2003-1427, 2008-1378, -1400 Alexander S. Orenshteyn v. Citrix Systems, Inc

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2003-1427, 2008-1378, -1400
ALEXANDER S. ORENSHTEYN,
Plaintiff-Appellant,
and
DAVID FINK, TIMOTHY W. JOHNSON,
and FINK & JOHNSON,
Sanctioned Parties-Appellants,
v.
CITRIX SYSTEMS, INC.,
Defendant-Appellee.
Alexander S. Orenshteyn, of Westborough, Massachusetts, pro se.
David Fink, of Houston, Texas, for sanctioned parties-appellants.
Douglas J. Kline, Goodwin Procter, LLP, of Boston, Massachusetts, for
defendant-appellee. With him on the brief was William A. Meunier.
Appealed from: United States District Court for the Southern District of Florida
Judge Adalberto Jordan

-- 1 of 15 --

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2003-1427, 2008-1378, -1400
ALEXANDER S. ORENSHTEYN,
Plaintiff-Appellant,
and
DAVID FINK, TIMOTHY W. JOHNSON,
and FINK & JOHNSON,
Sanctioned Parties-Appellants,
v.
CITRIX SYSTEMS, INC.,
Defendant-Appellee.
Appeal from the United States District Court for the Southern District
of Florida in case no. 02-CV-60478, Judge Adalberto Jordan.
____________________________
DECIDED: July 24, 2009
____________________________
Before MAYER, LOURIE, and BRYSON, Circuit Judges.
LOURIE, Circuit Judge.
DECISION
Alexander Orenshteyn appeals from the decision of the United States District
Court for the Southern District of Florida granting summary judgment of noninfringement
of U.S. Patent 5,889,942 (“the ’942 patent”) and U.S Patent 6,393,569 (“the ’569

-- 2 of 15 --

patent”). Orenshteyn v. Citrix Sys., Inc., 265 F. Supp. 2d 1323 (S.D. Fl. 2003).
Orenshteyn also appeals, along with his counsel at the district court, David Fink and
Timothy Johnson, from the district court’s imposition of sanctions on Orenshteyn, Fink,
and Johnson and assessment of $755,633.17 in attorney fees and costs against the
three men, assessed jointly and severally. Orenshteyn v. Citrix Sys., Inc., No. 02-
60478-Civ (S.D. Fla. Jan. 5, 2007) (Dkt. No. 253); Orenshteyn v. Citrix Sys., Inc., 558 F.
Supp. 2d 1251 (S.D. Fla. 2008). Because the district court correctly granted summary
judgment as to some of the claims, erred in granting summary judgment of
noninfringement as to claim 1 of the ’942 patent, and abused its discretion in imposing
sanctions, we affirm in part, reverse in part and remand.
BACKGROUND
Orenshteyn owns the ’942 patent and the ’569 patent, both of which are entitled
“Secured System for Accessing Application Services from a Remote Station.”
Orenstheyn brought suit against Citrix Systems, Inc. (“Citrix”) on April 9, 2002, alleging
that Citrix infringed “at least claim 1” of the ’942 patent. Two months later, he amended
his complaint to include the ’569 patent. On March 6, 2003, after the close of discovery,
Citrix moved for summary judgment of noninfringement and invalidity of the two patents
at issue.
On May 16, 2003, Citrix served Orenshteyn’s counsel, Fink, with a motion for
sanctions under Rule 11 and a memorandum in support of that motion. The letter
stated that Citrix intended to file the enclosed motion with the court unless Orenshteyn
dismissed each of his claims against Citrix by June 6, 2003. Rule 11 requires that a
2003-1427, 2008-1378, -1400
-2-

