Free Answer to Amended Complaint - 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 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Hypercom Corporation, CAUSE NO. CV04-0400 PHX PGR DEFENDANT OMRON CORPORATION' ANSWER TO S PLAINTIFF' SECOND AMENDED S COMPLAINT

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Plaintiff,
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vs.
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Omron Corporation,
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Defendant
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FENNEMORE CRAIG, P.C.
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The defendant, Omron Corporation ("Omron"), responds to Plaintiff' Second s Amended Complaint ("Second Amended Complaint") filed by the plaintiff, Hypercom Corporation ("Hypercom"), as follows: ADMISSIONS AND DENIALS PARTIES, JURISDICTION AND VENUE 1. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 1. 2. Omron admits the allegations in the first and last sentences of paragraph 2.

Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 2.
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3. 4. 5.

Omron admits the allegations in paragraph 3. Omron denies the allegations in paragraph 4. Omron admits that it is an alien corporation. Omron denies the remaining

allegations in paragraph 5. GENERAL ALLEGATIONS 6. Omron admits that it entered certain patent assignment agreements with

Verve L.L.C. ("Verve"). Omron denies the remaining allegations in paragraph 6 as to Omron. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 6. 7-8. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraphs 7 and 8. 9. Omron admits that Verve does not make or sell products. Omron is without

knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 9. 10. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 10. 11. Omron denies the allegations in paragraph 11 as to Omron. Omron is

without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 11. 12. Omron denies the allegations in paragraph 12 as to Omron. Omron is

without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 12. 13. Omron states that Verve' website speaks for itself and, therefore, denies the s

allegations in paragraph 13. 14. 15. Omron denies the allegations in paragraph 14. Omron admits that a memorandum prepared in the Japanese language and a

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document proposing to be an English translation thereof is attached to the Second Amended Complaint as Exhibit 4. Omron denies the remaining allegations in paragraph 15. 16. Omron admits that Raymond Galasso e-mailed Herbert Kerner on

September 5, 2003, that an Omron representative signed an assignment agreement on September 5, 2003, and that Verve filed a lawsuit against Hypercom in Michigan on September 11, 2003. Omron denies the remaining allegations in paragraph 16. 17. Omron admits that Verve prepared a document entitled "Point-Of-Sale

Portfolio Assessment and Market Analysis." Omron denies the remaining allegations in paragraph 17. 18. 19. Omron denies the allegations in paragraph 18. Omron admits that a memorandum prepared in the Japanese language and a

document proposing to be an English translation thereof is attached as Exhibit 5 to the Second Amended Complaint. Omron denies the remaining allegations in paragraph 19. 20. Omron admits that an e-mail communication from Raymond Galasso to

Herbert Kerner dated December 17, 2003, and a document entitled "Confidential Draft Proposal From Verve To Omron" are attached as Exhibit 6 to the Second Amended Complaint. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in the first and second sentences of paragraph 20. Omron denies the remaining allegations in paragraph 20. 21. Omron admits that on February 4, 2004, Verve filed a lawsuit against

Hypercom in the U.S. District Court for the Western District of Texas. Omron denies the remaining allegations in paragraph 21. 22. Omron admits that Herbert Kerner sent to Raymond Galasso the letter

attached as Exhibit 7 to the Second Amended Complaint. Omron denies the remaining allegations in paragraph 22.
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23.

Omron admits that a memorandum prepared in the Japanese language and a

document proposing to be an English translation thereof is attached as Exhibit 8 to the Second Amended Complaint. Omron denies the remaining allegations in paragraph 23. 24. Omron admits that it signed a written assignment and license agreement

with Verve on March 19, 2004; Herbert Kerner received the March 19, 2004, letter attached as Exhibit 9 to the Second Amended Complaint; and Herbert Kerner received from Kevin Imes an e-mail dated January 5, 2005. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in the fourth sentence of paragraph 24. Omron denies the remaining allegations in paragraph 24. 25. Omron admits that it assigned to Verve U.S. Patent No. 5,012,077 on March

19, 2004. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 25. 26. Omron admits that on July 20, 2004, Raymond Galasso sent an e-mail

communication to Herbert Kerner and Herbert Kerner responded to Raymond Galasso' s e-mail, and that a copy of these e-mail communications is attached as Exhibit 10 to the Second Amended Complaint. Omron further admits that Verve filed a complaint with the International Trade Commission ("ITC") based on U.S. Patent No. 5,012,077 on July 31, 2004, and that Hypercom was named as a respondent in the ITC proceeding. Omron further admits the allegations in the seventh sentence of paragraph 26. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in the sixth sentence of paragraph 26. Omron denies the remaining allegations in paragraph 26. 27. Omron admits that Verve filed a lawsuit against Hypercom in California on

