PS Prods. Inc. v. Panther Trading Co. In

Authored by: Jeremy J. Gustrowsky

A recent Federal Circuit decision highlights the risks for companies that repeatedly file weak or baseless patent lawsuits. In this case, PS Products, Inc. (PSP) sued Panther Trading Company, Inc. for allegedly infringing its U.S. Design Patent No. D680,188, which covers a spiked electrode for a stun device. However, the court found that Panther’s product was plainly dissimilar to PSP’s patented design, making the infringement claim implausible from the start. On top of that, PSP filed the lawsuit in the wrong court district, citing the general venue statute instead of the specific one required for patent cases.

What made this case stand out was PSP’s history: since 2010, it had filed 25 patent infringement lawsuits in the same district, many of which were dismissed or failed to state a valid claim. The court saw this pattern as evidence of bad faith, especially since PSP continued to use the wrong legal basis for venue in every case. When Panther pointed out these issues and even sent a warning letter under Rule 11 (which allows for sanctions for frivolous filings), PSP ignored it and later dismissed the case with prejudice.

The district court not only ordered PSP to pay Panther’s attorney fees and costs under the patent statute (35 U.S.C. § 285), but also imposed an additional $25,000 sanction under its inherent power to deter PSP from filing further meritless lawsuits. PSP appealed, arguing that the court couldn’t impose both attorney fees and an extra sanction, and that its conduct didn’t warrant such a penalty. The Federal Circuit disagreed, affirming that courts can use their inherent authority to impose sanctions for bad faith litigation, especially when other rules or statutes don’t fully address the misconduct.

This decision serves as a warning: Repeatedly filing weak or improper patent lawsuits can lead to significant financial penalties, even beyond paying the other side’s legal fees. Courts have broad power to deter abuse of the legal system, and a history of meritless filings can tip the scales toward harsh sanctions.