ChromaDex Corp. (CDXC)

[Milarepa]

Requests for sanctions don't appear that often -- maybe dozens of times per year in federal court -- mostly because attorneys practicing in federal court tend to behave themselves. However, there are certainly precedents for imposing sanctions when the facts of the case -- including the terms of a contract -- are misstated or mischaracterized.

IN 1989 in Teamsters v. B&M, 882 F.2d 274, the Seventh Circuit held "Rule 11 also prohibits a party from rewriting the factual record to reflect what it thinks should have occurred."

Last month a federal district court cited Teamsters in denying a sanctions request on the grounds that, unlike in Teamsters, the challenged behavior did not involve "(misstating) the factual terms of a contract." Seamans v. Hoffman, 2017 WL 3780317 (USDC N.D.Ill).

So if discovery shows that the proposed factual predicate for the patent misuse claim is a mischaracterization of the contract, and Elysium knew or should have known that, then a sanctions claim would be plausible.