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, vs. Omron Corporation, ) ) ) ) ) ) ) ) ) ) ) CAUSE NO. CV04-0400 PHX PGR DEFENDANT OMRON CORPORATION'S MOTION IN LIMINE NO. 8 TO EXCLUDE EVIDENCE FROM THE ITC ADMINISTRATIVE ACTION (Oral Argument Requested)

Defendants.

Omron Corporation respectfully moves this Court to exclude from evidence any reference to, prior orders from, or documents produced in the administrative proceedings

Case 2:04-cv-00400-PGR

Document 171

Filed 04/13/2007

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before the International Trade Commission ("the ITC Administrative Action") for two reasons. First, the issue of whether Verve L.L.C. should be sanctioned for its conduct in the ITC Administrative Action is still pending on appeal, and therefore any reference to prior orders on this issue (or any other issues before the ITC) is premature. Second, Omron has been denied the ability to conduct discovery related to the ITC Administrative Action because Hypercom has used the confidential nature of the proceedings to shield any discovery from Omron. Hypercom should not be permitted to reverse course now and use evidence from the ITC to prove its claims. I. A. ARGUMENT

The ITC Administrative Action Is Being Appealed By Verve And, Therefore, Any Evidence Regarding The ITC Should Be Excluded As Premature Verve L.L.C. filed a complaint in the ITC alleging that products of Hypercom and

several other companies that manufacture point of sale terminals infringed Patent No. 5,012,077. On June 8, 2005, the ITC granted Verve's motion to withdraw the complaint. However, the proceedings before the ITC still continue today. After the complaint was withdrawn, Hypercom continued to seek sanctions against Verve for its conduct in the ITC. Specifically, Hypercom sought a finding that Verve initiated the ITC Administrative Action without conducting a reasonable pre-filing investigation. This very issue is on appeal from a decision of the ITC Administrative Law Judge to a full panel of the International Trade Commission. For the same reasons that Judge Martone dismissed Hypercom's malicious prosecution claims against Verve, this Court should preclude any evidence from the ITC Administrative Action. The action is not ripe for adjudication because there are still numerous issues being appealed to the International Trade Commission. After Hypercom -2Case 2:04-cv-00400-PGR Document 171 Filed 04/13/2007 Page 2 of 8

and Verve briefed this issue on summary judgment, Judge Martone held that because the ITC action was being appealed, "there has been no final judgment in favor of Hypercom, and these actions cannot yet form the basis of a malicious prosecution claim." Id. (citing Frey v. Stoneman, 150 Ariz. 106, 109-10, 722 P.2d 274, 277-78 (1986)). The malicious prosecution claim, the court held, was not ripe. The same goes for Hypercom's abuse of process claims in the ITC. Judge Martone already dismissed the abuse of process claims because Arizona law limited "process" to "'court procedures incident to the litigation process'" and, therefore, "[Verve's] actions related to the ITC administrative proceedings cannot form the basis of an abuse of process claim." See August 16, 2006, Order at 9 (citing Nienstedt v. Wetzel, 133 Ariz. 348, 353, 651 P.2d 876, 881 (Ct. App. 1982)). The state of affairs is no different now than it was when Judge Martone handed down his opinion. The ITC proceedings are still on appeal, and the proceedings in the ITC cannot form the basis for an abuse of process claim any more than they could before him. Accordingly, then, Hypercom cannot prevail on any of its claims with respect to the ITC proceeding. If Hypercom is allowed to introduce evidence to the jury about the ITC, it would improperly suggest to the jury that they may enter a finding against Omron relating to its conduct in the ITC. For the reasons discussed above, the jury is not permitted to do so. Accordingly, the introduction of evidence would be irrelevant, confusing to the jury, and prejudicial, and should therefore be excluded under Fed. Rs. Evid. 402 and 403.

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B.

