Free Response - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11

David P. Irmscher (Indiana State Bar No. 15026-02) John K. Henning (Indiana State Bar No. 25203-49) Baker & Daniels LLP 111 East Wayne Street, Suite 800 Fort Wayne, IN 46802 Telephone: 260-424-8000 Facsimile: 260-460-1700 Ray Harris (Arizona State Bar No. 007408) Paul Moore (Arizona State Bar No. 019912) Fennemore Craig 3003 North Central Avenue, Suite 2600 Phoenix, AZ 85012-2913 Telephone: 602-916-5000 Facsimile: 602-916-5999 Attorneys for the defendant, Omron Corporation UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Hypercom Corporation, CAUSE NO. CV04-0400 PHX PGR DEFENDANT OMRON CORPORATION'S RESPONSE TO HYPERCOM'S STATEMENT OF FACTS IN OPPOSITION TO OMRON'S MOTION FOR SUMMARY JUDGMENT AND SUPPLEMENTAL STATEMENT OF FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

12

Plaintiff,
13

vs.
14

Omron Corporation,
15

Defendant
16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HO ENIX

The defendant, Omron Corporation ("Omron"), respectfully submits (1) its response to Hypercom Corporation's Statement Of Facts In Opposition To Omron's Motion for Summary Judgment ("Hypercom's Statement Of Facts"), and (2) Omron's Supplemental Statement Of Facts In Support Of Motion For Summary Judgment ("Omron's Supplement Statement Of Facts"). I. General Response To Hypercom's Statement Of Facts The Statement Of Facts submitted by the plaintiff, Hypercom Corporation ("Hypercom"), sets out 150 "facts." These facts include numerous improper legal

conclusions, such as: "Omron aided and abetted Verve's tortious activities" (Hypercom's
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94

Filed 01/12/2006

Page 1 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Statement Of Facts ¶ 32), and "Omron participated in Verve's scheme to extract money from Hypercom without regard to whether or not Hypercom actually infringed any of the Omron patents" (Hypercom's Statement Of Facts ¶ 6). Hypercom has improperly made its entire legal argument into a statement of facts. See Local Rule 56.1(a) of the District Court of Arizona. Excluding legal conclusions, Hypercom's Statement Of Facts contains only immaterial facts. Thus, while Hypercom's Statement Of Facts and Hypercom's

Opposition To Omron's Motion For Summary Judgment ("Hypercom's Response To Motion For Summary Judgment") misstates many facts, distorts others, and entwines most with innuendo and improper legal conclusions, Omron will not waste judicial resources with a fact-by-fact refutation. Further, Omron has addressed the absence of record

support for various Hypercom assertions in Omron's Reply In Support Of Motion For Summary Judgment ("Omron's Reply Brief"). II. General Reply To Hypercom's Response To Omron's Statement Of Facts In its Statement Of Facts, Hypercom also addressed each of Omron's asserted facts. See Hypercom's Response To Omron's Statement of Facts, included within Hypercom's Statement Of Facts at 38-52. The factual disputes asserted by Hypercom in its Response To Omron's Statement Of Facts are uniformly immaterial to Omron's Motion For Summary Judgment. Further, a significant part of Hypercom's disputed "facts" are not facts but legal conclusions. Hypercom repeatedly insists that Omron did not "actually assign[] any patents to Verve." See e.g., Hypercom's Response To Omron's Statement Of Facts at ¶¶ 7-11; 13-18; 21-23; 25-36; 38-39; 41; 45; 54; 58; 63. Similarly, Hypercom contests Omron's characterization of an addendum as "clarifying" the Third Assignment, and claims that the third assignment as modified by the addendum granted Omron "all rights in the Omron patents." Id. at ¶ 38. These are legal questions; the facts, by contrast, are the documents themselves. And for reasons set out in Omron's original brief and its
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 2 Filed 01/12/2006

Page 2 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Reply, the legal characterization of the assignment agreements between Omron and Verve cannot suggest a conspiracy or otherwise raise a genuine issue of fact barring summary judgment against Omron. As Hypercom has disputed only immaterial facts, Omron will not provide a factby-fact refutation of Hypercom's Response To Omron's Statement Of Facts. Omron has addressed many instances of factual license in its briefs. III. Objections To Hypercom's Statement Of Facts And Hypercom's Response To Omron's Statement Of Facts Local Rule 56.1(a) for the District Court of Arizona provides that each statement of fact in opposition to summary judgment "shall refer to a specific portion of the record where the fact may be found (i.e., affidavit, deposition, etc.)." A number of Hypercom's factual assertions do not merely over-extend evidentiary support, but lack it altogether. Omron thus objects to the following immaterial "facts" asserted in Hypercom's Statement Of Facts and Hypercom's Response To Omron's Statement Of Facts: A. Hypercom's Statement Of Fact ¶ 92 Again,

