In IPR2014-00739 involving petitioner Shire Development LLC and patent owner LCS Group, LLC, the petitioner sought authorization to file a motion for sanctions against the inventor based on his communications with petitioner in violation of a prior order from the Board. The Board's prior order stated that "the inventor, Dr. Louis Sanfilippo, is prohibited from contacting Shire, Shire's employees, the expert retained by Shire for this proceeding (Dr. Timothy Brewerton), and counsel for Petitioner, except through counsel for Patent Owner or in the presence of counsel for Patent Owner." Paper 9. According to the Petitioner, "the [inventor's] e-mail, as well as the hyperlink contained within the e-mail, contained misrepresentations, and constituted harassment, as well as veiled threats against Petitioner."
The Petitioner also sought an adverse judgment based on a statement in the e-mail that "Patent Owner has determined that in order to best protect its interests it is foregoing any further involvement in the IPR process so that it can take the appropriate actions, including legal remedies, to resolve such representations made to the Board that have now caused Patent Owner harm, and so that it can pre-empt further harm from the undue burden of such representations."
Counsel for the patent owner stated that it was not the intention of the patent owner or the inventor to abandon the contest and that the inventor felt that he complied with the Board's order because his email was drafted in the presence of counsel.
The Board began its analysis by restating its authority for imposing sanctions for misconduct:
The Board may impose sanctions against a party for misconduct, including for failure to comply with an order, abuse of the process, or any other improper use of the proceeding, such as harassment. 37 C.F.R. § 42.12. Sanctions may include expunging or precluding a party from filing a paper, or judgment in the trial. Id. In this instance, we note that we precluded Dr. Sanfilippo from proceeding pro se in this proceeding, because a juristic entity, LCS Group, LLC, and not Dr. Sanfilippo, in his individual capacity, is the real party-in-interest. Paper 9.
The Board ultimately concluded that the inventor's email was not "a statement to the Board requesting adverse judgment against Patent Owner in this proceeding" and therefore declined to enter an adverse judgment. However, the Board agreed with the petitioner that the inventor's email to the petition was in violation of the Board's order and subsequently clarified its order prohibiting his further direct involvement in the proceeding and reminding counsel of their professional responsibilities:
We further clarify our order of December 9, 2014. In particular, Dr. Sanfilippo is prohibited from contacting Petitioner, Petitioner's employees, Petitioner's expert, Petitioner's counsel, or anyone associated with Petitioner, in relation to this proceeding. Further, any communication from Patent Owner to Petitioner or Petitioner's representatives regarding this proceeding must be signed by Patent Owner's counsel of record. Moreover, Dr. Sanfilippo cannot sign any paper to be filed with the Board in this proceeding, but all papers must be signed by Patent Owner's counsel of record. We remind counsel that they are subject to the USPTO Rules of Professional Conduct set forth in 37 C.F.R. §§ 11.101 et. seq. and disciplinary jurisdiction under 37 C.F.R. § 11.19(a).
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The circumstances surrounding this decision may be somewhat of an outlier, but the decision itself serves as a reminder that the Board may impose sanctions against a party for misconduct, including for failure to comply with an order, abuse of the process, or any other improper use of the proceeding, such as harassment. 37 C.F.R. § 42.12.
Shire Development LLC v. LCS Group, LLC, Case IPR2014-00739 (PTAB Dec. 23, 2014) (Paper 14) (Per Curiam).