-- 3 of 15 --

plaintiff be afforded a twenty-one day window in which to withdraw an offending action
before a motion for sanctions can be filed in a court. Fed. R. Civ. P. 11(c)(2).
On May 20, 2003, four days after Citrix served Fink with its motion for sanctions,
the district court granted Citrix’s motion for summary judgment of noninfringement.
Orenshteyn, 265 F. Supp. 2d at 1324. The court construed the term “controller,” found
in claim 1 of both the ’942 and ’569 patents, to mean “something other than a general
purpose CPU.” Id. at 1329-30. Because it was undisputed that the accused Citrix
products all used general purpose CPUs in executing application program code, the
court found that “Mr. Orenshteyn ha[d] failed to meet his burden of showing that any of
the accused Citrix products infringe on his patents.” Id. at 1331.
On June 19, 2003, Citrix filed its motion for sanctions under Rule 11 in the district
court. Simultaneously, Citrix filed a motion for attorney fees and expenses against
Orenshteyn pursuant to 35 U.S.C. § 285, against Fink and Johnson pursuant to 28
U.S.C. § 1927, and against Orenshteyn, Fink, and Johnson pursuant to the court’s
inherent powers. The court granted the motion in part. The court found Orenshteyn
liable for sanctions under Rule 11 and Fink and Johnson liable under both Rule 11 and
28 U.S.C. § 1927. Orenshteyn, No. 02-60478-Civ, slip op. at 24. The case was then
referred to a magistrate judge for a recommendation as to the amount of sanctions.
The magistrate judge recommended a total award to Citrix in the amount of
$755,663.17 to be assessed jointly and severally against Orenshteyn, Fink, and
Johnson. Orenshteyn, 558 F. Supp. 2d at 1264-65. The district court adopted the
magistrate’s sanction recommendation. Orenshteyn v. Citrix Sys., Inc., No. 02-60478-
Civ, slip op. at 2 (S.D. Fla. Apr. 28, 2008) (Dkt. No. 266).
2003-1427, 2008-1378, -1400
-3-

-- 4 of 15 --

Orenshteyn timely appealed the court’s decision regarding noninfringement and
sanctions and Fink and Johnson timely appealed the court’s decision regarding
sanctions. We consolidated the two appeals. We have jurisdiction under 25 U.S.C.
§ 1295(a)(1).
DISCUSSION
A. Noninfringement of the ’942 and ’569 patents
We review the district court's grant of summary judgment de novo, “applying the
same criteria used by the district court in the first instance.” Rothe Dev. Corp. v. Dep’t
of Defense, 545 F.3d 1023, 1035 (Fed. Cir. 2008) (quoting W.H. Scott Constr. Co. v.
City of Jackson, 199 F.3d 206, 211 (5th Cir. 1999)). Summary judgment is appropriate
“if the pleadings, the discovery and disclosure materials on file, and any affidavits show
that there is no genuine issue as to any material fact and that the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(c).
As a preliminary matter, we agree with the district court that Orenshteyn has
presented no evidence of infringement of any claim, other than claim 1 of the ’942
patent. Furthermore, he has presented no evidence of infringement by any of Citrix’s
products, other than MetaFrame for Windows 1.8. Orenstheyn’s brief opposing
summary judgment provided a claim chart comparing claim 1 of the ’942 patent to
MetaFrame for Windows 1.8. No other claims of either patent are compared with any
Citrix product, and no other Citrix product is compared with any other claim. A note at
the bottom of the claim chart says, “[a] similar comparison can be made regarding claim
1 of U.S. Patent No. 6,393,569.” However, simply claiming that such a comparison can
be made is insufficient for purposes of forestalling summary judgment. We therefore
2003-1427, 2008-1378, -1400
-4-

-- 5 of 15 --

affirm the district court’s grant of summary judgment of noninfringement of all claims
and all products, except for claim 1 of the ’942 patent and MetaFrame for Windows 1.8.
What is left for us to determine, therefore, is whether a genuine issue of material fact
exists as to infringement of claim 1 of the ’942 patent by Citrix’s MetaFrame for
Windows 1.8 product.
Claim 1 of the ’942 patent reads as follows:
1. A secured system for accessing application services from at least one
application program, comprising:
at least one client station having low-level application independent logics
stored therein and at least one controller for controlling said low-level
application independent logics, said low-level application independent
logics including a user interface logic, a device control logic for
controlling devices, a file system logic, and a communication interface
logic, wherein said file system logic includes a file system capable of
storing data corresponding to said at least one application program;
at least one application server having high-level application logic stored in
a server device for running said at least one application program, said
server device being coupled to said at least one application server; and
a low-level interface between said at least one client station and said at
least one application server for connecting said at least one client
station to said at least one application server,
wherein upon accessing by said at least one client station, said at least
one application server runs said at least one application program which
selectively controls said low-level application independent logics for
controlling devices of said at least one client station and for accessing
data of said at least one client station, and wherein said at least one
application server processes said corresponding data from said at
least one client station on said at least one application program without
permanently storing said data in a server device coupled to said at
least one application server.
(emphasis added).
As indicated above, the district court construed the term “controller” in Claim 1 “to
mean something other than a general purpose CPU.” Orenshteyn, 265 F. Supp. 2d at
1329-30. The court then found that because the ’942 and ’569 patents “use a
2003-1427, 2008-1378, -1400
-5-

