Lead Opinion
Opinion for the court filed by Circuit Judge PROST. Concurring opinion filed by Circuit Judge REYNA.
Raylon, LLC (“Raylon”) brought three suits against, inter alia, Complus Data Innovations, Inc. (“Complus”), Casio America, Inc. and Casio Computer Co., Ltd., (collectively “Casio”), and Symbol Technologies, Inc, (“Symbol”) (collectively, “defendants”) in the Eastern District of Texas. Raylon alleged that all defendants infringe claims 1-17 of U.S. Patent No. 6,655,589 (“'589 patent”). The district court consolidated the three suits. After a combined hearing, the court adopted defendants’ claim construction, granted summary judgment in their favor, and denied their motions for Rule 11 sanctions. The district court also denied defendants’ motions for attorneys’ fees and costs under 35 U.S.C. § 285, citing its Rule 11 decision. Defendants appeal the denial of sanctions and attorneys’ fees. For the reasons set forth below, we affirm in part, vacate in part, and remand for further proceedings.
Background
Raylon is the assignee of the '589 patent, which is directed to a hand-held identification investigating and ticket issuing system. The object of the invention is to provide an affordable, durable system that reduces the amount of time a user spends identifying and issuing tickets to individuals and allows the user to maintain visual contact with the individual throughout the identification and ticketing process. '589 patent col.2 ll.64-65; col.3 ll.34-48. The system is described as containing a housing within which there is an input assembly for entering data, an elongated slot for receiving identification forms that have a. magnetic tape, an elongated aperture for access to the housing’s interior, a transceiver assembly to communicate remotely with a computer, a printer assembly for printing tickets, and a display that “is pivotally mounted on the housing for displaying data entered into the input assembly.” See, e.g., '589 patent Abstract; col.1 ll.26— 40; col.1 ll.66-co1.2 1.14; col.3 ll.18-33. Figure 1 is a schematic perspective of the system:
With reference to Figure 1, the preferred embodiment’s display 39 “may be pivotally mounted on the housing 12 and may be positioned generally adjacent to the first end 13 of the housing 12.” Id. col.5 ll.58-61. Claim 1 is representative of the patented system:
1. A system for investigating an identification of a person and for issuing tickets, the identification comprising a card having a computer readable magnetic tape secured on the card, the computer readable magnetic tape containing pertinent data relating to the person displayed on the identification card, said system being connectable to a computer for transmitting data between said system and the computer, said system being connectable to a data cable of a computer, said system comprising:
a housing having an interior, said housing having an elongated slot for selectively receiving the identification card, said housing having an elongated aperture providing access into said interior of said housing;
an input assembly for inputting data about a person, said input assembly being mounted on said housing, said input assembly including a data reading means for reading the computer readable magnetic tape on the identification card;
a transceiver assembly for remotely communicating with a computer, said transceiver assembly being mounted in said interior of said housing;
a display for displaying data entered into said input assembly, said display being pivotally mounted on said housing;
a printer assembly being mounted in said interior of said housing for printing a ticket; and wherein said printer assembly includes
a substrate for receiving indicia, said substrate including an end ex*1365 tendable through said elongated aperture in said housing,
a printer means for printing indicia on said substrate, and
means for advancing said substrate with respect to said printer means such that substrate is advanced though said elongated aperture in said housing when said printer means prints indicia on said substrate.
Id. col.7 ll.9-44 (emphasis added). Independent system claims 16 and 17 also recite a “display being pivotally mounted on said housing” limitation. Id. col.8 ll.55-57; col.9 ll.20-22.
In 2009, Raylon filed three suits in the U.S. District Court for the Eastern District of Texas against software integrators and product component manufacturers of various ticket-writing and enforcement handheld devices, including Complus, Casio, and Symbol. In each suit, Raylon asserted that defendants’ devices directly infringe claims 1-17 of the '589 patent literally and under the doctrine of equivalents, that defendants induce others to infringe, and that defendants contributorily infringe all claims of the '589 patent. Defendants moved to dismiss, for judgment on the pleadings, or for summary judgment; the court denied or postponed these motions pending claim construction.
