Order Regarding Sanctions IPR2014-00739

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Takeaway: The Board may impose sanctions against a party for misconduct, including for failure to comply with an order, abuse of the process, or any other improper use of the proceeding, such as harassment.

In its Order, the Board expunged Paper 12. Also, the Board ordered the inventor (Dr. Louis Sanfilippo) to refrain from contacting Petitioner or anyone associated with Petitioner in connection with this proceeding; that any communication from Patent Owner to Petitioner or its representatives in this proceeding must be signed by Patent Owner’s counsel of record; that Dr. Sanfilippo cannot sign any paper to be filed with the Board in this proceeding (instead, all papers must be signed by Patent Owner’s counsel of record); and that Petitioner is authorized to file a motion for sanctions against Patent Owner.

The Board had previously issued an order on December 9, 2014, which stated that “the inventor, Dr. Louis Sanfilippo, is prohibited from contacting [Petitioner], [Petitioner’s] employees, the expert retained [Petitioner] for this proceeding (Dr. Timothy Brewerton), and counsel for Petitioner, except through counsel for Patent Owner or in the presence of counsel for Patent Owner.” Patent Owner subsequently filed Paper 12 to which was attached an e-mail from Dr. Sanfilippo to Petitioner, which e-mail Petitioner asserts is in violation of the Board’s aforementioned order.

It was Petitioner’s position that “the e-mail, as well as the hyperlink contained within the e-mail, contained misrepresentations, and constituted harassment, as well as veiled threats against Petitioner.” Consequently, Petitioner had requested authorization to file a motion for sanctions against Patent Owner seeking the entry of adverse judgment against Patent Owner.  Of particular note, according to Petitioner, was “Dr. Sanfilippo’s statement in the e-mail that ‘Patent Owner has determined that in order to best protect its interests it is foregoing any further involvement in the IPR process so that it can take the appropriate actions, including legal remedies, to resolve such representations made to the Board that have now caused Patent Owner harm, and so that it can pre-empt further harm from the undue burden of such representations.’”

Patent Owner’s Counsel, in reply, asserted that Dr. Sanfilippo had not felt that he had failed to comply with the Board’s order, since the e-mail was composed in the presence of Patent Owner’s Counsel. Moreover, Patent Owner’s Counsel pointed out that following explanation of Petitioner’s interpretation of the Paper 12 order to Dr. Sanfilippo, he stopped all further communications with Petitioner and Petitioner’s representatives.

The Board ended up concluding that “Patent Owner’s Paper 12 did not conform to the filing authorized in Paper 11, because the paper directed to the Board did not state clearly that Patent Owner was forgoing any further participation in the instant proceeding.” For this reason, the Board declined to read the statement by Dr. Sanfilippo’s statement in his e-mail attached to Paper 12 as a statement to the Board requesting adverse judgment against Patent Owner in this proceeding.  Nonetheless, the Board agreed “that the e-mail was not in compliance with [the Board’s] order of December 9, 2014” and therefore expunged Paper 12.

Shire Development LLC v. LCS Group, LLC, IPR2014-00739
Paper 14: Order on Conduct of the Proceeding
Dated: December 23, 2014
Patent: 8,318,813 B2
Per Curiam.