Defendant and its former counsel of record were sanctioned for failing to disclose to the court and opposing counsel the existence of a reexamination proceeding concerning the patents-in-suit. The court awarded plaintiff its "Markman-related" costs and fees that would not have been incurred had the reexamination been disclosed and apportioned such fees and costs between defendant and its former counsel on an 80%/20% basis. Plaintiff sought sanctions in the amount of $800,000, but the court declined to determine the amount of damages until the conclusion of the reexamination proceeding. "Sanctions under Rule 37(c) are allowed to the extent of the damages 'caused by the failure'; here, the failure to supplement. Until the re-examination proceedings are complete, it is unknown how much of the work [plaintiff] has spent, and how much in costs and fees associated therewith have been wasted, and thus how much 'damages' have been incurred as a result." The court did not sanction defendant's current counsel because there was no evidence that current counsel knew of the reexamination proceeding until immediately prior to disclosure of that fact to the court and opposing counsel.
Allflex USA Inc v. Avid Identification Systems Inc., 5-06-cv-01109
(CACD October 30, 2009, Order) (Larson, J.)