During the spring of 2010, Casio and other defendants sent several letters to Raylon, expressing their concerns that Raylon’s complaints violated Rule 11(b)(2) and Rule 11(b)(3) because, inter alia, Raylon’s claim construction positions were unsupportable by intrinsic evidence and its infringement positions with regards to the display, magnetic strip reader, and printer elements of the asserted claims were unreasonable. Raylon disagreed, maintaining that the patent supported a broad claim construction and that the accused products infringed each and every claim of the '589 patent. Specifically, Raylon alleged that the accused devices all literally met the “display being pivotally mounted on said housing” element because they each had “a display that is mounted on the housing and can be pivoted relative to the viewer’s or user’s angle of visual orientation.” J.A. 4223; J.A. 4912; J.A. 5768. In other words, under Raylon’s theory of infringement a display with a fixed-mounted screen meets the ‘pivotally mounted on said housing’ limitation when the user pivots the device by moving his elbow, wrist, or other joint.
In advance of the Markman hearing, both Raylon and defendants proposed constructions of, inter alia, “display being pivotally mounted on said housing,” “a printer assembly being mounted in said interior of said housing,” and “said housing having an elongated slot for selectively receiving the identification card.” Defendants also filed motions for Rule 11 sanctions in each suit. The district court consolidated the three suits for purposes of claim construction, summary judgment, and sanctions.
On December 2, 2010, the district court held a consolidated hearing. The only term construed was “display being pivotally mounted on said housing.” Raylon construed the term to mean “an electronic device attached to a housing for the visual presentation of information, the display capable of being moved or pivoted relative to the viewer’s perspective.” Defendants proposed various constructions, all of which excluded from “pivotally mounted” any displays that are fixed or incapable of pivoting.
The district court’s holdings were memorialized in later-issued orders. On March 9, 2011, the district court issued an order reflecting its denial of Rule 11 sanctions. In that order, the district court quoted the Fifth Circuit’s objective standard and stated that while “Raylon’s claim construction arguments and infringement theory do stretch the bounds of reasonableness, and the Court rejected Raylon’s positions, they do not cross the line.” J.A. 4. The court then analyzed Raylon’s settlements and damages model to determine whether Raylon filed suit to recover nuisance value settlements or whether the numbers were “indicative of the good faith nature with which the case is brought.” Id. It found Raylon’s proffered model “not large for a patent case,” suggesting that Raylon’s “earlier settlements were not so unreasonable as to indicate that Raylon believed its case was weak or frivolous.” Id. On this basis, the district court concluded that this was not a situation where “the cost of the litigation is more of a driving force than the merits of the patent-in-suit,” so it denied the motions without considering the merits of the suit. J.A. 6.
On March 23, 2011, the district court issued an order granting summary judgment of non-infringement in favor of defendants. Based on the court’s construction of the “pivotally mounted” term
After final judgment was entered on March 23, 2011, defendants filed motions for attorneys’ fees and costs pursuant to 35 U.S.C. § 285, 28 U.S.C. § 1927, and the court’s inherent powers. In a joint order on October 31, 2011, the district court denied the motions. It found Raylon’s suits were not objectively baseless for the same reason it denied Rule 11 sanctions. The court also rejected defendants’ arguments that Raylon’s conduct in pursuing the baseless claims constituted litigation misconduct. The court similarly denied fees and costs under § 1927. On October 31, 2011, the court entered an amended final judgment. Defendants appeal.
Discussion
On appeal, defendants challenge the district court’s denial of Rule 11 sanctions and of attorneys’ fees. We address each issue in turn.
A. Rule 11 Sanctions
Rule 11 expressly requires that an attorney presenting a pleading, motion, or oth
In reviewing a district court’s decision to deny Rule 11 sanctions, we apply the law of the regional circuit. Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1328 (Fed.Cir.2011). The Fifth Circuit reviews a denial of sanctions for an abuse of discretion. Whitehead v. Food Max of Miss., Inc., 332 F.3d 796, 802 (5th Cir. 2003) (en banc); see Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). A district court necessarily abused its discretion “ ‘if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence.’ ” Whitehead, 332 F.3d 796 (quoting Cooter & Gell, 496 U.S. at 405, 110 S.Ct. 2447); Skidmore Energy, Inc. v. KPMG, 455 F.3d 564, 566 (5th Cir.2006) (“A district court abuses its discretion if it imposes sanctions based on (1) an erroneous view of the law or (2) a clearly erroneous assessment of the evidence.”).