-- 6 of 15 --

‘controller,’ which has been construed as something other than a general purpose
CPU,” while the accused Citrix products “all use a general purpose CPU to execute
application program code,” Orenshteyn had failed to show infringement. Id. at 1331
On appeal, Orenshteyn argues that the district court erred in construing the term
“controller.” Orenshteyn argues that, while the specification of the ’942 patent
discusses using controllers that are not CPUs in order to lower costs, the specification
does not limit his claims to non-CPU controllers. Orenshteyn argues that the district
court correctly recognized that the specification discloses an embodiment in which the
controller is a CPU, but erred in finding that this embodiment was unclaimed.
Orenshteyn argues that claim 2 of the ’942 patent and the doctrine of claim
differentiation require a construction of “controller” that includes CPUs.
We agree with Orenshteyn that Citrix is not entitled to summary judgment of
noninfringement of claim 1. The district court granted Citrix’s motion because the
MetaFrame product uses a CPU, in contrast to its construction of the ’942 patent as
referring to something other than a CPU. However, as we shall demonstrate, claim 1 of
the ’942 patent covers products that employ a CPU, and the district court’s grant of
summary judgment of noninfringement was therefore erroneous.
Claim 1 of the ’942 patent claims a secured system for accessing application
services that is made up of a client station connected through an interface with an
application server. ’942 patent cl. 1. The client station consists of a controller and a
number of “low-level application independent logics,” such as a user interface logic, a
file system logic, and a device control logic. Id. The client station accesses the
2003-1427, 2008-1378, -1400
-6-

-- 7 of 15 --

application server, which runs an application program that in turn controls the
application logics of the client station. Id.
Claim 2 of the ’942 patent claims the system of claim 1, “wherein said at least
one client station lacks a general purpose central processing unit to prevent execution
of application program code on said at least one client station, so as to decrease cost
and protect said at least one client station.” Id. cl. 2. Claim 2 adds to claim 1 only that
the “client station lacks a general purpose” CPU. Thus, claim 1, as the parent of
dependent claim 2, presumably includes the possibility of a client station that possesses
a general purpose CPU; otherwise claim 2 is identical to claim 1 and therefore
superfluous. See Xerox Corp v. 3Com Corp., 267 F.3d 1361, 1366 (Fed. Cir. 2001)
(stating that reading a limitation into a claim that would render two claims superfluous
“will not do”).
There can be no doubt, when looking at the specification and comparing claim 2
to claim 1, that a CPU may be included in the client station of claim 1. The district court,
in granting summary judgment of noninfringement, found that because Citrix’s “products
all use a general purpose CPU to execute application program code,” those products
did not infringe claim 1 of the ’942 patent because that claim required the use of a
controller, which was construed as “something other than a general purpose CPU.”
Orenshteyn, 265 F. Supp. 2d at 1329-30. However, as we have demonstrated,
because claim 2 claims a client station that “lacks a general purpose [CPU] to prevent
execution of application program code,” claim 1 impliedly may include just such a CPU.
In support of its decision, the district court noted the portions of the specification
that seem to indicate a distinction between a “controller” and a general purpose CPU.
2003-1427, 2008-1378, -1400
-7-

-- 8 of 15 --

See id. at 1329; ’942 patent col.6 ll.17-20 (“expensive general purpose processing
CPUs are preferably replaced with inexpensive but powerful controllers, such as DSP
chips.”); id. c.1 ll.65-67 – col.2 l.1 (“General purpose computing on the desktop, i.e.,
desktops having a standard OS (such as Windows 95®) and a microprocessor (such as
the Pentium® chip), has to be replaced by a system which is less expensive . . . .”).
However, those portions of the specification do not “define” the term controller, as the
district court held they do. Rather, they suggest that there are inexpensive controllers
that are not CPUs; they do not indicate that all controllers are distinct from all CPUs.
Furthermore, another portion of the specification indicates that the invention can,
in fact, employ a CPU. ’942 patent col.9 ll.48-52 (“It should be understood that general
purpose computers will also work with the present invention (with little or no
modifications), such that existing owners of PCs can access any specialized server to
spawn a selected application, if desired.”). The court explained that portion of the
specification, which appears to contradict its claim construction, by describing that
portion as an “unclaimed invention.” Orenshteyn, 265 F. Supp. 2d at 1329. While it is
true that a specification may contain unclaimed inventions, we have shown that the
claims in this case indicate that the use of a CPU is, in fact, encompassed within the
claims. We therefore find that the district court erred in concluding that Citrix failed to
demonstrate that there was no genuine issue of material fact concerning infringement of
claim 1 of the ’942 patent.
B. Sanctions
This case was not litigated well by Orenshteyn and his counsel. However, while
sanctions are awarded by a trial judge who is in the best position to appraise the
2003-1427, 2008-1378, -1400
-8-

