Refac International, Ltd. v. Hitachi Ltd.

141 F.R.D. 281, 19 U.S.P.Q. 2d (BNA) 1855, 1991 U.S. Dist. LEXIS 15890, 1991 WL 218743
CourtDistrict Court, C.D. California
DecidedMay 31, 1991
DocketNo. CV87-6191-TJH (Bx)
StatusPublished
Cited by5 cases

This text of 141 F.R.D. 281 (Refac International, Ltd. v. Hitachi Ltd.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Refac International, Ltd. v. Hitachi Ltd., 141 F.R.D. 281, 19 U.S.P.Q. 2d (BNA) 1855, 1991 U.S. Dist. LEXIS 15890, 1991 WL 218743 (C.D. Cal. 1991).

Opinion

ORDER

VOLNEY V. BROWN, Jr., United States Magistrate Judge.

Through its counsel Chung and Stein, on September 17, 1987 Refac International, Ltd. (“plaintiff” or “Refac”) commenced this action against 118 named defendants, [284]*284alleging infringement of its specified patents. Assigned then, as now, by District Court Judge Terry J. Hatter, Jr. to manage discovery disputes, the undersigned Magistrate Judge (then a Magistrate) first sanctioned plaintiffs counsel for discovery abuse and ordered that' further and detailed discovery be given defendants by a specific date. Finding thereafter that the latter order had been disobeyed, the undersigned recommended to Judge Hatter that he enter a judgment of noninfringement as to each defendant, that he direct entry of a judgment dismissing the complaint with prejudice, and that he consider initiating a Rule 11 inquiry. Judge Hatter then did enter a judgment of noninfringement as to the products of each defendant having an LCD device made, use, imported, sold or offered for sale before May 15, 1990, and he dismissed the complaint, but with leave to amend the complaint to assert infringement against other products. He declined to address Rule 11 sanctions “at this time”. Transcript of April 3, 1989 hearing, page 14. Defendants’ motions for fees and costs, whether under 35 U.S.C. § 285, 28 U.S.C. § 1927 or otherwise, were denied, but fees were awarded under Rule 37, F.R.Civ.P. Order of May 11, 1989.

Refac appealed to the United States Court of Appeals for the Federal Circuit from Judge Hatter’s Said order, and the Brico defendants cross appealed from that part of the order denying sanctions. In its published opinion, 921 F.2d 1247, 1253, the Court of Appeals affirmed in part, but remanded “to the district court for it to determine whether Rule 11 was violated when the complaint was signed and, if it so finds, to impose an appropriate sanction upon the person who signed it or upon Refac or both.” Page 1257. Judge Hatter, in turn, has referred this matter again to the Magistrate Judge.

The motions of the defendants for Rule 11 sanctions, and for fees, costs and damages pursuant to 35 U.S.C. § 285 and 28 U.S.C. § 1927, came on regularly for hearing before this Magistrate Judge on May 29, 1991, on all of the papers heretofore filed and the oral arguments of counsel.

Rule 11, Federal Rules of Civil Procedure, reads in pertinent part:

“... The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper, that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law ... and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation____ If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the ¡person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.”

The motions made under 35 U.S.C. § 285 and 28 U.S.C. § 1927 are hereby denied. The Federal Circuit remanded specifically for a Rule 11 consideration only. If, nevertheless, this court has jurisdiction, residual or otherwise, to consider the said motions, the Magistrate Judge hereby expressly declines to exercise it. Such awards as the moving parties might otherwise be entitled to under Section 285 and 1927 are, in any event, hereinafter largely awarded as Rule 11 sanctions.

With respect to the Rule 11 motion, the Magistrate Judge now makes the following findings of fact.

1. The plaintiff is Refac International, Ltd., a corporation which owns three United States patents, 3,744,049 (the “ ’049 patent”), 3,855,783 (the “’783 patent”), and 3,955,355 (the “ ’355 patent.”). At all times here pertinent, before the filing of the complaint, at that time, and after that time to and including the date of the dismissal of the complaint by Judge Hatter, Refac’s president was Philip Sperber, himself an experienced patent attorney. It was Mr. Sperber who conceived and directed the [285]*285filing of this action, and of similar actions in other District Courts throughout the United States. Mr. Sperber was, in turn, advised by expert patent counsel Peter Cor-bin of New York.

2. The subject motion for sanctions and other relief was filed by defendants Brico International Corporation, Golden Pacific Electronics, Inc., Hansen Sales Corp. d/b/a Travel-Tech International, and Kin Son Electronics (USA), Inc. (the “Brico Defendants”), all represented by the law firm of Sheldon & Mak, on October 24, 1990. A supplemental memorandum in support of their motion was filed on January 16, 1991.

3. Defendant 1554 Corp. doing business as the Mellinger Co. (“1554”) joined the Brico Defendants’ motion by a notice filed on October 30, 1990.

4. Defendant Tomix Watch Trading Co., Inc. (“Tomix”) joined the Brico Defendants’ motion by a notice filed on November 2, 1990.

5. Defendant May Department Stores Company (“May”) joined Brico Defendants’ motion by a notice filed on November 5, 1990.

6. Defendant Fortel Corporation (“For-tel”) joined the Brico Defendants’ motion by a notice filed on November 7, 1990.

7. Defendant Lucky Stores, Inc., doing business as Gemco (“Gemco”), joined the Brico Defendants’ motion by a notice filed on November 8,1990 and, on the same day, filed a supplemental memorandum in support of its joinder in that motion.

8. Defendant Circuit City Stores, Inc. (“Circuit City”) joined the Brico Defendants’ motion by a notice filed on November 9, 1990.

9. Defendant Leo’s Stereos, Inc. (“Leo’s Stereos”) joined the Brico Defendants’ motion by a notice filed on November 9, 1990.

10. Defendant Clarion Shoji Co., Ltd. (USA) (“Clarion”) joined the Brico Defendants’ motion by a notice filed on November 12, 1990.

11. Defendant Tele-Com Products, Inc. (“Tele-Com”) filed its motion for an order finding this an “exceptional case” under 35 U.S.C. § 285 (the “Tele-Com Motion”) on November 16, 1990, and obtained an order consolidating the hearing on its motion with the hearing on the Brico Defendant’s motion.

12. Defendant DAK Industries, Inc. (“DAK”) filed its motion for sanctions under Fed.R.Civ.P. 11, 28 U.S.C.

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141 F.R.D. 281, 19 U.S.P.Q. 2d (BNA) 1855, 1991 U.S. Dist. LEXIS 15890, 1991 WL 218743, Counsel Stack Legal Research, https://law.counselstack.com/opinion/refac-international-ltd-v-hitachi-ltd-cacd-1991.