Defendants argue that the denial of Rule 11 sanctions should be reversed because the district court abused its discretion in two regards. They argue that the district court applied the wrong standard — a subjective, rather than objective one — in evaluating Raylon’s conduct. Defendants argue that under the proper standard, Raylon’s claim construction and infringement contentions with regards to the “pivotally mounted” limitation (as well as others not addressed by the district court) were objectively unreasonable. Defendant Symbol also alleges that the district court abused its discretion by failing to consider some of its arguments. Specifically, Symbol argued that Raylon’s construction of a printer in “said housing” to include a printer in any housing, including an auxiliary housing, was frivolous; Symbol also argued that Raylon’s infringement allegations against its products, none of which contain a printer, were frivolous.
We agree with defendants. In the Fifth Circuit, when determining whether there was a Rule 11 violation, “the standard under which an attorney is measured is an objective, not subjective standard of reasonableness under the circumstances.” Whitehead, 332 F.3d at 803. The district court abused its discretion by evaluating Raylon’s conduct under a subjective standard.
Applying the objectively reasonable standard, we agree with defendants that Raylon’s claim construction (and thus infringement contentions) were frivolous. Claim construction is a matter of law, so that an attorney’s proposed claim construction is subject to Rule ll(b)(2)’s requirement that all legal arguments be nonfrivolous. Antonious v. Spalding & Evenflo Cos., Inc., 275 F.3d 1066, 1071 (Fed.Cir.2002). Reasonable minds can differ as to claim construction positions and losing constructions can nevertheless be nonfrivolous. But, there is a threshold below which a claim construction is “so unreasonable that no reasonable litigant could believe it would succeed,” iLor, LLC v. Google, Inc., 631 F.3d 1372, 1378 (Fed. Cir.2011), and thus warrants Rule 11 sanctions.
Raylon’s claim construction of “display pivotally mounted on said housing” is a prime example of a construction that falls below this threshold. Raylon, throughout the litigation, argued that this term should be construed as requiring a “display being capable of being moved or pivoted relative to the viewer’s perspective.” J.A. 1477 (emphasis added). Its construction encompasses any portable device with a display, regardless of how it is mounted to the housing. See, e.g., J.A. 3671 (Raylon’s example of a device not covered by the claim term is “a printer with a fixed display” because a printer cannot be pivoted relative to the user). In support of this broad construction, Raylon relies on a single sentence in the specification. That sentence states: “Even still another object of the present invention is to provide a new identification investigating and ticket issuing system that permits a police officer to maintain visual contact of a stopped person while investigating whether the person has any warrants or suspended license.” '589 patent col.3 ll.42-46.
Neither this sentence nor any other intrinsic evidence supports Raylon’s position that the term “pivotally mounted” is relative to the user rather than to the device’s housing. Rather, each and every claim of
In addition to the “pivotally mounted” limitation, defendants — in particular, Symbol — argued that several other of Raylon’s claim constructions were frivolous based on similar reasoning.
Raylon’s attorney argued that claim construction “is kind of [an] arcane subject that gets ordinary lawyers like me in trouble a lot of times.” J.A. 14048. There is nothing arcane about the location of the printer assembly in the claimed invention. Raylon’s position that the printer could be in an entirely different housing from the rest of the components is objectively unreasonable and an independent violation of Rule 11 with respect to Symbol, whose products lack a printer entirely. On remand, the district court should weigh Raylon’s multiple frivolous arguments with respect to Symbol’s products when crafting an appropriate sanction.
When a party’s conduct violates Rule 11(b), the court may impose “an appropriate sanction.” Fed.R.Civ.P. 11(c)(2). Rule 11 sanctions “may be set at a level ‘sufficient to deter repetition of such conduct or comparable conduct by others similarly situated.’ ” Clinton v. Jones, 520 U.S. 681, 710 n. 42, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997) (quoting Fed.R.Civ.P. 11(c)(2)). Determining what sanctions, if any, to impose is initially a matter within the discretion of the district court. Judin v. United States, 110 F.3d 780, 785 (Fed.Cir.1997). We remand these cases for a determination of an appropriate sanction.
