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

EXHIBIT 11 NELCELA'S PROPOSED PRETRIAL INSTRUCTIONS Proposed Jury Instruction No. 1 Agreed Upon Standard Instructions

The Parties request that the following instructions from the Ninth Circuit Manual of Model Jury Instructions ­ Civil should be given: Preliminary Instructions: 1.1, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8, 1.9, 1.10, 1.11, 1.13, and 1.15. Instructions During Trial When Appropriate: 2.1, 2.2, 2.4, 2.5, 2.6, 2.10, and 2.13 Instructions At End of Case: 3.1, 3.2, 3.3, 3.5, 3.6, 3.7, 3.9, 3.10, 3.11, 3.12, 4.1, 4.2, 4.3, 4.4, 4.5 (if necessary), 5.1, 5.3, 6.1, and 6.2.

Source:

Ninth Circuit Manual of Model Jury Instructions ­ Civil

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Nelcela's Additional Proposed Jury Instruction No. 2 Preliminary Instruction re Claims And Defenses To help you follow the evidence, I will give you a brief summary of the positions of the parties. This case involves competing claims of ownership of computer software. There are several corporate entities in this case as well as several individual persons who have been named. At this juncture, the Court is asking you to determine which corporate entity owns the software in dispute. Nelcela, Inc. is one corporation that claims to own the software at issue. Lexcel, Inc. and Lexcel Solutions, Inc. are two separate entities although they refer to themselves as "Lexcel." If you decide Lexcel owns any software, you must also determine if that software is owned by Lexcel, Inc. or Lexcel Solutions, Inc. You cannot simply determine that "Lexcel" owns it. Merchant Transaction Systems, Inc. ("MTSI") also claims ownership. Even though the Lexcel corporation(s), MTSI and Post Integrations, Inc. will often refer to themselves as: the Lexcel Parties, the MTSI Parties, and the POST Parties, those are not true entities. Each of those definitions consists of one or more companies and their owners or officers. You will not ultimately be permitted to find in favor of "parties" must decide which separate corporation owns the software. In addition to determining which party owns the software, Nelcela, Inc. claims that Post possesses and is using portions of software that Nelcela owns. You will have to determine if Post is using Nelcela's software and/or infringing on Nelcela's rights.

Source: Ninth Circuit Model Civil Jury Instruction 1.2 (with insertions); Sept. 30, 2006 Order on Motions for Summary Judgment at 28-29

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Nelcela's Additional Proposed Jury Instruction No. 3 Preliminary Instruction re Outline of the Trial The next phase of the trial will now begin. First, each side may make an opening statement. An opening statement is not evidence. It is simply an outline to help you understand what the party expects the evidence will show. A party is not required to make an opening statement. The original plaintiff in this case was Merchant Transaction Systems, Inc. ("MTSI"). MTSI sued both Nelcela and Post Integrations. Lexcel, Inc. and Lexcel Solutions, Inc. were not original parties in this matter. During the litigation, Lexcel, Inc. and Lexcel Solutions, Inc. intervened as additional Plaintiffs in this matter. The Lexcel entities sued MTSI, Nelcela, Post, and several individuals. Although Post is a defendant in this matter, Post has "aligned" with MTSI and Lexcel, and those parties entered into an Agreement regarding this litigation. