Free Reply in Support of Motion - District Court of Arizona - Arizona

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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

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FENNEMORE CRAIG, P.C.

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Hypercom Corporation, Plaintiff, v. Omron Corporation, Defendant. (Oral Argument Requested) CAUSE NO. CV04-0400 PHX PGR DEFENDANT OMRON CORPORATION' REPLY IN S SUPPORT OF MOTION FOR SUMMARY JUDGMENT

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TABLE OF CONTENTS Page I. II. III. HYPERCOM CONCEDES OMRON' CLAIMS OF INFRINGEMENT .............1 S HYPERCOM FAILS TO DISPUTE OMRON' EVIDENCE OF S REASONABLE INVESTIGATION......................................................................2 HYPERCOM OFFERS NO EVIDENCE OF Conspiracy ......................................3 A. B. Omron Has Denied Any Conspiracy and Met Its Celotex Burden ...............3 Hypercom Cannot Show Any Agreement to Commit a Tort .......................4 1. Verve' "Standing" Problems Do Not Show A Conspiracy ..............5 s a. b. The "Insufficient Standing" Conspiracy Makes No Sense .....................................................................................5 Hypercom Distorts Evidence On Verve' Standing To s Sue ........................................................................................5

i. Omron Did Not File "False" Documents with the PTO .................5 ii. The Addendum Merely Clarifies Previous Agreements................6 iii. Omron Voluntarily Disclosed the Assignments...........................6 2. Hypercom' "Evidence" is Consistent with the Documents..............7 s a. b. c. d. C. IV. V. VI. Omron' Litigation Risk Is Consistent With Its s Assignment ...........................................................................7 Omron Could Not Stop Verve From Suing ............................7 Omron Had No Duty To Conduct An Infringement Analysis ................................................................................8 Hypercom Did Infringe .........................................................8

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The Summary Judgment Against Verve Rests on Different Evidence .........9

HYPERCOM OFFERS NO EVIDENCE OF AIDING AND ABETTING ............9 HYPERCOM CANNOT SHOW MALICIOUS PROSECUTION BY OMRON..............................................................................................................10 FEDERAL LAW PRE-EMPTS HYPERCOM' CLAIMS..................................10 S

CONCLUSION ..............................................................................................................11

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Omron assigned patent rights to Verve. There is no evidence of an illicit agreement. There is no evidence that Omron knew Verve would file (or had filed) any frivolous lawsuit. Indeed, having premised its case on the contention that Verve' s allegations lack any reasonable basis, Hypercom does not challenge the infringement opinions of Omron' experts. Hypercom concedes, in effect, that the "frivolous lawsuits" s it has complained about rest on meritorious claims. Hypercom has not merely asked the Court to hold an assignor vicariously liable for the torts of its assignee ­ something no court has ever done. Hypercom has asked the court to hold Omron liable for its assignee' s "malicious prosecution" of valid claims. I. HYPERCOM CONCEDES OMRON' CLAIMS OF INFRINGEMENT S Omron' motion for summary judgment offered evidence that Hypercom infringed s the assigned patents: (1) a detailed opinion by its technical expert, engineer Brad Gulko, that publicly available information suggests Hypercom' ICE6000 terminal infringes the s ` 341, ` 895, and ` 077 Patents; (2) an engineering report on Hypercom terminals used in Petco retail stores showing that Hypercom' ICE6000 terminal can and did automatically s discriminate between debit and credit cards; and (3) a detailed claims analysis by Omron' s legal expert (the current Chair of the Fellows of the American Intellectual Property Law Association), concluding that Hypercom' ICE 5000/5500 series terminals infringe "at s least one claim in each of the ` 341, ` 895, and ` 077 Patents, either literally or under the doctrine of equivalents." Omron' Statement Of Facts ("SOF") ¶ 101, 113-18, 130. This s evidence contradicts the precise bases on which Hypercom has previously denied infringement, 1 yet in response, Hypercom offers no contrary opinion. And Hypercom' s Controverting Statement Of Facts ("Hypercom' SOF") "disputes" Omron' 48-paragraph s s

Omron' experts confirm, for example, that the Hypercom terminals qualify as "electronic cash registers" as that s term has now been interpreted by a California court. SOF ¶¶ 101-112, 143-46.
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showing of infringement only in the aggregate,2 without citing any evidence. This is insufficient. 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.)." See Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (noting it is not the court' task "`to s scour the record in search of a genuine issue of triable fact'") (internal citation omitted). Failure to address the movant' arguments on summary judgment concedes them.3 s Hypercom has conceded infringement because it failed to offer counter arguments and cite evidence. Hypercom' primary claim ­ that Verve has prosecuted baseless claims s against it ­ thus fails as a matter of law. Id. II. HYPERCOM FAILS TO DISPUTE REASONABLE INVESTIGATION OMRON' S EVIDENCE OF

Omron also provided evidence that Verve performed a reasonable pre-filing investigation of its infringement claims. SOF ¶¶ 84-97. Hypercom responds by asking the court to "judicially notice" the interlocutory ruling of another court. First, the ruling on which Hypercom relies (and which reaches no conclusion on actual infringement) rests on a fundamentally different factual record. 4 Second, it is interlocutory, 5 and cannot be asserted against non-parties like Omron. See Irwin v. Mascott, 370 F.3d 924, 929-30 (9th
2

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See SOF ¶¶ 99-146, and Hypercom' SOF ¶¶ 8-9, 11-12. s

3

See, e.g., Southern Nevada Shell Dealers Ass' v. Shell Oil Co., 725 F. Supp. 1104, 1109 (D. Nev. 1989) (finding n that court may treat non-movant' failure to address arguments made by moving party as a concession, even when the s result is summary judgment); Bancoult v. McNamara, 227 F. Supp. 2d 144, 149 (D. D.C. 2002) ("if the opposing party files a responsive memorandum, but fails to address certain arguments made by the moving party, the court may treat those arguments as conceded . . . "). Hypercom relies on the August 16, 2006, order partially granting summary judgment to Hypercom in Verve, L.L.C. v. Hypercom Corp., No. CV-05-03650-PHX-FJM (hereafter, "Interlocutory Order"). The Interlocutory Order, however, assessed a dramatically different record ­ e.g., this record includes Hypercom' concession that it did s infringe the patents at issue. See SOF ¶¶ 84-88, 98-142.
5

4

See State v. One Single Family Residence at 1810 East Second Ave., 193 Ariz. 1, 6-7, 969 P.2d 166, 171-72 (App. 1997) (holding collateral estoppel requires proof that "a final judgment was entered; [and] the party against whom collateral estoppel is to be invoked had a full and fair opportunity to litigate the matter . . .").
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Cir. 2004) (non-party to litigation can be bound only by party so closely aligned as to be non-party' "virtual representative"); 6 compare Kilroy v. State of California, 119 Cal. s App. 4th 140, 148 (Cal. Ct. App. 2004) ("factual findings in a prior judicial opinion are not a proper subject of judicial notice;" rather, "the finding itself may be a proper subject of judicial notice if it has a res judicata or collateral estoppel effect in a subsequent action"). Hypercom has thus failed to dispute Omron' showing regarding Verve' "pres s filing investigations." See Local Rule 56.1(a). Without evidence of an underlying tort, Hypercom cannot pursue its derivative common law claims. III. HYPERCOM OFFERS NO EVIDENCE OF CONSPIRACY Hypercom' conspiracy claims against Omron fail as a matter of law regardless of s Verve' pre-filing investigations. Omron' only agreements with Verve are the legitimate s s assignments before this court. Hypercom responds by pointing to: 1) Omron' reliance on s deposition testimony rather than affidavits denying any conspiracy; 2) conduct by Omron that is either consistent with disclosed agreements or inconsistent with Hypercom' s conspiracy theories; and 3) Hypercom' summary judgment against Verve based on s different evidence in a different case. None of these responses suggests an agreement that Verve would commit a tort. And none raises an issue for trial. A. Omron Has Denied Any Conspiracy and Met Its Celotex Burden

Hypercom finds it "remarkable" that Omron failed to present any affidavits denying that Omron participated in the alleged conspiracy, and urges the court to decree this omission fatal under Beltz Travel Service, Inc. v. Int' Air Transport Assoc., 620 F.2d l 1360 (9th Cir. 1980). What is remarkable, however, is Hypercom' failure to acknowledge s deposition testimony by Omron' 30(b)(6) designee that expressly denies any agreement s
6

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Green v. City of Tucson, 255 F.3d 1086, 1101 (9th Cir. 2001), partly over' on other grounds (finding mere d representation of "essentially identical" interests insufficient to create virtual representation); Nordhorn v. Ladish Co., Inc., 9 F.3d 1402, 1405 (9th Cir. 1993) (no virtual representation where non-party "had no participation in or control over" the prior suit).

