Pellegrini v. Analog Devices, Inc. , 312 F. App'x 304 ( 2008 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-1091
GERALD N. PELLEGRINI,
Plaintiff-Appellant,
v.
ANALOG DEVICES, INC.,
Defendant-Appellee.
Gerald N. Pellegrini, of Worcester, Massachusetts, pro se.
Wayne L. Stoner, Wilmer Cutler Pickering Hale and Dorr LLP, of Boston,
Massachusetts, for defendant-appellee. With him on the brief were Richard W. O’Neill
and Jordan L. Hirsch.
Appealed from: United States District Court for the District of Massachusetts
Judge Rya W. Zobel
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2008-1091
GERALD N. PELLEGRINI,
Plaintiff-Appellant,
v.
ANALOG DEVICES, INC.,
Defendant-Appellee.
Appeal from the United States District Court for the District of Massachusetts in case
no. 02-CV-11562, Judge Rya W. Zobel.
__________________________
DECIDED: June 5, 2008
__________________________
Before BRYSON and PROST, Circuit Judges, and ZAGEL, District Judge. ∗
PER CURIAM.
Gerald N. Pellegrini appeals the decisions of the United States District Court
for the District of Massachusetts granting Analog Devices, Inc.’s (“Analog”) motion for
sanctions, denying Mr. Pellegrini’s request for sanctions, and denying Mr. Pellegrini’s
requests to amend the complaint. We affirm.
BACKGROUND
In August 2002, Mr. Pellegrini sued Analog in the United States District Court for
the District of Massachusetts alleging infringement of U.S. Patent No. 4,651,069 (“’069
∗
Honorable James T. Zagel, District Judge, United States District Court for
the Northern District of Illinois, sitting by designation.
Patent”). Mr. Pellegrini alleged that some of Analog’s chips, its “ADMC chips,” infringe
the ’069 Patent claims directed to motor drive circuits when combined with other
components in a brushless motor. Pursuant to an agreement of the parties, the district
court, early in the case, allowed limited discovery and cross-motions for partial summary
judgment addressing the issue of whether Analog’s accused ADMC chips manufactured
outside the United States and never shipped to or from the United States infringed the
’069 Patent under 35 U.S.C. § 271(f). The district court noted that
[a]t the time, it was clear to both parties and the court that any ADMC
chips manufactured outside of the United States but sold to customers
inside the United States -- were minute in number and any possible
recovery, even if infringement were proven, would be minuscule. Indeed,
Pellegrini represented both to the court and to Analog that if Analog
prevailed on the § 271(f) issue, he would voluntarily dismiss the remainder
of the case.
Pellegrini v. Analog Devices, Inc., No. 02-CV-11562, 2006 U.S. Dist. LEXIS 726, at *2
(D. Mass. Jan. 11, 2006) (“Jan. 2006 Order”).
In May 2003, the district court granted Analog’s motion for partial summary
judgment of noninfringement, dismissing Mr. Pellegrini’s claims under § 271(f) regarding
Analog’s chips manufactured and sold entirely outside of the United States. In
September 2003, final judgment was entered pursuant to Fed. R. Civ. P. 54(b), and the
remaining claims were stayed pending appeal. In July 2004, this court affirmed.
Pellegrini v. Analog Devices, Inc., 375 F.3d 1113, 1118-19 (Fed. Cir. 2004).
Thereafter, Mr. Pellegrini returned to the district court, but he did not voluntarily
dismiss his remaining claims. Instead, he sought leave from the district court to amend
his complaint in order to assert additional claims. At a status conference in January
2005, pursuant to an agreement of the parties, Mr. Pellegrini was given until March 1,
2005 to “provide evidentiary support underlying the good faith basis for his remaining
2008-1091 2
allegations of patent infringement.” See Jan. 2006 Order, at *3. When he failed to do
so, Analog filed a motion for sanctions, claiming that “Pellegrini violated Rule 11 by
accusing Analog of inducing infringement under 35 U.S.C. § 271(b) without having
‘evidentiary support’ of direct infringement by Analog’s customers.” On January 11,
2006, the district court granted Analog’s motion for Rule 11 sanctions and dismissed Mr.
