RONAN & FIRESTONE, PLC _‘
2 9300 E. RAINTREE DRIVE, SUITE 120 .
SCOTTSDALE, ARIZONA 85260
3 (480) 222-9100
Merrick B. Firestone, SB #012138 I
4 Veronica L. Manolio, SB #020230 q
Attorneys for the Nelcela Defendants I
5
6 UNITED STATES DISTRICT COURT p
7 IN AND FOR THE DISTRICT OF ARIZONA
8 Merchant Transaction Systems, Inc., No. 02-CV-1954 — PI-IX—MHM I
9 Plaintiff NELCELA, INC., LEN CAMPAGNA
10 vs. AND ALEC DOLLARHIDE’S e
RESPONSE TO LEXCEL’S
11 Nelcela, Inc., an Arizona corporation; MOTION FOR POSSESSION OF
Ebocom, Inc., a Delaware Corporation; TRIAL EXHIBIT 675 ;
12 POST Integrations, Inc., an Illinois Corp., et. al.
(Oral Argument Requested)
1 3 Defendants.
it i£££$L?l§de€?$]§l§$§€?“““S’ C‘°SS"Cl“‘“‘““d
15
16 Nelcela, Inc., Len Campagna and Alec Dollarhide (collectively "Nelcela") respond to
17 Lexcel’s Motion for Possession of Trial Exhibit 675. Because litigation is continuing, because the
18 ownership issue is still not resolved, and because Nelcela disagrees that Lexcel owns Trial Exhibit
19 675, the best course of action is for this Court to maintain possession ofthe trial exhibit} Until and
20 unless the issue(s) of ownership are resolved, either this Court should hold Exhibit 675 or the floppy ‘
2] disks should be returned to Nelcela. I
22 """’_"'â€'_'_"‘““ .
I By now, Lexcel and all parties) should have received Nelcela’s "Renewed Motion for Judgment A
23 . . . J
as a Matter of Law and/or Motion for Judgment Notwithstanding the Verdict or, in the alternative,
24 Motion for a New Trial." (Docket Nos. 505-506) Therefore, Lexcel is now fully aware that Nel cela
challenges both the jury verdict on ownership. Regardless of how the Renewed Motion is decided,
25 there is still a Phase II of this litigation, which will necessarily involve the source codes. See, e. g. ,
26 Docket Nos. 505-506 at p. 6 and fn. 1 (The Court stated it would detennine "whether the software
[in question] in fact is copyrightable" in Phase II of this case.) Until the issues of ownership and
"copyrightability" are resolved, Trial Exhibit 675 should not be handed over to Lexcel.
Case 2:02—cv—01954-IVIHIVI Document 507 Filed 05/08/2007 Page 1 of 3
1 Contrary to Lexcel’s assertions, all parties agree that Trial Exhibit 675 (the floppy disks)
2 were given to CCS, Ltd. or Charles Anderson as part of a Settlement Agreement. Mr. Anderson i
3 (CCS Ltd.) testified that he gave those floppy disks to Mr. Dollarhide knowingly and voluntarily.
4 No party has ever disputed Mr. Dollarhide’s testimony about how he received the floppy disks nor
5 Mr. Anderson’s testimony that the floppy disks were freely given to Mr. Dollarhide. Mr. Anderson if
6 was permitted to have the floppy disks and permitted to do with them whatever he saw appropriate.
7 Despite the jury verdict on ownership of code, Lexcel does not own the three (3) floppy disks.
8 Lexcel may ultimately be determined the owner of some part ofthe code on the disks, but it does not
9 own the disks themselves. Lexcel gave the disks to Mr. Anderson, and Mr. Anderson owned them. l
10 When Mr. Anderson decided to give the floppy disks to Alec Dollarhide, Lexcel could not complain.
11 Also contrary to Lexcel’s statements, only one expert testified about the integrity of the
12 floppy disks. Expert Kevin Faulkner proved that Carl Kubitz was not telling the truth about what
13 was contained on the floppy disks — no Merchant System or Database Schema ever existed on the l
14 floppy disks, and nothing was removed from the floppy disks by Alec Dollarhide or anyone else.
1 5 Lexcel freely chose to ignore that expert testimony and never rebutted the fact that no Merchant code
16 was @ on the floppy disks. For Lexcel to claim now that it is entitled to possession ofthe floppy
17 disks by virtue of the fact that it "owns" what it pretends that it had copied onto the disks back in
18 1994/1995 is just plainly disingenuous. Lexcel can only “own" what is on its 2001 CD, and the i
19 floppy disks do not even contain a large portion of what Lexcel states that it “owns." A
20 Perhaps more importantly, when this Court does the proper "analytic dissection" in this
21 matter, the floppy disks will become essential in continuing litigation. The floppy disks will
22 continue to disprove Lexcel’s false claims for ownership because Lexcel never had a Merchant
23 system in 1994/1995, and no such system was ever on this disks as falsely alleged and disproven.
2 4 This Court should either hold the disks until such time as each party can (in a "forensically sound"
25 and "proper" enviromnent) inspect them and/ or evaluate them, or the Court should return the floppy
26 disks to Nelcela because Nelcela owns the disks regardless of whose code is contained on them.
Case 2:02—cv—01954-IVIHIVI Document 507 2 Filed 05/08/2007 Page 2 of 3
1 For all the reasons asserted herein, Nelcela respectfully asks this Court to either hold these
2 disks for the Phase ll analysis and the decisions on post-trial motions, or Nelcela respectfully asks
3 that the Court return Trial Exhibit 675 to Nelcela.
4 RESPECTFULLY SUBMITTED this Sm day of May, 2007.
5 RONAN & FIRESTONE, PLC
6
7 /s/ Veronica L. Manolio ‘
Merrick B. Firestone
8 Veronica L. Manolio ?
9300 E. Raintree Drive, Suite 120 E
9 Scottsdale, Arizona 85260 P
Attorneys for Nelcela, Inc., Leonard Campagna `
10 and Alec Dollarhide
11 ORIGINAL filed electronically with the Clerk’s Office D
and COPIES electronically transmitted to the following
12 CM/ECP registrants this same date to:
13 Nicholas J. DiCarlo
ndicarlo(a`>,thedcptir1n.com T
14 Local Counsel for Merchant Transaction Systems l
William McKinnon
1 5 mailgfowiliiaminckinnoncom
Attorney for Merchant Transaction Systems
16
17 George C. Chen .
g·cchen(wb1;gaiicave.coni or
1 8 george.chen§a>bry ancavecom
Attorneys for Lexcel, Inc. and Lexcel Solutions, Inc.
19
Peter D. Baird
20 pbg.irdga2irlaw.coin
Robert H. McKirgan S
21 rmcki.rgan(a?lr1a.w.c
22 Rhallora ntcolflawcom
Kimberly Demarchi 1
23 Kdema1*chi{aUlrlaw.co1n
Attorneys for POST Ebocom,
24 Mary Gerdts, and Douglas McKinney
26 By: /s/ Diana Ren ria
Case 2:02—cv—01954-IVIHIVI Document 507 3 Filed 05/08/2007 Page 3 of 3
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