In  Arunachalam v. International Business Machines Corp., the Federal Circuit affirmed the district court's order imposing sanctions against plaintiff and patent owner, Dr. Arunachalam.

Dr. Arunachalam sued IBM, SAP, and JPMorgan Chase (Appellees) for alleged patent infringement and violations of racketeering laws. The district court dismissed the racketeering claims, explaining that patent infringement does not qualify as a criminal act. Meanwhile, the Patent Trial and Appeal Board found the asserted claims of '506 patent unpatentable. The district court then dismissed Dr. Arunachalam's infringement claim and imposed monetary sanctions against Dr. Arunachalam for pursuing "a baseless racketeering lawsuit." Slip op. at 10.

The Federal Circuit held the sanctions against Dr. Arunachalam were warranted because the Appellees expended resources "responding to Dr. Arunachalam's vexatious and wanton litigation conduct." Id.  at 14. Supporting the decision, the Court cited a laundry list of Dr. Arunachalam's frivolous conduct, including filing seven motions to recuse the judge and claiming the Appellees colluded with the judge to evade U.S. laws. The Court also used its inherent power to impose additional sanctions against Dr. Arunachalam by striking "scandalous and irrelevant statements" made in her appeal brief. The stricken statements included that the Court "committed treason" and the district court judges "must be arrested." Id. at 19.

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