Name of Assigned Judge or Magistrate Judge Robert M. Dow, Jr Sitting Judge if Other than Assigned Judge
Before the Court is Defendant John Minemyer's motion asking the Court to impose Rule 11 sanctions  on Plaintiffs Robert and Carolyn Lundeen and their counsel in connection with the filing of a false marking lawsuit that Defendant contends is being pursued solely for the purpose of harassing and intimidating him. For the reasons below, Defendant's motion  is denied.
O[ For further details see text below.] Notices mailed by Judicial staff.
Defendant Minemyer manufactures and sells plastic couplers that are used to join lengths of conduit for telecommunications and other industries. Minemyer owns two related patents that cover the two different types of couplers that he makes: the '772 patent and the '726 patent. The '726 patent covers a single-piece coupler -- the type of coupler at issue in the instant litigation. The single-piece coupler is manufactured and produced using 14 different molds. Half of the single-piece coupler molds (seven) are marked with patent number '722. As a result, a "significant percentage" of single-piece couplers that Minemyer has sold are marked with patent number '722. See [1, at ¶ 8]. The '722 patent is not owned by or assigned to Minemyer, and does not relate in any way to the couplers he produces. Rather, the '722 patent pertains to a type of screw jack, and is assigned to Kawasaki Industrial Co., Ltd.
On June 24, 2009, Plaintiffs brought this qui tam action against Defendant, claiming that Defendant had violated 35 U.S.C. § 292, the "false marking" statute, by mismarking the couplers with the '722 screw jack patent number.  Section 292(a) provides that:
Whoever, without the consent of the patentee, marks upon, or affixes to * * * anything made, used, offered for sale, or sold by such person within the United States * * * the patent number, or the words "patent," "patentee," or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; * * * [s]hall be fined not more than $500 for every such offense.
35 U.S.C. § 292(a). Subsection (b) of the false marking statute provides that one-half of the penalty in a prevailing false marking suit will go to the party bringing the suit, and the other half will go to the use of the United States. 35 U.S.C. § 292(b). When a defendant uses a mark that he knows is false, a presumption of intent to deceive the public applies. Pequignot v. Solo Cup Co., 608 F.3d 1356, 1362-63 (Fed. Cir. 2010). A defendant bears the burden of rebutting this presumption by a preponderance of the evidence. Id. at 1364. Plaintiffs' complaint  alleges that Defendant "is and has been aware" that the single-piece couplers covered by the '726 patent are improperly marked with the '722 screw jack patent number, has failed to remedy the problem, and thus has presumptively intended to deceive the public by selling the mismarked couplers.
In this motion , Defendant contends that although he has long been aware that the single-piece couplers are marked with the incorrect patent number, he had no intent to deceive the public. Defendant further contends that Plaintiffs' attorneys are cognizant of the unintentional nature of the mismark, know that they will be unable to prove the intent element of the false marking allegation, and have filed the instant action merely to harass and intimidate Defendant in a co-pending patent infringement action in violation of Rule 11.*fn1
Rule 11 requires an attorney to certify, to the best of his knowledge, that any pleading the attorney presents to the court is not being presented for any improper purpose -- such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation -- and that the legal contentions asserted in the pleading are non-frivolous and have or are likely to have evidentiary support. Fed. R. Civ. P. 11(b); see also Jimenez v. Madison Area Tech. College, 321 F.3d 652, 656 (7th Cir. 2003). "The central goal of Rule 11 is to deter abusive litigation practices." Corley v. Rosewood Care Center, Inc. of Peoria, 388 F.3d 990, 1013 (7th Cir. 2004) (internal quotation marks and citations omitted). Rule 11 thus serves to protect courts and parties against "callous disregard for governing law or the procedures of the court." Allison v. Dugan, 951 F.2d 828, 834 (7th Cir. 1992).
Courts have cautioned that Rule 11 should not be used as "a battleground for satellite controversies where, in effect, the tail would wag the dog, potentially diverting judicial resources from the prompt disposition of the merits of controversies." Harlyn Sales Corp. Profit Sharing Plan v. Kemper Financial Servs., Inc., 9 F.3d 1263, 1269 (7th Cir. 1993). To forestall such use, a court should apply Rule 11 sanctions only "with utmost care and caution." FDIC v. Tefken Construction and Installation Co., Inc., 847 F.2d 440, 444 (7th Cir. 1988). Indeed, even when a court has ruled that a party has been "wrong on the law," sanctions against that party do not flow inevitably. Harlyn Sales, 9 F.3d at 1270. Rather, the test is whether "competent attorneys performing a ...