Free Notice of Filing Proposed Pretrial Order - District Court of Arizona - Arizona

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40 North Central Avenue Phoenix, Arizona 85004-4429 Facsimile (602) 734-3746 Telephone (602) 262-5311 Peter D. Baird (001978) ([email protected]) Robert H. McKirgan (011636) ([email protected]) Richard A. Halloran (013858) ([email protected]) Kimberly A. Demarchi (020428) ([email protected]) Attorneys for POST Integrations, Inc., et al.

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Merchant Transaction Systems, Inc., ) ) Plaintiff, ) vs. ) ) Nelcela, Inc., et al., ) ) Defendants. ) ) ) And Related Counterclaims, Cross-Claims, ) and Third-Party Claims. ) ) No. CIV 02-1954-PHX-MHM JOINT PARTIES' WRITTEN OBJECTIONS TO NELCELA'S PROPOSED FORM OF VERDICT (Assigned to The Honorable Mary H. Murguia)

The Joint Parties anticipate that this Court will hear oral argument on the proposed

16 forms of verdict that have been filed by the parties to this case. The Joint Parties file this 17 written objection to the proposed form of verdict submitted by the Nelcela Parties to 18 clarify and document their objections. 19 I. 20 21 Nelcela's Proposed Form of Verdict Introduces Unnecessary Confusion Regarding Lexcel Solutions, Inc. and MTSI. Nelcela's proposed form of verdict asks the jury to choose one of four parties as the

22 owner of the software in this case: Nelcela; Lexcel, Inc.; Lexcel Solutions, Inc.; and 23 MTSI. None of the parties to this case contend, in this Phase I, that either Lexcel 24 Solutions, Inc. or MTSI own the software. As set forth in detail in the Joint Parties' 25 Written Objections to Nelcela's Proposed Jury Instructions, the Lexcel, MTSI, and POST 26 Parties each contend that Lexcel, Inc. owns the software. Nelcela contends that it owns 27 the software. Including any options for the jury other than the two contentions of the 28 parties would introduce unnecessary confusion and prejudice the parties.
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II.

By Asking the Jury to Determine "Ownership," Rather than Resolving the Specific Factual Question Remaining After this Court's Summary Judgment Ruling, Nelcela's Proposed Form of Verdict Introduces Unnecessary Confusion. As set forth in this Court's order on summary judgment, the remaining issue for

trial regarding Lexcel, Inc. and Nelcela's competing claims of ownership is very narrow. Because this Court has found "as a matter of law that [the Lexcel and Nelcela Softwares] are substantially similar beyond the possibility of random chance and that copying took place," all that remains is a determination of who copied from whom. (Sept. 30, 2006 Order, Docket no. 383, at 28.) Specifically, this Court has described the remaining issue for trial on this issue as "which came first." (Trans. of Nov. 20, 2006 Hearing at 29, Docket no. 412, at p. 29, ll. 20-21; cf. Sept. 30, 2006 Order at 27-29.) The jury should be asked the precise question that this Court has determined remains to be tried. That is what the Joint Parties' proposed form of verdict does. Nelcela's proposed form of verdict introduces unnecessary confusion, and the prospect of prejudice, by substituting the abstract concept of ownership for the specific factual issue that the jury should be charged with resolving. III. Nelcela's Proposed Form of Verdict Regarding the Nelcela-POST Dispute Is Inherently Biased and Improperly Expands Its Claim Regarding the POST Software Beyond the Limits Imposed by this Court's Ruling on Summary Judgment. Nelcela's proposed form of verdict also asks the jury to "find that Post Integrations, Inc. ("Post") is infringing on software owned by Nelcela, Inc." This instruction is fundamentally unfair to the POST Parties. It does not make clear in any way that the jury may only find infringement if it finds that Nelcela owned the software, as the Joint Parties' proposed form of verdict does. It also provides no option for the jury that favors POST's position, only one favoring Nelcela's. Moreover, this Court's ruling on summary judgment limited the Nelcela-POST issue in this Phase I to whether or not POST is using the one single file, bnkmerch.pbl, that Nelcela's expert identified as common between the code Nelcela claims to own and the
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server backup copies produced by POST in this litigation. Nelcela's proposed form of verdict impermissibly expands this claim beyond that file to unspecified "software" and to the issue of infringement, an issue reserved for Phase II. RESPECTFULLY SUBMITTED this 23rd day of March, 2007 DICARLO CASERTA & PHELPS PLLC Nicholas J. DiCarlo and LAW OFFICES OF WILLIAM McKINNON By s/ William McKinnon William McKinnon Attorneys for Merchant Transaction Systems, Inc. and Gene and Tone Clothier LEWIS AND ROCA LLP By s/ Kimberly A. Demarchi Peter D. Baird Robert H. McKirgan Richard A. Halloran Kimberly A. Demarchi Attorneys for POST Integrations, Inc., Ebocom, Inc., Mary L. Gerdts, and Douglas McKinney CERTIFICATE OF SERVICE I hereby certify that on March 23, 2007, I electronically transmitted the attached document 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: Merrick B. Firestone [email protected] Veronica L. Manolio [email protected] s/ Debi Garrett BRYAN CAVE LLP

By s/ George C. Chen George C. Chen Attorneys for Lexcel, Inc. and Lexcel Solutions, Inc.

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