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between Omron and Verve save those (legitimate) agreements which they have disclosed. SOF ¶ 65. Nor is Beltz even the standard. In Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986), the Supreme Court expressly rejected the position that the party moving for summary judgment must "support its motion with affidavits or other similar materials negating the opponent' claim." Rather, "the burden on the moving party may be s discharged by ` showing' ­ that is, pointing out to the district court ­ that there is an absence of evidence to support the nonmoving party' case." Id. at 326. s Omron has denied the conspiracy. Hypercom has offered no evidence of a conspiracy. Under Celotex, Omron is entitled to judgment as a matter of law. Id. at 323. B. Hypercom Cannot Show Any Agreement to Commit a Tort

The Arizona Supreme Court confirms that "a claim for civil conspiracy must include an actual agreement, proven by clear and convincing evidence" to commit a tort. Wells Fargo Bank v. Arizona Laborers, Teamsters and Cement Masons Local No. 395, 201 Ariz. 474, 499, 38 P.3d 12, 36-37 (2002) (emphasis added). But the agreement alleged by Hypercom is irrational. Hypercom posits that Omron assigned patent rights so Verve could file frivolous lawsuits in exchange for a risk-free percentage of settlements. Response at 11-12, 16. Yet there is no claim Omron' patents ­ a portfolio reflecting tens s of millions of investment dollars ­ lacked substantial value. See Deposition of Herbert Kerner ("Kerner Dep."), 144:10-20, attached as Exhibit A to Reply. There is no claim that Verve had a history of frivolous filings. And Hypercom effectively concedes it has infringed the patents. Hypercom has theorized, in effect, that Omron assigned valuable patents so Verve could file inadequately-investigated lawsuits against actual infringers. Thus even as conjecture, Hypercom' "conspiracy" makes no sense. s Hypercom offers no evidence that Omron knew (much less agreed) Verve would fail to conduct adequate pre-filing investigations. Hypercom offers no evidence of a preassignment agreement of any kind. Instead, Hypercom would infer a conspiracy from
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conduct consistent with disclosed agreements, and inconsistent with the alleged conspiracy. Hypercom raises no issue for trial. 1. Verve' "Standing" Problems Do Not Show A Conspiracy s a. The "Insufficient Standing" Conspiracy Makes No Sense

Hypercom offers as its primary evidence of conspiracy the claim that Omron secretly retained almost all rights in the patents "assigned" to Verve, because Omron wanted "only [to] make it look like Verve owned the patents, while Omron actually retained the rights in the patents, so that Omron would not be named as a party in any of the lawsuits." Response at 12. This arrangement, according to Hypercom, would allow Verve to file frivolous suits while Omron incurred no risk of sanctions. Verve' "standing" conspiracy makes no sense. If the parties wanted Verve to file s frivolous suits while Omron got royalties without risk, Omron would have transferred all but royalty rights to Verve. See Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875 (Fed. Cir. 1991) (holding that the right to receive infringement damages was insubstantial and did not deprive purported assignee of standing to sue without joining "assignor"). Omron' transfer of too few rights, by contrast, jeopardizes s the very scheme Hypercom has alleged. An inadequate transfer means Verve cannot sue infringers without joining Omron as an indispensable party. Joining Omron defeats the purported objective ­ i.e., to eliminate Omron' litigation "risk." Indeed, the alleged s "standing" problems are not proof of a conspiracy but evidence against it. b. i. Hypercom Distorts Evidence On Verve' Standing To Sue s Omron Did Not File "False" Documents with the PTO

Hypercom' "standing" theory distorts the evidence. To support its conspiracy, s Hypercom begins with the claim that Omron filed "false and misleading" assignment documents with the Patent and Trademark Office ("PTO"). These documents, according to Hypercom, "made it appear as if Verve had standing to bring the patent infringement
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lawsuits without joining Omron as a party." Response at 12. Yet these documents, as explained by the ITC, are specifically contemplated by federal statute and serve merely as notice of Verve' interest in the patents. See 35 U.S.C. § 261. The ITC rejected s Hypercom' claim: s The existence of the assignment is itself a matter of public record and constitutes notice of Verve' interest in the ` s 077 patent. The PTO does not require recordations of such assignments to lay out the full agreement between the parties . . . It would be inappropriate to attribute bad faith to Verve for not making public what the PTO itself does not require in its public records. (emphasis added) See ITC Order No. 40 at 21, Exh. 60, Hypercom' 12/23/05 Statement of Facts. s ii. The Addendum Merely Clarifies Previous Agreements