Hypercom submits as undisputed fact that: "Omron admits that the patent asserted against Hypercom in the Michigan Action 'covers technology for an electronic cash register and payment system.' Doc. # 74, Statement Of Facts In Support Of Omron Corporation's Motion For Summary Judgment ¶12. . . . Omron knew that Hypercom does not sell electronic cash registers when Omron approved Hypercom as a target to be sued in the Michigan Action." Hypercom's Statement Of Fact ¶ 92 (emphasis in original). The statement that Omron "knew" Hypercom did not sell electronic cash registers appears at least four times in Hypercom's Statement Of Facts, and repeatedly in Hypercom's Response To Motion For Summary Judgment. In Statement Of Fact

paragraphs 92, 93, and 102, the "fact" appears without record citation. In paragraph 57 of Hypercom's Response To Omron's Statement Of Facts, the exhibit cited in support of this
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 3 Filed 01/12/2006

Page 3 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

proposition is Hypercom's own brief. Later in the same paragraph, Hypercom cites its Exhibit 8, an internal Omron document seeking approval for a patent assignment to Verve. Exhibit 8 does not mention the business of Hypercom. Finally, in its response brief, Hypercom supports this factual assertion with exhibits that are nothing but photographs of machines ­ presumably, its machines. See Hypercom's Response To Motion For Summary Judgment at 9, referring to Exhibits 27 and 28 attached to Hypercom's Statement Of Facts. knowledge is baseless. B. Hypercom's Statement Of Fact ¶ 103 In short, Hypercom's bolded, repeated assertion of

Hypercom submits as undisputed fact that: "Omron's U.S. Patent No. 4,562,341 is limited to an electronic cash register. Exhibit #49; Doc. #74, Omron Statement of Facts ¶ 20. Hypercom's accused ICE 6000 terminal is not an electronic cash register, and clearly cannot infringe Omron's U.S. Patent No. 4,562,341. Exhibit 59." Hypercom's Statement Of Fact ¶ 103 (emphasis added). Exhibit 59 to Hypercom's Statement Of Facts is a legal brief that Hypercom filed in the ITC proceedings that purports to show non-infringement. Yet Hypercom's chief legal officer, Douglas Reich, testified on behalf of Hypercom in a deposition pursuant to Rule 30(b)(6) of the Federal Rules Of Civil Procedure as follows: Q: Is it Hypercom's contention that no reasonable attorney could disagree with Hypercom's conclusion that Hypercom has not infringed either the '340 or the '341 patents? ... A: As I stated before, I am not a patent or an intellectual property lawyer, and I don't really have a basis for answering the question. See Deposition Transcript of Douglas Reich ("Reich Deposition") at 125:25-126:8, attached as Exhibit 24 to Hypercom's Statement Of Facts. infringement is not clear to Hypercom's chief legal officer.
PHX/RHARRIS/1751540.1/12623.001

At a minimum, non-

Case 2:04-cv-00400-PGR

Document 94 4 Filed 01/12/2006

Page 4 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Hypercom's legal conclusion also contradicts record facts. The '341 patent covers not only electronic cash registers, but an "entire system for performing credit transactions." See U.S. Patent No. 4,562,341, claim 11, attached as Exhibit 49 to

Hypercom's Statement Of Facts. Further, the cash register of this system must include: (1) a card reader for reading data recorded in a card; (2) a communication control unit for communicating with the center; (3) a device for converting data relating to the credit standing of a selected customer sent from the center to visible information; and (4) a unit for controlling transmission of the data read from the card to the center in response to a communication start instruction and controlling conversion of the data from the center to visible information. Id. Whoever knowingly sells "a component of a patented machine [or] a material or apparatus for use in practicing a patented process, constituting a material part of the invention," and not a "staple article," or suitable for substantial non-infringing use is liable as a "contributory infringer." 36 U.S.C. 271(c) (emphasis added). That Hypercom sells no electronic cash register cannot, as a matter of law, show that it did not infringe the '341 patent. Id. C. Hypercom's Response To Omron's SOF ¶ 46

Hypercom states as undisputed fact that: "Omron coordinated the ITC Action with Verve. Omron coordinated with Verve in getting a lawyer in Japan to help make sure the witness did not talk to Hypercom." Hypercom's Response To Omron's Statement Of Facts ¶ 46. To support its assertion that Omron found a lawyer "to make sure the witness did not talk to Hypercom," Hypercom cites Exhibit 12, a letter from Omron's counsel to Verve. See Correspondence attached as Exhibit 12 to Hypercom's Statement Of Facts. This letter asserts that Omron's executive director, Tetsuyuki Nakano, would let the "witness" know that Verve wanted to contact him and prepare him for contacts from other parties. There is no mention of any intent to prevent the witness from speaking with
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 5 Filed 01/12/2006

