  United States Court of Appeals
      for the Federal Circuit
                 ______________________

           DRONE TECHNOLOGIES, INC.,
                 Plaintiff-Appellee

                            v.

            PARROT S.A., PARROT, INC.,
                Defendants-Appellants
               ______________________

                  2015-1892, 2015-1955
                 ______________________

   Appeals from the United States District Court for the
Western District of Pennsylvania in No. 2:14-cv-00111-
AJS, Judge Arthur J. Schwab.
                ______________________

              Decided: September 29, 2016
                ______________________

    GENE A. TABACHNICK, Beck & Thomas, P.C., Pitts-
burgh, PA, argued for plaintiff-appellee. Also represented
by RICHARD T. TING.

    JEFFREY A. LAMKEN, MoloLamken LLP, Washington,
DC, argued for defendants-appellants. Also represented
by SARAH JUSTINE NEWMAN, ERIC RICHARD NITZ; JAMES E.
HOPENFELD, Singer Bea LLP, San Francisco, CA; TAMMY
J. TERRY, Osha Liang LLP, Houston, TX; JOHN M.
WHEALAN, Chevy Chase, MD.
                ______________________
2                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



     Before NEWMAN, SCHALL, and CHEN, Circuit Judges.
    Opinion for the court filed by Circuit Judge SCHALL.
    Opinion concurring in the judgment filed by Circuit
                   Judge NEWMAN.
SCHALL, Circuit Judge.
    Parrot, S.A. and Parrot, Inc. (collectively, “Parrot”)
appeal from the final judgment of the United States
District Court for the Western District of Pennsylvania
that awarded Drone Technologies, Inc. (“Drone”) damages
for Parrot’s infringement of two patents owned by Drone
as assignee and that also awarded Drone attorney fees
pursuant to 35 U.S.C. § 285 and Rule 37 of the Federal
Rules of Civil Procedure. Drone Techs., Inc. v. Parrot
S.A., No. 14CV0111, 2015 WL 3756318, at *1, *14 (W.D.
Pa. June 12, 2015). The awards of damages and attorney
fees came after the district court entered a default judg-
ment against Parrot as a sanction for Parrot’s failure to
comply with two discovery orders issued by the court. The
default judgment struck Parrot’s answer and counter-
claims and made Parrot liable for infringement of the two
patents. Drone Techs., Inc. v. Parrot S.A., 303 F.R.D. 254,
266 (W.D. Pa. 2014). For the reasons set forth below, we
hold that the district court abused its discretion in issuing
the two discovery orders and in entering a default judg-
ment against Parrot for its failure to comply with the
orders. We therefore vacate the final judgment and the
awards of damages and attorney fees and remand the
case to the district court for further proceedings con-
sistent with this opinion.
    Parrot also appeals the district court’s denial of its
motion to dismiss Drone’s complaint for lack of standing.
As discussed below, the basis for the motion was Parrot’s
contention that the assignments to Drone were invalid
because the person named on the patents and who as-
signed the patents to Drone was not the true inventor.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                  3



Parrot also raised the affirmative defense of improper
inventorship under 35 U.S.C. § 102(f), which the district
court struck as part of its default judgment. We affirm
the district court’s denial of Parrot’s motion to dismiss for
lack of standing. However, on remand, Parrot will have
the opportunity to reassert its invalidity defense based on
alleged incorrect inventorship. The district court will be
in a position to resolve the issue of inventorship; a suc-
cessful challenge to inventorship may invalidate the
patents-in-suit.
                       BACKGROUND
                             I.
    Drone is a Taiwanese corporation and the assignee of
U.S. Patent Nos. 7,584,071 (“the ’071 patent”) and
8,106,748 (“the ’748 patent”) (collectively, “the patents-in-
suit”). The patents-in-suit are generally directed to sys-
tems for remotely controlled machines. ’071 patent,
Abstract; ’748 patent, Abstract. 1 According to the ’071
patent, at the time of the invention, conventional remote-
control systems included two main components: a remote-
controlled device (e.g., a model airplane) and a handheld
device with a control stick. Id. at 1:22–36. To control the
movement of the airplane once in flight, a user would
alter the position of the stick to cause an associated
change in the flight angle of the plane. See id. at 1:36–47.
Such systems had drawbacks, though, as they only con-
trolled movement in two directions. See id. at 1:48–51.
Other systems existed that enabled users to control three
directions of movement. The handheld devices in those
systems, however, incorporated multiple control elements,
which required simultaneous use of both hands and thus



    1   The patents-in-suit share similar specifications;
thus, reference to the ’071 patent suffices for the purpose
of providing background.
4                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



made controlling the airplane’s flight path difficult. See
id. at 1:52–60. The patents-in-suit purport to overcome
these deficiencies by providing a system that enables a
user to synchronize the movement of a remote-controlled
device with the movement of a remote controller. See id.
at 1:64–2:2, 2:62–3:3.     In other words, moving the
handheld control itself causes a synchronous movement of
the airplane. For example, if the handheld control is
tilted downward and to the left, the plane moves down
and to the left.
    The claims of the patents-in-suit recite systems with
“a remote controller” and “a remote-controlled device,”
each having a set of “modules.” Id. at 7:63–8:24. Inde-
pendent claim 1 of the ’071 patent is representative of the
claimed subject matter and provides as follows:
    1. A remote control system, comprising:
    a remote controller, comprising:
        a motion detecting module, which detects the
    remote controller’s motion and outputs a motion
    detecting signal; and a first communication mod-
    ule, which connects to the motion detecting mod-
    ule and receives the motion detecting signal, and
    transmits a target motion signal according to the
    motion detecting signal; and
    a remote-controlled device, which is controlled by
    the remote controller, comprising:
        a second communication module, which re-
    ceives the target motion signal from the remote
    controller;
        a terrestrial magnetism sensing module,
    which detects the remote-controlled device’s ter-
    restrial magnetism and outputs a terrestrial
    magnetism sensing signal;
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                5



       a processing module, which has a first input
   connected to the terrestrial magnetism sensing
   module and receives the terrestrial magnetism
   sensing signal, and a second input connected to
   the second communication module and receives
   the target motion signal, and processes the terres-
   trial magnetism sensing signal and the target mo-
   tion signal to output a driving control signal; and
       a driving module, which connects to the pro-
   cessing module and receives the driving control
   signal, and adjusts the remote-controlled device’s
   motion according to the driving control signal.
’071 patent, 7:63–8:24 (emphases added).
    Parrot, S.A. is based in Paris, France. Its wholly
owned subsidiary, Parrot, Inc., is a New York corporation
headquartered in Michigan. Parrot is a designer, devel-
oper, and marketer of hobby aircraft, i.e., “drones.” When
this lawsuit was initiated, Parrot offered the AR.Drone
and the AR.Drone 2.0 in the United States. Parrot also
had two other types of drones: the Bebop Drone, which
was still under development, and its Jumping Sumo and
Rolling Spider MiniDrones (the “MiniDrones”), which had
not yet been released in the United States. Parrot also
offered software—the “FreeFlight” application—that
consumers could download and install on a touchscreen
device (e.g., a smartphone) to pilot a Parrot drone. Perti-
nent to this case, Parrot’s drones require source code for
their operation. 2 Parrot uses source code for the Free-
Flight application (the “off-board source code”) and sepa-



   2   Source code is the text of a program written in a
human-readable programming language. Microsoft Com-
puter Dictionary 491 (5th ed. 2002). Once written, source
code needs to be compiled into machine code before it can
be executed by a computer. Id. at 372, 491.
6                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



rate source code in the drone itself (the “on-board source
code”).


                             II.
    On January 24, 2014, Drone sued Parrot in the West-
ern District of Pennsylvania, alleging that Parrot (by
virtue of its customers’ actions) indirectly infringed the
’071 patent and the ’748 patent. In particular, Drone
contended that Parrot instructed customers who pur-
chased the AR.Drone or AR.Drone 2.0 to download and
use the FreeFlight application to pilot their aircraft. 3
Once the customers followed Parrot’s instructions and
implemented Parrot’s remote-controlled system, Drone
alleged, they directly infringed the systems claimed in the
patents-in-suit.
     Parrot answered the complaint on May 7, 2014, deny-
ing infringement and asserting various counterclaims and
affirmative defenses, based on its view that the patents-
in-suit were neither infringed nor valid. As more fully
discussed below, after discovery was underway, the par-
ties began to dispute whether Parrot should be required
to produce all source code used in operating its drones.
Eventually, Drone filed a motion to compel. In an order
dated July 1, 2014, the district court granted Drone’s
motion, compelling Parrot to produce, inter alia, its on-
board source code. Unsatisfied with Parrot’s subsequent
productions, Drone filed another motion to compel Parrot
to produce its on-board source code, which the court
granted on July 25, 2014. Subsequently, on November 3,
2014, the district court sanctioned Parrot for its failure to
comply with its two prior discovery orders. In imposing
sanctions, the court struck Parrot’s counterclaims and


    3  Drone did not identify the Bebop Drone or Mini-
Drones in its complaint.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                7



defenses and entered a default judgment against it as to
liability.