-- 9 of 15 --

conduct of a party and counsel, there is a high standard to be met. We find that that
standard was not fully met here.
1. Rule 11 Sanctions
“An appellate court should apply an abuse-of-discretion standard in reviewing all
aspects of a district court’s Rule 11 determination.” Cooter & Gell v. Hartmarx Corp.,
496 U.S. 384 (1990). In reviewing such decisions, we apply the law of the regional
circuit. Intamin, Ltd. v. Magnetar Techs., Corp., 483 F.3d 1328, 1337 (Fed. Cir. 2007).
In this case, we apply the law of the Eleventh Circuit.
Citrix presented its motion for Rule 11 sanctions to Orenshteyn’s counsel on May
16, 2003. Four days later, the district court entered final judgment of noninfringement.
On June 19, 2003, thirty-five days after presenting its motion to counsel, Citrix filed its
motion for Rule 11 sanctions with the district court.
Rule 11 requires that a motion for sanctions “must not be filed . . . if the
challenged . . . claim . . . is withdrawn within 21 days after service.” Fed. R. Civ. P.
11(c)(2). The twenty-one day “safe harbor” provision was added to the rule in 1993.
The Eleventh Circuit has recently interpreted the safe harbor provision as requiring a
motion for Rule 11 sanctions to be filed prior to final judgment.
We agree with the Second, Fourth, and Sixth Circuits that the service and
filing of a motion for sanctions must occur prior to final judgment or judicial
rejection of the offending motion. Any argument to the contrary renders
the safe harbor provision a mere formality. The provision cannot have any
effect if the court has already denied the motion; it is too late for the
offending party to withdraw the challenged contention.
In re Walker, 532 F.3d 1304, 1308 (11th Cir. 2008). In this case, Citrix’s motion for
sanctions was not filed prior to final judgment, so Orenshteyn was unable to avail
himself of the twenty-one day safe harbor provision. The court entered final judgment of
2003-1427, 2008-1378, -1400
-9-

-- 10 of 15 --

noninfringement on both patents before the twenty-one day period had elapsed. Thus,
the district court awarded Rule 11 sanctions in circumstances where Orenshteyn was
deprived of a benefit provided by the rule, in effect, on an erroneous view of the law.
We therefore reverse the court’s imposition of Rule 11 sanctions against appellants as
an abuse of discretion. See Cooter, 496 U.S. 384, 402 (“If a district court's findings rest
on an erroneous view of the law, they may be set aside on that basis.” (citation
omitted)).
2. Section 1927 Sanctions
In reviewing sanctions decisions from a district court, we apply the law of the
regional circuit in which the district court sits. Nystrom v. Trex Co., 424 F.3d 1136, 1139
(Fed. Cir. 2005). The Eleventh Circuit reviews the district court’s award of sanctions
under 28 U.S.C. § 1927 under an abuse of discretion standard. Peterson v. BMI
Refractories, Inc., 124 F.3d 1386, 1390 (11th Cir. 1997).
Section 1927 states:
Any attorney or other person admitted to conduct cases in any court of the
United States or any Territory thereof who so multiplies the proceedings in
any case unreasonably and vexatiously may be required by the court to
satisfy personally the excess costs, expenses, and attorneys' fees
reasonably incurred because of such conduct.
28 U.S.C. § 1927. The Eleventh Circuit imposes three requirements on an award of
sanctions under section 1927. The attorney must first engage in “unreasonable and
vexatious” conduct. Peterson, 124 F.3d at 1396. Second, the attorney’s unreasonable
and vexatious conduct must multiply the proceedings. Id. Lastly, the amount of
sanctions may not exceed the “costs, expenses, and attorneys’ fees reasonably
incurred because of such conduct.” Id.
2003-1427, 2008-1378, -1400
-10-