Page 5 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Hypercom. Hypercom then cites a letter from Verve to the inventor's attorney asking the attorney to instruct him not to discuss the '077 patent "until we have had a chance to discuss first." See Correspondence attached as Exhibit 13 to Hypercom's Statement Of Facts. Again, there is no mention of preventing contact with adversaries. Nor is it remarkable that a patent owner would try to speak with the inventor before the inventor speaks with other parties to litigation. D. Hypercom's Statement Of Facts ¶ 46 and Hypercom's Response To Omron Statement Of Facts ¶ 46 "Omron's representative Mr.

Hypercom also states as undisputed fact that:

Nakano, who is based in the United States, traveled to Japan and met with the witness in person to discuss the pending proceeding before the [ITC] in which the inventor would be a potential witness. Exhibit 12. Mr. Nakano also called the witness on two additional occasions to talk to the witness about the ITC proceedings. Exhibit 23, Nakano depo. at 151." Hypercom's Statement Of Facts ¶ 46, and Hypercom's Response To Omron's

Statement Of Facts ¶ 46 (emphasis added). Exhibit 12 to Hypercom's Statement Of Facts, on which Hypercom relies, recites only Mr. Nakano's agreement to contact the inventor of the patented technology at issue. There is no mention of meetings much less travel to Japan for that purpose. To the contrary, Mr. Nakano testified in his deposition: Q: Did you speak with Mr. Takano, the inventor of the '077 patent? A: Yes, I have spoken to him. ... Q: How many times have you spoken with him since the ITC action started? A: Three or four times. Three times, I think. Q: Were all of these times telephone conversations . . . .
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 6 Filed 01/12/2006

Page 6 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

A: I spoke to him by telephone about two times. I met him once when I went to Japan on business. Mr. Takano happens to be my old friend so we met in Osaka and had a meeting with him. ... Q: When you met with Mr. Takano, the inventor of the '077 patent in Osaka, did you talk about the '077 patent or the ITC proceeding? A: Yes, I did. Q: What did you discuss with him? A: It wasn't so much of a discussion. We just ­ I just said that there is such ITC proceeding and about the '077 patent. He had forgotten about what patent it was so I explained what patent it was and that was about it. See Deposition Transcript of Tetsuyuki Nakano ("Nakano Deposition") at 151:2 -152:3, attached as Exhibit 23 to Hypercom's Statement Of Facts. Neither Hypercom's exhibits nor this testimony supports Hypercom's factual assertions. E. Hypercom's Statement Of Fact ¶ 72

Hypercom states as undisputed fact that: "[T]he administrative law judge presiding over the ITC Action ruled that Verve did not own the Omron patents and did not have standing to bring the ITC Action without joining Omron as a party. Exhibit 26, Doc. # 61, ITC Order No. 48, at 3." Hypercom's Statement Of Fact ¶ 72 (emphasis added). The ITC did not find that Verve owned no rights in the assigned patents. See e.g., ITC Order 40 at 21, attached as Exhibit 60 to Hypercom's Statement Of Facts. Indeed, the ITC found that Verve would have been a proper plaintiff to the infringement proceedings had Omron joined as a co-plaintiff: "Verve's lack of standing . . . is only a result of Verve's inability to prevail as a matter of law in showing that Verve alone owns full right, title and interest in the '077 patent, thus entitling it to sue for infringement of the patent without Omron's joinder." Id. The ITC thus did not question that Verve owns substantial
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 7 Filed 01/12/2006

Page 7 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

rights in the assigned patents. Id. F. Hypercom's Statement Of Fact ¶ 99

Hypercom states as undisputed fact that: "Verve dismissed [the Michigan Action against Hypercom] because Verve truly had no interest in obtaining an adjudication on the merits." Hypercom's Statement Of Fact ¶ 99. This is one of many instances in which Hypercom sets out a purported fact with no record citation. On summary judgment a district court is not obligated to wade through and search the entire record for some specific facts which might support the nonmoving party's claim. See Orr v. Bank of America, NT & SA, 285 F.3d 764, 774-75 (9th Cir. 2002) ("The efficient management of judicial business mandates that parties submit evidence responsibly"); Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (noting it is not the court's task "'to scour the record in search of a genuine issue of triable fact'" (internal citation omitted)); Huey v. UPS, Inc., 165 F.3d 1084, 1085 (7th Cir. 1999) ("[J]udges need not paw over the files without assistance from the parties."). IV. Omron's Supplemental Statement Of Facts In Support Of Motion For Summary Judgment Omron submits the following Supplemental Statement Of Facts In Support Of Motion For Summary Judgment, which supplement Omron's Statement Of Facts ¶¶ 1-68:

