F & G Research, Inc. v. Dynapoint (Taiwan), Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1350
F & G RESEARCH, INC.,
Plaintiff-Appellant,
v.
DYNAPOINT (TAIWAN), INC.,
Defendant-Appellee.
Allen D. Brufsky, Allen D. Brufsky, P.A., of Naples, Florida, for plaintiff-appellant.
George R. Diaz-Arrastia, Schirrmeister Diaz-Arrastia Brem, L.L.P., of Houston,
Texas, for defendant-appellee.
Appealed from: United States District Court for the Southern District of Florida
Judge Cecilia M. Altonaga
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1350
F & G RESEARCH, INC.,
Plaintiff-Appellant,
v.
DYNAPOINT (TAIWAN), INC.,
Defendant-Appellee.
Appeal from the United States District Court for the Southern District of Florida in case
no. 06-CV-60904, Judge Cecilia M. Altonaga.
__________________________
DECIDED: January 31, 2008
__________________________
Before GAJARSA, LINN, and MOORE, Circuit Judges.
LINN, Circuit Judge.
F & G Research, Inc. (“F&G”) filed this appeal from the dismissal of its complaint
against Dynapoint (Taiwan), Inc. (“Dynapoint Taiwan”) for lack of personal jurisdiction.
F & G Research, Inc. v. Dynapoint (Taiwan), Inc., No. 06-60904 (S.D. Fla. Apr. 13,
2007) (“Dismissal Opinion”). Because we find that no basis for reversal in law or fact
can be or is even arguably shown and that F&G and its counsel, Allen D. Brufsky
(“Brufsky”), have significantly misrepresented the facts, we conclude that this appeal is
both frivolous as filed and frivolous as argued. See Abbs v. Principi, 237 F.3d 1342,
1345 (Fed. Cir. 2001). Accordingly, we affirm on the merits and award sanctions
against F&G and Brufsky jointly and severally, in the amount of Dynapoint Taiwan’s
reasonable attorneys’ fees and costs in defending this appeal. See Fed. R. App. P. 38.
I
On June 22, 2006, F&G filed a complaint alleging that Dynapoint Taiwan “willfully
and deliberately infring[ed]” F&G’s U.S. Patent No. 5,313,229 “by distributing and selling
within the United States and/or importing into the United States for sale its various lines
of scrolling wheel computer mice.” See Dismissal Opinion at 1. Dynapoint Taiwan
challenged personal jurisdiction by filing a motion to dismiss, contending that it is a
Taiwanese corporation with its headquarters in Taipei, Taiwan, and that its sole
business function is to serve as the Asia and Europe sales division for Dynapoint (Dong
Guan) Inc., a separate corporation organized under the laws of China and located in
Mainland China (“Dynapoint China”). Dynapoint Taiwan specifically contended, and
F&G does not contest, that Dynapoint Taiwan has no office in the State of Florida, has
never operated, conducted, engaged in, or carried on any business venture in the State
of Florida or anywhere else in the United States, has not sold or solicited customers for
Dynapoint China in the State of Florida or anywhere in the United States, has not
attended any trade shows in the United States, has no corporate officers who are
residents of the United States, maintains no financial accounts in the United States,
does not manufacture computer mice, and has only a passive website, which does not
enable visitors to order products.
In opposing Dynapoint Taiwan’s motion to dismiss for lack of personal
jurisdiction, F&G relied upon a declaration from its counsel, Brufsky. See Dismissal
Opinion at 3. That declaration does not mention Dynapoint Taiwan, and instead links
2007-1350 2
the distribution of computer mice allegedly infringing F&G’s patent to Dynapoint China.
Specifically, it alleges that Spec-Research, Inc. “obtained scrolling mice for distribution
from Dynapoint (Dong Guang) Inc. of Chang An, Dong Guang, Duang Dong, China,”
and that Spec-Research, Inc. then distributed these mice to Targus, Inc. and Iogear,
Inc. for resale under their own brand names in Florida.
Following the filing of Dynapoint Taiwan’s motion to dismiss, F&G moved to join
Dynapoint China as a defendant on March 26, 2007. On April 11, 2007, the district
court granted F&G’s motion, noting that Dynapoint Taiwan “ha[d] failed to submit a
memorandum in opposition to F&G’s motion.” One day later, on April 12, 2007,
Dynapoint Taiwan filed a motion for reconsideration, alerting the court that under the
local rules, the time for its response to F&G’s motion had not expired. It joined its
motion with a memorandum in opposition to F&G’s motion. On April 13, 2007, the
district court granted Dynapoint Taiwan’s motion and accordingly set aside the April 11,
2007 order.