                             III.
    Having found Parrot liable for infringement, the court
scheduled proceedings on damages. In due course, the
issue of damages was tried before a jury, with the jury
finding that Drone was entitled to $7.8 million in damag-
es for Parrot’s infringement. Thereafter, the court en-
tered judgment in favor of Drone in the amount of $7.8
million and awarded Drone roughly $1.7 million in attor-
ney fees pursuant to 35 U.S.C. § 285 and Fed. R. Civ. P.
37. Parrot now appeals. We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(1).
                       DISCUSSION
    Parrot raises three issues on appeal. First, it con-
tends that Drone did not have standing to sue and that,
therefore, the district court should have dismissed Drone’s
suit for lack of jurisdiction. Second, Parrot argues that
the court abused its discretion in directing Parrot to turn
over its on-board source code and then sanctioning Parrot
by entering a default judgment against it when it failed to
do so. Finally, Parrot urges that, even if the default
judgment of liability is allowed to stand, the award of
damages should be vacated because the district court
misapplied the law on damages and abused its discretion
in allowing the jury to consider certain evidence on dam-
ages. We turn first to the matter of standing.
                              I.
                             A.
    Following the district court’s entry of default judg-
ment, but before the trial on damages, Parrot moved on
February 5, 2015, for dismissal of Drone’s complaint for
lack of standing. Parrot argued that the district court
8                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



lacked jurisdiction because Drone did not have complete
ownership of the ’071 and ’748 patents and thus did not
have standing to bring an action for infringement. While
recognizing that Drone is the putative assignee of the
patents-in-suit, Parrot contended that the assignment to
Drone is null and void because Yu-Tuan Lee (“Ms. Lee”),
who is named as the sole inventor on the face of the
patents and who executed the assignment, did not actual-
ly invent the claimed subject matter. According to Parrot,
Bruce Ding (“Mr. Ding”), Ms. Lee’s husband, is the true
inventor or, at the very least, is a co-inventor. Parrot
appended to its motion transcripts of portions of Ms. Lee’s
and Mr. Ding’s depositions. Parrot urged that the tran-
scripts demonstrated that Ms. Lee does not qualify as an
inventor and that they showed that Mr. Ding, who did not
execute the assignment to Drone, does qualify as an
inventor.
    In a memorandum order filed on March 24, 2015, the
district court denied Parrot’s motion. Drone Techs., Inc. v.
Parrot S.A., No. 14CV0111, 2015 WL 1326334, at *3
(W.D. Pa. Mar. 24, 2015). Despite viewing Parrot’s argu-
ments as “re-styled versions” of invalidity defenses strick-
en as part of the default judgment, the court addressed
Parrot’s challenge to inventorship. Id. at *2. 4 Although



    4   Before the default judgment, on October 22, 2014,
Parrot moved for leave to amend its answer to “add a
defense and counterclaim for unenforceability due to
inequitable conduct, and to add more specificity to the
already pled defense and counterclaim for invalidity . . .
under 35 U.S.C. § 102(f).” On November 3, 2014, the
same day it sanctioned Parrot, the district court denied as
moot Parrot’s motion to amend. J.A. 42. On February 18,
2015, Parrot moved for leave to assert against Drone’s
damages claim an affirmative defense and a request for
equitable relief based on the contention that Ms. Lee was
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                 9



the court did not cite any particular evidence or caselaw,
it nevertheless found that the record sufficiently support-
ed Ms. Lee’s claim to be a properly named inventor and
that it did not demonstrate that Mr. Ding is at least a co-
inventor. Id. at *2. In light of Parrot’s concession that
Ms. Lee is presumed to be the sole inventor, the court
concluded that Drone had standing to sue as the rightful
owner of the patents-in-suit by virtue of the assignment
from her. See id. at *2–3.
                             B.
    Parrot argues that we must consider inventorship to
satisfy ourselves that Drone has standing and that the
district court thus had jurisdiction. According to Parrot,
the record establishes that Ms. Lee is not an inventor or
at most is only a co-inventor, along with Mr. Ding. In
particular, Parrot contends that Ms. Lee did not conceive
of the claimed invention because she had “just a simple
idea” to control aircraft using the movements of a remote
controller, and did not have a solution for accomplishing
that idea or even understand any of the technology de-
scribed in the patents-in-suit. It was Mr. Ding, Parrot
asserts, who conceived of the invention’s structure and
the operative method of making the technology. In fact,
in Parrot’s view, Mr. Ding accounted for all aspects of the
invention except the “idea” of having the aircraft’s move-
ments mimic the controller’s. Because Mr. Ding was the
inventor or at least a co-inventor, Parrot reasons, Drone




incorrectly named as the sole inventor on the ’071 and
’748 patents. The district court denied the motion on
March 2, 2015. J.A. 43–46. In its order, the court stated
that Parrot’s motion, “filed over three months after liabil-
ity has been established,” was “the product of undue delay
and would impede the resolution of remaining damages
issues.” J.A. 44–45.
10                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



did not acquire complete (or any) ownership from Ms. Lee
and, thus, did not have standing to sue.
    Drone contends that an analysis of inventorship is
unnecessary, given Parrot’s acknowledgment that Ms. Lee
is named as the sole inventor and that she assigned to
Drone the patents-in-suit. Drone reasons that, because
Ms. Lee had standing as the patentee to whom the pa-
tents-in-suit issued, it obtained standing as her successor
in title. In Drone’s view, the district court therefore did
not need to consider inventorship as a prerequisite to
standing because inventorship and standing are separate
legal issues. And even if the court was required to ad-
dress inventorship, Drone urges, Parrot failed to provide
clear and convincing evidence that Mr. Ding is a co-
inventor. It thereby failed to overcome the presumption
that Ms. Lee is the only inventor.
                             C.
    We review de novo a district court’s determination of
standing. Bard Peripheral Vascular, Inc. v. W.L. Gore &
Assocs., Inc., 776 F.3d 837, 842 (Fed. Cir. 2015); Rite-Hite
Corp. v. Kelley Co., 56 F.3d 1538, 1551 (Fed. Cir. 1995) (en
banc). Standing is a jurisdictional issue that implicates
the case-or-controversy requirement of Article III. Lujan
v. Defs. of Wildlife, 504 U.S. 555, 560 (1992); Samsung
Elecs. Co. v. Rambus, Inc., 523 F.3d 1374, 1378 (Fed. Cir.
2008) (“Standing to sue or defend is an aspect of the case-
or-controversy requirement.”).      To establish standing
under Article III, a plaintiff must demonstrate, inter alia,
that it has suffered an “injury in fact.” Lujan, 504 U.S. at
560. “Constitutional injury in fact” occurs when a party
infringes a patent in violation of a party’s exclusionary
rights. Morrow v. Microsoft Corp., 499 F.3d 1332, 1339–
40 (Fed. Cir. 2007).
    Before a court may exercise jurisdiction over a patent
infringement action, it must be satisfied that, “in addition
to Article III standing, the plaintiff also possesse[s] stand-
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                  11



ing as defined by § 281 of the Patent Act.” Alps S., LLC v.
Ohio Willow Wood Co., 787 F.3d 1379, 1382 (Fed. Cir.
2015). Under § 281, “[a] patentee shall have remedy by
civil action for infringement of his patent.” 35 U.S.C.
§ 281 (2012) (emphasis added). A “patentee” is not lim-
ited to the person to whom the patent issued, but also
includes “successors in title to the patentee.” 35 U.S.C.
§ 100(d) (2012) (emphasis added); see also H.R. Techs.,
Inc. v. Astechnologies, Inc., 275 F.3d 1378, 1384 (Fed. Cir.
2002) (“In order to have standing, the plaintiff in an
action for patent infringement must be a ‘patentee’ pur-
suant to 35 U.S.C. §§ 100(d) and 281 . . . .”). A party may
become the successor in title to the original patentee by
assignment, 35 U.S.C. § 261 at ¶ 2 (“[P]atents, or any
interest therein, shall be assignable in law by an instru-
ment in writing.”), and then may sue for infringement in
its own name, Propat Int’l Corp. v. RPost, Inc., 473 F.3d
1187, 1189 (Fed. Cir. 2007); Morrow, 499 F.3d at 1339–40
(explaining that a plaintiff that “hold[s] all legal rights to
the patent as the patentee or assignee of all patent rights
. . . is one entitled to sue for infringement in its own
name”).
     When multiple inventors are listed on the face of a pa-
tent, “each co-owner presumptively owns a pro rata
undivided interest in the entire patent, no matter what
their respective contributions.” Isr. Bio-Eng’g Project v.
Amgen, Inc., 475 F.3d 1256, 1263 (Fed. Cir. 2007) (inter-
nal quotation marks and citation omitted). Consequently,
if a co-inventor assigns his or her ownership interest to a
third party, the assignee cannot sue infringers “[a]bsent
the voluntary joinder of all co-owners.” Id. at 1264–65.
    The parties do not dispute that Ms. Lee is the only
person named on the face of the patents-in-suit, or that
Ms. Lee assigned to Drone her ownership interests in the
patents-in-suit. Instead, as noted, the parties dispute
whether, in assessing standing, we (1) should presume
that Ms. Lee is correctly named as the sole inventor or
12                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



