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"Do not go gentle into that good night." Dylan Thomas' poem refers to raging against dying, but attorneys can take this same approach by continuing to litigate a case at all costs until the bitter end. However, in a recent case, the Federal Circuit cautions attorneys that some issues should stop raging on appeal and instead should go gentle into that good night; otherwise, the end will be bitter: The attorneys will be jointly and severally liable for sanctions.

'E-PASS TECHNOLOGIES V. 3COM'

In E-Pass Technologies, Inc. v. 3Com Corp. et al., Nos. 2008-1144, -1145, -1146, -1470, -1471, -1472, Slip. Op. (Fed. Cir. March 24, 2009) (revised), the Federal Circuit granted sanctions for a frivolous appeal against E-Pass, finding the attorneys jointly and severally liable for the sanctions. From the start, the case on appeal looked bad for E-Pass. E-Pass was appealing a district court order awarding attorney fees to the defendants in three related patent infringement cases filed by E-Pass. E-Pass slip op. at 3. The district court found the cases exceptional under 35 U.S.C. §285 because E-Pass had not conducted an adequate pre-filing investigation before filing suit, and E-Pass repeatedly engaged in misconduct throughout the litigation. Id. at 2-3.

Apparently, the Federal Circuit did not like E-Pass any more than the district court and it thought that the case should have been put to rest long ago. One defendant, PalmSource, filed a motion arguing that the appeal was frivolous under Rule 38, Fed.R.App.P. Id. at 3. An appeal can be "frivolous as filed," which means that arguments were not reasonable and cannot arguably serve as a basis for reversal in law or fact, or an appeal can be "frivolous as argued," which means that the party did not deal fairly with the court or significantly misrepresented the law or facts. Id. at 4 (citing Abbs v. Principi, 237 F.3d 1342, 1345 (Fed. Cir. 2001)). The Federal Circuit found the E-Pass appeal was both "frivolous as filed" and "frivolous as argued." Id.

First, the court found that E-Pass failed "to clearly or cogently identify a ground for reversal of the district court's decision as to PalmSource." Id. at 4. E-Pass only argued that the district court erred as to the other sets of defendants, but failed to argue any grounds for overturning the district court's decision as to PalmSource. Id. at 5-6. Second, the court found that E-Pass made "multiple misrepresentations to the court." Id. at 7. E-Pass misrepresented decisions of the district court and misstated the legal standard for an exceptional case. Id. at 7-8. The majority found that E-Pass stated that a case was exceptional only if it was brought in bad faith and was objectively baseless, whereas the actual standard is "Absent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless." Id. at 9 (emphasis in original, citation omitted). Because litigation misconduct was a central issue in the appeal, the Federal Circuit found that E-Pass's selective citation was "an attempt to mislead the court." Id. at 9. And, to make sure that there was no dispute that the issue was dead and buried, the Federal Circuit found that even if E-Pass did "make a non-frivolous (yet ultimately unmeritorious) argument, it would not change our determination that the appeal as a whole is frivolous." Id. at 9-10.

A dissent was filed that reads like a eulogy for someone no one really liked: Yes, the "briefs on appeal fell short of the standards we expect of counsel in this court," but the appeal was "not so egregious" and it did have at least one redeeming argument. Id., dissent slip op. at 1-2, 4. (Bryson, dissenting).

THE FEDERAL CIRCUIT'S POWER TO SANCTION FRIVOLOUS APPEALS

A second look at the facts of E-Pass could explain why E-Pass appealed the district court's decision as to PalmSource. One of the three cases had been previously appealed and E-Pass was successful in changing a claim construction and overturning the district court's grant of summary judgment. Id. at 2. Furthermore, the defendants in two of the cases did not contend that the appeal was frivolous. Viewed as a whole, as apparently E-Pass argued, the three cases collectively had nonfrivolous arguments to appeal. Id. at 5-6.

Taken alone, however, the court found that the appeal related to PalmSource was frivolous. And a quick look at the history of the Federal Circuit shows that the court does not look kindly upon frivolous appeals. Less than two months after it was created, the Federal Circuit found an appeal to be frivolous under Rule 38 and it held the appellant and the attorneys jointly and severally liable for costs and attorney fees. Asberry v. United States, 692 F.2d 1378 (Fed. Cir. 1982). The Federal Circuit has since incorporated Asberry into its practice notes to Rule 38 to explain that it has "established the policy of enforcing this rule vigorously." Furthermore, the court explains that there are "many precedential opinions" that have been imposed under Rule 38 on counsel, parties, and pro se petitioners. Rule 38, Practice Notes.

In the end, although it was bad for E-Pass and the attorneys, the sanctions could have been worse. Had the Federal Circuit wished, there were several tools in the court's arsenal that allowed for further sanctions. For example, although the court only awarded costs in E-Pass, Rule 38 allows the court to award double costs.

The court could have also awarded damages and costs for the other two nonfrivolous appeals under 28 U.S.C. §1912. Unlike Rule 38, which is specifically directed to frivolous appeals and requires either filing a motion, like in E-Pass, or providing notice and an opportunity to respond prior to awarding sanctions, section 1912 provides the court the power to grant damages and costs to the prevailing party when a judgment is affirmed. Therefore, even though E-Pass' appeals in the other two cases were not frivolous, the court affirmed the district court's findings and it could have awarded damages and costs to those prevailing parties under section 1912.

The court could have also looked to 28 U.S.C. §1927 in order to assess costs, expenses and attorney fees solely on the attorney. Unlike Rule 38 and Section 1912 which are limited to appellate courts, section 1927 can be used by any court of the United States to assess liability for excessive costs when the attorney "multiplies the proceedings in any case unreasonably and vexatiously." Furthermore, section 1927 directs the court to require the attorney to "satisfy personally the excess costs, expenses, and attorneys' fees," as opposed to being jointly and severally liable.

Rule 46(c), Fed.R.App.P., can strike the most fear into the heart of an attorney when it is wielded by the court. Rule 46(c) is the appellate court's disciplinary rule "for conduct unbecoming a member of the bar or for failure to comply with any court rule." The Federal Circuit has special rules setting a procedure for handling violations of this Rule. See Federal Circuit Attorney Discipline Rules 5 and 6. Sanctions under Rule 46(c) can include a death knell for attorneys: removal of their name from the roll authorized to practice before the court.

The last potential basis for the Federal Circuit to sanction attorneys for frivolous appeals is the court's inherent power to impose sanctions. The Federal Circuit, however, has found that the inherent power of courts should be invoked only when "neither the statute nor the Rules are up to the task." ClearValue Inc., et al. v. Pearl River Polymers Inc., et al., Nos. 2007-1487, 2008-1176, Slip. Op. at 32 (Fed. Cir. March 24, 2009). With several rules and statute sections at its disposal, the Federal Circuit is unlikely to ever need to resort to its inherent powers to sanction for frivolous appeals.

Returning now to E-Pass, it is unlikely that E-Pass or its attorneys thought that the appeal would reach such a harsh end. They must have believed that they were merely being zealous advocates fighting to the bitter end. No one thinks that their appeal will be the next Asberry or E-Pass, but history has proven that another frivolous appeal will occur and sanctions will be granted. So as you sit in your office hammering out your next appeal brief, think back to E-Pass and consider carefully which arguments should "rage, rage against the dying of the light" and which arguments should "go gentle into that good night."

Jenner & Block partner David R. Bennett is a member of the firm's Intellectual Property Practice.