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Sid Leach (#019519) Andrew F. Halaby (#017251) Monica A. Limón-Wynn (#019174) SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren Phoenix, AZ 85004-2202 Telephone: (602) 382-6372 Attorneys for Plaintiff Hypercom Corporation [email protected] [email protected] [email protected] IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Hypercom Corporation, Plaintiff, vs. Omron Corporation, Defendant. Pursuant to Local Rule LRCiv 56.1(a), Hypercom Corporation ("Hypercom") respectfully submits specific facts controverting the statement of facts filed by Omron Corporation and setting forth additional facts all of which establish a genuine issue of material fact to preclude entry of summary judgment. HYPERCOM'S OPPOSITION TO OMRON'S STATEMENT OF FACTS 1. Hypercom does not dispute the statements set forth in Paragraph 1 of No. CV 04-0400 PHX PGR HYPERCOM CORPORATION'S CONTROVERTING STATEMENT OF FACTS
Omron's Statement of Facts ("OSOF"). 2. Hypercom disputes the accuracy of Paragraph 2 of OSOF. Hypercom
moved for leave to file its Second Amended Complaint on December 15, 2005. (Doc #81.) Pursuant to LRCiv 15.1(a)(2), an "original" of the proposed amended pleading was attached to Hypercom's motion for leave. The Court granted Hypercom's motion for leave on June 7, 2006. (Doc #126.) Pursuant to LRCiv 15.1(a)(3), the "entry of the order granting leave to amend the pleading constitutes the filing date of the amended pleading and the Clerk of the Court shall file the lodged pleading once the order is entered."
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3.
Hypercom disputes Paragraph 3 of OSOF. As alleged in Hypercom's
Second Amended Complaint, Hypercom's causes of action are based upon the concerted action between Verve and Omron to assert patent infringement claims against Hypercom (and other companies) without the good faith basis or probable cause to do so in order to extort cash. (See e.g., Second Amended Complaint, Doc # 127, at ¶¶ 6-26.) Verve filed lawsuits in Michigan, Texas, California and in the International Trade Commission ("ITC"). The patents at issue in these frivolous lawsuits included U.S. Patent No. 4,678,895 ("the `895 Patent"), U.S. Patent 5,012,077 ("the `077 Patent"), and U.S. Patent No. 4,562,341 ("the `341 Patent"). 4. Hypercom disputes Paragraph 4 of OSOF. Omron knew that U.S. Patent
No. 4,678,895 on which the Michigan action was brought "covers technology for an electronic cash register and payment system." Omron Statement of Facts at ¶¶ 40-41. Omron knew that Hypercom does not have any electronic cash register products. Hypercom's T7 terminals do not connect to electronic cash registers. (Exhibit 27 to Doc. #85.) 5. Hypercom disputes the statements in Paragraph 8 because Mr. Nakano
testified that he also "promote[s] projects for invention," is responsible for finding "marketing partner in the United States in order to utilize Omron's technology by utilizing Omron's patents, and has duty to "utilize Omron's patents." (Exhibit 23 to Doc. #85 at 6:3-22.) 6. Hypercom disputes the statement in Paragraph 9 that Verve is merely a
"patent holding company." Hypercom submits that Verve instituted this patent infringement lawsuits not for any legitimate reason but solely for the improper purpose of bringing frivolous patent infringement lawsuits to extort large sums of cash. (See Verve LLC v. Hypercom Corp., No. CV-05-0365-PHX-FJM, 2006 U.S. Dist. LEXIS 58398 (D. Ariz. Aug 16, 2006).) 7. Hypercom disputes the statement in Paragraphs 10, 14 19, and 29 that
Omron actual "assigned" the patents to Verve and/or for any legitimate business purpose.
