Production of Incorrect Testing Data Discovered During Trial Justifies $1.5 Million Discovery Sanction

The court granted in part plaintiffs' motion for discovery sanctions and sanctioned defendant $1.5 million after defendant disclosed corrected stability dissolution testing data during a bench trial. "With two days of trial remaining, [defendant] revealed that its stability dissolution testing data was incorrect. . . . [Defendant's] decision to withhold the correct data caused a delay in trial, extra expenses for [plaintiff], and a drain in judicial resources. . . . ⁠[Plaintiff] is not entitled to all the fees associated with time spent analyzing [defendant's] ANDA stability and dissolution data. [Plaintiff] is only entitled to the costs it incurred reviewing the incorrect dissolution data. . . . [Plaintiff] is entitled to the costs associated with the deposition of current and former [employees of defendant's manufacturer], as well as time spent researching the relationship between [the manufacturer] and [defendant] and the ownership of [the manufacturer], because these tasks were taken in order to determine who had knowledge of the incorrect dissolution data. But for the misconduct, [plaintiff] would not have engaged in the aforementioned tasks. . . . [Plaintiff] is entitled to all fees and costs associated with [its expert] following the revelation of the misconduct. As a result of the misconduct, [his] expert report had to be amended in light of the corrected data."

Shire LLC et al v. Abhai LLC, 1-15-cv-13909 (MAD July 11, 2018, Order) (Young, USDJ)

Rule 11 Sanctions of $222,937 Awarded Against Plaintiff and Plaintiff’s Attorneys

The court granted defendant's concurrent motions for attorney fees under 35 U.S.C. § 285 and for sanctions under Rule 11 and awarded $222,937 jointly and severally against plaintiff and plaintiff's attorneys. "The conduct of both [plaintiff] and its lawyers in this litigation was plainly irresponsible and frivolous. . . . [E]ven though [defendant] gave [plaintiff] a [defendant] engineer's declaration, an invitation to inspect the source code at [its] offices, and the bill of materials for an accused device, [plaintiff] and its lawyers did not amend their infringement contentions (or even inspect the source code until much later). Instead, [plaintiff] boldly continued to assert its implausible (and, as the unrebutted evidence at summary judgment showed, impossible) theories of infringement. . . . Moreover, [plaintiff] failed to conduct an adequate investigation into the plausibility of its claims by refusing to do a teardown of the devices -- even after being informed that the devices did not contain or use the sensors as [plaintiff] alleged."

Smart Wearable Technologies Inc. v. Fitbit, Inc., 3-17-cv-05068 (CAND June 27, 2018, Order) (Chhabria, USDJ)

Counsel’s Failure to Investigate Plaintiff’s Ownership of Patent-in-Suit Justifies $360,000 Sanctions Award

The court granted defendants' motion for more than $360,000 in sanctions under Rule 11 and 28 U.S.C. § 1927 against plaintiff's counsel because plaintiff's standing allegations and pre-suit investigation were unreasonable. "⁠[Counsel] disregarded any reasonable inquiry into the ownership or assignment of the [patent-in-suit], and asserted this claim for infringement without any objectively reasonable basis for the allegation that [plaintiff] was the owner of the right to enforce the [patent] by assignment. . . . [Counsel's] alleged reliance on its client does not absolve it of any of the violations of Rule 11. . . . [Counsel] improperly withheld the purported assignment documents, drafted in March 2016, until March 23, 2017. . . . [Plaintiff's] alleged oral, exclusive license, even if it had existed since prior to the original Complaint, would not have cured the standing defect or altered that [plaintiff's] claim for infringement of the [patent] was subject to dismissal. . . . [Counsel's] pattern of conduct demonstrates bad faith or a disregard of attorney obligations in filing and pursuing claims, which is akin to bad faith."

Sub Zero Franchising, Inc. v. Frank Nye Consulting LLC, d/b/a The Arctic Scoop et al, 2-15-cv-00821 (UTD April 27, 2018, Order) (Jenkins, SJ)