Pellegrini’s remaining claims. Jan. 2006 Order. Mr. Pellegrini appealed.
We have jurisdiction pursuant to 28 U.S.C. §1295(a)(1).
DISCUSSION
A. Standard of Review
We apply the law of the regional circuit in which the district court sits in review of
the court’s decisions regarding sanctions and requests to amend. See Innova/Pure
Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1124 (Fed. Cir. 2004)
(providing that a district court’s denial of a motion to amend a complaint “is a nonpatent
matter where we apply the law of the circuit in which the district court sits”);
Phonometrics, Inc. v. Economy Inns of Am., 349 F.3d 1356, 1361 (Fed. Cir. 2003) (“We
apply regional circuit law when reviewing the imposition of Rule 11 sanctions.”).
Applying the standard that would be applied in the First Circuit, we review for an abuse
of discretion the district court’s decisions granting Analog’s motion for sanctions,
denying Mr. Pellegrini’s request for sanctions, and denying Mr. Pellegrini’s requests to
amend the complaint. See Torres-Alamo v. Puerto Rico, 502 F.3d 20, 25 (1st Cir. 2007)
(“We review the district court’s denial of Appellant’s motion to amend for abuse of
discretion.”); Anderson v. Beatrice Foods Co., 900 F.2d 388, 393 (1st Cir. 1990) (“It is
axiomatic that, ‘absent abuse of discretion, we will not disturb a district court’s choice of
2008-1091 3
sanctions.’” (quoting Fashion House, Inc. v. K Mart Corp., 892 F.2d 1076, 1081 (1st Cir.
1989))). The First Circuit has explained that “[a]buse [of discretion] occurs when a
material factor deserving significant weight is ignored, when an improper factor is relied
upon, or when all proper and no improper factors are assessed, but the court makes a
serious mistake in weighing them.” Anderson, 900 F.2d at 394 (quoting Fashion House,
892 F.2d at 1081).
B. Analog’s Motion for Sanctions
As previously discussed, the district court granted Analog’s motion for Rule 11
sanctions, concluding that Mr. Pellegrini “failed to demonstrate any factual basis upon
which to claim direct infringement of the ’069 by Analog customers in the United States,”
and that he “failed to conduct a sufficiently reasonable pre-filing inquiry” in violation of
Fed. R. Civ. P. 11(b)(3). Jan. 2006 Order, at*11. The district court directed Analog to
submit a bill of reasonable attorney fees and costs accrued since January 2005, for
determination of an appropriate award of sanctions. In February 2006, Analog
requested $217,503.14 in attorney fees and costs. Mr. Pellegrini, who appeared pro se
in the case, opposed the requested amount of fees and costs, arguing that they were
both unreasonable and beyond that which he could afford. 1 The district court ordered
Mr. Pellegrini to submit documentation regarding his financial circumstances and ability
to pay the attorney fees and costs. Thereafter, upon the recommendation of the
1
The district court noted that, “[a]lthough Pellegrini may be appearing pro
se, he has apparently received assistance from law firms throughout the litigation. (See
Appearance of Thomas C. O’Konski, Esq., Docket No. 63, June 22, 2005; Def.’s Mot.,
at 7 n.4).” Jan. 2006 Order, at *10.
2008-1091 4
magistrate judge who held an evidentiary hearing on the matter, the district court
ordered Mr. Pellegrini to pay a sanction in the amount of $20,000.
On appeal, Mr. Pellegrini claims that the district court made several errors in
granting Analog’s motion for sanctions. His arguments include claims that the district
court erred in finding Analog’s motion for sanctions to be timely and that it erred in
determining that he failed to demonstrate any factual basis to support a claim of direct
infringement in the United States and that he failed to perform a reasonable pre-filing
inquiry.
First, as to the timeliness of Analog’s motion for sanctions, the district court noted
that “Analog had no reason to challenge the good-faith basis of Pellegrini’s pending
claims while the extraterritorial infringement claims were being separately litigated and
appealed, since Pellegrini maintained throughout that he would voluntarily dismiss the
pending claims if Analog prevailed.” Jan. 2006 Order, at *10. Analog did not receive
notice that Mr. Pellegrini intended to pursue the pending claims, despite being
unsuccessful on appeal, until January 2005. Then, pursuant to an agreement of the
parties, Mr. Pellegrini was given until March 1, 2005 to demonstrate an evidentiary basis
for the pending claims. Analog filed its motion for sanctions when Mr. Pellegrini failed to
do so within the agreed timeline. In light of the foregoing, we conclude that the district
court did not abuse its discretion in finding that Analog’s motion for sanctions was
timely.