-- 11 of 15 --

The district court based its decision to impose sanctions against Fink and
Johnson under section 1927 on three aspects of the attorneys’ conduct. First, the court
found that Fink and Johnson pursued Orenshteyn’s claims “recklessly and
unreasonably.” Orenshteyn, No. 02-60478-Civ, slip op. at 16. As support for that
finding, the court noted Fink’s and Johnson’s continued pursuit of the lawsuit in light of
Orenshteyn’s apparent agreement with Citrix’s expert’s claim construction of
“controller.” Id. Second, the court found that Fink and Johnson had “minimal” contact
with Orenshteyn during their pre-filing investigation. Id. at 17. Lastly, the court was
disturbed by the fact that neither Fink nor Johnson corrected the apparent
inconsistencies between Orenshteyn’s deposition testimony and his testimony at the
April 8, 2005 hearing regarding Orenshteyn’s conversations with counsel prior to filing
suit. Id.
As we have reversed the court’s summary judgment of noninfringement, it goes
without saying that Fink’s and Johnson’s position regarding infringement and the claim
construction of “controller” was not totally unreasonable. As this case has not been
tried, and we are merely reversing a grant of summary judgment of noninfringement, we
cannot say whether Orenshteyn will eventually prevail in his suit, and the district court
has noted that it harbors serious doubts about the ’942 patent’s validity. Orenshteyn,
265 F. Supp. 2d at 1331 (stating that invalidity arguments “appear to be meritorious”).
However, Orenshteyn’s position on the claim construction of “controller” was far from
frivolous or unreasonable and thus did not vexatiously multiply the proceedings.
Therefore, Fink’s and Johnson’s pursuit of the lawsuit cannot form a basis for sanctions
under section 1927.
2003-1427, 2008-1378, -1400
-11-

-- 12 of 15 --

Furthermore, we do not see why Fink and Johnson should be sanctioned for their
“minimal contact” with Orenshteyn during their pre-filing investigation. Both Fink and
Johnson have scientific backgrounds that suggest that they are at least competent in
conducting an investigation of this sort, and the district court never truly challenged that
ability. In addition, there is some advantage in attorneys making their own independent
evaluation of a patent infringement issue free from any inherent bias of the inventors. In
any event, we can find no authority that requires attorneys to consult with patentees
during the pre-filing investigation, although it would seem to be prudent, highly
desirable, and the usual practice. Indeed, much of the district court’s dim view of Fink
and Johnson’s conduct may be attributable to the court’s erroneous interpretation of
Orenshteyn’s own view of the correct claim construction of his patent. The court viewed
Orenshteyn’s deposition testimony as supporting Citrix’s proposed claim construction of
“controller.” See Orenshteyn, No. 02-60478-Civ, slip op. at 13 (“Mr. Orenstheyn
similarly testified that the term ‘controller,’ as used in his patents, means a hardwire
device, and not a general purpose CPU.” (citing Orenshteyn’s deposition at 127-27)); id.
at 15 (characterizing Orenshteyn’s deposition testimony as “consistent” with Citrix’s
claim construction). When read in context, however, Orenshteyn’s deposition testimony
directly contradicts Citrix’s proposed claim construction that the term “controller” could
not include a general purpose CPU.
Q: What’s a controller?
Orenshteyn: A processing element.
Q: What’s an example?
Orenshteyn: A processor, a chip, an integrated circuit.
2003-1427, 2008-1378, -1400
-12-

-- 13 of 15 --

Q: Could a Pentium chip be a controller?
Orenshteyn: It could be.
A Pentium chip is indisputably a CPU; thus, the court’s characterization of Orenshteyn’s
testimony as supporting Citrix’s proposed construction is clearly erroneous.
The last aspect of Fink’s and Johnson’s conduct for which the court felt sanctions
were warranted is their failure to correct Orenshteyn’s testimony regarding pre-filing
investigation conversations. We defer to the district court’s characterization of
Orenshteyn’s contradictory testimony regarding his conversations with his counsel. The
court obviously felt that Fink and Johnson were less than forthcoming in failing to
correct Orenshteyn’s statements. While it does not appear that this failure alone
“multiplied the proceedings” to such a degree that sanctions were warranted under
section 1927, we will leave that determination to the district court on remand.
We note, however, that if the court does decide that such conduct alone merits
sanctions, a new determination as to the amount of appropriate sanctions would need to
be made as well. Under section 1927, only that portion of the applicable costs,
expenses, and fees attributable to the multiplication of the proceedings that resulted
from the failure to correct testimony could be awarded. See Peterson, 124 F.3d at
1396. That amount would appear to be a fraction of the total litigation cost, but we
leave that determination to the district court on remand.
CONCLUSION
Because the court erred in granting summary judgment of noninfringement of
claim 1 of the ’942 patent, we reverse in part. We affirm the rest of the court’s grant of
summary judgment relating to the other claims in the case and all Citrix products other
2003-1427, 2008-1378, -1400
-13-

-- 14 of 15 --

2003-1427, 2008-1378, -1400
-14-
than MetaFrame for Windows 1.8. We also reverse the court’s imposition of Rule 11
sanctions against Orenshteyn, Fink, and Johnson as an abuse of discretion. We vacate
the court’s grant of section 1927 sanctions against Fink and Johnson. We remand the
case for further proceedings in accordance with this opinion.

-- 15 of 15 --