21 day "safe harbor" provision which requires that you send your motion to the opposing party and give them 21 days to remedy the alleged Rule 11 violation before filing the motion with the Court; and
  2. Making an award of fees and costs related to a winning Rule 11 motion automatic, instead of discretionary.

The Federal Bar Association (of which I am a member) has published a call for comment that sets out both sides of the issue well.  It follows below.  I can understand the inclination to make fees and costs automatic, but the 21 day "safe harbor" serves a valuable gatekeeping role.  It avoid clogging the federal courts with Rule 11 motions that could be fixed with notice of the alleged deficiency.

Proposed Amendments in H.R. 966

The H.R. 966 bill would repeal amendments that the Judicial Conference of the United States proposed for adoption effective in 1993, thereby in part reinstating an earlier version of Rule 11 that had been in force between 1983 and 1993. It would also add a new provision for punitive monetary sanctions to be paid into court.

Under the bill, there would no longer be a “safe harbor” provision that allows an adverse party to withdraw or modify a challenged pleading or other paper before a sanctions motion can be filed or otherwise presented to the court. See Fed. R. Civ. P. 11(c)(2). That safe harbor clause was adopted effective in 1993.

The bill would also provide that sanctions awards would once again be mandatory, rather than discretionary, in cases where a court has found that a pleading or other paper was signed without adequate factual or legal grounds. Sanctions had been mandatory from 1983 to 1993. The bill would specify that, in addition to any other sanctions the court might impose, “the sanction shall consist of an order to pay to the party or parties the amount of the reasonable expenses incurred as a direct result of the violation, including reasonable attorneys’ fees and costs.”

In doing so, the bill would repeal the current provision in Rule 11(c)(2) that that fees and costs “may” be awarded “if warranted.” In place of that provision, the bill would further authorize punitive monetary awards, to be paid into the court, “if warranted for effective deterrence.”

Testimony Supporting and Opposing the H.R. 966 Bill

According to testimony on behalf of the National Federation of Independent Business and the U.S. Chamber Institute for Legal Reform, the changes are necessary because frivolous lawsuits and staggering litigation costs are creating a climate of fear for America’s small businesses. In their view, the current “safe harbor” means that preparing a motion for sanctions may serve only to increase the costs for the moving party – which is, generally, the defendant. And even if a plaintiff does not withdraw his or her claims for relief, and even if the court finds them to be frivolous, the discretionary nature of the current sanctions provision means that the court may choose not to impose any sanction other than dismissing the case. These trade associations also believe that the current version of Rule 11 discourages judges from imposing sanctions for the purpose of compensating defendants for their attorney’s fees and costs.

In opposition to the H.R. 966 bill, a professor at the University of Houston Law Center has testified that the 1993 amendments of Rule 11 were adopted in the face of studies suggesting that the 1983 version of Rule 11 was deterring the filing of meritorious cases. Additionally, in practice, civil rights and employment discrimination plaintiffs were impacted the most severely under the earlier version of Rule 11 as adopted in 1983. Studies also showed that plaintiffs had been the targets of sanctions far more often than defendants, even though the terms of Rule 11 apply to all pleadings and other papers – including a defendant’s answer containing denials and affirmative defenses. Scholars and practitioners had noted that the 1983 version actually increased costs and delays by encouraging “the Rambo-like use of Rule 11 by too many lawyers,” and that the resulting increase in sanctions-oriented motions practice had led to a breakdown of civility and professionalism. This professor cited a 1991 study by the Federal Judicial Center, which revealed that few judges polled thought the then-current 1983 version of the rule was “very effective” in deterring groundless pleadings. In a 2005 survey of 278 district judges polled by the Federal Judicial Center, more than 80% of the judges said that “Rule 11 is needed and it is just right as it stands now.”

Call for Comment and Proposals from the Federal Litigation Bar

The Committee on Federal Rules of Civil Procedure and Trial Practice seeks your comments. Comments may be submitted concerning any of the proposed revisions contained in the H.R. 966 bill; or concerning any other proposals to modify Rule 11; or concerning whether to retain the text of Rule 11 as currently in force. We also welcome any other proposals that are germane to the application or purposes of Rule 11. Upon request, we will handle any comment as confidential. Anonymous comments will also be accepted.

Rob Kohn and John McCarthy are co-chairs of the Committee on Federal Rules of Civil Procedure and Trial Practice. Kohn is also the Secretary and Treasurer of the Federal Litigation Section; and McCarthy is Chapter President of the Southern District of New York chapter of the FBA. Kohn may be reached at rkohn@kohnlawgroup.com. McCarthy may be reached at jmccarthy@sgrlaw.com.

False In Forma Pauperis Application Does Not Warrant Dismissal

Posted in Local Rules

Kim v. Earthgrains Co., No. 01 C 3895, Slip Op. (N.D. Ill. Jun. 24, 2010) (Cox, Mag. J.).