18

69.
19

Omron facilitated access to a potential witness, the inventor of the '077

Patent.
20 21

Nakano Deposition at 149:5-151:1, attached as Exhibit 23 to Hypercom's

Statement Of Facts. 70.
22 23

Omron also recommended a local attorney, Mr. Okada, that had worked for

Omron for many years. Id. at 150:15-151:1 and 152:11-22. 71.
24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Omron did not, by contrast, obstruct discovery or tell any witness what to

say to Verve's adversaries. Id. at 150:15-151:1 and 153:12-20.

PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 8 Filed 01/12/2006

Page 8 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

72.

In his deposition, Hypercom's in-house counsel and chief legal officer,

Douglas Reich ("Reich"), had the following to say about the settlement meeting on September 16, 2004: [T]hey may have reserved their evaluation of it, but we clearly demonstrated why we believed they didn't infringe the patents that were at that time being asserted against us. I am not sure that there was much conversation about the actual infringement because we didn't really go into that much detail about the claims in the patents. . . .[W]e attempted to go through maybe one or more of the patents, but it became obvious that that was going to be a very lengthy process. And then we got down to more of a discussion about well, how we can resolve this matter between us and Verve. Reich Deposition at 39:15-40:2 (emphasis added), attached as Exhibit 24 to Hypercom's Statement Of Facts. 73. Nakano, Omron's Rule 30(b)(6) representative, has testified, moreover, that

he did not even "know specifically which patent [Verve's claims against Hypercom] concerned [or] which Hypercom product was involved" at the time of the September 16, 2004, meeting. Nakano Deposition at 157:2-7, attached as Exhibit 23 to Hypercom's Statement Of Facts. 74. In any case, an independent evaluation of Verve's claims against Hypercom

would have been costly. Id. at 73:11-14. 75. Hypercom's representative, Reich, testified that Omron referred to a

"significant number of patents that Omron had with . . . potential application to Hypercom's business," and offered a licensing arrangement for those patents. Reich Deposition at 34:21-35:3, attached as Exhibit 24 to Hypercom's Statement Of Facts (emphasis added). 76. When asked if Hypercom knows of any evidence that "Omron knew

Hypercom was not infringing any of the patents when it assigned those patents to Verve," Hypercom's Rule 30(b)(6) designated witness (Reich) answered: "I am not aware of such
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

Document 94 9 Filed 01/12/2006

Page 9 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

evidence . . . ." Id. at 128:20-129-3. 77. And when asked whether a reasonable attorney could have concluded that

Hypercom infringed the assigned patents, Hypercom responded: "I don't have a basis for saying whether some else could make that conclusion or not." Id. at 104:22-25: 105:1-3. 78. Reich, Hypercom's chief legal officer and 30(b)(6) designate, testified: Q: So Hypercom doesn't have any specific evidence other than what's in the ITC and which you don't actually know about to support the claim that there was an unwritten agreement? I believe that's correct.

A: Id. at 72:16-20.

Respectfully submitted on January 12, 2006. FENNEMORE CRAIG, P.C. By: s/Ray K. Harris Ray Harris Paul Moore BAKER & DANIELS LLC David P. Irmscher John K. Henning Attorneys for Defendant Omron Corporation CERTIFICATE OF SERVICE I hereby certify that on January 12, 2006, I electronically transmitted the attached documents to the Clerk' Office using the CM/ECF System for filing and transmittal f a s

21

Notice of Electronic Filing to the following CM/ECF registrants:
22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Michael K. Kelly Sid Leach SNELL & WILMER L.L.P. One Arizona Center 400 East Van Buren Phoenix, AZ 85004-2202
PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

- Filed Document 94 10 - 01/12/2006

Page 10 of 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
FENNEMORE CRAIG, P.C.
P HOENIX

Peter Henry Schelstraete SCHELSTRAETE LAW OFFICE 1949 East Broadway Suite 107 Tempe, AZ 85282-0001 I hereby certify that on January 12, 2006, I served the attached document by mail on the following, who are not registered participants of the CM/ECF System: Christopher S. Walton Gregory S. Donahue SIMON GALASSO & FRANTZ PLC 115 Wild Basin Road Suite 107 Austin, TX 78703

_s/Melody Tolliver_________________

PHX/RHARRIS/1751540.1/12623.001

Case 2:04-cv-00400-PGR

- Filed Document 94 11 - 01/12/2006

Page 11 of 11