B. Attorneys’ Fees and Costs
Defendants argue that the district court improperly denied attorneys’ fees and costs under 35 U.S.C. § 285, and that these cases qualify as exceptional under the statute. A case is exceptional under § 285 if there has been some inappropriate conduct relating to the matter in litigation. Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (Fed.Cir.2005). Absent litigation misconduct or misconduct in securing the patent, a case is exceptional under § 285 if “(1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.” Id. Similar to the evaluation under Rule 11, for litigation to be objectively baseless, the allegations “must be such that no reasonable litigant could reasonably expect success on the merits.” Dominant Semiconductors Sdn. Bhd. v. OSRAM GmbH, 524 F.3d 1254, 1260 (Fed. Cir.2008). The district court found that there was no litigation misconduct. In evaluating whether the cases were otherwise exceptional, the court relied exclusively on it Rule 11 order to find that the litigation was not “objectively baseless.” Since we reverse the district court’s holding with regards to a Rule 11 violation, the district court can no longer rely on its Rule 11 analysis to find the objectively baseless prong not met. We remand to the district court to reconsider, in light of our decision, whether these cases are exceptional under § 285.
Conclusion
The district court abused its discretion in denying defendants’ Rule 11 motions. We reverse the district court’s holding that there was no Rule 11 violation and remand to the district court to determine, in the first instance, a proper sanction. Because the court’s evaluation of § 285 relied on its Rule 11 analysis, we vacate the district court’s denial of attorneys’ fees and costs, and remand for the court to reconsider defendants’ motions in light of our decision.
AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED
. Defendant EZ Tag proposed a construction that requires the housing and display to not be in fixed positions. Defendants Casio, Complus, and Fujitsu construed the limitation
. As a result of the consolidated hearing, discussed above, the district court construed the "display being pivotally mounted on said housing” term as “the display must be mounted on the housing so that the display and housing may pivot with respect to each other.” J.A. 7029.
. The district court mentioned Raylon’s claim construction positions — stating "[w]hile Raylon’s claim construction arguments and infringement theory do stretch the bounds of reasonableness, and the [c]ourt rejected Ray-Ion's positions, they do not cross that line”— but provided no analysis or explanation for this conclusion.
. Raylon’s infringement contentions were based on its claim construction. Because we find Raylon's claim construction of “pivotally mounted” frivolous, we need not reach whether Raylon's infringement contentions serve as an independent basis for imposing Rule 11 sanctions.
. The limitations at issue were “a printer assembly being mounted in said interior of said housing” and “said housing having an elongated slot for selectively receiving the identification card.” Raylon construed these limitations as covering printer assemblies and elongated slots that were contained in any housing despite the use of "said” housing in the claims. Symbol argued that based on the claims' use of “said housing” and the specification, the claims require the printer assembly and elongated slot to be in the same housing as the other elements of the device.
. We leave the district court’s denial of attorneys’ fees and costs under 28 U.S.C. § 1927 undisturbed. Establishing attorney misconduct under § 1927 implicates a higher level of culpability than Rule 11, and defendants have not established that Raylon’s misconduct rises
Concurrence Opinion
concurring.
I concur with the majority opinion and the result reached. I write separately to make clear that when a court finds a Rule 11 sanction based on conduct involving the allegation and pursuit of patent infringement claims that have been found objectively unreasonable, the court is compelled, if so moved by a party, to undertake a detailed and thorough § 285 inquiry and analysis. I deviate slightly from my colleagues in the majority in that, given the record in this case, I would reverse and declare this an exceptional case and limit the remand to determination of appropriate sanctions.
I. Legal Landscape
In three separate suits that were later consolidated, Raylon, LLC (“Raylon”) alleged that numerous defendants infringed U.S. Patent No. 6,655,589 (“the '589 patent”). At the conclusion of a hearing addressing claim construction, summary judgment, and motions for sanctions, eight defendants, including appellants Complus Data Innovations, Inc., Casio America, Inc. and Casio Computer Co., Ltd., (collectively “Casio”), and Symbol Technologies, Inc. (“Symbol”) (collectively, “defendants”), prevailed on their respective motions for summary judgment of noninfringement.
Casio argued a Rule 11 motion on behalf of defendants. Casio asserted that the accused devices were missing certain limitations claimed in the '589 patent. Casio stressed that it gave Raylon advance notice that its infringement allegations were without merit, further, were objectively unreasonable.
Symbol joined Casio’s argument regarding the pivotal mounting of the display, but also moved for sanctions under Rule 11 because Raylon had disregarded claim language requiring that a printer be inside of the housing to which the pivotally mounted display is attached.
