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US Appeals Court upholds lower court: Raniere has to pay Microsoft and AT&T’s legal fees

BY Frank Parlato

It has not been a good year for Vanguard.  Lost in the excitement of his arrest and incarceration, we lost track of his lawsuit against Microsoft and AT&T.   Raniere, as readers know, claims to have invented teleconferencing and that AT&T and Microsoft stole the tech from him. He had patents to prove it, he said. Only one problem – the patents were not in his name.

Judge Barbara M.G. Lynn dismissed the case and issued sanctions requiring Raniere to pay AT&T and Microsoft’s legal fees. Raniere appealed to the US Court of Appeals.  Their decision came on April 18, 2018 – about a month and three weeks after Raniere was collared in Mexico.

Raniere lost. He has to pay the fees. But there is a problem here. According to his Pretrial Services Financial Affidavit, Raniere has zero assets and zero income; it is unclear how he will pay the sanctioned fees. In fact how he paid his own lawyers in the case: Robert Dale Crockett, Hase Tajima, Lisa Dearden Trepanier and Stephen Blake Kinnaird – is a mystery. Perhaps he has a benefactor who believes in ethical science.

Here is the PDF of the US Court of Appeals decision affirming the lower court decision to sanction Raniere and make him pay for AT&T and Microsoft’s lawyers.

Below is a truncated version of the document with comments in [brackets and bold]

Judge Barbara M. G. Lynn said Vanguard is a liar.

KEITH RANIERE, Plaintiff-Appellant v   MICROSOFT CORPORATION, AT&T CORP., Defendants-Appellees
______________________.

Keith Raniere … appeals from the district court’s decisions awarding attorney fees and costs to Microsoft Corporation and AT&T Corporation (“Appellees”)….

Because the district court did not err in finding that Appellees are prevailing parties … and did not abuse its discretion in awarding attorney fees and costs under that provision, we affirm.

BACKGROUND
Raniere sued Appellees for patent infringement, asserting five patents against AT&T … and two …  against Microsoft….

In 1995, Raniere … assigned all rights in these patents to Global Technologies, Inc. (“GTI”)….   Raniere is not listed on GTI’s incorporation documents as an officer, director, or shareholder. GTI was administratively dissolved in May 1996…. [that means the company was legally closed by the state for inactivity.]

In December 2014, Raniere executed a [fraudulent] document on behalf of GTI, [which no longer existed and a company he did not own and therefore had no right to create any documents for GTI] claiming to be [GTI’s] “sole owner,” that purportedly transferred the … patents from GTI to himself. [It was a document Raniere created, signed by himself as GTI’s owner – to himself personally] … Raniere’s suits against Appellees identified himself as the owner of the patents at issue.

In 2015, Microsoft moved to dismiss Raniere’s suit for lack of standing, noting that …  Raniere did not own the patents… [since he did not own GTI and any document signed by only himself from GTI was invalid.]

Raniere’s counsel represented to the district court that GTI’s ownership passed to Raniere … at some point [in the dim past], and that Raniere properly transferred ownership of the patents from GTI to himself…. The court ordered Raniere to produce [this] documentation proving [he owned GTI]….  Raniere produced various documents that…  failed to indicate that Raniere had an ownership interest in GTI at any time or that Raniere had the right to assign the patents … from GTI to himself….

Given Raniere’s failure to produce evidence …  the parties began negotiating terms of settlement, but Raniere refused to finalize the settlement….  AT&T then filed a motion [for dismissal] …. for lack of standing. ..

[In law, standing means “the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party’s participation in the case.” Because Raniere did not own the patents or GTI – the company that owned the patents –  he did not have standing to legally claim he was harmed by Microsoft of AT%T’s alleged use of the patented inventions. It was never litigated, much less proven, that the patented inventions were used by AT&T or Microsoft, or that the patents even worked.]  

