From Orenshteyn v. Citrix Sys., Inc., 2009 U.S. App. LEXIS 16403 (Fed. Cir. July 24, 2009):

On May 20, 2003, four days after Citrix served Fink with its motion for sanctions, the district court granted Citrix's motion for summary judgment of noninfringement.***

On June 19, 2003, Citrix filed its motion for sanctions under Rule 11 in the district court. Simultaneously, Citrix filed a motion for attorney fees and expenses against Orenshteyn pursuant to 35 U.S.C. § 285, against Fink and Johnson pursuant to 28 U.S.C. § 1927, and against Orenshteyn, Fink, and Johnson pursuant to the court's inherent powers. The court granted the motion in part. The court found Orenshteyn liable for sanctions under Rule 11 and Fink and Johnson liable under both Rule 11 and 28 U.S.C. § 1927.... The case was then referred to a magistrate judge for a recommendation as to the amount of sanctions. The magistrate judge recommended a total award to Citrix in the amount of $755,663.17 to be assessed jointly and severally against Orenshteyn, Fink, and Johnson.... The district court adopted the magistrate's sanction recommendation. ***

We agree with Orenshteyn that Citrix is not entitled to summary judgment of noninfringement of claim 1. ***

Citrix presented its motion for Rule 11 sanctions to Orenshteyn's counsel on May 16, 2003. Four days later, the district court entered final judgment of noninfringement. On June 19, 2003, thirty-five days after presenting its motion to counsel, Citrix filed its motion for Rule 11 sanctions with the district court.

Rule 11 requires that a motion for sanctions "must not be filed . . . if the challenged . . . claim . . . is withdrawn within 21 days after service." Fed. R. Civ. P. 11(c)(2). The twenty-one day "safe harbor" provision was added to the rule in 1993. The Eleventh Circuit has recently interpreted the safe harbor provision as requiring a motion for Rule 11 sanctions to be filed prior to final judgment.

We agree with the Second, Fourth, and Sixth Circuits that the service and filing of a motion for sanctions must occur prior to final judgment or judicial rejection of the offending motion. Any argument to the contrary renders the safe harbor provision a mere formality. The provision cannot have any effect if the court has already denied the motion; it is too late for the offending party to withdraw the challenged contention.

In re Walker, 532 F.3d 1304, 1308 (11th Cir. 2008). In this case, Citrix's motion for sanctions was not filed prior to final judgment, so Orenshteyn was unable to avail himself of the twenty-one day safe harbor provision. The court entered final judgment of noninfringement on both patents before the twenty-one day period had elapsed. Thus, the district court awarded Rule 11 sanctions in circumstances where Orenshteyn was deprived of a benefit provided by the rule, in effect, on an erroneous view of the law. We therefore reverse the court's imposition of Rule 11 sanctions against appellants as an abuse of discretion. See Cooter, 496 U.S. 384, 402, 110 S. Ct. 2447, 110 L. Ed. 2d 359 ("If a district court's findings rest on an erroneous view of the law, they may be set aside on that basis" (citation omitted)).