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(See Verve LLC v. Hypercom Corp., No. CV-05-0365-PHX-FJM, 2006 U.S. Dist. LEXIS 58398 (D. Ariz. Aug 16, 2006).) Verve and Omron executed an "Addendum" to the agreements executed previously that stripped Verve of virtually all rights in the Omron patents that Verve had asserted against Hypercom. (Exhibit A and E). This "Addendum" stripped Verve of the right to sue for patent infringement not only for the `341 Patent, but also for the `895 Patent, the `340 Patent, and the `077 Patent. Id. That Verve did not receive any consideration for signing back all rights in the patents to Omron creates an inference from which a jury could infer that Verve would not give back the patents after Omron had allegedly assigned "all right, title and interest" to Verve, and give them back for nothing, unless Verve never really owned the Omron patents in the first place. This fact serves as evidence of a tacit understanding or unwritten agreement between Omron and Verve. 8. Hypercom does not dispute that Omron in Paragraphs 15-17, 21, 22-24, 27-
28, 30-34, 37-39, 89-151 correctly cited certain excerpts from the referenced documents. Hypercom disputes that Omron the patent was actually "assigned." Hypercom disputes that Omron actual "assigned" the patents to Verve for any legitimate business purpose. (See Verve LLC v. Hypercom Corp., No. CV-05-0365-PHX-FJM, 2006 U.S. Dist. LEXIS 58398 (D. Ariz. Aug 16, 2006).) Verve and Omron executed Addendum 1-033004 to Patent Assignment and License Agreement No. 031804. At the time that Verve and Omron executed Agreement No. 031804 in March 2004 and Addendum 1-033004 in April 2004, the only right remaining in the expired `341 patent and in `077 was the right to sue for past damages. The March 2004 Agreement (No. 031804) "appears to strip Verve of the discretion to determine whether, and against whom, to bring suit for past infringement" of the `341 Patent. (HSOF at Exhibit A.) The reimbursement provision of the April 2004 addendum (1-033004) contemplates that Omron, not Verve, has the right and ability to terminate litigation." (HSOF at Exhibit A.) The right to determine if and when and against whom the patent infringement claims will be asserted in litigation and when litigation will be terminated are necessary rights in exercising the right to sue for
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past infringement. (HSOF at Exhibit A.) That Verve did not receive any consideration for signing back all rights in the patents to Omron creates an inference from which a jury could infer that Verve would not give back the patents after Omron had allegedly assigned "all right, title and interest" to Verve, and give them back for nothing, unless Verve never really owned the Omron patents in the first place. This fact serves as evidence of a tacit understanding or unwritten agreement between Omron and Verve. 9. Hypercom does not dispute the statements in Paragraphs 43, 47, 49, and 50,
97-151 that the lawsuits were filed. However, Hypercom disputes that Verve had a good faith belief or had probable cause to file the lawsuits. The standard for probable cause can be measured by the objective standard of Rule 11, Fed.R.Civ.P. Wolfinger v. Cheche, 80 F.3d 783, 788-789 (9th Cir. 2003). Actions for patent infringement must be brought in U.S. District Courts thus requiring attorneys filing such cases to satisfy the standards of Rule 11, Fed.R.Civ.P. The investigation includes such engineering analysis as is necessary to fully understand the accused product's parts, constituents and operation. An investigation that falls short of obtaining or examining a sample of the accused device, which was available, with the requisite thoroughness to enable it to be compared to the patent claims does not meet the minimum standards imposed by Rule 11. Hypercom respectfully requests that pursuant to Rule 201 of the Federal Rules of Civil Procedure, the Court take judicial notice of the facts, allegations, rulings, findings, conclusions, and judgments entered in Verve LLC v. Hypercom Corp., No. CV-05-0365-PHX-FJM, 2006 U.S. Dist. LEXIS 58398 (D. Ariz. Aug 16, 2006). In that Verve case, the District Court considered first whether Verve's lawsuits were motivated by malice and instituted without probable cause. Verve, 2006 U.S. Dist. LEXIS 58398, at *6-7. In determining whether Verve had probable cause, the District of Arizona stated that the existence of probable cause is measured by the objective standard of Rule 11 of the Federal Rules of Civil Procedure. Verve, 2006 U.S. Dist. LEXIS 58398, at *7-8. The District of Arizona also acknowledged that in patent litigation, "probable cause requires a reasonable pre-filing investigation of the accused product in comparison to the patent claims." Id. The
