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LAWYERS AVOID $755,000 SANCTION IN PATENT INFRINGEMENT ACTION BROUGHT AGAINST CITRIX

by | Jul 24, 2009 | Patent | 0 comments

In Orenshteyn v. Citrix Systems, Inc., the Federal Circuit reversed in part a ruling from the U.S. District Court for the Southern District of Florida, which entered summary judgment of non-infringement in a patent infringement action brought by the inventor of  U.S. Patent 5,889,942and U.S. Patent 6,393,569, both entitled “Secured System for Accessing Application Services from a Remote Station.”  The appellate court also reversed a sanction of $755,633.17, imposed against the Plaintiff inventor, and two of his attorneys.  

While the Federal Circuit found that the “case was not litigated well by [Plaintiff] and his counsel,” it did find that there was a triable issue with regard to at least one of the asserted claims of the patents-in-suit, and reversed the summary judgment as to that claim, but affirmed the summary judgment as to all other asserted claims.  Accordingly, the case was remanded to the district court for trial on the remaining asserted claim, and the defendant’s non-infringement and invalidity defenses.  

Based on the reversal, as well as the fact that the Defendant’s Rule 11 motion for sanctions was served after entry of summary judgment, thereby depriving Plaintiff and his attorneys of the 21-day safe harbor, the appellate court found that an award of Rule 11 sanctions was an abuse of discretion.  However, because an issue remained as to whether the Plaintiff’s attorneys should have corrected the Plaintiff’s testimony regarding pre-filing investigation conversations, the appellate court left open for the district court’s determination whether sanctions were appropriate for vexatious litigation, but cautioned that any award should be limited to the “costs, expenses, and fees attributable to the multiplication of the proceedings that resulted,” which it predicted would be “a fraction of the total litigation cost”.