(2) should independently assure ourselves that, in fact,
she is the sole inventor. Drone argues for the first ap-
proach, Parrot the second. We agree with Drone that, in
this case, the first approach is the correct one.
     There is a “presumption that [a patent’s] named in-
ventors are the true and only inventors.” Acromed Corp.
v. Sofamor Danek Grp., Inc., 253 F.3d 1371, 1379 (Fed.
Cir. 2001) (citing Hess v. Advanced Cardiovascular Sys.,
Inc., 106 F.3d 976, 980 (Fed. Cir. 1997)). In our view,
Parrot has failed to advance a persuasive reason for not
accepting this presumption at this stage of the litigation,
particularly when another avenue exists for it to chal-
lenge inventorship. Specifically, a party may raise the
defense that a patent is invalid for failing to name the
correct inventors. 35 U.S.C. § 102(f) (2006) 5; Pannu v.
Iolab Corp., 155 F.3d 1344, 1348–50 (Fed. Cir. 1998).
Parrot recognized as much when it first attempted to add
a claim and defense under § 102(f) to its answer, alleging
both the misjoinder of Ms. Lee and the nonjoinder of
Mr. Ding. J.A. 2437–38. However, the court denied as
moot 6 Parrot’s motion to amend its answer at the same
time the court imposed sanctions. While “[i]t is well
settled that questions of standing can be raised at any
time,” Bd. of Trustees of Leland Stanford Junior Univ. v.
Roche Molecular Sys., Inc., 583 F.3d 832, 841 (Fed. Cir.
2009), aff’d, 563 U.S. 776 (2011) (hereinafter “Roche”), we
see no reason why Parrot should be allowed to reassert an
invalidity challenge under the guise of a motion to dismiss
for lack of standing.




     5  35 U.S.C. § 102(f) provides that a person shall be
entitled to a patent unless “he did not himself invent the
subject matter sought to be patented.”
    6   A decision the district court may reconsider on
remand.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                 13



     Parrot does not cite any controlling authority suggest-
ing that we must undertake the review it seeks; namely, a
substantive examination of inventorship in order to re-
solve an issue of standing in an infringement action
where the plaintiff’s claim to title is not otherwise in
dispute. Parrot’s reliance on Pandrol USA, LP v. Airboss
Railway Products, Inc., 320 F.3d 1354 (Fed. Cir. 2003), in
support of its position is misplaced. In Pandrol, we found
that “the defendants waived the right to contest the
plaintiffs’ title to the patent, insofar as lack of ownership
is viewed as a defense to the claim of infringement.” Id.
at 1367. We explained, however, that “the defendants’
waiver of the defense of lack of patent ownership did not
waive the defendants’ ability to challenge the plaintiffs’
standing to sue.” Id. Significantly, in “examin[ing] the
record to determine if it support[ed] the plaintiffs’ Arti-
cle III standing,” we only analyzed the relevant assign-
ment records (i.e., the ownership information); we did not
evaluate inventorship as it may relate to ownership and
standing. See id. at 1367–68. It does not follow from our
examination of patent ownership in Pandrol that we here
must consider whether Ms. Lee is correctly named as the
sole inventor for purposes of determining standing.
Indeed, while ownership and inventorship are related
concepts, they involve separate inquiries. Isr. Bio-Eng’g,
475 F.3d at 1263 (explaining that “issues of patent owner-
ship are distinct from questions of inventorship”); Beech
Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed.
Cir. 1993) (“It is elementary that inventorship and owner-
ship are separate issues.”).
     Neither does Roche support Parrot’s position. In that
case, we held that although the defendant was time-
barred from obtaining a judgment of patent ownership, it
still could assert the plaintiff’s lack of patent ownership
“as a defense and a challenge to [the plaintiff’s] standing
to maintain its action against [the defendant].” Roche,
583 F.3d at 839. In Roche, we considered the plaintiff’s
14                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



ownership of the patent at issue to satisfy ourselves on
the question of standing. Id. at 839, 848. As in Pandrol,
though, we only examined ownership when addressing
standing, and, in considering ownership, we accepted that
the named inventors were the true inventors. See id. at
837, 844, 848.
    Parrot suggests that Ethicon, Inc. v. U.S. Surgical
Corp., 135 F.3d 1456 (Fed. Cir. 1998), requires us to
assess inventorship when considering Drone’s standing.
We do not agree. In Ethicon, the defendant obtained a
license from a putative co-inventor and then moved the
trial court, under 35 U.S.C. § 256, to add the co-inventor
as a named inventor on the patent asserted against the
defendant. Id. at 1459. After the court granted the
motion to correct inventorship, the defendant successfully
moved to dismiss the case for failure to join a co-inventor.
Id. at 1459–60. We affirmed. Id. at 1468. The key differ-
ence between Ethicon and this case is that the district
court in Ethicon had already established that the patent-
in-suit had a co-inventor who was not named as a plaintiff
when the defendant moved to dismiss. Unlike in Ethicon,
here, the district court never granted (or even considered)
a § 256 motion, so the court was not presented with a
newly established inventorship when Parrot moved to
dismiss based on Drone’s alleged lack of standing. Thus,
even though Ethicon involved an issue of inventorship
ultimately leading to a dismissal, it does not compel
consideration of inventorship in determining standing in
this case.
    Since we need not address the merits of Parrot’s in-
ventorship challenge, the standing analysis in this case is
straightforward.    Parrot concedes, as it must, that
Ms. Lee is the presumed “true and only” inventor. Moreo-
ver, beyond its challenge to inventorship, Parrot does not
contend that Drone’s assignment is null or void under a
contractual theory or any other ownership theory. In
short, Drone established standing under § 281 by virtue of
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                   15



its status as the sole patentee (i.e., successor in title), and
also satisfied Article III’s standing requirement by owning
a patent that allegedly has been infringed, Pandrol, 320
F.3d at 1368 (“Establishing ownership of a patent that
has been infringed satisfies the requirements of Article III
standing.”). We therefore affirm the district court’s denial
of Parrot’s motion to dismiss for lack of standing without
reviewing or endorsing the district court’s inventorship
analysis. The district court had, and will continue to
have, jurisdiction to hear Drone’s suit. 7
                              II.
                              A.
    Parrot’s main argument on appeal is that the district
court twice abused its discretion: first, when it directed
Parrot to turn over its on-board source code; and, second,
when it sanctioned Parrot by entering a default judgment
against it after it failed to produce the source code.
    Discovery in patent cases in the Western District of
Pennsylvania is governed by the Federal Rules of Civil
Procedure and the district’s local patent rules. See W.D.
Pa. LPR (effective Dec. 1, 2009). Pertinent to the issue
before us is Local Patent Rule 3.1 (“LPR 3.1”). While this
case was pending in the district court, LPR 3.1 provided
in relevant part as follows:
        With the Initial Disclosures of the party op-
    posing a claim of patent infringement, such party