Hypercom claims the Addendum lacks consideration and thus reveals "a tacit understanding or unwritten agreement between Omron and Verve." Response at 13. This claim ignores both the plain terms of the document and testimony explaining it. By its terms, the Addendum requires Omron to reimburse litigation costs in consideration for the right to sub-license customers and business partners Verve has sued. SOF ¶¶ 38-40. Omron' counsel has testified this provision served merely to clarify a situation left s ambiguous by the original documents, i.e., Omron' discovery that a potential infringer of s the assigned patents is an existing business partner or customer only after Verve has filed suit. Exh. A, Kerner Dep. at 131; SOF ¶¶ 30-32. iii. Omron Voluntarily Disclosed the Assignments

Hypercom finally implies that Omron improperly withheld the assignment documents from the ITC and others. Hypercom is mistaken. Omron has shown that it voluntarily produced the documents to the ITC, made unredacted copies available to all parties to ITC proceedings, and never objected to Verve' production of the agreements s subject to a protective order. SOF ¶ 75; Exh. A, Kerner Dep. at 192:19-192:22, 195:15-20.

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2.

Hypercom' "Evidence" is Consistent with the Agreement s

Conduct consistent with legitimate behavior does not create an inference of conspiracy. See generally Richards, 810 F.2d 898, 904 (9th Cir. 1987). Yet for its remaining "evidence," Hypercom offers nothing else. Hypercom' own expert, Laurence s Pretty, has admitted that Omron did nothing inconsistent with its contractual relationship with Verve. SOF ¶ 69. Hypercom' conspiracy theory fails as a matter of law. Id. s a. Omron' Litigation Risk Is Consistent With Its Assignment s

Hypercom presents Omron' preference to avoid litigation risk as evidence of illicit s agreements. Response at 11-12, 16. This preference, however, explains nothing but the assignment itself. Hypercom cannot dispute that all litigation carries risks. And Hypercom cannot make a conspiracy out of Omron' decision to minimize them. s b. Omron Could Not Stop Verve From Suing Hypercom

Hypercom repeatedly distorts the record to portray Omron as actively selecting litigation "targets," and willfully refusing to stop frivolous actions by Verve. In fact, the assignments left Omron with only a limited right to curtail Verve' assertion of the s patents. Specifically, Omron' right to grant sub-licenses to customers and clients s amounts to nothing more than an ability to shield business partners from infringement claims. 7 Thus Omron could not terminate any suit against a non-business partner like Hypercom. Nor did Omron owe any such duty. The law imposes no obligation on assignors to regulate the activities of assignees (or licensees). And no court has imposed vicarious liability on an assignor for the conduct of an assignee.8
7

Omron merely retained a right "to sub- and cross-license its present and future business partners and customers." In other words, Omron received a "future" right to grant sub- and cross-licenses to entities that qualify as "present" business partners and customers at the time of the license. Exh. A, Kerner Dep. at 128-31. Further, the conduct of Omron and Verve confirm this interpretation. Id.
8

Hypercom also claims that Omron assigned an unrelated set of patents knowing of two previous suits and Verve' s intentions to proceed before the ITC, but it remains unclear what this allegation could show. Omron merely protected business partners; it did not monitor which patents or parties were involved in any lawsuit, or receive periodic reports on the litigation. Exh. A, Kerner Dep. at 120-21.

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c.

Omron Had No Duty To Conduct An Infringement Analysis

Hypercom next portrays Omron' failure to conduct an independent infringement s analysis as evidence of a pre-assignment conspiracy. Why would an assignor voluntarily undertake this expense? Hypercom similarly wonders why Omron did not join the ITC action at Verve' request. Omron assigned its patent rights to avoid the demands of s licensing and litigation. It had no reason to assume costs it had bargained away. d. Hypercom Did Infringe