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evidence submitted by Verve regarding its pre-filing investigation included the same evidence that Omron relies upon here: a declaration submitted by Christopher Walton, an attorney from Simon, Galasso & Frantz, PLC, and statements of Kevin Imes regarding supposed "testing" in May and July of 2004 and "observing" terminals that included Hypercom models. Verve, 2006 U.S. Dist. LEXIS 58398, at *11-14. The District Court held that Counterdefendants had failed "to raise an issue of material fact on whether probable cause existed to support the filing of" the Michigan Action, the Texas Action, the California Action, and the ITC Action. Verve, 2006 U.S. Dist. LEXIS 58398, at *1314. 10. Hypercom disputes that Omron did not "participate" in Verve's prosecution
of the lawsuits against Hypercom as stated in Paragraphs 44, 48, 60, 77. Omron knew that Verve would be filing suit against Hypercom in Michigan, knew that Verve would be filing the ITC Action, and knew of the Texas Action when it visited Hypercom in Arizona in September 2004. (See Exhibit 7 to Doc #85, Exhibit 23 to Doc 85 at pp. 101-02, 15758, and 162-63; Exhibit 18 to Doc #85.) 11. Hypercom discuses the statements in Paragraphs 84-151 with regard to
Kevin Imes' knowledge or adequacy of any pre-filing investigation. In Verve LLC v. Hypercom Corp., No. CV-05-0365-PHX-FJM, 2006 U.S. Dist. LEXIS 58398 (D. Ariz. Aug 16, 2006), the court found insufficient the evidence submitted by Verve regarding its pre-filing investigation, which is the same evidence that Omron relies upon here: a declaration submitted by Christopher Walton, an attorney from Simon, Galasso & Frantz, PLC, andstatements of Kevin Imes regarding supposed "testing" in May and July of 2004 and "observing" terminals that included Hypercom models. The District Court held that Counterdefendants had failed "to raise an issue of material fact on whether probable cause existed to support the filing of" the Michigan Action, the Texas Action, the California Action, and the ITC Action. Hypercom respectfully requests that pursuant to Rule 201 of the Federal Rules of Civil Procedure, the Court take judicial notice of the facts, allegations, rulings, findings, conclusions, and judgments entered in the Verve case. Also
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whether Verve had probable cause prior to filing the lawsuit is all that is relevant. 12. Unless otherwise disputed above or in Hypercom's Statement of Facts
below, Hypercom does not dispute Paragraphs 5-7, 12-13, 20, 25, 26, 35-36, 40, 41-42, 45, 46, 51, 52, 53, 54, 56-58. All other facts are disputed. I. HYPERCOM'S STATEMENT OF FACTS 1. Omron also assisted Verve in its scheme by signing documents to be filed
with the United States Patent and Trademark Office falsely representing that the entire right, title and interest in each of the Omron patents had been assigned outright to Verve. (See Exhibits 52, 53 and 54 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc #85.) 2. In a memorandum seeking initial approval from Omron headquarters in
12 Japan before any lawsuits had been filed by Verve, Omron's U.S. representative 13 Tetsuyuki Nakano wrote: 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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Main points of the contract 1) Among the profit obtained with the transmitted US patents, excluding the fee needed for exercising the rights, 44% of the portion up to $5 million and 30% of the portion above $5 million should be paid by Verve LLC to OC [Omron Corporation]. 2) Even after transmission of rights, OC still reserves the right of free licensing to its customers. Supplementary explanation: 1) OC has zero payment risk. In case of losing a suit, as it is not a party of the suit, it has no risk, even other than money. 2) Verve LLC will negotiate a license after petitioning for a jury trial with East Michigan Municipal Court against 3 companies, including VeriFone, Lipman, and Hypercom. (Exhibit 4 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc #85.) 3. At the time that Omron gave the first patents to Verve, Omron knew that
Verve was going to sue Hypercom with those patents in Michigan ("the Michigan Action"). Id.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 A 24 25 26 27 28
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4.
Omron specifically approved Hypercom as a target for Verve to sue.
(Exhibt 7 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc #85.)
5.
Mr. Nakano admitted that Omron had no basis for believing that Hypercom
infringed the `895 patent in the Michigan Action, and made no effort to do any evaluation of the infringement claims that Verve asserted against Hypercom. Q As of October 14, 2003, when you signed the agreement of Exhibit 6A, you knew at that time that Verve had sued Hypercom in Michigan on the `895 patent; correct? Yes, I did, I believe so. As of October 14, 2003, when you signed the agreement of Exhibit 6A, did you have any information from Verve or that Omron had obtained itself that supported any basis for accusing Hypercom of infringement of the `895 patent that was in the Michigan lawsuit?
A Q
It does not include anything that suggests such a basis. We didn't do even an evaluation of patent `895. (Exhibit 23 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc #85, Nakano Depo., at pp. 101-02).
A
6.