Second, as the district court noted, this court has explained that
[i]n bringing a claim of infringement, the patent holder, if challenged, must
be prepared to demonstrate to both the court and the alleged infringer
exactly why it believed before filing the claim that it had a reasonable
chance of proving infringement. Failure to do so should ordinarily result in
2008-1091 5
the district court expressing its broad discretion in favor of Rule 11
sanctions, at least in the absence of a sound excuse or considerable
mitigating circumstances.
View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000). On
appeal, Mr. Pellegrini points to several pieces of evidence that he claims the district
court either misunderstood or ignored in determining that he failed to demonstrate a
sufficient factual basis to support a claim of direct infringement in the United States and
that he failed to perform a reasonable pre-filing inquiry. For example, Mr. Pellegrini
argues that, inter alia, an article written by Analog representatives is “sufficient pre-filing
evidence,” claiming that
[t]he fact that this Article was available worldwide is itself circumstantial
evidence of direct infringement since: (1) it is specifically intended to
induce customers worldwide to use its EKE sensorless motor control with
its ADMC chips, and (2) there is more than a “reasonable chance” that
someone in the United States practiced the EKE motor control described
in the Article.
In light of the record, we conclude that Mr. Pellegrini failed to demonstrate that the
district court applied an incorrect legal test or made a serious mistake regarding a
material factor in determining that the Analog article was not sufficient pre-filing
2008-1091 6
evidence. 2 Likewise, we have considered all of Mr. Pellegrini’s other arguments
regarding the purported factual basis for his claims and we conclude that the district
court did not abuse its discretion in finding that he “failed to demonstrate any factual
basis upon which to claim direct infringement of the ’069 by Analog customers in the
United States,” and that he “failed to conduct a sufficiently reasonable pre-filing inquiry”
in violation of Fed. R. Civ. P. 11(b)(3). Jan. 2006 Order, at *10-11.
We defer to the district court’s discretion as to whether to sanction a litigant who
continues to pursue claims without an evidentiary basis, particularly where said litigant
previously told the district court that he would voluntarily dismiss these claims after his
first unsuccessful appeal to this court. 3 “Because the imposition of sanctions is
2
Mr. Pellegrini argues that the district court’s analysis was flawed because,
inter alia, the district court incorrectly stated that Analog’s article did not mention the
ADMC chips. Analog acknowledges that the district court incorrectly stated that the
Analog article did not mention the ADMC chips. Analog submits, however, that “[t]his
oversight is immaterial” because “[t]he relevant aspect of the district court’s analysis—
that the article does not evidence direct infringement by a third party in the United
States—was based on the court’s determination that the article does not discuss any
Analog customers or any activities of any such customer in the United States.” We note
that the district court agreed with Analog that the article is “devoid of any reference to a
brushless D.C. motor made, used, sold, offered for sale, or imported in the United
States by one of Analog’s customers.” Jan. 2006 Order, at *6. Thus, we are not
persuaded by Pellegrini’s arguments that the district court’s incorrect statement that the
article did not mention the ADMC chips was material to its conclusion that he failed to
demonstrate any factual basis upon which to claim direct infringement by Analog
customers in the United States.
3
On appeal, Mr. Pellegrini denies that he ever represented to the court that
he would voluntarily dismiss his remaining claims if he did not prevail on the threshold
issue in his first appeal. Mr. Pellegrini claims that the district court relied solely on
Analog’s version of the facts as to this point. We note, however, that the district court
stated that, “Pellegrini represented both to the court and to Analog that if Analog
prevailed on the § 271(f) issue, he would voluntarily dismiss the remainder of the case.”
Jan. 2006 Order, at *2 (emphasis added). Thus, the district court did not rely solely on
Analog’s version of the facts, as it appears that Mr. Pellegrini made the disputed
representation directly to the court (in addition to Analog). We are not persuaded by Mr.
