Free Motion in Limine - District Court of Arizona - Arizona

Matthew A. C. Zapf (pro hac vice) A. Colin Wexler (pro hac vice) GOLDBERG KOHN 55 East Monroe Street, Suite 3300 Chicago, IL 60603-5792 Telephone: 312.201.3914 Facsimile: 312.863.7414 [email protected] [email protected] David P. Irmscher (15026-02) John K. Henning (25203-49) BAKER & DANIELS LLP 111 East Wayne Street, Suite 800 Fort Wayne, IN 46802 Telephone: 260-424-8000 Facsimile: 260-460-1700 [email protected] [email protected] H. Michael Clyde (009647) PERKINS COIE BROWN & BAIN P.A. 2901 North Central Avenue, Suite 2000 Phoenix, AZ 85012-2788 Telephone: 602.351.8000 Facsimile: 602.648.7000 [email protected] Attorneys for the defendant, Omron Corporation UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Hypercom Corporation, Plaintiff, ) ) ) ) ) ) ) ) ) ) ) ) ) CAUSE NO. CV04-0400 PHX PGR DEFENDANT OMRON CORPORATION'S MOTION IN LIMINE NO. 10 TO PREVENT HYPERCOM CORPORATION FROM PURSUING RECOVERY OF ATTORNEYS' FEES FOR PURSUIT OF CLAIMS AGAINST OMRON AND COUNTERCLAIMS IN OTHER ACTIONS (Oral Argument Requested)

vs.

Omron Corporation, Defendants.

Case 2:04-cv-00400-PGR

Document 173

Filed 04/13/2007

Page 1 of 6

The defendant, Omron Corporation ("Omron"), respectfully moves this Court to limit Hypercom Corporation ("Hypercom") from introducing evidence and seeking recovery for attorneys' fees and costs associated with the present action for the following reasons: 1. Hypercom's claims against Omron are based on four lawsuits filed

against Hypercom by Verve L.L.C., a patent holding company to which Omron assigned multiple patents under a series of assignment agreements. 2. Verve filed a patent infringement lawsuit in (1) the Eastern District

Court of Michigan on September 11, 2003 ("the Michigan Action"); (2) the Western District of Texas on February 4, 2004 ("the Texas Action"); (3) the International Trade Commission on August 2, 2004 ("the ITC Administrative Action"); and (4) the Northern District of California on August 30, 2004 ("the California Action"). 3. On June 8, 2004, Verve voluntarily dismissed its claims against

Hypercom in the Michigan Action. 4. On July 12, 2004, Hypercom filed its First Amended Complaint in

this case, naming Omron as a co-defendant with Verve and asserting a claim for civil conspiracy. 5. On March 8, 2005, Verve voluntarily dismissed its claims against

Hypercom in the California Action. 6. In the ITC Administrative Action, Hypercom and other defendants

moved the ITC to impose sanctions on Verve for failing to conduct a reasonable prefiling investigation and other litigation conduct. On February 11, 2005, Verve filed a motion seeking to withdraw the ITC complaint. The ITC proceedings are still ongoing,

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but Hypercom should not be permitted to recover attorneys' fees based on its pursuit of sanctions against Verve after Verve offered to end the proceedings in the ITC on February 11, 2005. See Motion To Withdraw Complaint And Terminate Investigation, filed February 11, 2005, in the ITC Administrative Action. If awarded, any sanctions would be paid by Verve to the ITC, not Hypercom. 7. On November 16, 2005, Hypercom filed counterclaims against

Verve in the Texas Action, which had been transferred to this Court. See Hypercom Corp. v. Verve L.L.C., Case No. 2:05-cv-00365-FJM. The counterclaims included counts of malicious prosecution, abuse of process, and violation of 28 U.S.C. § 1927. 8. On December 13, 2005, the Court dismissed, pursuant to Federal

