Posts Tagged ‘Sanctions’

Fox Rothschild Sanctioned $25K For Altering Docs In IP Suit

April 12th, 2016 Alexander No comments

A California federal judge ordered Fox Rothschild LLP to pay $25,000 in sanctions to two California-based clothing companies that lost a copyright infringement suit they filed against the firm’s clients.

U.S. District Judge Dolly M. Gee determined that Fox Rothschild attorneys, representing China-based clothing wholesalers Saza Jeans Inc. and Rich Cowboy USA Inc. in a trademark and copyright infringement dispute lodged by Sweet People Apparel Inc. and RCRV Inc., altered financial information on invoices in order to reflect only the amounts related to the relevant product, but didn’t inform the plaintiffs of the changes or why they did so.

“Defendants’ counsel altered at least some of the documents produced in a manner that obfuscated the true meaning of the information provided,” the judge wrote. “At the very least, defendants’ counsel knew or should have known that they had altered the documents and were aware of the risk that plaintiff was being misled by the alterations.”

In July, a jury ruled that Saza and Rich Cowboy’s denim apparel did not infringe any of the at-issue copyrighted designs belonging to Sweet People, which sells Miss Me brand jeans, and RCRV, which makes Rock Revival brand jeans.

RCRV and Sweet People claimed that at trial, they were able to identify several documents produced by the Fox Rothschild attorneys during discovery that had been altered to change information on invoices that made their clients’ businesses seem smaller by a factor of 15.

“When plaintiffs attempted to ask defendants’ witnesses why they had altered the documents, defendants’ attorneys objected, arguing that defendants themselves did not change the invoices. Instead, at first, defendants’ attorneys blamed plaintiffs without the slightest basis,” the companies said. “Eventually they conceded that defendants’ attorneys had changed the documents.”

For more information, see Law360.

Categories: Intellectual Property

Jackson Lewis Sanctioned For ‘Crap Cleaner’ Evidence Wipe

May 21st, 2015 Alexander No comments

Jackson Lewis PC was slammed with hefty monetary sanctions after a California federal judge found they destroyed evidence with “Crap Cleaner” software in Clear-View Technologies Inc.’s suit alleging the investors conspired to steal its intellectual property.

U.S. District Judge Paul S. Grewal’s order imposed $212,320 in sanctions jointly and severally on the defendants and their former counsel.

The judge expressed his displeasure over the destroyed evidence in the battle over Clear-View’s “BarMaster,” an automated system that tracks the use of alcohol for bars and nightclubs, and further said plaintiff is entitled to a jury instruction that allows jurors to presume the spoliated documents favor Clear-View.

“Deployment of ‘Crap Cleaner’ software — with a motion to compel pending,” the judge wrote. “Lost media with relevant documents. False certification that document production was complete. Failure to take any steps to preserve or collect relevant documents for two years after discussing this very suit. Any one of these transgressions by Defendants … and their prior counsel might justify sanctions. Taken together, there can be no doubt.”

Clear-View filed suit against the defendants in June 2013, alleging the shareholder defendants tried to take over the company, or get “rogue employees” to join them to form a rival business, while Clear-View’s BarMaster product struggled with technical difficulties.

As the defendants were just about to put their plan into action, they learned another shareholder was about to invest $3.5 million into Clear-View. They quickly went to work trying to dissuade the investor from pulling the trigger, and they were ultimately successful

Clear-View alleges it had been highly successful at generating capital until the shareholders enacted their scheme, causing its ability to raise new capital to be “severely compromised to a point where it was unable to continue as an ongoing business enterprise.”

The company filed its motion for sanctions against the defendants in January, saying a court-ordered computer forensics investigation shows they deliberately violated discovery rules and failed to preserve evidence over a period of two years.

“Instead, in violation of their preservation obligation, defendants systematically deleted thousands of files and discarded admittedly critical electronic media,” Clear-View argued in its motion. “This inexcusable misconduct did not stop once this case was filed: forensic investigation reveals that just six days after CVT filed a motion to compel — which this Court granted — Defendant Basil Mattingly installed and ran wiping software on his computer, resulting in the permanent loss of ‘over 50,000′ files.”

The defendants quickly shot back, denying any evidence was destroyed and calling the motion a “tour de force in misrepresentation of material facts” and “a desperate attempt to evade the consequences of its spectacular failure in squandering $9 million in investor money with no working product and no sales to show for it.”

For more information, see Law360.

Categories: Intellectual Property

Attorneys In ‘Frivolous’ Filing To Pay Sanctions

May 11th, 2015 Alexander No comments

A Texas federal judge has ordered three attorneys involved in a patent infringement case deemed to be frivolous to pay a total of $451,382 to Complus Data Innovations Co., Casio America Inc. for what the attorneys collected from a settlement, plus an additional 50 percent.

The company that filed the frivolous claims, Raylon LLC, was declared insolvent, so U.S. District Judge Leonard Davis ruled the remaining issue was the sanctions to be imposed on three lawyers who represented the company in the suits against Complus, Casio, EZ Tag Corp. and other related companies. The patent in question related to hand-held computers with a display screen “pivotally mounted” on its housing that read magnetic tape on an identification card, display and transmit information, and print tickets.