The Court Should Exclude All Evidence From The ITC Action Based On Hypercom's Position Throughout Discovery That Information From The ITC Action Was Confidential And Could Not Be Disclosed 1. Hypercom's Corporate Representative Repeatedly Claimed That Hypercom Could Not Answer Questions About The ITC Because Those Proceedings Were Confidential

In this case, Omron noticed the deposition of a corporate representative from Hypercom pursuant to Rule 30(b)(6) of the Federal Rules Of Civil Procedure. According to the Rule 30(b)(6) notice of deposition served on Hypercom, Omron wanted to depose the Hypercom representative most knowledgeable about Hypercom's claims that Omron and Verve conspired to file baseless patent infringement lawsuits, that Omron and Verve abused judicial process, and that Omron and Verve conspired to extort money from Hypercom. See Notice Of Videotaped Rule 30(B)(6) Deposition Of Hypercom Corporation, attached as Exhibit A to this Motion. For the deposition, Hypercom designated its chief legal counsel, Douglas Reich. During the deposition, however, it became clear that Reich, and therefore Hypercom, had no knowledge of any evidence to support its claims against Omron. Reich repeatedly took the position during his deposition that Hypercom did not have direct knowledge of the evidence proving the existence of a conspiracy because that evidence was governed by a confidentiality order in the ITC proceedings. See, e.g., Deposition of Douglas Reich, at 52-56, attached as Exhibit B to this Motion. For example, Reich testified that he was not aware of "any of the evidence or facts that would have led Hypercom to believe that Omron had some role in deciding where to file these particular lawsuits" because that evidence was protected from disclosure by the ITC protective order. Id. Based on this testimony, Hypercom should not permitted to now use documents and information previously withheld from discovery as confidential to support its claims against Omron.

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2.

Hypercom Failed To Produce Thousands Of Pages Of Relevant Documents From The ITC Administrative Action

In its Rule 26(a)(1) Initial Disclosure Statement, Hypercom listed the following documents as relevant and available for inspection: "Documents produced by Verve during discovery in the ITC investigation." On April 13, 2006, Omron requested from Hypercom "copies of all documents listed on Hypercom's Rule 26(a)(1) Initial Disclosure Statement." See Correspondence to Sid Leach, dated April 13, 2006, attached as Exhibit C to this Motion. In response, Hypercom produced documents from Verve bates-labeled 00001 through 00918 and VER0919 through VER002408. No other documents "produced by Verve during discovery in the ITC investigation" were made available by Hypercom, nor did Hypercom indicate the existence of any additional documents other than those produced. On April 6, 2007, Omron obtained documents from the ITC bates labeled in the ranges of VER010000, 011000, and 014000. Based on these numbers, Omron believes that there are approximately 12,000 pages of additional documents produced by Verve to Hypercom during discovery in the ITC investigation, and which have not been produced to Omron despite its specific request for this information. This is not the first instance of Hypercom's failure to produce documents requested by Omron. Omron also requested during discovery "[a]ll technical manuals, operator manuals and instructions for Hypercom's POS devices." See Hypercom Corporation's Response To Omron Corporation's First Set Of Requests For Production Of Documents, served May 31, 2006, Response to Request No. 2, attached as Exhibit D to this Motion. Hypercom agreed to produce any responsive documents and ultimately produced Hypercom's software manual for the T7 terminal. See Hypercom T7 and T8 Series HyperWare Retail And Restaurant Software Manual ("T7 Software Manual"). On its own, Omron later discovered the T7 Installation Manual, which specifically states the T7 terminals are capable of ­ and designed for ­ performing the very function that

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Hypercom claims in this litigation that they cannot perform: connecting to an electronic cash register. Hypercom repeatedly has failed to produce documents responsive to Omron's discovery requests. With respect to the ITC Administrative Action, the Court should not permit Hypercom to refuse to produce documents under the guise of confidentiality and then use those same documents at trial to prove its claims against Omron. Basic principles of fairness dictate that all documents produced during the ITC be excluded. However, to the extent that the Court permits Hypercom to use any documents from the ITC, those documents must be provided to Omron prior to trial, and Omron should be permitted to take any necessary discovery relating to those documents as well as use the ITC documents to defend or rebut claims and testimony of Hypercom. II. CONCLUSION

The Court should preclude Hypercom from offering into evidence any discovery, documents, or evidence produced during discovery in the ITC Administrative Action. In the alternative, to the extent Hypercom is permitted to use any documents from the ITC proceeding, Omron respectfully requests that this Court order Hypercom to produce all other responsive documents from the ITC proceeding, and permit Omron to take the necessary discovery with respect to those documents.

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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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