August 30, 2004. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 27. 28. Omron admits that a meeting between representatives of Hypercom and Omron denies the remaining allegations in

Omron took place in September 2004.
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paragraph 28. 29. Omron admits that Exhibit 12 is an e-mail communication from Herbert

Kerner to Raymond Galasso; Exhibit 13 is an e-mail communication from Raymond Galasso to Haruo Okada; Exhibit 14 is an e-mail communication from Herbert Kerner to Jeff Plies; Exhibit 15 is an e-mail communication from Herbert Kerner to Raymond Galasso attaching documents Bates labeled OMRON 00518-522; and Exhibit 16 is a series of e-mail communications between Raymond Galasso and Herbert Kerner. Omron denies the remaining allegations in paragraph 29. 30. Omron admits the allegations in the last sentence of paragraph 30. Omron

further admits that the ITC issued Order No. 31: Concerning Hypercom' Motion To s Terminate Investigation Based On Complainant' Lack Of Standing on February 7, 2005. s Omron denies the remaining allegations in paragraph 30. 31. 32. Omron denies the allegations in paragraph 31. Omron admits that on June 7, 2005, the Administrative Law Judge for the

ITC issued Order No. 48: Imposing Sanctions, Jointly and Severally, On Complainant Verve; Simon, Galasso And Frantz; And Raymond Galasso And Kevin Imes. Omron denies the remaining allegations in paragraph 32. 33-35. Omron admits the allegations in paragraphs 33 through 35. 36. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 36. 37. Omron denies the allegations in paragraph 37. Details of the Baseless Lawsuits Brought Against Hypercom 38-39. Omron denies the allegations in paragraphs 38 and 39 as to Omron. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraphs 38 and 39. 40. Omron admits that Verve filed a lawsuit for infringement of U.S. Patent No.

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4,678,895 against Hypercom, VeriFone, Inc., and Lipman USA, Inc., in the U.S. District Court for the Eastern District of Michigan on September 11, 2003. Omron denies the remaining allegations in paragraph 40. 41. Omron admits the allegations in the first sentence of paragraph 41. Omron

denies the remaining allegations in paragraph 41. 42-44. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraphs 42 through 44. 45. Omron admits that Verve filed its First Amended Complaint And Jury

Demand in the District Court for the Eastern District of Michigan on October 10, 2003, and added as defendants Ingenico Corp. USA, Thales e-Transactions, Inc., Telecheck Services, Inc., LinkPoint International, Inc., and Schlumberger Limited. Omron is

without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 45. 46. Omron admits that Omron assigned U.S. Patent Nos. 4,562,340 and

4,562,341 to Verve on October 14, 2003, and that Verve filed its Second Amended Complaint And Jury Demand in the District Court for the Eastern District of Michigan on October 16, 2003. Omron states that the October 21, 2003, Order from the District Court for the Eastern District of Michigan speaks for itself and, therefore, denies the allegations in the last sentence of the Second Amended Complaint. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 46. 47-48. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraphs 47 and 48. 49. Omron admits that on May 11, 2004, the District Court for the Eastern

District of Michigan entered its "Opinion And Order Denying Defendant Hypercom' s Motion To Dismiss, Granting Defendant Hypercom' Motion To Sever And Transfer s
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Venue Of The Severed Claims To The District of Arizona And Ordering Plaintiff Verve To Show Cause On Or Before June 3, 2004 Why The Claims Alleged Against The Remaining Defendants Should Not Be Severed For Misjoinder." Omron states that the Court' Order speaks for itself and, therefore, denies the remaining allegations in s paragraph 49. 50-51. Omron admits the allegations in paragraphs 50 and 51. 52. Omron admits that Verve filed a Notice Of Dismissal on June 8, 2004.

Omron denies the remaining allegations in paragraph 52 as to Omron. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 52. 53. Omron admits that on February 4, 2004, Verve filed a complaint against

Hypercom in the U.S. District Court for the Western District of Texas, captioned Verve L.L.C. vs. Hypercom Corporation, VeriFone, Inc., Ingenico Corporation USA, Thales e-Transactions, Inc., First Data Corporation, Radiant Systems, Inc., CyberNet USA, Inc., and Mist Inc., USA, Case No. 04-CV-62. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 53. 54-56. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraphs 54 through 56. 57. Omron admits that the U.S. District Court for the Western District of Texas

entered its Order On Motions To Sever And Transfer on December 29, 2004. Omron denies the remaining allegations in the first sentence of paragraph 57. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 57. 58. 59. Omron admits the allegations in paragraph 58. Omron admits that on December 12, 2005, the District Court of Arizona

entered its Order. Omron denies the remaining allegations in paragraph 59.
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60.