Judge Davis ordered D. Scott Hemingway to pay $352,486, Corby Bell to pay $70,066 and Carl Roth to pay $28,830.

The lawyers had argued that the “devastating negative impact on the professional careers” of everyone involved in representing Raylon should be sufficient punishment.

“A nonmonetary sanction would only show others similarly situated that they can file frivolous cases, from which they may ultimately profit by exacting cost-of-defense settlements, with the only consequence being harsh words from a court,” Judge Davis wrote.

Initially, in 2011 Judge Davis denied imposing sanctions because “while Raylon’s claim construction arguments and infringement theory do stretch the bounds of reasonableness … they do not cross that line.” However, the federal circuit remanded the case back to Judge Davis, which led to a reversal.

“If the worst result that one could expect when filing a frivolous lawsuit is that one might not profit from the venture, then one is not deterred from attempting the pursuit,” Judge Davis wrote. “A disgorgement sanction alone has no greater deterrent effect than the risk that any plaintiff’s attorney takes when embarking on a nonfrivolous case under a pure contingency fee arrangement.”

For more information, see Law360.

BlackBerry Wins $860K Sanction For Sales Of Keyboard

February 10th, 2015 Alexander No comments

U.S. District Judge William H. Orrick found Typo Products LLC in contempt of a preliminary injunction enjoining the company from selling a wraparound iPhone keyboard accused of infringing BlackBerry Ltd.’s patented keyboard and imposed a hefty sanction of $860,600 plus attorneys’ fees and costs.

Judge Orrick found that Typo had sold more than 18,000 products in violation of the injunction, but nevertheless imposed a sanction that fell well short of the $2.6 million requested by BlackBerry. The judge agreed with Typo that the damage BlackBerry suffered as a result of the sales was uncertain but said the award was nonetheless just and appropriate.

“Typo’s not-so-clever attempts to evade the court’s preliminary injunction is quite certain, and it is my obligation and intent to vindicate respect for and compliance with the court’s orders,” the order said. “The amount of sanctions awarded is only a third of what BlackBerry sought and is directly tied to additional revenue that Typo could have expected from its illegal conduct.”

Typo sold 1,908 enjoined keyboards to Chris Yergensen, a good friend of Typo’s CEO Laurence Hallier, in Las Vegas, as well as 16,829 enjoined keyboards to customers outside of the United States and 365 warranty replacements of enjoined keyboards, and referred six customers to third parties to buy the enjoined keyboard after the preliminary injunction went into effect in April 2014.

Judge Orrick also scolded Typo for shipping 6,804 enjoined keyboards to Canada on the same day as the contempt hearing, saying the company couldn’t evade the preliminary injunction by transferring enjoined products out of the country for sale.

Typo has 45 days to pay BlackBerry the $860,600.

BlackBerry, which has been struggling in the smartphone market as the iPhone and Android-based devices have become more popular, filed a lawsuit against Typo last January over its keyboard cases for later models of the iPhone.

For more information, see Law360.

Judge Rips ‘Ridiculous’ Nokia Bid To Seal

November 26th, 2014 Alexander No comments

A California federal judge denied and ripped into Nokia Corp.’s latest “ridiculous” request to seal documents in its fight with Samsung Electronics Co. Ltd. over the leaking of patent licensing terms between Nokia and Apple in Samsung’s ongoing patent war with the iPhone maker.

Judge Paul Grewal’s order declines Nokia’s request for leave to file a reconsideration of his earlier order denying seal on certain documents. This marks the latest instance of the judge making no secret of his exasperation with a flurry of seal requests from all the parties in the suit, which Nokia was brought into after Samsung disclosed the confidential details of a licensing deal between Apple and Nokia.

“The undersigned is not quite sure, but sealing in this case may just have officially passed from the sublime to the ridiculous,” Judge Grewal’s order says.

Among the portions Nokia wants blacked out are certain passages of publicly available news stories estimating the terms of Apple’s patent license with Nokia despite the fact that the articles are “available to anyone on the planet with a web browser and basic internet access,” Judge Grewal says.

The court may have been more forgiving of Nokia’s request if this were the second, third or fourth time, “but at some point, the cost of such unwarranted sealing requests to the taxpayers, the press and other parties with equally important claims to the court’s resources must take priority.”

Also in June, Judge Grewal addressed all the parties’ then-recent requests to seal dozens of documents, largely keeping them unsealed. He said there still was a backlog of requests stemming from 26 separate administrative motions to seal 134 documents.

At that time, he said that although “old dogs, it turns out, can learn new tricks” when it comes to exercising restraint with seal requests, Nokia’s seal requests were not narrowly tailored to confidential business information.

These disputes arise as part of the larger patent infringement suit Apple filed against Samsung, accusing it of infringing several design and utility patents pertaining to iPhone and related technology. A $930 million district-court verdict against Samsung is pending on appeal before the Federal Circuit.

For more information, see Law360.

Categories: Intellectual Property