Mr. Nakano admitted even in March 2005, when his deposition was being
taken, that Omron did not have any basis for believing that Hypercom infringed any of the Omron patents. Q But has anyone at Omron looked into the merits of the patent infringement claims that Verve is asserting against Hypercom and the other companies Verve has sued to reach a conclusion whether you can confirm the infringement that's alleged against those companies? About this matter, I was in charge as a representative of Omron in America and I -- the Japanese side was, basically, not involved. I asked to get the documents that were concerned but when you ask me whether we analyzed the merit of the Verve's case in this matter, to this day I do not know what Hypercom product it is involved so there is no way I can analyze anything. So the short answer is you have not made any effort to analyze the merits of the patent infringement claims asserted by Verve?
Q
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Regarding Hypercom, no, I did not make any analysis but for companies other than Hypercom, after the ITC action was initiated, I did some research because I was worried. (Exhibit 23 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, Nakano Depo., at 157-58). 7. As late as March, 2005, Omron had never investigated any of the patent
A
infringement claims that had been asserted by Verve against Hypercom. Q Did you make any investigation of -- concerning the merits of any of the patent infringement claims against any company that had been brought by Verve other than Ingenico in the ITC?
No, there is not. I do not have the information about products involved. (Exhibit 23 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, Nakano Depo., at 162-63).
A
8.
Mr. Nakano's testimony that he did not know what Hypercom products
were involved raises issues of credibility, because the presentation that was made to him on September 16, 2004 discussed the Hypercom products that were involved, and why they did not infringe any of the Omron patents. (Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, at Exhibit 18.)
9.
On September 16, 2004, less than two weeks after the commencement of the
ITC Action, Hypercom met with Mr. Nakano and Omron's attorney Herb Kerner and demonstrated why none of Hypercom's accused products infringed any of the asserted Omron patents, including the patent involved in the ITC Action. (Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85 at Exhibit 18; Exhibit 24; Reich AZ Depo., at 22-47; Exhibit 30, Reich Decl.at ¶¶ 2-3; and Exhibit 23, Nakano Depo., at 155-56.)
10.
According to Omron, patents were given to Verve at three different points in
time. When Omron provided the third group of patents to Verve, Omron knew that Verve had sued Hypercom in Michigan and in Texas, and yet Omron approved Verve's use of an
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additional Omron patent to bring another action against Hypercom before the International Trade Commission in Washington, D.C. ("the ITC Action"). (Exhibit 8 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85; Deposition of Herbert Kerner dated May 17, 2006 ("Kerner Depo.") attached hereto as Exhibit B, at 122-24.)
11.
Omron's attorney Herbert Kerner knew about the ITC Action before it was
filed, and assisted Verve in the preparation of Verve's complaint. [Exhibit 10 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85]
12.
In order to aid Verve in bringing the ITC Action, Mr. Nakano signed a
misleading "assignment" form to be filed with the U.S. Patent and Trademark Office just before the ITC complaint was filed so that Verve could cite the recorded document to the ITC as proof that Verve owned the entire right, title and interest in the Omron patent asserted against Hypercom in the ITC Action. (See Exhibits 52, 53 and 54 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc #85.)
13.
Omron aided and assisted Verve by contacting a critical third-party witness
in Japan who was the inventor named in the patent, so he would be "prepared for any contacts he may receive from the other side." (Exhibit 12 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.)
14.
Omron's representative, Mr. 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 International Trade Commission in which the inventor would be a potential witness. (Exhibit 12 to Hypercom's Statement of Facts filed in opposition to Omron's
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First Motion for Summary Judgment, Doc. #85.)
15.
Mr. Nakano also called the witness on two additional occasions to talk to the
witness about the ITC proceeding. (Exhibit 23 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, Nakano Depo., at 151.)
16.
Omron also contacted a lawyer in Japan to assist Verve in this endeavor.
(Exhibit 13 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.)
17.
Mr. Nakano got one of Omron's Japanese lawyers to assist Verve. (Exhibit
23 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, Nakano Depo., at 152.) (The Japanese lawyer "has been attorney for Omron for a long time.").
18.
After Omron set things up with the lawyer in Japan, Raymond Galasso told
the lawyer to "let me know as soon as possible if anyone does try to contact [the inventor witness] and please instruct him not to discuss anything with anybody about United States Patent No. 5,012,077 until we have a chance to discuss first." (Exhibit 13 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.)
19.
Omron's attorney Herbert Kerner assisted Verve by providing legal research
to Verve's attorneys in connection with the ITC proceeding. Mr. Kerner actively assisted in the ITC proceeding by sending information to Verve's lawyers concerning prior decisions of the ITC on the issue of standing. (Exhibit 14 and Exhibit 15 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment,
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Doc. #85.).