Omron admits that on July 31, 2004, Verve filed a complaint with the ITC

in Washington D.C., naming Hypercom as a respondent and alleging a claim of patent infringement against Hypercom. Omron further admits the allegations in the second and third sentences of paragraph 60. Omron denies the remaining allegations in paragraph 60. 61-62. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraphs 61 and 62. 63. Omron denies the allegations in paragraph 63 as to Omron. Omron is

without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 63. 64. Omron admits that on February 7, 2005, Order No. 31: Concerning

Hypercom' Motion To Terminate Investigation Based On Complainant' Lack Of s s Standing was issued in the ITC. Omron denies the remaining allegations in paragraph 64. 65. Omron admits that a copy of an addendum to an assignment agreement

between Verve and Omron is attached as Exhibit 17 to the Second Amended Complaint. Omron denies the remaining allegations in paragraph 65 as to Omron. Omron is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 65. 66. Omron admits that on April 11, 2005, the ITC issued Order No. 40: Denying

Respondents' Joint Motion For Sanctions; Denying Motions Of Respondents Lipman and Thales For Sanctions Based on 19 C.F.R. § 210.4; Ordering Complainant To Show Cause Why Sanctions Should Not Be Imposed. Omron denies the remaining allegations in paragraph 66. 67. Omron admits that on May 24, 2005, the staff attorney for the Office Of

Unfair Import Investigations filed the Staff Response To Order No. 40. Omron denies the remaining allegations in paragraph 67. 68-71. Omron admits that on June 7, 2005, the Administrative Law Judge issued
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Order No. 48: Imposing Sanctions, Jointly and Severally, On Complainant Verve; Simon, Galasso And Frantz; And Raymond Galasso And Kevin Imes. remaining allegations in paragraphs 68 through 71. 72. 73. Omron denies the allegations in paragraph 72. Omron admits that on August 30, 2004, Verve commenced a civil action in Omron denies the

the United Stated District Court for the Northern District of California captioned Verve L.L.C. v. VeriFone, Inc., CyberNet, Inc., Hypercom Corporation, Ingenico Corporation, Lipman USA, Inc., Thales e-Transactions, Inc., and Trintech, Inc., Civil Action No. C-0403659 HRL. Omron denies the remaining allegations in paragraph 73. 74. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 74. 75. Omon denies the allegations in paragraph 75 as to Omron. Omron is

without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 75. 76-77. Omron is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraphs 76 and 77. 78. 79. Omron admits the allegations in paragraph 78. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 79. 80. Omron denies the allegations in paragraph 80. First Count ­ Civil Conspiracy For Abuse of Process and Malicious Prosecution 81. Omron incorporates its responses to paragraphs 1 through 80 of the Second

Amended Complaint. 82-87. Omron denies the allegations in paragraphs 82 through 87. ...
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Second Count ­ Malicious Prosecution 88. Omron incorporates its responses to paragraphs 1 through 87 of the Second

Amended Complaint. 89. Omron is without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 89. 90-91. Omron denies the allegations in paragraphs 90 and 91. Third Count ­ Aiding and Abetting Abuse of Process and Malicious Prosecution 92. Omron incorporates its responses to paragraphs 1 through 91 of the Second

Amended Complaint. 93-99. Omron denies the allegations in paragraphs 93 through 99. AFFIRMATIVE DEFENSES 1. be granted. 2. 3. 4. Hypercom' claims are preempted by federal law. s Hypercom' Second Amended Complaint violates Rule 11. s The Second Amended Complaint fails to state a claim for punitive damages The Second Amended Complaint fails to state a claim upon which relief can

upon which relief can be granted. 5. The imposition of punitive damages against Omron would violate its

constitutional rights under the following provisions of the United States Constitution and the comparable provisions of the Arizona Constitution: the Due Process Clauses in the Fifth and Fourteenth Amendments, the Double Jeopardy Clause in the Fifth Amendment, and the Commerce Clause. WHEREFORE, Omron demands judgment and the dismissal of Hypercom' s Second Amended Complaint, at Hypercom' cost, and all other relief, legal and equitable, s to which Omron is entitled.
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DATED this 5th day of July, 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 July 5, 2006, I electronically transmitted the attached documents to the Clerk' Office using the CM/ECF System for filing and transmittal of a s Notice of Electronic Filing to the following CM/ECF registrants: Michael K. Kelly Sid Leach SNELL & WILMER L.L.P. One Arizona Center 400 East Van Buren Phoenix, AZ 85004-2202

_s/Melody Tolliver_________________
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