    7    As noted above, Parrot will have the opportunity
to reassert its defense based on alleged incorrect inven-
torship. Should Parrot choose to challenge inventorship
under 35 U.S.C. § 102(f), the district court will be in a
position to consider Parrot’s arguments relating to inven-
torship that we do not address here, giving due considera-
tion to our precedents on inventorship.
16                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



     shall produce or make available for inspection and
     copying, among other items:
              Source code, specifications, schemat-
         ics, flow charts, artwork, formulas, draw-
         ings or other documentation . . . sufficient
         to show the operation of any aspects or el-
         ements of each accused apparatus, prod-
         uct, device, process, method or other
         instrumentality identified in the claims
         pled of the party asserting patent in-
         fringement . . . .
W.D. Pa. LPR 3.1 (emphases added). 8
    Discovery began on June 11, 2014, when Parrot
served on Drone its “Initial Disclosures,” which included
over two-thousand pages of documents. The parties
immediately began to dispute whether Parrot’s production
met the requirements of LPR 3.1, with Drone insisting
that Parrot was required to produce “source code, specifi-
cations, schematics, [and] flow charts” relating to the
accused products and Parrot contending that its produc-
tion was “sufficient to show the operation of the accused
products as required by LPR 3.1.” J.A. 609–14. After a
series of email exchanges and a fruitless meet and confer,
Drone moved the district court to compel Parrot to pro-
duce the requested information (the “Initial Motion”). In
the Initial Motion, Drone reiterated its belief that, under
LPR 3.1, Parrot was required to produce source code,
specifications, schematics, and flow charts. J.A. 578–83.
Noting that Parrot’s products use off-board and on-board
source code, Drone asserted that the former was critically
important to its case because that code permits users to



     8 After Parrot filed its appeal, the Western District
amended its local patent rules. The amended rules be-
came effective December 5, 2015.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                17



pilot the accused products. J.A. 581–82. For its part,
Parrot did not dispute that it had not produced any source
code. It instead argued that LPR 3.1 did not include a
requirement to produce source code, or any other particu-
lar kind of document. J.A. 604–05. According to Parrot,
Drone did not even dispute that Parrot had complied with
LPR 3.1 by producing documents “sufficient to show” the
operation of the accused products. J.A. 601. Parrot also
contended that Drone had failed to establish that any of
Parrot’s source code was necessary to show the operation
of the accused products or to prove infringement of any
claim. J.A. 602–04.
     The district court sided with Drone, issuing a one-
page order on July 1, 2014 (the “July 1 Order”). In the
July 1 Order, the court compelled Parrot to “produce all
source code, specifications, schematics, [and] flow
charts . . . relating to the operation of the accused prod-
ucts (Parrot’s AR.Drone, AR.Drone 2.0, MiniDrone[s], and
Bebop Drone) . . . on or before July 9, 2014.” J.A. 5. The
court provided no analysis or reasoning in the July 1
Order. See J.A. 5. Two days later, Parrot filed an emer-
gency motion for clarification and reconsideration of the
July 1 Order. In it, Parrot made three requests. J.A. 698.
First, Parrot asked the court to allow it to make available
for inspection its on-board source code, which it said is
“extremely sensitive technical information.” J.A. 703–04.
Second, it requested that it be able to produce documents
on a rolling basis beginning on July 9. J.A. 704–06. And
third, it sought permission to not produce documents
relating to the Bebop Drone and MiniDrones because, in
its view, those products were not accused of infringement.
J.A. 706–07. On July 8, 2014, the court denied Parrot’s
emergency motion in a text order (i.e., a text-only entry on
the court’s docket that does not include a written analy-
sis).
   Shortly thereafter, Parrot produced various docu-
ments, as required by the July 1 Order. These documents
18                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



included its off-board source code. J.A. 892. However,
because Parrot did not produce, among other things,
documents relating to the Bebop Drone, the MiniDrones,
and the on-board source code, Drone moved the district
court to order Parrot to comply with the July 1 Order (the
“Second Motion”). See J.A. 879–89. In opposing the
Second Motion, Parrot argued that it had produced, or
would imminently produce, the documents necessary to
comply with the July 1 Order. See J.A. 893–900. As for
the on-board source code and the Bebop Drone and Mini-
Drones documents, Parrot suggested that it should be
allowed to make the former available for inspection and
insisted that the latter were irrelevant to the lawsuit.
J.A. 895–97. The court granted Drone’s Second Motion in
an order dated July 25, 2014 (the “July 25 Order”), and
gave Parrot until August 13, 2014, to comply. J.A. 8–9.
The district court also ordered Parrot to file a “written
confirmation” of its compliance. J.A. 9. In addition, the
court prompted Drone to file a “Motion to Show Cause
why [Parrot] should not be held in contempt” if Parrot
again failed to comply. J.A. 9.
    One week later, Parrot moved the district court to
modify the existing protective order to include certain
safeguards for the production of the on-board source code.
See J.A. 914–24. Believing that the protective order in
place adequately guarded Parrot’s interests, the court
denied the motion. J.A. 10–11. On August 13, 2014, the
last day to comply, Parrot filed an emergency motion to
seek relief from the July 25 Order. It urged the court to
excuse it from producing its on-board source code and
from producing documents relating to the Bebop drone,
and it sought an extension of time to produce documents
relating to the MiniDrones. J.A. 1279–80. Parrot also
requested, in the alternative, a stay of the litigation in
order to allow it to file with this court (and to allow this
court to resolve) an application for a writ of mandamus.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                19



J.A. 15, 1279. The district court denied Parrot’s motion
the following day. J.A. 16.
     On August 18, 2014, Drone filed a motion to show
cause why Parrot should not be held in contempt. J.A.
1328. Thereafter, on October 23, 2014, the district court
held a hearing on the motion. J.A. 27. By this time,
although Parrot had produced over 14 million pages of
documents, it had not given Drone the on-board source
code or filed its “written confirmation.” J.A. 27, 31, 3273–
74. At the hearing, the court heard testimony from Par-
rot’s “head of legal” and from a “project manager” at
Parrot, as well as arguments from counsel for both par-
ties. J.A. 20, 27. At the conclusion of the hearing, the
district court ordered the parties to file briefing on the
appropriateness of sanctions. J.A. 27–28. On November
3, 2014, the court issued an opinion on Drone’s motion to
show cause. Drone Techs., Inc. v. Parrot S.A., 303 F.R.D.
254 (W.D. Pa. 2014). In assessing the propriety of sanc-
tions, the court balanced the six “Poulis” factors. See
Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 867
(3d Cir. 1984) (enumerating factors for courts to consider
in sanctioning parties). Considering the Poulis factors,
the court found that they weighed in favor of imposing a
default sanction instead of holding Parrot in contempt.
303 F.R.D at 265–66. Concluding that “lesser sanctions”
would have been inadequate, the court entered a default
judgment against Parrot as to liability and struck its
answer and counterclaims. Id. at 266; J.A. 42.
     In the meantime, on September 24, 2014, Parrot had
filed with us two petitions for writ of mandamus. In re
Parrot S.A., Nos. 14-156, 14-157 (Fed. Cir. 2014). In its
petitions, Parrot contended that the writs should issue
because the district court (1) had exceeded its authority
by compelling Parrot to produce its on-board source code
and information relating to the Bebop Drone and Mini-
Drones and (2) had abused its discretion by refusing to
grant a motion to transfer venue filed by Parrot. We
20                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



denied the petitions on January 22, 2015. In re Parrot
S.A., No. 14-156, Order at 2 (Fed. Cir. Jan. 22, 2015) (per
curiam) (Doc. No. 34). Relevant here, we stated that “the
appeal from the default judgment” entered as a sanction
“provides an adequate means to challenge the discovery
order relating to the source code.” Id.
                              B.
     As noted, Parrot contends that the district court
(1) abused its discretion when it issued the July 1 and
July 25 Orders and (2) abused its discretion again when it
entered a default judgment against Parrot for its failure
to comply with the orders. 9 On the first point, Parrot
argues that the court misconstrued Parrot’s initial-
disclosure obligations because LPR 3.1 does not require
defendants to produce all source code, or even any source
code, and does not require production. Parrot further
argues that LPR 3.1 only requires materials sufficient to
show how each accused product operates. Further, Parrot
asserts that the court’s July 1 and July 25 Orders defied
traditional principles of discovery by requiring Parrot to
produce irrelevant materials without considering the
burden placed on it. Regarding the second point, Parrot
concedes it did not produce its on-board source code, but
avers that Drone’s unsubstantiated prejudice and the
availability of alternative remedies demonstrate that the
default sanction was improper.
    Drone does not present substantive arguments in
defense of the July 1 and July 25 Orders. On the matter
of the default sanction, Drone relies on the district court’s
decision. It contends that default was the right sanction
because the record supports the district court’s findings




