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July 3, 2003


The opinion of the court was delivered by: Whitman Knapp, United States District Senior Judge


In this patent infringement action, Plaintiff Safe-Strap Company, Inc. ("Plaintiff" or "Safe-Strap") alleges that Defendant Koala Corporation ("Defendant" or "Koala") violated the Patent Act, 35 U.S.C. § 101 et seq. Koala, however, contends that Safe-Strap's lawsuit is frivolous and argues that the allegations in Safe-Strap's Complaint lack evidentiary support. Accordingly, Koala now moves this Court to sanction Safe-Strap and its attorneys pursuant to Rule 11 of the Federal Rules of Civil Procedure.


Safe-Strap manufactures child restraint systems which are sold throughout the United States. (Compl. ¶ 7.) Among such products, Safe-Strap manufactures and markets, inter alia, child seatbelts which are used to secure and to protect children while they are riding in shopping carts commonly used by grocery stores. (Id.)

On August 15, 2000, the United States Patent and Trademark Office issued U.S. Patent No. 6,101,687 ("`687 Patent"), entitled "Child Seatbelt Assembly," to Paul F. Giampavolo ("Giampavolo")*fn1 and John S. Pontaoe (collectively the "patentees"). (See Compl. ¶ 8; see also Compl. Ex. 1.) The entire right, title, and interest to the `687 Patent was assigned to Safe-Strap. (Compl. ¶ 8; see also Compl., Ex. 1 (listing Safe-Strap as the assignee).) To date, Safe-Strap continues to manufacture and to distribute the Child Seatbelt Assembly under the `687 Patent. (Compl. ¶ 9.)

Safe-Strap contends that Koala infringed and continues to infringe the `687 Patent "by making, using, selling and offering to sell a Child Seatbelt Assembly that infringes the `687 Patent." (Compl. ¶ 10.) In 1998, Koala apparently acquired the assets of Smart Products Corporation. (Giampavolo Decl. ¶ 3.) Among those assets were safety belts sold under the name "SmartStrap ™." (See Giampavolo Decl. ¶¶ 1, 3; see also Giampavolo Decl., Ex. 1.) Thereafter, the Defendant continued to sell and to distribute safety belts "of the same design" as that product. (Giampavolo Decl. ¶ 3.) In 2000, Koala purportedly altered the manufacturing process by which it made the SmartStrap ™ safety belts in such a manner that the modified belts infringed Safe-Strap's `687 Patent. (See Giampavolo Decl. ¶¶ 9, 11.) According to Safe-Strap, Koala now sells these "infringing" SmartStrap ™ belts through its "Smart Products" division. (See Compl. ¶¶ 11-12.) Koala allegedly maintains a "vast stockpile" of such infringing products, has offered to sell them to Safe-Strap, and intends to sell them to Safe-Strap's current and future customers. (Compl. ¶ 13.)

As a consequence, Safe-Strap initiated this patent infringement action on September 5, 2002. The Plaintiff contends that Koala "infringed, contributorily infringed and/or induced others to infringe" the `687 Patent in violation of 35 U.S.C. § 271 (a), (b), and (c). (Compl. ¶ 17.) As such, Safe-Strap seeks declaratory and injunctive relief as well as damages.

Koala was served with the Summons and Complaint on September 12, 2002. (See Docket No. 3.) Three weeks later, Koala's counsel wrote a letter to Safe-Strap's attorneys in which he explained that the Defendant's safety belts could not have infringed the `687 Patent because the SmartStrap ™ was "in the prior art" and "one [could not] infringe a patent by practicing the prior art." (Def.'s Mot. for Sanctions, Ex. 2 at 1.) Koala's counsel also opined that "if the claims of the `687 Patent [were] interpreted so broadly as to encompass Koala's Smart Strap product, the `687 Patent would be fully anticipated by at least" one prior patent (namely U.S. Patent No. 5,940,944, U.S. Patent No. 5,920,968, or U.S. Patent No. 5,781,970 (collectively the "Anscher Patents")) and that "the `687 patent would be obvious and not patentable under 35 U.S.C. § 103 in light of any number of combinations of" the Anscher Patents and other prior art. (Id. at 2.) Koala therefore called upon Safe-Strap to withdraw the Complaint and enclosed a motion for sanctions which Koala intended to file with the Court if Safe-Strap chose not to do so. (See id. at 2-3.)

Safe-Strap's attorneys disagreed with the contentions enumerated in the foregoing letter. They sent Koala's counsel a response in which they explained that Safe-Strap had "a meritorious claim." (Def.'s Mot. for Sanctions, Ex. 3.) They also argued that Koala's counsel had misunderstood the "`687 claimed invention" and suggested that he should further "review the claims and file history of the `687 Patent-in-suit." (Id.) Safe-Strap's attorneys therefore informed Koala's counsel that Safe-Strap would not withdraw the Complaint. (Id.)

Koala's counsel took advantage of their suggestion and re-examined "the claims and file history of the `687 Patent." (Def.'s Mot. for Sanctions, Ex. 4.) However, this new evaluation only reinforced his previous views about Safe-Strap's case. (See id.) As such, on October 8, 2002, Koala's counsel sent Safe-Strap's attorneys a second letter in which he informed them that Koala would move for sanctions if Safe-Strap did not withdraw its Complaint within 21 days. (Id.) He also enclosed an amended motion for sanctions with his correspondence. (See id.) Safe-Strap chose not to withdraw its Complaint and, on November 5, 2002, Koala moved the Court for sanctions.


I. Standards For Rule 11 Sanctions

Koala moves the Court to sanction the Plaintiff and its attorneys pursuant to Rule 11 of the Federal Rules of Civil Procedure. Koala contends that they have engaged in conduct which violates Rule 11. As a consequence, Koala seeks "(1) [the] dismissal of this action; and (2) [an] award of attorneys' fees for being needlessly put to the defense of Safe-Strap Company, Inc.'s objectively frivolous infringement charge." (Def.'s Reply in supp. of Sanctions ("Def.'s Reply Br.") at 1; see also Def.'s Notice of Mot. at 1 (moving "for an Order, (1) imposing sanctions against Safe-Strap and its attorneys in violation of Fed.R.Civ.P. 1, (2) requiring payment of Koala's reasonable attorney's fees and other expenses incurred as a direct result of said violation, (3) dismissing this frivolous action against Koala . . ."); Def.'s Reply Br. at 10 ("The Complaint should be dismissed as frivolous and Koala awarded fees.").)

"Rule 11 requires an attorney to sign every pleading or other paper filed with the court." Storey v. Cello Holdings, L.L.C. (S.D.N.Y. 2002) 182 F. Supp.2d 355, 364; see also Fed.R.Civ.P. 11(a). When he signs a pleading, the attorney certifies that to the best of the person's knowledge, information, ...

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