Rule of Civil Procedure 41(b), Verve's patent infringement claims in the Texas Action for lack of prosecution. Following this dismissal, only Hypercom's counterclaims against Verve remained in that case. Hypercom Cannot Recover Fees For Prosecuting This Case 9. Arizona follows the American Rule, recognizing that each party is

generally responsible for its own attorneys' fees. See Cortaro Water Users' Ass'n v. Steiner, 148 Ariz. 314, 316, 714 P.2d 807, 809 (1986) ("In Arizona we follow the general American rule that attorneys' fees are not recoverable unless they are expressly provided for either by statute or contract"). Hypercom's claims against Omron in this case for conspiracy, malicious prosecution, and aiding and abetting are state common law claims. Thus, no statutory basis exists for an award of attorneys' fees in prosecuting its claims against Omron. Likewise, no contractual basis is present to authorize awarding attorneys' fees. Hypercom's alleged attorneys' fees and costs associated with pursuing this action, therefore, are not recoverable and any evidence of such fees and costs is not admissible. -3Case 2:04-cv-00400-PGR Document 173 Filed 04/13/2007 Page 3 of 6

Hypercom Cannot Recover Its Fees From Its Counterclaims Against Verve In the Texas Action or Its Counterclaims For Sanctions In the ITC Administrative Action 10. For the same reasons, this Court should also exclude any evidence

of attorneys' fees related to Hypercom's pursuit of (1) its counterclaims against Verve in the Texas Action and (2) sanctions in the ITC Administrative Action. 11. In the ITC Administrative Action, Hypercom spent an excessive

amount of money, before and after Verve voluntarily dismissed its complaint, seeking sanctions against Verve for alleged misconduct by Verve in the ITC. 12. The attorneys' fees after February 11, 2005, are related to

Hypercom's fees in seeking sanctions against Verve. Under the American Rule, Hypercom is not entitled to recover any attorneys' fees related to the sanctions motions because these are the equivalent of counterclaims rather than Hypercom's defense. There is no reason why Hypercom should be permitted to recover fees it expended in pursuing the action Verve offered to withdraw its claim. 13. Similarly, Hypercom may offer evidence of attorneys' fees related

to its prosecution of counterclaims in the Texas Action. In its earlier trial against Verve based on the same alleged misconduct involved in this case, Hypercom Corp. v. Verve L.L.C., No. CV-05-0365-PHX-FJM, the District Court of Arizona rejected Hypercom's arguments that it was entitled to recover fees related to the prosecution of its own claims against Verve, and enforced the American Rule recognized by Arizona courts. 14. For the same reasons, this Court should exclude evidence of

attorneys' fees and costs incurred in connection with the prosecution of counterclaims against Verve.

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RESPECTFULLY SUBMITTED on April 13, 2007.

By: /s/ Matthew A.C. Zapf Matthew A.C. Zapf A. Colin Wexler GOLDBERG KOHN 55 East Monroe Street Suite 3300 Chicago, IL 60603-5792 David P. Irmscher (15026-02) John K. Henning (25203-49) BAKER & DANIELS LLP 111 East Wayne Street Suite 800 Fort Wayne, IN 46802 H. Michael Clyde (009647) PERKINS COIE BROWN & BAIN P.A. 2901 North Central Avenue Suite 2000 Phoenix, AZ 85012-2788 Attorneys for Defendant Omron Corporation

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CERTIFICATE OF SERVICE I hereby certify that on April 13, 2007, I electronically transmitted the attached documents to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Andrew Foster Halaby Ray Kendall Harris John Kenyon Henning, IV David P. Irmscher Sid Leach Monica Anne Limon-Wynn Paul Moore A. Colin Wexler Matthew A.C. Zapf [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

I hereby certify that on April 16, 2007, I caused the attached document to be served by hand delivery on Judge Paul G. Rosenblatt, United States District Court of Arizona, 401 West Washington Street, Phoenix, Arizona 85003-2118.

/s/ Lisa M. Sandoval

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