On April 13, 2007, the district court also granted Dynapoint Taiwan’s motion to
dismiss for lack of personal jurisdiction. It found that F&G could not establish specific
jurisdiction because of the absence of “evidence demonstrating that Dynapoint [Taiwan]
manufactures, sells, markets or distributes any of the allegedly infringing products in the
State of Florida.” Id. at 8 (citing Fla. Stat. § 48.193(1)(b)). The district court similarly
found that F&G could not establish general jurisdiction, because “[t]he only facts
presented here illustrate that Dynapoint [Taiwan] has no contacts with Florida; it does
not conduct business in Florida; and it has no offices, employees, assets or leases in
Florida,” and that “[t]here ha[d] been no showing that Dynapoint [Taiwan] engages in
2007-1350 3
substantial and not isolated activity within [Florida].” Id. at 8–9 (citing Fla. Stat.
§ 48.193(2)).
II
In this appeal, F&G argues that the district court improperly dismissed its case for
lack of personal jurisdiction over Dynapoint Taiwan. F&G’s appeal has no merit. F&G
points to no errors in the district court’s decision, contending only that support for its
position can be found in the Brufsky declaration. As previously noted, the Brufsky
declaration does not mention Dynapoint Taiwan but, rather, links the distribution of
computer mice allegedly infringing F&G’s patent to Dynapoint China, a company distinct
from Dynapoint Taiwan, notwithstanding the shared use in their respective business
names of the word “Dynapoint.” F&G cites nothing in the record to link Dynapoint
Taiwan with the State of Florida or to any sales activities by Dynapoint Taiwan on
Dynapoint China’s behalf in the United States. Instead, it simply treats the Taiwanese
and Chinese companies as if they are one and the same. In response to Dynapoint
Taiwan’s argument that Dynapoint China and Dynapoint Taiwan are not the same,
Brufsky, on page 1 of the reply brief, misrepresents that Dynapoint China “is a co-
defendant in this case,” citing the district court’s order of April 11, 2007, with no mention
of the fact that the April 11, 2007 order was set aside on April 12, 2007.
F&G’s failure to point to any legal errors by the district court, or any evidentiary
support for its position, and Brufsky’s misstatement of the record with respect to
Dynapoint China’s status as a party prompted this court on December 19, 2007, to
issue an order directing F&G and Brufsky to show cause in writing as to why this case
should not be deemed frivolous as filed and frivolous as argued in the submitted briefs.
2007-1350 4
The show cause order further directed both F&G and Brufsky to show cause as to why
sanctions should not be imposed and as to how such sanctions, if imposed, should be
apportioned between them. On January 4, 2008, F&G responded to this court’s
December 19, 2007 order and separately filed a Motion to Dismiss the Appeal, offering
to dismiss the appeal or seeking in the alternative an order directing the district court to
take certain actions.
III
“If a court of appeals determines that an appeal is frivolous, it may, after . . .
notice from the court and reasonable opportunity to respond, award just damages and
single or double costs to the appellee.” Fed. R. App. P. 38. We have held that an
appeal may be “frivolous as filed” when “an appellant grounds his appeal on arguments
or issues that are beyond the reasonable contemplation of fair-minded people, and no
basis for reversal in law or fact can be or is even arguably shown.” Abbs, 237 F.3d at
1345 (internal quotation marks omitted). An appeal may be “frivolous as argued when
an appellant has not dealt fairly with the court, [or] has significantly misrepresented the
law or facts.” Id. “[A]n appeal which is frivolous as filed must also be frivolous as
argued, since any arguments made in support of it are, by definition, frivolous.”
Constant v. United States, 929 F.2d 654, 658 (Fed. Cir. 1991). Although “[w]e are
reluctant to impose sanctions,” Abbs, 237 F.3d at 1346, “examples of actions deemed
sanctionable include . . . failing to explain how the trial court erred or to present cogent
or clear arguments for reversal, . . . making irrelevant and illogical arguments, [and]
misrepresenting facts or law to the court,” id. at 1345 (internal citations omitted).