      9   On appeal, Parrot does not raise the issue of ven-
ue.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                21



on the Poulis factors and because the court properly
balanced those factors when considering sanctions.
                             C.
    We are guided by regional circuit law when reviewing
discovery rulings, Dorf & Stanton Commc’ns, Inc. v.
Molson Breweries, 100 F.3d 919, 922 (Fed. Cir. 1996), and
the imposition of sanctions, Transclean Corp. v. Bridge-
wood Servs., Inc., 290 F.3d 1364, 1370 (Fed. Cir. 2002). In
the Third Circuit, “[i]t is well established that the scope
and conduct of discovery are within the sound discretion
of the trial court.” Marroquin-Manriquez v. I.N.S., 699
F.2d 129, 134 (3d Cir. 1983). Accordingly, a ruling on a
discovery issue is only disturbed on appeal when it is
found to be an abuse of discretion. Petrucelli v. Bohringer
& Ratzinger, 46 F.3d 1298, 1310 (3d Cir. 1995).
     The imposition of sanctions is likewise reviewed for
an abuse of discretion. Grider v. Keystone Health Plan
Cent., Inc., 580 F.3d 119, 134 (3d Cir. 2009). A district
court abuses its discretion in imposing sanctions when it
bases its ruling (1) “on an erroneous view of the law” or
(2) “on a clearly erroneous assessment of the evidence.”
Bowers v. Nat’l Collegiate Athletic Ass’n, 475 F.3d 524,
538 (3d Cir. 2007) (quoting Cooter & Gell v. Hartmarx
Corp., 496 U.S. 384, 405 (1990)). When reviewing a
default or dismissal sanction, “[i]t is the function of the
appellate court to determine if the court properly bal-
anced the Poulis factors and whether the record supports
its findings.” Livera v. First Nat’l State Bank of N.J., 879
F.2d 1186, 1194 (3d Cir. 1989); Ali v. Sims, 788 F.2d 954,
957 (3d Cir. 1986).
    We conclude that, in this case, the district court twice
abused its discretion: first, when it issued the July 1 and
July 25 Orders; and second, when it imposed a default
sanction on Parrot for not complying with those orders.
We turn first to the discovery orders.
22                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



                             1.
     District courts must generally follow their own local
rules. See Blue v. U.S. Dep’t of Army, 914 F.2d 525, 550
(4th Cir. 1990) (vacating attorney-disciplinary sanctions
because “the district court failed to follow its own local
rules”); Ortega v. Geelhaar, 914 F.2d 495, 497–98 (4th Cir.
1990) (vacating Rule 11 sanctions because “the district
court ignored its own local rules”); Manshack v. Sw. Elec.
Power Co., 915 F.2d 172, 175 (5th Cir. 1990) (explaining
that a district court should “scrupulously adhere[] to its
own local procedures”); Woods Constr. Co. v. Atlas Chem.
Indus., Inc., 337 F.2d 888, 890 (10th Cir. 1964) (“Rules of
practice adopted by the United States District Courts . . .
have the force and effect of law, and are binding upon the
parties and the court which promulgated them . . . .”)
(citations omitted). In issuing the July 1 and July 25
Orders, the district court failed to follow its local patent
rules (as well as the Federal Rules) and also failed to
provide any explanation for its deviation from those rules.
In our view, the court erred in five respects.
    First, the district court granted the Initial Motion
even though it did not find (and Drone did not show) that
Parrot had failed to meet its obligations under LPR 3.1.
Indeed, in the Initial Motion, Drone did not even attempt
to address whether the documents Parrot produced in its
Initial Disclosures were “sufficient to show” the operation
of the accused products, which is all that LPR 3.1 re-
quires. As noted, Parrot produced over two-thousand
pages of documents that, in its view, sufficiently demon-
strated how its accused products operate. Drone never
explained why Parrot’s production was lacking; neverthe-
less, it insisted that Parrot was required to produce all of
its source code. Drone was wrong. Although LPR 3.1
describes various types of documentation that may be
disclosed, it requires no particular kind of document.
LPR 3.1 plainly envisions that a defendant may produce
“other documentation” instead of source code. The record
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.               23



is devoid of any showing that Parrot’s initial production
did not meet the requirements of LPR 3.1. In addition,
the July 1 Order does not provide any explanation for the
decision to grant the Initial Motion and does not address
any perceived flaws in Parrot’s initial production. With-
out any explanation from Drone as to any deficiencies in
Parrot’s initial production, the court could not have de-
termined that Parrot had not met its burden under the
local rules. Under these circumstances, we think the
court should not have granted the Initial Motion. 10
    Second, in the July 1 and July 25 Orders, the district
court appears to have overlooked the “sufficient to show”
limitation in LPR 3.1 by forcing Parrot to turn over “all”
of its technical information “relating to the operation of
the accused products.” J.A. 5, 9. The court’s July 1 Order
provides no explanation for its breadth; in fact, Drone did
not even request such a broad order. To the contrary,
Drone only requested “all of the source code, specifica-
tions, schematics and flow charts, as required by
LPR 3.1.” J.A. 583 (emphasis added). Thus, even if
Drone was entitled to some source code, the court provid-
ed no rationale for forcing Parrot to produce all of its
source code and other technical documents as part of its
Initial Disclosures.
     Third, in the July 1 and July 25 Orders, the district
court also appears to have overlooked the “make available
for inspection and copying” language in LPR 3.1 by direct-
ing Parrot to “produce” all information. J.A. 5, 9. LPR 3.1
clearly allows Parrot to make its source code available for
inspection. Drone never argued in its Initial and Second
Motions that it needed Parrot to produce the code be-


   10    Although we focus on the July 1 Order, our analy-
sis applies with equal force to the July 25 Order, as the
later-issued order provides no new reasoning or analysis
and merely enforces the earlier order.
24                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



cause, for whatever reason, it could not inspect the code;
rather, Drone misconstrued LPR 3.1 as requiring produc-
tion. J.A. 579. Instead of recognizing that Drone had
misconstrued the local rule, the court accepted Drone’s
position and did so without providing any explanation.
J.A. 6. Thereafter, when Parrot filed an emergency
motion to clarify that LPR 3.1 allows it to make its source
code available for inspection, the court simply denied the
request for relief, again without providing any reasoning.
J.A. 6. The record contains no basis to support the court’s
conclusion that Parrot had to produce its source code even
though LPR 3.1 envisions inspection as an alternative.
     Fourth, the district court’s July 1 and July 25 Orders
failed to take into account the “identified in the claims
pled” limitation in LPR 3.1 by forcing Parrot to produce
documents relating to the Bebop Drone and MiniDrones.
None of these products were identified in Drone’s com-
plaint or otherwise accused of infringement. See J.A.
153–59. Contrary to Drone’s assertion, it did not identify
these products as infringing in its infringement conten-
tions. Instead, it merely stated that the Bebop Drone and
MiniDrones “may also be Accused Instrumentalities;
however, there is insufficient information currently
available to make [that] determination.” J.A. 2097.
Notwithstanding that these products were never identi-
fied as infringing, the court compelled Parrot to produce
all technical information related to their operation, and it
did so without providing any explanation. J.A. 5. When
Parrot tried to clarify that LPR 3.1 does not call for pro-
duction relating to non-accused products, the court denied
Parrot’s request without providing any reasoning. J.A. 6.
The record thus contains no basis to support the court’s
conclusion that Parrot had to produce documents relating
to non-accused products, even though LPR 3.1 only re-
quires disclosures relating to accused products.
    Finally, the July 1 and July 25 Orders failed to ad-
dress the absence of any showing of relevance or need for
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.               25



the on-board source code and documents relating to the
Bebop Drone and MiniDrones. 11 Federal Rule of Civil
Procedure 26(b)(1) allows a party to obtain discovery
“relevant to any party’s claim or defense.” 12 Fed. R. Civ.
P. 26(b)(1); see also Micro Motion, Inc. v. Kane Steel Co.,
894 F.2d 1318, 1323 (Fed. Cir. 1990) (explaining that
discovery may not be had unless it is relevant to the
subject matter of the pending action). However, “[e]ven if
relevant, discovery is not permitted where no need is
shown.” Micro Motion, 894 F.2d at 1323; Am. Standard
Inc. v. Pfizer Inc., 828 F.2d 734, 743 (Fed. Cir. 1987)
(“Where proof of either relevance or need is not estab-
lished, discovery is properly denied.”). Drone’s Initial
Motion was virtually silent on the subject of the Bebop
Drone and MiniDrones, offering no explanation as to how
these non-accused products were relevant or necessary to
any of its infringement claims. See J.A. 578–83. The only
mention of these products, in fact, appears in the pro-
posed order attached to Drone’s Initial Motion. J.A. 597.
Notwithstanding that the Bebop Drone and MiniDrones
seemed to have slipped into the fold, the court’s July 1
and July 25 Orders failed to address the relevance of, or
need for discovery relating to, these products. J.A. 5, 9.
Because there was neither a charge of infringement nor


