Health Grades, Inc. v. MDX Medical, Inc.

Filing 708

ORDER denying 568 Motion for Sanctions. by Magistrate Judge Boyd N. Boland on 1/2/2014.(trlee, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 11-cv-00520-RM-BNB
HEALTH GRADES, INC.,
Plaintiff,
v.
MDX MEDICAL, INC., d/b/a Vitals.com,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on MDx Medical, Inc.’s Motion for Rule 11 Sanctions [Doc. # 568,
filed 4/24/2013] (the “Motion for Sanctions”), which is DENIED as premature.
By an Order [Doc. # 480], I granted Health Grades leave to amend its complaint to add
allegations of indirect and joint infringement relating to a software application for cell phones
offered by iTriage, an affiliate of Aetna Life. MDx opposed the motion to amend arguing that
the added claims were frivolous and made in bad faith. I allowed the amendment, however,
finding that MDx was putting the “cart before the horse” and suggesting that MDx’s challenge to
the added claims was better made in a motion for summary judgment. Order [Doc. # 480] at p.
2. MDx obliged, filing a Motion for Summary Judgment [Doc. # 490] on the indirect and joint
infringement claims on January 22, 2013. The Motion for Summary Judgment has not been
referred to me, and it remains pending before the district judge.
Meanwhile, and after complying with the mandatory notice provisions of Fed. R. Civ. P.
11(c)(2), MDx also filed the Motion for Sanctions [Doc. # 568]. MDx argues that the claim for

contributory infringement is sanctionable under Rule 11 because it is objectively apparent that
the data MDx leases to Aetna Life has substantial non-infringing uses. Id. at pp. 5-9. In
addition, MDx argues that the joint infringement claim is sanctionable because (1) there is no
evidence of any communication between MDx and iTriage which operates the cell phone app, id.
at pp.9-10; and (2) iTriage’s use of the leased data does not infringe Health Grade’s ‘060 patent,
either literally or under the doctrine of equivalents, because the use does not meet the
requirement of the patent that “the patient ratings are received from an on-line patient
experience survey completed on a company Web site . . . wherein the company Web Site is
managed by the company providing the services for connecting healthcare providers with the
potential patients.” Id. at pp. 10-12.
The arguments made in support of the Motion for Sanctions are anticipated by arguments
in MDx’s Motion for Summary Judgment [Doc. # 490]. In particular, MDx argues at pages 1517 of the Motion for Summary Judgment [Doc. # 490] that “Health Grades has not cited, and
cannot cite, to any credible evidence that physician data such as the data leased by MDx to Aetna
is not substantially useful for anything other than in an infringement of the ‘060 patent.”
With respect to the claim of joint infringement, MDx argues at pages 10-12 of the Motion
for Summary Judgment [Doc. # 490] that the claim element that “patient ratings are received
from an on-line patient experience survey completed on a company Web site . . . wherein the
company Web Site is managed by the company providing the services for connecting healthcare
providers with the potential patients” is absent from iTriage’s use of the leased data. MDx also
argued that Health Grades cannot prove a claim for joint infringement because there is no
evidence of any communication between MDx and iTriage, incorporating by reference

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arguments made in MDx’s Motion for Summary Judgment of Non-Infringement [Doc. #
367/368]. Motion for Summary Judgment [Doc. # 490] at p. 12. MDx subsequently withdrew
that motion, however, “in view of recent discovery supplements. . . .” Notice of Withdrawal
[Doc. # 627].
As a sanction for Health Grades’ alleged Rule 11 violations, MDx seeks “for Health
Grades and its counsel to each pay half of all attorney’s fees and costs incurred by MDx
addressing the allegations in the Rule 11 Papers.” Motion for Sanctions [Doc. # 564] at pp. 1415.
I agree with Health Grades that, at a minimum, the Motion for Sanctions is premature.
The Motion for Summary Judgment [Doc. # 490] which underlies the Motion for Sanctions
largely is unresolved1 and, in some respects, has been withdrawn. See Motion for Summary
Judgment [Doc. # 490] at p. 12; Notice of Withdrawal [Doc. # 627]. As the Advisory
Committee Notes to Rule 11 point out:
[Rule 11 motions] should not be employed as a discovery device or
to test the legal sufficiency of efficacy of allegations in the
pleadings; other motions are available for those purposes. Nor
should Rule 11 motions be prepared to emphasize the merits of a
party’s position, . . . to intimidate an adversary into withdrawing
contentions that are fairly debatable, [or] to increase the costs of
litigation. . . .
Fed. R. Civ. P. 11 1993 Amendments advisory committee’s note. Accord Rich v. Taser Int’l,
Inc., 2012 WL 3155137 *3 (D. Nev. Aug. 2, 2012).
IT IS ORDERED that the Motion for Sanctions [Doc. # 568] is DENIED as premature.

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Significantly, the district judge has reserved to himself the decision of the sufficiency of
Health Grades’ pleadings in connection with the claims for contributory and joint infringement.
I do not presume to anticipate his ruling.
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Dated January 2, 2014.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

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