Free Reply to Response to Motion - District Court of Delaware - Delaware

Case 1:04-cv-01436-JJF

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

ST. CLAIR INTELLECTUAL PROPERTY CONSULTANTS, INC. Civil Action No. 04-1436 JJF Plaintiff, JURY TRIAL DEMANDED v. SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, L.P. SAMSUNG TELECOMMUNICATIONS AMERICA, L.P., MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., MATSUSHITA ELECTRIC CORPORATION OF AMERICA, VICTOR COMPANY OF JAPAN, LTD., JVC COMPANY OF AMERICA, NOKIA CORPORATION, NOKIA, INC., HEWLETTPACKARD COMPANY, EASTMAN KODAK COMPANY, Defendants.

PLAINTIFF ST. CLAIR'S REPLY IN SUPPORT OF ITS MOTION TO LIFT THE STAY IN LITIGATION AS TO DEFENDANTS SAMSUNG, MATSUSHITA, NOKIA, AND HEWLETT-PACKARD The California action settled. Kodak and St. Clair have entered into a binding, enforceable Memorandum of Understanding that resolves all claims between Kodak and St. Clair regarding the Roberts patents. The Non-Kodak Defendants offer no basis to justify supporting the further stay of this patent infringement case. The stay should be lifted immediately. I. The Condition upon which the Court Based the Stay Has Been Satisfied. In 2006, this Court ordered this action stayed, and administratively closed, pending the resolution of the ownership dispute between Kodak and St. Clair in Eastman Kodak Company v. Speasl, Case No. 05-39164 (Cal. Sup. Ct.) (formerly styled Mirage Sys., Inc. v. Speasl). (D.I.

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109, 110.) As St. Clair has advised this Court and as Kodak and St. Clair's joint submission to the International Trade Commission makes clear, all claims between Kodak and St. Clair regarding the Roberts Patents have been resolved: The California Court commenced trial proceedings in the California Action in January 2008, the action then settled, and the parties have signed a memorandum of understanding, which is binding under California law. The memorandum of understanding between the parties in the California Action provides for the resolution of all claims between the parties regarding the Roberts Patents . . . . (Opening Mot. Ex. A.) This Court has already acted on this information to lift the stay in the related Fuji case. (St. Clair Intellectual Property Consultants, Inc. v. Canon, Inc., Civil Action No. 03-241-JJF (D. Del.) (March 14, 2008 Order (no document number).) Based upon a joint submission, this Court entered an order lifting the Fuji stay and scheduling a status conference for April 2, 2008. (Civil Action No. 03-241, D.I. 1020.) Given the fact of the binding, enforceable Memorandum of Understanding, it is irrelevant that the parties may be working on finalizing settlement and licensing documents. See Kelly v. Greer, 365 F.2d 669, 671 (3rd Cir. 1966) ("[A] settlement agreement or stipulation voluntarily entered into cannot be repudiated by either party."); Loppert v. WindsorTech, Inc., 865 A.2d 1282, 1285 (Del. Ch. 2004) ("[A] settlement agreement is enforceable as a contract."). There is also no basis for the Non-Kodak Defendants to argue that having resolved the California case, new conditions should be imposed on St. Clair before the stay can be lifted. The California action has settled and the condition supporting the Court's original stay is no longer present. Therefore, the Court should lift the stay in this case so that St. Clair's action currently pending before the Court can finally be resolved.

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II.

The Non-Kodak Defendants' Arguments Are Not Relevant to the Question of Lifting the Stay. The Non-Kodak Defendants' arguments in opposing the stay are completely irrelevant to

St. Clair's Motion. Indeed, Defendants' standing argument (which St. Clair disputes) only serves to confirm that the stay should be lifted so that claims and defenses can be raised and resolved in an open case.1 Likewise, while the Memorandum of Understanding may be discoverable subject matter if the stay is lifted, details of the settlement are irrelevant to the pending motion.2 What is relevant now is that all claims between the parties to the California action have been resolved. Since that has occurred, there is no basis for the stay to continue. III. St. Clair Will Be Unduly Prejudiced if the Court Does Not Lift the Stay. In this case, a continued stay will result in significant damage, hardship, and inequities to St. Clair. NeoMagic Corp. v Trident Microsystems, Inc., No. CIV. A. 98-699, 2001 WL 1064812, at *2 (D. Del. Sept. 7, 2001) ("In determining whether to grant a stay, a district court weighs the possible damages, hardship, and inequities to the parties to the lawsuit against the possibility that a stay will conserve resources and simplify the issues in question and the trial of the case."). Continued delay of these actions brings the Roberts patents closer to their 2010 expiration date, which unduly prejudices St. Clair's ability to enforce its intellectual property rights.

Although irrelevant at this stage, as the assignee of record to the Roberts patents in the United States Patent and Trademark Office, St. Clair has established a prima facie case of standing. (Am. Compl. ¶¶ 17-22, D.I. 4.) This Court has already ruled that St. Clair has made a sufficient showing of ownership to move forward with its infringement actions. (St. Clair Intellectual Property Consultants, Inc. v. Canon, Inc., No. 03-241 (D. Del.), D.I. 812.) Kodak has not consented to any disclosure of the MOU. In a March 20, 2008 response to correspondence from St. Clair, Kodak stated: "Voluntarily disclosing the MOU to the District of Delaware will violate the explicit terms of the MOU and therefore constitute a material breach." (Ex. A.)
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IV.

Lifting the Stay Now Will Best Conserve Resources and Serve the Interests of Justice. Lifting the stay will result in an efficient resolution of this case, allowing the parties to

receive the "just, speedy, and inexpensive determination" of this proceeding. Fed. R. Civ. P. 1. St. Clair's infringement action can proceed without foreclosing the Non-Kodak Defendants from working with the applicable rules and pretrial litigation processes to make discovery of the facts and resolution of the issues as efficient as possible. CONCLUSION St. Clair respectfully requests that the Court grant its motion to lift the stay in litigation.

Dated: March 27, 2008

SEITZ, VAN OGTROP & GREEN /s/ Patricia P. McGonigle _______________________________ George H. Seitz, III (No. 667) Patricia P. McGonigle, Esquire (No. 3126) 222 Delaware Avenue, Suite 1500 P.O. Box 68 Wilmington, DE 19899 (302) 888-0600 OF COUNSEL: Ronald J. Schutz Becky R. Thorson Annie Huang David B. Zucco ROBINS, KAPLAN, MILLER & CIRESI L.L.P. 2800 La Salle Plaza 800 LaSalle Avenue Minneapolis, MN 55402 (612) 349-8500 ATTORNEYS FOR PLAINTIFF ST. CLAIR INTELLECTUAL PROPERTY CONSULTANTS, INC.

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