   11   “A determination of relevance implicates substan-
tive patent law. Therefore, we look to Federal Circuit law
rather than regional circuit law in discussing relevance.”
Micro Motion, Inc. v. Kane Steel Co., 894 F.2d 1318, 1326
n.8 (Fed. Cir. 1990) (citing Truswal Sys. Corp. v. Hydro-
Air Eng’g, Inc., 813 F.2d 1207, 1212 (Fed. Cir. 1987)).
    12  The Federal Rules of Civil Procedure, particularly
the rules regarding discovery, were amended effective
December 1, 2015. Because the old rules governed the
proceedings below when the district court issued the
July 1 and July 25 Orders, we review the district court’s
actions based on the rules then in effect.
26                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



any evidence of relevance or need, discovery relating to
the Bebop Drone and MiniDrones should not have been
granted based solely on Drone’s suspicion. See Micro
Motion, 894 F.2d at 1327 (explaining that “mere suspi-
cion” of a product’s infringement does not support discov-
ery into that subject matter).
     As for the on-board source code, Drone also failed to
show its relevance or establish any need for the code as it
relates to the operation of the accused products. In the
Initial Motion, Drone identified both the off-board and on-
board source code but only explained why it felt it needed
the former. See J.A. 578–83. Drone even conceded at oral
argument before us that it “did not talk specifically about
the on-board source code in the [Initial Motion].” Oral
Arg. at 22:51–56, available at http://oralarguments.cafc.
uscourts.gov/default.aspx?fl=2015-1892.mp3. In granting
Drone’s Initial and Second Motions, the district court
failed to explain why “all” source code or even any source
code was needed or relevant in this case. J.A. 5, 9. Thus,
we find that the court acted in contravention of Federal
Rule 26(b)(1) by ordering Parrot to produce its on-board
source code—code which has never been shown to be
relevant. 13



     13  We also think the district court should have com-
pared the needs of the case with both the burden placed
on Parrot to produce “all source code” and the significant
consequences that might result from unauthorized or
inadvertent disclosure.      Despite the well-intentioned
provisions of protective orders designed to guard confiden-
tial information, “there may be circumstances in which
even the most rigorous efforts of the recipient of such
[sensitive] information to preserve confidentiality in
compliance with . . . a protective order may not prevent
inadvertent compromise.” In re Deutsche Bank Trust Co.
Ams., 605 F.3d 1373, 1378 (Fed. Cir. 2010). In addition, it
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                27



    We do not decide today whether the on-board source
code is relevant to this case. However, we note that
source code is not necessary in every case. See, e.g.,
Cochran Consulting, Inc. v. Uwatec USA, Inc., 102 F.3d
1224, 1231 (Fed. Cir. 1996) (vacating discovery order
requiring the production of computer-programming code
because the party seeking discovery had not shown that
the code was necessary to the case). At this stage of the
proceedings, it is far from clear that all source code—
whether off-board or on-board—is necessary to Drone’s
case. Nevertheless, on remand, Drone will have a chance
to make a showing of need and relevance for the on-board
source code, and Parrot will have a chance to dispute any
such showings.
    Taken together, the errors discussed above convince
us that the district court abused its discretion in granting



is well recognized among lower courts that source code
requires additional protections to prevent improper
disclosure because it is often a company’s most sensitive
and most valuable property. See, e.g., Via Vadis Control-
ling GmbH v. Skype, Inc., No. Civ.A. 12-MC-193, 2013 WL
646236, at *3 (D. Del. Feb. 21, 2013) (noting that source
code might represent a company’s “most sensitive and
confidential property” and that, in “U.S. litigation, ex-
treme measures are ordered to protect [its] confidentiali-
ty”). As a result, district courts regularly provide for
additional restrictions on discovery to account for the
unique characteristics of source code. Indeed, after this
case was decided, the Western District of Pennsylvania
adopted more robust protections for source code. See W.D.
Pa. App’x LPR 2.2 ¶¶ 12–19 (effective Dec. 5, 2015).
Although there is no source-code exception to the produc-
tion requirements of the Federal Rules, the district court
should have considered these concerns in light of the
proportionality requirements of Federal Rule 26(b)(2)(C).
28                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



Drone’s Initial and Second Motions and in issuing the
associated July 1 and July 25 Orders. Accordingly, the
July 1 and July 25 Orders are vacated. 14
                             2.
    We turn next to the district court’s default sanction.
A dismissal or default is a “drastic” sanction, Poulis, 747
F.2d at 867, which is why the Third Circuit has “estab-
lished [a] strong presumption against sanctions that
decide the issues of a case,” Ali, 788 F.2d at 958. Accord-
ingly, a dismissal or default sanction is “disfavored absent
the most egregious circumstances.” United States v.
$8,221,877.16 in U.S. Currency, 330 F.3d 141, 161 (3d Cir.
2003). To determine whether a district court abused its
discretion when imposing a default or dismissal sanction,
the Third Circuit balances the six Poulis factors: (1) the
extent of the party’s personal responsibility; (2) whether
the party had a history of dilatoriness; (3) whether the
conduct of the party or the attorney was willful or in bad
faith; (4) the meritoriousness of claims or defenses; (5) the
prejudice to the adversary caused by the party’s conduct;
and (6) the effectiveness of sanctions other than dismissal
or default. Poulis, 747 F.2d at 868; Ware v. Rodale Press,
Inc., 322 F.3d 218, 221 (3d Cir. 2003) (citing Poulis, 747
F.2d at 868); Bull v. United Parcel Serv., Inc., 665 F.3d
68, 80 (3d Cir. 2012) (citing Poulis, 747 F.2d at 868).
“[N]o single Poulis factor is dispositive,” Ware, 322 F.3d at
222, and the Third Circuit has recognized that “not all of
the Poulis factors need be satisfied in order to dismiss a
complaint,” Mindek v. Rigatti, 964 F.2d 1369, 1373 (3d


     14 On remand, pursuant to LPR 1.4 (as amended in
2015), the parties “shall meet and confer promptly . . . for
the purpose of determining whether any provisions in [the
amended local patent rules] should be made applicable” to
this case, paying particular attention to the amended
provisions of App’x LPR 2.2 ¶¶ 12–19.
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                  29



Cir. 1992). In this case, the district court concluded that
five of the factors favor default, while one weighs neutral-
ly. On that basis, the court imposed upon Parrot the
sanction of a default judgment.
     Before examining the district court’s sanctions ruling,
however, we address the preliminary question of whether,
in fact, a Poulis analysis is required in this case. Specifi-
cally, it could be argued that, having ruled that the dis-
trict court abused its discretion in issuing the July 1 and
July 25 Orders, we should automatically vacate the
district court’s entry of a default judgment against Parrot
for its failure to comply with those orders. There is au-
thority supporting that approach. See, e.g., EEOC v. First
Nat’l Bank of Jackson, 614 F.2d 1004, 1007–08 (5th Cir.
1980) (reversing dismissal sanction for refusal to comply
with a discovery order because the sought-after infor-
mation was “not properly discoverable” and thus “the
district court should not have imposed a Rule 37 sanction
upon appellant for refusing to reveal the information”)
(citing Dunbar v. United States, 502 F.2d 506, 509 (5th
Cir. 1974)); Dole v. Local 1942, Int’l Bhd. of Elec. Workers,
870 F.2d 368, 376 (7th Cir. 1989) (reversing dismissal
sanction for refusal to comply with a discovery order
because “the district court abused its discretion by com-
pelling discovery” and “such an abuse of discretion will
not support a Rule 37(b) dismissal”). If followed, that
course would obviate the need for a Poulis analysis. At
the same time, however, there also is authority suggest-
ing that abrogation of a discovery order does not automat-
ically result in reversal of a sanction imposed for failure to
comply with the order. See Chudasama v. Mazda Motor
Corp., 123 F.3d 1353, 1366 (11th Cir. 1997) (explaining
that an “important factor” in evaluating whether a dis-
trict court abused its discretion in imposing severe sanc-
tions upon a party for violating an order is “whether the
entry of [the] order was itself an abuse of discretion”);
Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1292
30                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