Judge Cox denied defendant’s motion to dismiss plaintiff’s patent claims regarding a bread formulation pursuant to 28 U.S.C. 1915(e)(2)(A). The Court held that plaintiff made false statements on her in forma pauperis ("IFP") application. The normal remedy for false IFP application statements was dismissal of the applicant’s case.

But that remedy was not appropriate in this case because plaintiff had not "reaped the benefits" of IFP status. Plaintiff financed her own case for over nine years by mortgaging her house, using credit cards and borrowing from friends and family. Plaintiff only applied for IFP status after the Court suggested it, and only enjoyed its benefits for ten months. And while plaintiff made false statements, they were all either contradicted elsewhere in the application or the false statements tended to portray plaintiff as wealthier than she was. The consumers, therefore, suggested plaintiff misunderstood the question. While the Court did not dismiss plaintiff’s claims, the Court did sanction plaintiff pursuant to Fed. R. Civ. P. 11 for her false statement. Plaintiff was ordered to pay for here legal services received from pro bono counsel. The Court, however, observed the fees and costs were not likely recoverable unless plaintiff won at trial.

Does Following The Rules Matter?

Posted in Federal Rules

Yes! Following the rules, all of them, matters – federal and local, substantive and procedural, big and small. Regular readers will not be surprised by my answer. I have repeatedly reminded people, as do the Northern District judges (click here for examples of both), to comply with Local Rule 56.1.

But I also think it matters for more “minor” rules, such as the newly revised Fed. R. Civ. P. 11 & 26, which now require that counsel include an e-mail address along with a physical address and phone number (click here for my previous post on the December 1, 2007 Fed. R. Civ. P. amendments.)

My experience since December 1 is that most attorneys are not following the e-mail address requirement. It is unlikely that courts will sanction counsel for failure to provide an e-mail address, but to me, and I presume to at least some judges and clerks, it signals sloppy lawyering. It says that counsel is not staying current with changes in the profession. And it makes me wonder what else counsel is not current with. Have they explored the significant codification of electronic discovery rules from December 1, 2006? At least it is unprofessional, and at most it is an indication of a lack of knowledge of the current state of the law — a significant advantage to those of us that keep current.

Am I overreacting because these are "minor" rules that likely are not sanctionable? Comment to this post or send me an e-mail with your thoughts. I will post about whatever feedback I receive (without names, of course).

Federal Rules Require Email in Signature Blocks, But Not Email Service

Posted in Federal Rules

As promised last week, here are highlights of the substantive changes to the Federal Rules of Civil Procedure that went into effect last Saturday, December 1st:*

  • New Rule 5.2 Privacy Protection  This rule limits what personal information can be left in public pleadings without redaction, unless a court orders the information to be publicly filed. Public filings may only include:  the last four digits of a social security number, tax identification number or other financial account number; the year of a person’s birth; and the initials of known minors (not whole names). All other information must be redacted or left out of the papers.
  • Rule 11 Signing Pleadings  Signature blocks on all filings must now include an email address, in addition to counsel’s or a pro se party’s phone number and physical address. The comments to Rule 11 note that inclusion of an email address is a courtesy and is not an automatic consent to email service. For that, you still have to get a separate agreement with the opposing party.
  • Rule 26 Discovery  As with Rule 11, signature blocks on all discovery papers must now include an email address, in addition to counsel’s or a pro se party’s phone number and physical address. The comments to Rule 26 note that if a party lacks an email address, a physical address or a telephone number, the party need not supply the nonexistent information. So, at least Rule 26 does not require that counsel get email accounts.  But Rule 11 does not have the same exception, so arguably Rule 11 does require that counsel have email accounts.

* This is only a summary of the substantive changes that I found most interesting or important. It is not a detailed explanation of all substantive changes.  For example, I did not explain the changes to Fed. R. Civ. P. 4 regarding summonses. If you want detailed advice regarding the Federal Rules, please consult your attorney or dig in to your copy of the Federal Rules.

Rule 11: You Must Follow the Procedures

Posted in Federal Rules

Big Dipper, Inc. v. Wells’ Dairy, Inc., No. 05 C 5395, 2006 WL 2711843 (N.D. Ill. Sept. 20, 2006) (Manning, J.).

In this trademark action, Judge Manning denied defendant’s Rule 11 motion without considering it on the merits because defendant failed to comply with Rule 11’s "safe harbor period."  Rule 11(c) requires that before filing a Rule 11 motion, the party serve the motion on its opponent and give the opponent at least 21 days to correct the issues raised in the motion.  Defendant’s Rule 11 motion was also defective because defendant combined its Rule 11 motion with its response to plaintiff’s motion to strike. As the Court noted, a Rule 11 motion must be filed as a separate, standalone motion. 

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