11
Nov
By Eric Schweibenz
On November 8, 2013, ALJ E. James Gildea issued Order No. 44 requiring that Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (“Finnegan”), counsel for nonparty Hillcrest Laboratories, Inc. (“Hillcrest”), show cause why they should not be sanctioned in Certain Microelectromechanical Systems (“MEMS Devices”) and Products Containing the Same (Inv. No. 337-TA-876).

By way of background, ALJ Gildea had previously issued Order No. 30 granting-in-part Hillcrest’s motion to quash a subpoena served by Complainant STMicroelectronics, Inc., and ordering Hillcrest to produce documents and one or more knowledgeable witnesses for deposition in connection with discovery related to infringement.  See our October 14, 2013 post for more details.  However, instead of complying with Order No. 30, Hillcrest filed a motion for reconsideration which the ALJ denied in Order No. 39.  In doing so, ALJ Gildea made specific findings that the motion appeared to be “frivolous and calculated to create delay,” including putting Hillcrest on notice that the ALJ would consider whether “it would be productive to issue an order to show cause why [Finnegan] should not be sanctioned pursuant to Commission Rule 210.4(c) and (d)(1)(ii).”  ALJ Gildea added that he “has issued warnings, but never issued sanctions pursuant to this rule; yet if there was ever an example of a motion that appeared to warrant a show cause order, it is this motion for reconsideration.”  See our October 28, 2013 post for more details.

In the Order, ALJ Gildea likened Commission Rule 210.4 to Fed. R. Civ. P. 11, and noted that the rule “is designed to be applied to nonparties, namely attorneys and law firms not named as respondents to Section 337 investigations.”  The ALJ further observed that sanctions pursuant to this rule are not applicable to discovery requests, responses, objections and motions, but that a motion for reconsideration is not among the foregoing:  “Had Nonparty simply refused to cooperate with the subpoena, the proper response would have been prompt judicial enforcement.  Commission Rule 210.32(g).  Instead, Counsel for Nonparty filed a motion for reconsideration that, for the reasons discussed above and in Order No. 39, lacked merit, appeared frivolous, and appeared to have been presented for an improper purpose, namely to attempt to inject further delay before judicial enforcement.”  Accordingly, ALJ Gildea ordered Finnegan to show cause why they should not be sanctioned pursuant to Commission Rule 210.4(c) and (d)(1)(ii), and “recommended that [Finnegan] provide evidence and/or sworn declarations to support their response.”