In the face of defendants’ strongly argued assertions of objective unreasonableness, Raylon maintained that its allegations were objectively reasonable, including on grounds that it relied on expert advice of patent attorneys who conducted a pre-suit investigation. At the claim construction hearing, instead of advancing arguments based on the plain language of its asserted claims, Raylon offered that its claim construction proposals were premised on the “rather unusual interpretations that are sometimes put on claim terms by the Federal Circuit and practitioners.” J.A. 14049.
Prevailing parties Casio, Complus, and Symbol moved for an award of fees and a declaration that this case is exceptional pursuant to 35 U.S.C. § 285. The district court tied its § 285 objective inquiry to the earlier Rule 11 sanctions inquiry and declined to find the case exceptional. The district court did not provide detailed findings regarding whether the litigation was objectively baseless or whether Raylon brought the litigation in subjective bad faith. The ruling generally concluded that Raylon’s pivotally mounted display positions were not objectively baseless and there was no litigation misconduct that warranted an inference of bad faith. J.A. 13.
II. Distinct Rule 11 and § 285 Inquiries
Rule 11 of the Federal Rules of Civil Procedure and 35 U.S.C. § 285 of the Patent Act offer courts distinct, yet overlapping, rationales for awarding an injured party relief. In asking whether a party violated Rule 11, courts in the Fifth Circuit look only to “objectively ascertainable circumstances.” FDIC v. Maxxam, Inc., 523 F.3d 566, 586 (5th Cir.2008). By contrast, our § 285 precedent asks (1) whether the litigation is brought in subjective bad faith, and (2) whether the litigation is objectively baseless. Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (Fed.Cir.2005).
Rule 11 directs attorneys to focus on their obligations and responsibilities as officers of the court in making representations, while also operating as an enforcement mechanism to correct any “unusual circumstances” where a party “pursued an illegitimate purpose to increase costs or to harass a party regardless of the weight of that purpose in filing suit.” Maxxam, 523 F.3d at 586 (explaining that Rule 11 reaches those pleadings which constitute an abuse of legal purpose by discouraging dilatory or abusive tactics); see also Jenkins v. Methodist Hosp. of Dallas, Inc., 478 F.3d 255, 265 (5th Cir.2007) (“As stated by the Advisory Committee Note to Rule 11, a lawyer is required to ‘stop-and-think’ before ... making legal or factual contentions.”) (quoting Advisory Committee Notes on Fed. R. Civ. P. 11 (1993 Amendments)). Sanctionable Rule 11 conduct is distinguishable from a judgment on the merits because Rule 11 addresses the collateral issue of “whether the attorney has abused the judicial process, and, if so, what sanction would be appropriate.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 396, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990).
Section 285 was enacted to address a patent-specific policy rationale, awarding fees in “exceptional cases” in which sanctions were necessary to deter the “improper bringing of clearly unwarranted suits.” Automated Bus. Cos. v. NEC Am., Inc., 202 F.3d 1353, 1354 (Fed.Cir.2000) (quoting Mathis v. Spears, 857 F.2d 749, 753-54 (Fed.Cir.1988)). The purpose of the stat
In non-patent contexts, a litigant is sometimes sanctioned for misleading the court, e.g., Precision Specialty Metals, Inc. v. U.S., 315 F.3d 1346, 1357 (Fed.Cir.2003), or for exhibiting sloppiness during the course of the proceedings, Spiller v. Ella Smithers Geriatric Ctr., 919 F.2d 339, 347 (5th Cir.1990) (“slipshod and unprofessional work”). But in patent cases invoking Rule 11, courts are often asked to weigh whether the substantive allegations are so weak that they are not grounded in fact and legally tenable. See, e.g., View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed.Cir.2000).
Here, notwithstanding whether sanctions are issued pursuant to Rule 11, § 285, or both, the offending conduct is intertwined with governing patent law. I believe that if the circumstances in a patent case result in finding that Rule 11 has been violated on grounds related to substantive positions taken or advanced, then the district court must also, when so moved by the parties, engage in a comprehensive § 285 inquiry. In my view, a § 285 inquiry is compelling where the case progresses beyond the pleading stages and a party’s unwillingness to abide by precedent controlling claim construction lends to escalation of avoidable costs.