Raniere informed the district court that he could produce evidence to establish his standing, but he required a subpoena to obtain evidence from Alan Rubens, a Washington state attorney…. The district court … ordered Rubens to produce all relevant documentation. …  Rubens’s documents showed the GTI shareholders’ consent to a transfer of shares from Raniere’s ex-girlfriend [Toni Natalie] —who owned 75% of GTI’s shares—to Raniere.  The documents Raniere proffered did not indicate that any such transfer was ever completed…  and did not establish that Raniere owned the patents…

Appellees filed a renewed motion to dismiss …  Raniere testified…  his ex-girlfriend [Natalie] held her shares in the corporation in trust for him, based on a side letter executed between [them] but he did not have possession of that letter nor did he know where the letter could be….{Perhaps the dog had eaten it.]

Keith Raniere’s attorney Robert Crockett. Did he know Vanguard was a bullshitter?

The district court found that Raniere’s testimony surrounding the alleged transfer contradicted Raniere’s earlier representation that the shares had already been transferred to him [He originally produced a document signed by him to himself transferring patents to him – but it was proven he did not own GTI – now ‘eureka’ there was a side letter between him and Toni that did so but sadly that side letter somehow came up missing]. [The court found his testimony] “wholly incredible and untruthful” [i.e he lied] [and] Raniere was unlikely to be able to cure the standing defect, and dismissed the case…. with prejudice [Dismissal with prejudice means the plaintiff is barred from filing another case on the same claim.] because [the court] found that Raniere’s conduct demonstrated “a clear history of delay and contumacious conduct.”  [Contumacious –defined: “stubbornly perverse or rebellious; willfully and obstinately disobedient.”]

Raniere appealed the district court’s decision. [The US Court of Appeals] summarily affirmed the district court’s dismissal with prejudice ….  Appellees filed a motion seeking attorney fees and costs…

The district court … concluded … this case was exceptional …  “with respect to the unreasonable manner in which it was litigated. [Raniere]’s conduct throughout this litigation, culminating in his untruthful testimony at the hearing on the motion to dismiss, demonstrates a pattern of obfuscation and bad faith.”… [Obfuscation defined – “the action of making something obscure, unclear, or unintelligible.” And he – a Vanguard and Ethicist!]

The district court noted that Raniere promised repeatedly that he could produce evidence that would cure the standing defect …  Raniere failed to satisfy these promises… “[d]espite numerous representations, [Raniere] failed to produce any written document or other credible evidence that he had an interest in GTI that would allow him to transfer the patents to himself.” …  Raniere’s conduct required Appellees “to expend significant resources to oppose [Raniere]’s arguments, which the Court now finds were made in bad faith to vexatiously multiply these proceedings and avoid early dismissal.” … [Vexatiously defined in law: “Denoting an action or the bringer of an action that is brought without sufficient grounds for winning, purely to cause annoyance to the defendant.”]

The district court rejected Raniere’s attempts to recharacterize his conduct as “zealous pursuit of his good faith claim of ownership,” noting … that Raniere “made false and misleading representations to Defendants and the Court that resulted in…  significant legal fees incurred in defending this action.”…

The district court awarded fees [and] reiterated that Raniere had “acted in bad faith and vexatiously multiplied these proceedings” by failing to seize on any of the multiple opportunities to correct the standing issue…. [Bad faith defined- “intent to deceive.”]

Keith Raniere deep in thought.  Possibly contemplating his next great lie.

“From the inception of the litigation, [Raniere] engaged in a pattern of obfuscation, offering inconsistent theories and arguments and promising to produce evidence that never materialized”….  According to the district court, “[t]his deplorable conduct constitutes an abuse of the judicial process and warrants an imposition of sanctions…”

Raniere argued that his conduct was not sufficiently egregious to justify imposition of sanctions…  the district court rejected Raniere’s characterization of his actions, noting that it “requires full candor on all matters from the parties who come to it seeking relief. [Raniere]’s submission of a document that contained a knowingly false representation constitutes an abuse of the judicial process that warrants sanctions.”…

[T]he district court … awarded $300,295.71 to AT&T and $143,719.26 to Microsoft in attorney fees and costs….

[The Court of Appeals upheld the sanction of fees.  See document: https://frankreport.com/wp-content/uploads/2018/06/2018-04-18-Raniere-v-microsoft-samntcitons-affirmed.pdf]

Oh, when will Vanguard ever learn? 


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Frank Parlato

Frank Parlato

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