20. 4 5
Mr. Kerner offered this assistance after having participated in the meeting
with Hypercom on September 16, 2004, in which Hypercom demonstrated that its accused products did not infringe the Omron patent asserted in the ITC Action. (Exhibit 23 to 6 Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary 7 Judgment, Doc. #85, Nakano Depo., at 155-56.) 8 9 21. 10 with its scheme with Verve by emphasizing that Omron had "no risk" because Omron 11 would not be a party to any of the lawsuits. (Exhibit 4 to Hypercom's Statement of Facts 12 filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.) 13 22. 14 [Omron] is not a party of the suit, it has no risk." (Exhibits 4, 5 and 8 to Hypercom's 15 Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, 16 Doc #85.) 17 23. 18 Omron patents, Omron refused to intervene in any of the lawsuits. (Hypercom's Statement 19 of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, 20 Exhibit 23, Nakano Depo., at 161-62.) 21 24. 22 the beginning." (Hypercom's Statement of Facts filed in opposition to Omron's First 23 Motion for Summary Judgment, Doc. #85, Exhibit 23, Nakano Depo., at 159.) 24 25 26 27 28 25. Omron aided and assisted Verve by executing "assignment documents" that As Mr. Nakano testified, Omron "had no intention of joining ITC case from Even after it became clear that Verve did not have standing to sue on the Mr. Nakano specifically relied on the fact that "[i]n case of losing a suit, as Omron obtained approval from internal decision makers to move forward
made it appear as if Verve had standing to bring the patent infringement lawsuits without joining Omron as a party. (Exhibits 52, 53 and 54 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.)
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26.
Verve recorded assignment documents with the United States Patent and
Trademark Office representing that Omron had assigned all right, title and interest in the Omron patents to Verve, including the patent asserted against Hypercom in this case. (See Assignment Documents for the `077 Patent and the `341 Patent attached as Exhibits 52 and 53, respectively, to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.)
27.
As part of the due diligence performed before Dewey Ballantine entered an
appearance for Verve in the ITC Action, those attorneys checked the assignment records recorded at the U.S. Patent and Trademark Office and were led to believe that Verve had sufficient rights in the Omron patents to enforce those patents. (See Deposition of Bryan Farney dated June 15, 2006 at 40:18-41:5, attached hereto as Exhibit C.)
28.
The publicly recorded assignment documents were false and misleading. In
fact, Verve and Omron had secret agreements in which Omron retained all rights under the patents and only pretended to assign the patents to Verve. (Exhibits 5 to Omron's Statement of Facts.) 29. Verve and Omron executed an "Addendum" to the agreements executed
previously that stripped Verve of virtually all rights in the Omron patents that Verve had asserted against Hypercom. (Memorandum Opinion and Order on First Data Corporation's Motion to Dismiss for Lack of Subject-Matter Jurisdiction entered by the United States District Court, Western District of Texas, dated March 27, 2006 attached hereto as Exhibit A; Order Granting Defendant's Motion to Dismiss, dated March 27, 2006 in Michigan Action, attached hereto as Exhibit E.) 30. This "Addendum" stripped Verve of the right to sue for patent infringement
1 2 3
not only for the `341 Patent, but also for the `895 Patent, the `340 Patent, and the `077 Patent. (Exhibit A) 31. It is very significant that Verve did not receive any consideration for signing
4 back all rights in the patents to Omron. (Verve case Doc #244 at Exhibit D at 60:2.) *** 5 6 32. 7 Verve removing its right to commence patent infringement lawsuits (assuming Verve ever 8 really had such a right), Galasso and Kevin Imes hid the existence of the "Addendum" 9 from their own attorneys at Dewey & Ballantine. (Declaration of Bryan Farney attached 10 hereto as Exhibit G.) 11 33. 12 not receive a copy of the "Addendum" until after the administrative law judge in the ITC 13 Action had entered two orders compelling Verve to produce all agreements between 14 Verve and Omron. (Id.) 15 34. 16 Dewey & Ballantine immediately produced the "Addendum" in the ITC Action, and when 17 the administrative law judge saw the "Addendum," he terminated the ITC Action because 18 Verve did not have standing to enforce the Omron patents without at least joining Omron 19 as a party. Omron was invited to join the ITC Action, but refused. (Exhibit 43 to Doc 20 #85.) 21 35. 22 approval for participation of the scheme with Verve, Mr. Nakano represented that Omron 23 would have "zero risk" because Omron would not be a party to the lawsuits. (Memos to 24 Japan attached hereto as Exhibit H.) The fact that Omron refused to join the ITC Action as 25 a party when invited to do so tends to confirm the conclusion that Verve and Omron 26 wanted to conceal the fact that Verve did not own the patents so that Omron could remain 27 at a distance and have "no risk." 28
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Even though Raymond Galasso had executed the "Addendum" on behalf of
Dewey & Ballantine, who was representing Verve in the ITC Action, did
Dewey & Ballantine thereafter withdrew from representation of Verve.