Pellegrini’s arguments to the contrary.
2008-1091 7
peculiarly within the province of the court in which the challenged conduct occurs, a
party complaining to an appellate tribunal in respect to trial-level sanctions ‘bears a
heavy burden of demonstrating that the trial judge was clearly not justified in entering
[the] order.’” Anderson, 900 F.2d at 393 (quoting Spiller v. U.S.V. Labs., Inc., 842 F.2d
535, 537 (1st Cir. 1988)). We conclude that Mr. Pellegrini failed to demonstrate that the
district judge was “clearly not justified” in the sanction awarded.
C. Mr. Pellegrini’s Motion for Sanctions
Mr. Pellegrini claims that the district court abused its discretion in denying his
request for sanctions against Analog. Mr. Pellegrini’s request for sanctions is primarily
based on what he views to be legally and factually erroneous arguments made by
Analog in pleadings to the district court.
For example, one of the factual disputes involves the following representation
made by Mr. Pellegrini to the district court: “The payment to Plaintiff from the settlement
with Texas Instruments . . . was used to pay litigation costs (approximately fifty percent)
and forty percent of the remainder went to Mr. Herring.” Characterizing the foregoing
representation, Analog argued to the district court that Mr. Pellegrini misrepresented his
financial status to the court by, inter alia, “represent[ing] to the Court that he received
only ten percent of the TI settlement money.” On appeal, Analog submits that it read
the statement “forty percent of the remainder” to refer to forty percent of the total
settlement, rather than forty percent of the amount remaining after paying litigation fees
(i.e., twenty percent of the total settlement, calculated as forty percent of the remaining
fifty percent of the settlement). Even assuming that Analog’s interpretation of Mr.
2008-1091 8
Pellegrini’s representation was erroneous, however, the district court did not abuse its
discretion in deciding not to sanction Analog for this interpretation.
We have considered the other legal and factual disputes cited in support of Mr.
Pellegrini’s request for sanctions and, even though he may have ultimately prevailed in
many of the cited factual and legal disagreements, he has not shown that the district
court abused its discretion in refusing to sanction Analog for its contrary positions.
D. Mr. Pellegrini’s Request to Amend his Complaint
In March 2005, Mr. Pellegrini requested permission to supplement his pleadings
to include a claim of infringement under 35 U.S.C. § 271(f) alleging that Analog supplied
“software code” from the United States for combination outside the United States.
Essentially, Mr. Pellegrini sought to claim that Analog infringed the ’069 Patent under §
271(f) by allegedly supplying software from the United States to be downloaded on
foreign-made chips and then combined with other components in a brushless motor. In
April 2005, the district court denied this request as “futile.” In May 2007, Mr. Pellegrini
requested permission to file an amended complaint to include a claim of infringement
under § 271(f) alleging that Analog supplied “computer-readable software” from the
United States for combination outside of the United States. In October 2007, the district
court denied this request as both “futile and late.”
Analog argued to the district court, as it does on appeal, that Mr. Pellegrini’s
requests to amend to add software-based § 271(f) claims are “futile” because they are
barred by issue preclusion, claim preclusion, and the law of the case doctrine. We have
previously stated that
the court is entitled to assume that an appellant has raised all issues it
deems important against a judgment appealed from. An issue that falls
2008-1091 9
within the scope of the judgment appealed from but is not raised by the
appellant in its opening brief on appeal is necessarily waived. Unless
remanded by this court, all issues within the scope of the appealed
judgment are deemed incorporated within the mandate and thus are
precluded from further adjudication.
Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1383 (Fed. Cir. 1999). In his prior
appeal of the district court’s grant of partial summary judgment of non-infringement
under § 271(f), Mr. Pellegrini failed to argue that the supply of software was among the
actions allegedly taken by Analog in the United States that could result in liability under
§ 271(f) relating to the accused foreign-made chips.
Analog argues that Mr. Pellegrini’s requests were futile because his “proposed
amendments sought to allege § 271(f) infringement with respect to the same software
residing on the same chips already found by this Court and the district court to not
infringe as a matter of law under the same statutory provision.” It also argues that Mr.