2007-1350 5
F&G’s persistent and exclusive reliance on the Brufsky declaration, which
identifies Dynapoint China—rather than Dynapoint Taiwan—as the producer of the
allegedly infringing products, can best be described as the type of irrelevant and illogical
argument warned against in Abbs. F&G makes no effort to identify any legal or factual
error in the district court’s reasoning or findings. Instead, F&G relies on vague
allegations without basis in the record, e.g., F&G Br. at 12 (asserting without citation
that Dynapoint Taiwan was “[a]cting in concert with Spec-Research”), and on
generalized statements that treat both the Taiwanese and Chinese companies as if they
were one and the same, e.g., id. at 7 (asserting without citation that “Dynapoint injected
infringing scrolling computer mice into the stream of commerce by delivering them to
Spec-Research”). F&G and Brufsky attempt to portray Dynapoint Taiwan and
Dynapoint China as “one entity,” id. at 5 n.1, despite their separate corporate existence
and the district court’s decision to set aside its order joining Dynapoint China as a co-
defendant. This approach to advocacy reflects not only a “fail[ure] to explain how the
trial court erred or to present cogent or clear arguments for reversal,” but also a
willingness to mislead the court. Abbs, 237 F.3d at 1345. Brufsky’s misrepresentation
regarding Dynapoint China’s status in this case along with F&G’s reliance on an order
withdrawn by the district court, see Reply Br. at 1, more than justify a conclusion that
this appeal is frivolous as filed and as argued.
F&G’s response to the show cause order not only fails to justify its conduct and
that of its counsel but reiterates the same frivolous arguments presented previously,
thus compounding the impropriety of their actions, individually and collectively. F&G,
through Brufsky’s reply to the show cause order, illogically and misleadingly argues that
2007-1350 6
“[b]ecause of [its] treatment of ‘Dynapoint Taiwan’ and ‘Dynapoint China’ as one entity
. . . the appeal is not frivolous in law or fact as [F&G] is believed to have shown a chain
from the one entity to sales with knowledge thereof within the State of Florida.” But
F&G points to no evidence supporting this claim, and F&G’s request to treat Dynapoint
Taiwan and Dynapoint China as a single entity simply ignores the directive of our order
and the actions of the district court. Moreover, despite our observation in the December
19, 2007 order that “the district court’s docket sheet plainly reveals that the April 11,
2007 order was set aside on April 12, 2007, and that Dynapoint China has not been
made a party to this litigation,” F&G’s response to this order nonetheless relies again on
the April 11, 2007 order as evidence of Dynapoint China’s joinder. While F&G asserts
that it was never given a chance to respond to Dynapoint Taiwan’s motion to
reconsider, that simply is not relevant to its misrepresentation of the events that did
occur. Likewise, F&G’s offer to voluntarily dismiss the appeal is immaterial to the
propriety of its filing the appeal in the first place. Because we affirm the judgment of the
district court, F&G’s Motion to Dismiss is denied as moot.
F&G’s failure to point to any legal errors by the district court or any evidentiary
support for its position, Brufsky’s misstatement of the record with respect to Dynapoint
China’s non-joinder, and their mutual failure to respond meaningfully to the show cause
order render this appeal both frivolous as filed and frivolous as argued under Rule 38 of
the Federal Rules of Appellate Procedure. Moreover, there is no reason why Dynapoint
Taiwan should have had to expend the time and resources necessary to respond to
what F&G and its counsel knew or should have known was a baseless appeal.
Accordingly, we find sanctions to be in order in the amount of Dynapoint Taiwan’s
2007-1350 7
reasonable attorneys’ fees and costs in defending this appeal. Although F&G is liable
for sanctions because “parties are . . . held liable for the acts or omissions of their
counsel,” our finding that this appeal is frivolous “rests not only on the filing of the
appeal, but also on the frivolous nature of the advocacy in support of it.” State Indus.,
Inc. v. Mor-Flo Indus., Inc., 948 F.2d 1573, 1582 (Fed. Cir. 1991). For these reasons,
we affirm the dismissal of the district court and hold F&G and Brufsky jointly and
severally responsible for payment of the monetary sanctions awarded herein. See id. at
1582–83.
Dynapoint Taiwan is directed to file with this court its claim for reasonable
attorneys’ fees and costs incurred by Dynapoint Taiwan in the defense of this appeal,
together with supporting documentation, within fifteen (15) days of the date of this
opinion. F&G shall have five (5) days from the date Dynapoint Taiwan files its
submission with the court to file any objection thereto.
2007-1350 8