In a memorandum that Mr. Nakano sent to headquarters in Japan to get
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
36.
On February 7, 2005, the administrative law judge in the ITC Action entered
an Order concluding that Verve lacked standing to bring an infringement claim for the `077 Patent. (ITC Order No. 31, dated February 7, 2005, attached hereto as Exhibit 26.)
37.
Omron had the power at all times to stop the litigation that Verve filed
against Hypercom. (Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85 at Exhibit 30, Reich Decl. ¶¶ 2-4; Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85 at Exhibit 24, Reich AZ depo., at 22-26, 32-34, 39-47.)
38.
Omron retained the right to grant licenses under the Omron patents to
anyone, without limitation, including anyone that Verve had already sued, and could have granted Hypercom immunity from suit by Verve at any time. (Exhibit 17 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85.) 39. But after Hypercom demonstrated on September 16, 2004, that none of the
17 Hypercom products infringed any of the Omron patents, instead of putting a stop to the 18 litigation, Omron demanded millions of dollars from Hypercom. (Hypercom's Statement 19 of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85 at 20 Exhibit 24, Reich Depo., at 34-35.) 21 22 23 24 25 26 27 28
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40.
Neither Omron nor Verve took any action until March 8, 2005 when Verve
dismissed the action after Hypercom had written to Verve and threatened Rule 11 sanctions.
41.
Verve continued to pursue the Texas Action after it was transferred to the
District of Arizona in December 2004. (CIV-05-0365-PHX-FJM)
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42.
Omron had an extraordinary economic motivation to aid in Verve's scheme,
because Omron stood to get 50% of the money that Verve collected, and which Verve estimated to be potentially between $979 Million and $4.9 Billion. (Exhibit 22 to Hypercom's Statement of Facts filed in opposition to Omron's First Motion for Summary Judgment, Doc. #85, at p. 3).
43.
In the ITC Action, Hypercom had to file multiple motions to compel before
Verve finally produced the secret agreements with Omron. In opposition to one of Hypercom's motions to compel, one of the lawyers at the Simon, Galasso & Frantz law firm signed a brief that made the false representation that Omron had not retained any ownership interest or rights in the Omron patents. (Motion to Compel attached hereto as Exhibit D.) Verve represented that Verve's "only reluctance" in producing the agreements with Omron was based on confidentiality obligations that Omron had imposed on Verve in the agreements. Id., at 4. Verve attached as "Exhibit A" to that brief a copy of a response that Verve gave to the ITC staff's interrogatories stating that "Verve sent a letter ... to Omron asking for it to waive any confidentiality provisions" in the agreements. Id., at Exh. A. Verve attached as "Exhibit B" to that agreement the alleged letter to Omron, and it was actually a letter to Herb Kerner. Id., at Exhibit B. RESPECTFULLY SUBMITTED this 28th day of August, 2006. SNELL & WILMER L.L.P.
By s/Monica A. Limón-Wynn Sid Leach Monica A. Limón-Wynn SNELL & WILMER L.L.P. One Arizona Center Phoenix, AZ 85004-2202 Attorneys for Plaintiff Hypercom Corporation
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Case 2:04-cv-00400-PGR
1879732
CERTIFICATE OF SERVICE I hereby certify that on August 28, 2006, I electronically transmitted the foregoing Notice to the Clerk's Office using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: David P. Irmscher John K. Henning, IV BAKER & DANIELS 300 N. Meridian Street, Suite 2700 Indianapolis, IN 46204 Phone: 317-237-1317 Fax: 317-237-1000 [email protected] [email protected] Paul Moore Ray K. Harris FENNEMORE CRAIG, P.C. 3003 N. Central Avenue, Suite 2600 Phoenix, AZ 85012-2913 Phone: 602-916-5414 Fax: 602-916-5614 [email protected] [email protected] Attorneys for Defendant Omron Corporation s/ Linda I. Patenaude
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Filed 08/29/2006
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