Pellegrini’s attempt to distinguish its requested § 271(f) claims relating to software from
those relating to the accused foreign-made chips “does not make sense” because “[t]he
Analog software referenced by Pellegrini is intended for use with Analog’s ADMC chips.”
Mr. Pellegrini argues that his requests to amend were not futile because
[t]he only issue that was adjudicated by the district court and this Court
was whether Analog’s generic (i.e., non-application specific and
programmable) ADMC chips that were manufactured outside the United
States were supplied in or from the United States under 35 U.S.C. section
271(f).
The issue of whether Analog’s “computer-readable software”,
developed inside the United States, was supplied, or caused to be
supplied, in or from the United States is clearly a completely separate
issue and is the issue raised in Pellegrini’s amended complaint.
Additionally, Mr. Pellegrini seemingly attempts to justify his failure to raise this argument
during his prior appeal by stating that the March 2005 request was “filed shortly after
(fifteen days) the law came into effect in [Eolas Technologies Inc. v. Microsoft Corp.,
2008-1091 10
399 F.3d 1325 (Fed. Cir. 2005)] that ‘software code’ may be a ‘proper subject of relief’
under section 271(f).”
Contrary to Mr. Pellegrini’s suggestion, however, the Eolas decision did not
change the law regarding whether software qualifies as a “component” under § 271(f);
rather, it interpreted what § 271(f) has always meant. See id. at 1338-40 (interpreting
§ 271(f) to “decide whether software code made in the United States and exported
abroad is a ‘component[] of a patented invention’ under section 271(f)”); cf. Rivers v.
Roadway Express, 511 U.S. 298, 312-13 (1994) (“A judicial construction of a statute is
an authoritative statement of what the statute meant before as well as after the decision
of the case giving rise to that construction.”). While Mr. Pellegrini may not have
previously thought that a copy of software may, in some circumstances, be considered
a “component” for purposes of § 271(f), that does not excuse his failure to make that
argument to the district court or this court when he previously litigated his claim that
Analog infringed under § 271(f) relating to the combination of its foreign-made ADMC
chips with other components in a brushless motor. As we have previously explained,
[t]he scope of the issues presented to this court on appeal must be
measured by the scope of the judgment appealed from, . . . not by the
arguments advanced by the appellant. To hold otherwise would allow
appellants to present appeals in a piecemeal and repeated fashion, and
would lead to the untenable result that “a party who has chosen not to
argue a point on a first appeal should stand better as regards the law of
the case than one who had argued and lost.” Fogel v. Chestnutt, 668 F.2d
100, 109 (2d Cir. 1981).
Engel Indus., 166 F.3d at 1382. In light of the foregoing analysis, we conclude that the
district court did not err in dismissing Mr. Pellegrini’s March 2005 request to supplement
as “futile.”
2008-1091 11
Additionally, we conclude that the district court did not abuse its discretion in
refusing Mr. Pellegrini’s May 2007 request to amend as “late.” Mr. Pellegrini’s May
2007 request to amend was filed over two and a half years after this court affirmed the
district court’s grant of partial summary judgment of non-infringement under § 271(f),
and over two years after the district court denied his first request to bring a new § 271(f)
claim alleging that Analog supplied software for the accused foreign-made chips. Mr.
Pellegrini attempts to justify his failure to make the request to amend sooner by arguing
that it was filed “immediately after (three days) when the law came into effect in
[Microsoft v. AT&T Corp., 127 S. Ct. 1746 (2007)] that ‘computer-readable software’
may be a ‘proper subject of relief’ under section 271(f).” We are not persuaded by Mr.
Pellegrini’s argument that the timing of the Microsoft decision excuses his delay in
making his May 2007 request to amend to add a new software-related § 271(f) claim,
particularly where this request was made over two years after the district court rejected
his attempt to add a similar software-related § 271(f) claim. Because we affirm the
district court’s denial of the May 2007 request to amend as “late,” we need not address
its finding that this request was also “futile.”
CONCLUSION
For the aforementioned reasons, we conclude that the district court did not abuse
its discretion by granting Analog’s motion for sanctions, denying Mr. Pellegrini’s request
for sanctions, and denying Mr. Pellegrini’s requests to amend the complaint.
Accordingly, we affirm.
2008-1091 12