III. Record Inferences of Bad Faith
Having determined that the challenged litigation is objectively meritless,
Our cases have not established a precise definition for “bad faith” in the exceptional case context. We recognize the enactment of § 285 as a “bad faith equitable exception” to the American Rule on awarding fees to an alleged infringer, Mathis, 857
[T]he payment of attorney’s fees for the victor is not to be regarded as a penalty for failure to win a patent infringement suit. The exercise of discretion in favor of such an allowance should be bottomed upon a finding of unfairness or bad faith in the conduct of the losing party, or some other equitable consideration of similar force, which makes it grossly unjust that the winner of the particular law suit be left to bear the burden of his own counsel fees which prevailing litigants normally bear.
Rohm & Haas Co. v. Crystal Chemical Co., 736 F.2d 688, 691 (Fed.Cir.1984) (emphases added) (discussing 1952 Patent Act) (quoting Park-in Theatres, Inc. v. Perkins, 190 F.2d 137, 142 (9th Cir.1951)). Against this backdrop, I interpret “bad faith” as synonymous with a patent holder’s unreasonable continued pursuit of an infringement claim that has been demonstrably shown to be based on “wrongful intent, recklessness, or gross negligence.” Phonometrics, Inc. v. Westin Hotel Co., 350 F.3d 1242, 1246 (Fed.Cir.2003) (quoting Eltech, 903 F.2d at 811).
As I have noted, I agree with and join the majority’s strong analysis and result on Rule 11 sanctions. But, unlike the majority, I believe that the district court, in the first instance, should have fully explored the existence of an inference of bad faith.
A. Early Notice
Here the likelihood of success on infringement could have been projected simply by examining the accused devices and comparing those features element-by-element and claim-by-claim with the disclosures in the '589 patent. Rather than acknowledge that its claims could not survive, Raylon built its case on positions that misapply Federal Circuit precedent.
Indeed, Casio memorialized its concerns by writing to Raylon early in the case regarding the merits of its allegations, but it appears that Raylon took no curative measures and proceeded through claim
B. “Pivotally Mounted Display”
Raylon contended that the flatly fixed displays of the accused devices could meet the “pivotally mounted display” limitation because a person could move the entire device while it was held in the user’s hand. Yet, as the majority well clarifies, this position is inconsistent with the intrinsic disclosures and Raylon cannot rely on a single, inapposite sentence in the specification to redefine the meaning of the claim. Majority Op. 1368-69. As shown in Figure 1, the display was mounted on the housing in such a manner that it could be pivoted up or down with no movement of the housing. Illustrations of the patent figures next to the accused devices emphasize the objective unreasonableness of Raylon’s infringement allegations.
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The '589 patent specification teaches that the pivotally mounted display is attached to the housing and as a result the housing be made able to pivot up or down. '589 patent col.5 ll.58-61 (depicted in Figure 1). By contrast, it is readily apparent that the accused devices are fixed in a flat position and lack a display that is not, nor is it capable of, being pivotally mounted on the housing. Given the clear meaning of the claim elements, no objectively reasonable litigant would believe it could succeed by linking the “pivot” to the up and down movement of the user’s arm.
C. “Interior Printer Assembly”
Raylon also asserted all seventeen claims in the '589 patent against printer-less Symbol devices by contending that an external printer attached to a separate housing would satisfy the limitation requir
The disconnect between the accused devices and the claim language should have been apparent, but we have no indication as to whether Raylon’s expert’s conducted a visual examination of the Symbol devices and the stand alone printers. See J.A. 3975-82; 3991-4008. Again, the above figures clearly show that in the preferred embodiment of the '589 patent, a printer is housed within the device. Raylon argues that attaching a stand alone printer to the Symbol device satisfies the claim that the printer be located in the housing of the device.
The absence of analysis regarding the Symbol devices immediately raises doubt as to the credibility of Raylon’s assertions. For example, in responses to defendants’ motions for summary judgment, counsel for Raylon made only the limited statement that accused Symbol devices were analyzed by Raylon’s patent expert and that Symbol was provided claim charts that “consisted of a good faith, informed comparison of the claims of a patent against the accused subject matter.” J.A. 3972, ¶ 9; see also id. at 3969-71, ¶¶ 1-5. Raylon did not supplement the comparison with an explanation as to what the expert was relying upon or how the Symbol devices might infringe. In the end, Raylon never conceded the unavoidable reality that Symbol models did not infringe. Notably, Raylon continued to defend the reasonableness of its allegations on appeal, including during the oral argument before this court. Oral Argument, available at http://www.cafc.uscourts.gov/oralargument-recordings/all/raylonMml.