(11th Cir. 2005) (“This is not to say, however, that sanc-
tions based on erroneous discovery orders will never be
upheld.”)
     The Third Circuit, whose law controls here, does not
appear to have spoken on this question. Indeed, it did not
state in Poulis (nor has it stated in any case since as far
as we can tell) that a determination that a discovery order
was an abuse of discretion obviates the need for a Poulis
analysis when assessing a default or dismissal sanction
that is based at least in part on failure to comply with the
discovery order. We recognize that the Circuit has said
that the validity of a civil contempt order is predicated on
the merits of the underlying order that was violated. See,
e.g., In re Grand Jury Proceedings Harrisburg Grand
Jury 79-1, 658 F.2d 211, 217 n.13 (3d Cir. 1981) (“It is a
well established principle that an order of civil contempt
cannot stand if the underlying order on which it is based
is invalid.”) (quoting ITT Cmty. Dev. Corp. v. Barton, 569
F.2d 1351, 1356 (5th Cir. 1978)); John T. ex rel. Paul T. v.
Del. Cty. Intermediate Unit, 318 F.3d 545, 559 (3d Cir.
2003) (“[I]t is well settled that the viability of a civil
contempt order entered either to remedy past non-
compliance or to coerce future compliance with a prelimi-
nary injunction hinges on the validity of the underlying
injunction.”). However, this case does not involve a civil
contempt order. See Drone Techs., 303 F.R.D. at 265
(explaining that “treating [Parrot’s] actions as contempt of
court pursuant to Rule 37 would not meet the goals of
sanctions”). Under these circumstances, and in view of
the fact that neither Drone nor Parrot has presented
argument on the question, we think the prudent approach
is to conduct a Poulis analysis. As seen below, based upon
that analysis, we conclude that the district court abused
its discretion in imposing upon Parrot the sanction of a
default judgment. Thus, even if weighing the Poulis
factors is viewed as unnecessary given our holding that
the district court abused its discretion in issuing the
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                  31



July 1 and July 25 Orders, our conclusion (as informed by
our Poulis analysis) on the issue of the court’s sanction
stands as an alternative ground for vacating the default
judgment. We turn now to the Poulis factors.
       The extent of Parrot’s personal responsibility
     We begin by looking at Parrot’s personal responsibil-
ity for not complying with the July 1 and July 25 Orders.
The district court correctly found that Parrot was “per-
sonally involved in the decision to not produce required
initial disclosures and, therefore, [was] responsible for
[its] failure to comply with th[e] Court’s discovery Or-
ders.” Drone Techs., 303 F.R.D. at 262. The court heard
testimony from Parrot’s head of legal, who stated that she
understood the court’s orders and that Parrot would not
produce the on-board source code until an appellate court
compelled it to do so. Id. at 261 & n.4. Parrot also con-
ceded its personal involvement in its opening brief. As a
result, we see no reason to disturb the court’s conclusion
on this factor.
  History of dilatoriness & Willful or bad-faith conduct
     In evaluating these factors together, the district court
reviewed Parrot’s various submissions to it relating to the
discovery orders. The court found that Parrot understood
its obligations and willfully chose not to comply, as evi-
denced by, inter alia, testimony from its head of legal that
the July 1 Order was “crystal clear” and by its continuous
attempts to make its on-board source code available for
inspection even after the court clarified that production
was required. Id. at 263–64. Finding that Parrot took
“shifting” and “inconsistent” positions as the case pro-
gressed and that its noncompliance was a tactical deci-
sion, the court concluded that these factors weighed in
favor of “serious sanctions.” Id. at 262–65. We do not
think Parrot should be faulted for requesting clarification
of the July 1 Order or for seeking additional safeguards
for its source code. We also think Parrot made clear that
32                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



it was willing to make its on-board source code available
for inspection, as permitted by LPR 3.1, which demon-
strates that it was not seeking to hide information.
Nevertheless, the record reflects that Parrot was fully
aware of the consequences of its actions and that it vacil-
lated, at least to some extent, on whether it intended to
comply with the court’s orders. Parrot indeed does not
dispute that its positions “evolved over time,” and it
concedes that it should have informed the district court at
the outset of its intention not to produce the on-board
source code. The record therefore supports the court’s
findings on these factors.
    The Poulis factors do not explicitly account for the
propriety of a discovery order when considering the merits
of a discovery sanction. Still, the Third Circuit has “rec-
ognized that a party sufficiently exercised over a discov-
ery order may resist that order, be cited for contempt, and
then challenge the propriety of the discovery order in the
course of appealing the contempt citation.” In re Flat
Glass Antitrust Litig., 288 F.3d 83, 89 (3d Cir. 2002)
(quoting MDK, Inc. v. Mike’s Train House, Inc., 27 F.3d
116, 121 (4th Cir.1994)); see also Firestone Tire & Rubber
Co. v. Risjord, 449 U.S. 368, 377 (1981). Even though
Parrot took a circuitous path to its contempt hearing, it
did what the Third Circuit envisions a party should do if
it hopes to overturn a court’s discovery order—it resisted
the order and sought appellate review. Consequently, we
think our conclusion above—that the court abused its
discretion in issuing the July 1 and July 25 Orders—
sheds some favorable light on Parrot’s decision not to
comply and thereby reduces the extent to which its dilato-
riness and willfulness weigh in favor of serious sanctions.
          Meritoriousness of claims or defenses
    Despite the brevity of the court’s analysis on this is-
sue, we agree that this factor is neutral because both
parties “advanced prima facie cases.” Drone Techs., 303
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                33



F.R.D. at 266. Parrot attempts to cast doubt on the
court’s finding by arguing that its defenses, if successful,
would bar Drone’s recovery. But this argument misses
the point. The district court did not need to fully assess
the merits of the parties’ claims and defenses; it only
needed to look to the pleadings. See Poulis, 747 F.2d at
869–70 (“A claim, or defense, will be deemed meritorious
when the allegations of the pleadings, if established at
trial, would support recovery by plaintiff or would consti-
tute a complete defense.”). Because Parrot has not shown
that Drone’s pleadings could not support recovery, we
reject its arguments on this factor.
           Prejudice to Drone caused by Parrot
    As for prejudice to Drone, we think the district court
erred by concluding that this factor “weighs heavily
toward the imposition of severe sanctions.” Drone Techs.,
303 F.R.D. at 262. The court found that Parrot’s noncom-
pliance with the July 1 and July 25 Orders prejudiced
Drone by (1) preventing Drone from reviewing infor-
mation before the claim-construction hearing scheduled
for October 24, 2014, (2) inhibiting Drone’s ability to
prepare its case for trial, and (3) causing Drone to “expend
substantial funds, time, and energy” on motions practice.
Id. In our view, the record does not support the court’s
findings. Although the court did not specify what infor-
mation Drone needed but did not receive, it presumably
was referring to the on-board source code and documents
relating to the Bebop Drone and MiniDrones. However,
as discussed above, Drone has not shown that this infor-
mation is relevant or necessary to its case, so the record
does not support a finding that lacking this information
prejudiced Drone in any way, whether for claim-
construction purposes or for trial.
    Nor do we believe that Drone demonstrated that it
was prejudiced by spending time and money on its mo-
tions and its responses to Parrot’s motions. The Third
34                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



Circuit has stated that prejudice, for the purpose of Pou-
lis, includes “the excessive and possibly irremediable
burdens or costs imposed on the opposing party.” Bull,
665 F.3d at 80 (quoting Scarborough v. Eubanks, 747 F.2d
871, 876 (3d Cir. 1984)). Although the district court
deemed Drone’s expenditures of time and money as being
substantial, it did not state that they were “excessive” or
“possibly irremediable.” Furthermore, the court did not
provide a quantitative analysis of Drone’s lost time and
money or provide any explanation of how this case is
distinguishable from a garden-variety discovery dispute
in terms of time and cost. Drone does not present any
such arguments either on appeal. And neither the district
court’s ruling nor Drone’s arguments on appeal point us to
a case suggesting that the mere expenditure of time and
money associated with filing motions amounts to preju-
dice for the purpose of a Poulis analysis.
    The district court also stated that Drone was “no clos-
er to obtaining complete initial disclosures” than it was on
the day it filed the Initial Motion. Drone Techs., 303
F.R.D. at 262. That conclusion, we think, overlooks that
Parrot produced 14 million pages of documents and that
Drone has never shown Parrot did not meet its obligations
under LPR 3.1. Accordingly, because the apparent preju-
dice to Drone is unsubstantiated, we hold that this factor
disfavors a severe sanction.
       Effectiveness of sanctions other than default
    In our view, the remaining Poulis factor, the effec-
tiveness of alternative sanctions, also militates against
the sanction of default. In determining that default was
the appropriate sanction, the district court stated that
“monetary or other similar sanctions” would not “ade-
quately account for or correct” the prejudice caused to
Drone. Id. at 265–66. The court also emphasized the
need to “penalize” and “deter others from taking similar
action.” Id. at 265. Lastly, the court concluded that
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                35