Hypercom finally claims that Omron assigned the patents to Verve knowing Hypercom did not infringe them. But Hypercom has not rebutted the findings of Omron' s experts that Hypercom did, indeed, infringe the patents. Even without evidence of infringement, Hypercom cannot establish that Omron knew Verve' claims lacked merit. Hypercom relies on the assertion of its own chief legal s officer (Douglas Reich) that Hypercom "demonstrated" non-infringement to Omron during a settlement meeting in Phoenix ­ a meeting that occurred after Omron had assigned the patents at issue. Reich, moreover, admitted that he was "not sure that there was much conversation about the actual infringement ... " SOF ¶ 76. In other words, Hypercom admittedly failed to demonstrate to Omron that it did not infringe the assigned patents. Reich has all but retracted his claim to have "proved" non-infringement by conceding incompetence to say what "evidence" of non-infringement would be. 9 Testifying on behalf of Hypercom, Reich admitted ignorance of any evidence (even after the Phoenix meeting) that "Omron knew Hypercom was not infringing any of the patents when it assigned those patents to Verve." SOF ¶ 80. Hypercom has offered no evidence that Omron knew of any misconduct by Verve or did anything unexplained by the legitimate assignments. Omron is entitled to judgment
When asked if a reasonable attorney could conclude that Hypercom infringed the patents, Mr. Reich responded: "I don' have a basis for saying whether someone else could make that conclusion or not." SOF ¶ 81. t

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as a matter of law. In re Citric Acid Litigation, 191 F.3d 1090, 1104 (9th Cir. 1999), cert denied 529 U.S. 1037 (2000) ("evidence as consistent with legitimate behavior as illegal behavior cannot independently support an inference of conspiracy"). C. The Summary Judgment Against Verve Rests on Different Evidence

Instead of "evidence," Hypercom offers its summary judgment against Verve in a separate action to support its conspiracy claims. This Interlocutory Order, however, rests on a starkly different record containing no evidence that Hypercom infringed the assigned patents. Here Hypercom has conceded infringement. Neither party addressed Omron' s conduct because the court had dismissed the conspiracy claims before summary judgment briefing. See Order at n. 2, filed June 12, 2006, attached as Exh. B to Reply. Hypercom' attempt to stave off summary judgment with the summary judgment s of another court is unavailing. Whatever the contents of that record, this record contains no evidence of a conspiracy. Kilroy, 119 Cal. App. 4th at 148 (factual findings in judicial opinion not a proper subject of judicial notice). IV. HYPERCOM OFFERS NO EVIDENCE OF AIDING AND ABETTING Omron is entitled to summary judgment on Hypercom' aiding and abetting claim. s One cannot accidentally abet a tort. The Arizona Supreme Court has clarified that aiding and abetting "is based on proof of a scienter . . . the defendants must know that the conduct they are aiding and abetting is a tort." Wells Fargo, 38 P.3d at 23 ("the party charged with [aiding and abetting] the tort must have knowledge of the primary violation. . . ").Hypercom thus faces the same lack of knowledge that defeats its conspiracy claims. Omron' expert reports demonstrate that Hypercom infringed the assigned patents. s Hypercom offers no response. Hypercom must contend, therefore, that Omron intended Verve would file frivolous lawsuits against actual infringers. This makes no sense. Omron had no reason to encourage Verve to conduct inadequate investigations of valid

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claims. And there is no evidence Omron even knew of an inadequate investigation. 10 Unable to show intent, Hypercom can not take its aiding and abetting claims to trial. Id.11 V. HYPERCOM CANNOT SHOW MALICIOUS PROSECUTION BY OMRON Hypercom' claim of "instigating" malicious prosecution is without legal basis. s Bradshaw v. State Farm Mut. Auto. Ins. Co., 758 P.2d 1313 (Ariz. 1988), on which Hypercom solely relies, permitted a malicious prosecution claim against an insurance company that filed suit in the insured' name. This is de facto subrogation. This is not a s new species of derivative liability. Even if, moreover, Omron had encouraged Hypercom to file suit (which it did not), and even if that were enough to constitute malicious prosecution (and it is not), there is no evidence Omron encouraged Hypercom to sue an actual infringer without reasonable investigation. For all these reasons, this claim does not merit a trial. VI. FEDERAL LAW PRE-EMPTS HYPERCOM' CLAIMS S Preemption bars Hypercom' ITC-based claims against Omron. Hypercom points s to the Interlocutory Order and Ninth Circuit case law it cites. The preemptive reach of federal patent law, however, is governed by the law of the Federal Circuit. See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1067 (Fed. Cir. 1998) (the Federal Circuit applies its "own law, not regional circuit law, to resolve issues that clearly involve [its] exclusive jurisdiction"). Thus after the Ninth Circuit rejected preemption of malicious prosecution claims in U.S. Aluminum Corp. v. Alumax, Inc., 831 F.2d 878, 88081 (9th Cir. 1987), the Federal Circuit repeatedly held that federal law preempts common