D. Undue Reliance on Expert Declarations
Instead of focusing on why its pre-suit investigation was a reasonable application of Phillips, Raylon argues that its allegations were made in good faith because it was informed by pre-suit advice it received from a patent practitioner it considered an expert. Applicable law, however, clearly states that a patent practitioner’s statements regarding the meaning of claim terms are entitled to no weight. Symantec Corp. v. Computer Assocs. Intern., Inc., 522 F.3d 1279, 1289 n. 3 (Fed.Cir.2008) (citing Sinorgchem Co., Shandong v. Int’l Trade Comm’n, 511 F.3d 1132, 1137 n. 3 (Fed.Cir.2007)). Similarly, patent practitioners are unqualified to opine on the issue of infringement. See Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1362 (Fed.Cir.2008).
The majority has ascertained that Rule 11 sanctions were necessary because Raylon did not follow standard canons of claim construction and its arguments were not reasonably supported by the intrinsic record. To date there have been no findings as to the adequacy of the presuit investigation and whether it was conducted in a manner intended to ignore or overlook the
For the post-Complaint analysis, Raylon defers to its technical expert, Dr. Sharp. Review of Dr. Sharp’s declaration reveals no significant effort to explain why Raylon’s interpretation of the pivotally mounted display limitation is the best understanding of the feature in light of the patent disclosures. See J.A. 3991-4008. The declaration simply states Dr. Sharp’s tacit approval of Raylon’s expansive positions through cursory conclusions indicating that there is “no restriction” that would stand in the way of Raylon’s effort to link the claim language to the perspective of the viewer. J.A. 4001-02. Dr. Sharp made no reasonable attempt to create a nexus between the asserted patent and the accused devices. Raylon’s heavy and continued reliance on an uninformative declaration calls into question whether the statements were predicated in good faith.
Raylon’s elevation of extrinsic declarations again ignores Federal Circuit precedent, which, at minimum, requires that structural discrepancies that lie at the basis of an infringement allegation be explained according to the intrinsic evidence. Bell & Howell Document Mgmt. Prod. Co. v. Altek Sys., 132 F.3d 701, 706 (Fed.Cir. 1997) (“Patents should be interpreted on the basis of their intrinsic record, not on the testimony of such after-the-fact ‘experts’ that played no part in the creation and prosecution of the patent.”) (citing Southwall Tech., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1578 (Fed.Cir.1995)). I submit that an inference of bad faith may arise where expert conclusions are steadfastly relied upon to “inject a new meaning into terms that is inconsistent with what the inventor set forth in his or her patent and communicated, first to the patent examiner and ultimately to the public.” Bell & Howell, 132 F.3d at 706.
IV. Conclusion
When a court finds a Rule 11 sanction based on conduct involving the allegation and pursuit of patent infringement claims that have been found objectively unreasonable, the court is compelled, if so moved by a party, to undertake a detailed and thorough § 285 inquiry and analysis. I concur with the majority and would reverse and declare this an exceptional case and limit the remand to determination of appropriate sanctions.
. This court recently held that objective baselessness is a question of law based on underlying mixed question of law and fact. Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300, 1309 (Fed.Cir.2012). The Highmark decision did not issue until after the district court denied the § 285 motion. Because I find Raylon's claim construction and infringement positions meritless, the objective analysis would compel the same result regardless of whether we reviewed de novo or for clear error.
. The district court limited its scant subjective intent analysis to general statements that there was no material misconduct because of a low probability of the case having been brought to force a settlement. J.A. 13. These general statements are incomplete following the acknowledgement that Raylon's claim construction positions "stretched the bounds of reasonableness.” J.A. 4. Recognition of the objectively weak contentions was basis enough to further inquire as to bad faith.
. Although Raylon noted at the claim construction hearing that it considers Federal Circuit teachings "somewhat unusual,” it is still bound to adhere to those guidelines— even when such rulings do not suit its litigation strategy. See J.A. 14049.
. As pointed out in the briefing, Raylon misrepresented the claim language — by substituting "pivotable” in place of the "pivotally mounted” limitation — and proceeded to claim construction by relying on an untenable position that was refuted by the '589 patent specification. See J.A. 12239-40; 12247; 12253; 12273-74.