lesser sanctions “would not meet the goals of sanctions”
and that Parrot should not be allowed to remedy the
situation through self-imposed sanctions. Id. We find
several problems with the court’s analysis.
    The court’s analysis suggests it did not seriously con-
sider alternative sanctions. As noted, the only real preju-
dice here was lost time, energy, and money. Had the
court started with that premise, it would have determined
that numerous, alternative sanctions were available to
adequately account for any prejudice to Drone. Notwith-
standing the “strong presumption” against a “drastic”
sanction like default, the court rejected all alternatives
without explanation.
    We also question the court’s stated need to “penalize”
Parrot. While “all sanctions by their very nature involve
an element of punishment,” a court may not enter a
default judgment against a defendant who failed to com-
ply with a discovery order as “mere punishment.” Di-
Gregorio v. First Rediscount Corp., 506 F.2d 781, 789 (3d
Cir. 1974). Two facts suggest that the default sanction
here was meant to serve as “mere punishment.” First, as
explained above, “the sanction invoked [was] more stern
than reasonably necessary” to cure the actual prejudice to
Drone. Id. And second, the record does not support the
presumption that Parrot refused to provide its on-board
source code because discovery of that information would
have revealed the lack of merit in its defense against
Drone’s infringement case. See Ins. Corp. of Ir. v. Com-
pagnie des Bauxites de Guinee, 456 U.S. 694, 705 (1982)
(explaining that a proper application of Rule 37(b)(2) will,
“as a matter of law,” support “the presumption that the
refusal to produce evidence material to the administration
of due process was but an admission of the want of merit
in the asserted defense”) (citing Hammond Packing Co. v.
Arkansas, 212 U.S. 322, 351 (1909)). To the contrary, the
record indicates that Parrot repeatedly offered to make
the on-board source code available for inspection. Parrot
36                  DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



even offered to stipulate that all claim limitations relating
to the “remote-controlled device” (i.e., limitations to which
the on-board source might be relevant) are met if Drone
could prove infringement of all of the “remote controller”
limitations. In addition, Parrot proposed that the court
sanction it by deeming all “remote-controlled device”
limitations met or by precluding it from offering non-
infringement defenses with respect to those limitations.
Those offers are not indicative of a party trying to hide a
smoking gun. Accordingly, we find that the district court
abused its discretion in concluding that default was the
only available remedy.
    In sum, we conclude that the district court erred in its
findings on prejudice and the availability of alternative
sanctions and, consequently, erred in weighing the Poulis
factors. We conclude that, on the facts of this case, those
two factors outweigh the three factors suggesting that the
imposition of severe sanctions was appropriate. Moreo-
ver, because “all sanctions originate from the realm of
equity,” Bull, 665 F.3d at 83, we believe our vacatur of the
district court’s discovery orders underscores the notion
that a default sanction was improper here. Put most
simply, bearing in mind that, in the Third Circuit, a
default sanction is “disfavored absent the most egregious
circumstances,” $8,221,877.16 in U.S. Currency, 330 F.3d
at 161, we think it would be illogical to uphold the sanc-
tion of default for Parrot’s failure to comply with discovery
orders which we have determined represented abuses of
discretion. The district court’s entry of default judgment
against Parrot is vacated. The awards of damages and
attorney fees which resulted from the entry of judgment
against Parrot also are vacated.
    Notwithstanding that we are vacating the district
court’s discovery orders and its entry of a judgment of
default, we recognize that Parrot’s actions displayed a
measure of misconduct. That is, Parrot vacillated be-
tween positions of compliance and noncompliance and
DRONE TECHNOLOGIES, INC.   v. PARROT S.A.                 37



brought various motions that would have been unneces-
sary had it immediately subjected itself to a contempt
hearing. Parrot acknowledges as much in its opening
brief, stating that it “perhaps should have taken the
position, at the outset, that it would not produce the [on-
board] source code without additional protections and
asked for an immediately appealable sanction.” Accord-
ingly, on remand, in the event Drone again moves for
sanctions for Parrot’s prior conduct in this case, the
district court may, in its discretion, consider whether
lesser sanctions are warranted for such conduct. If the
court chooses to consider sanctions, it should take into
account, inter alia, Parrot’s production to date, its efforts
to comply with the actual requirements of LPR 3.1, and
the extent of any actual prejudice caused to Drone. It also
should take into account the fact that we have vacated the
July 1 and July 25 Orders.
                             III.
    Parrot has raised arguments in regard to the district
court’s evidentiary rulings relating to damages. Because
we are vacating both the judgment of liability and the
awards of damages and attorney fees, those arguments
are now moot and we do not need to address them.
                       CONCLUSION
    We hold that the district court has jurisdiction to en-
tertain Drone’s suit because Drone has standing. We also
hold that the district court abused its discretion when it
issued the July 1 and July 25 Orders and again abused its
discretion when it entered a default sanction against
Parrot for its failure to comply with those orders. We
therefore vacate the district court’s July 1 and July 25
Orders and the default judgment. With the default judg-
ment against Parrot vacated, we also vacate the awards of
damages and attorney fees against Parrot. The case is
remanded to the district court for further proceedings
consistent with this opinion.
38                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



              VACATED AND REMANDED
                           COSTS
     Each party shall bear its own costs.
  United States Court of Appeals
      for the Federal Circuit
                 ______________________

           DRONE TECHNOLOGIES, INC.,
                 Plaintiff-Appellee

                            v.

            PARROT S.A., PARROT, INC.,
                Defendants-Appellants
               ______________________

                  2015-1892, 2015-1955
                 ______________________

   Appeals from the United States District Court for the
Western District of Pennsylvania in No. 2:14-cv-00111-
AJS, Judge Arthur J. Schwab.
                ______________________
NEWMAN, Circuit Judge, concurring in the judgment.
    I agree that the default judgment was inappropriately
imposed, and I join the court’s ruling. On the ensuing
remand, the case would normally proceed to trial on the
merits. I write separately to stress an issue of potentially
threshold impact.
     The record raises the question of inventorship, for the
named sole inventor, Ms. Yu-Tuan Lee, testified that, “I
came up with this idea about having the aircraft move
following the motion of the remote controller,” but when
asked whether she knew “how to make that idea work,”
Ms. Lee answered, “I only came up with the ideas, and
subsequently Bruce told me that there was such a chip
that could detect movement.” Lee Dep. at 66:19–67:4.
2                   DRONE TECHNOLOGIES, INC.   v. PARROT S.A.



Precedent provides that “‘[o]ne who merely suggests an
idea of a result to be accomplished, rather than means of
accomplishing it, is not a joint inventor.’” Nartron Corp.
v. Schukra U.S.A. Inc., 558 F.3d 1352, 1359 (Fed. Cir.
2009) (alteration in original).
     Thus I do not share the view that it is unnecessary to
undertake “a substantive examination of inventorship in
order to resolve an issue of standing in an infringement
action where the plaintiff’s claim to title is not otherwise
in dispute.” Maj. Op. at 13. Inventorship affects not only
the validity of the patent, but also ownership and transfer
of ownership. See Beech Aircraft Corp. v. EDO Corp., 990
F.2d 1237, 1248 (Fed. Cir. 1993) (“At the heart of any
ownership analysis lies the question of who first invented
the subject matter at issue, because the patent right
initially vests in the inventor who may then, barring any
restrictions to the contrary, transfer that right to another,
and so forth.”). There is no right to sue on patents one
does not own. See Bd. of Trs. of Leland Stanford Junior
Univ. v. Roche Molecular Sys., 583 F.3d 832, 839 (Fed.
Cir. 2009), aff’d, 563 U.S. 776 (2011) (absence of owner-
ship can be raised “as a defense and a challenge to [the
plaintiff’s] standing to maintain its action against [the
defendant].”). An incorrect inventor or inventive entity
cannot pass title by assignment, because that entity has
no title to pass.
    Inventorship and standing appear to be critical to fur-
ther proceedings. “The requirement that jurisdiction be
established as a threshold matter ‘spring[s] from the
nature and limits of the judicial power of the United
States’ and is ‘inflexible and without exception.’” Steel Co.
v. Citizens for a Better Env’t, 523 U.S. 83, 94–95 (1998)
(alteration in original).