10

As evidence of knowledge, Hypercom once again relies on the September meeting between Reich, Nakano, and the parties' counsel. Not only did this meeting fail to establish "non-infringement," but there is no evidence it included any discussion of Verve' "pre-filing investigation." s
11

Further, Omron' de minimis, lawful, and indeed contractually-dictated conduct has never passed the "substantial s aid" test for aiding and abetting a tort. Compare Wells Fargo, 201 Ariz. at 489-90, 38 P.2d at 27-28 (bank' s extraordinary failure to foreclose on loan to delinquent developer, to report false representations on developer' s financial statements, and to disclose fraud during meeting with new lender raised triable issue).

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law torts which consist of nothing more than misconduct in administrative patent proceedings. Abbott Laboratories v. Brennan, 952 F.2d 1346, 1355 (Fed. Cir. 1992, cert. denied, 505 U.S. 1205 (1991); Semiconductor Energy Lab. Co. v. Samsung Elecs. Co., 204 F.3d 1368, 1382 (Fed. Cir. 2000), cert. denied, 531 U.S. 1190 (2001). Competitive Technologies v. Fujitsu Ltd., 286 F. Supp. 2d 1118, 1155 (N.D. Cal. 2003), specifically found preemption of a common law tort12 based on misconduct before the ITC. The Interlocutory Order found tort claims based on ITC misconduct unripe as a matter of law.13 Thus, Hypercom has offered no authority that its ITC-based tort claims against Verve survive federal preemption.14 Federal law preempts Hypercom' claim that s Omron conspired about, aided and abetted, and/or maliciously prosecuted proceedings before the ITC.15 Indeed, the Interlocutory Order rightly granted judgment to Verve on all claims based on "misconduct" in administrative proceedings.16 CONCLUSION Hypercom can identify no evidence of an illicit agreement. Hypercom concedes it infringed the assigned patents. And Hypercom cannot escape federal preemption. Through 12 months and thousands of pages of discovery, Hypercom has waged a baseless lawsuit against "baseless" lawsuits. Omron is entitled to judgment as a matter of law.

12

Though Fujitsu, 286 F. Supp. 2d at 1155, addressed abuse of process, its reasoning applies to malicious prosecution. Hydranautics v. FilmTec Corp., 204 F.3d 880, 886 (9th Cir. 2000) ­ cited by Hypercom ­ similarly addressed no tort based on misconduct in administrative patent proceedings, and did not even address a preemption defense. See Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 1331 & n. 1 (Fed. Cir. 1998) (cases permitting state law torts without mention of preemption provide little precedential value). Zenith Laboratories, Inc. v. Abbott Laboratories, No. 96-1661, 1996 U.S. Dist. LEXIS 22567, at *11-12 (D. N.J. Aug. 7, 1996), cited by Hypercom, addressed preemption by the Federal Food, Drug and Cosmetic Act, not patent law.
14 13

Hypercom neglected to file a timely fee request in ITC proceedings. See Order No. 40 at 1, Exh. 60 to Hypercom' s 12/23/05 SOF. 15 Nor has Hypercom countered Omron' remaining contentions. Omron has argued that the very principles which s dictate preemption of state law torts based on administrative patent proceedings bar torts solely involving misconduct in federal patent lawsuits. See Omron' Memorandum In Support Of Second MSJ at 14-16. s 16 The Interlocutory Order dismissed Hypercom' ITC-based claims as premature based on ongoing proceedings. s
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Respectfully submitted on September 15, 2006. FENNEMORE CRAIG By s/Ray K. Harris Ray Harris Paul Moore BAKER & DANIELS LLP David P. Irmscher John K. Henning Attorneys for Defendant Omron Corp. CERTIFICATE OF SERVICE

I hereby certify that on September 15, 2006, I electronically transmitted the attached documents to the Clerk' Office using the CM/ECF System for filing and s transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Sid Leach Michael K. Kelly Andy Halaby Monica Limon-Wynn SNELL & WILMER L.L.P. One Arizona Center 400 East Van Buren Phoenix, AZ 85004-2202

s/Melody Tolliver

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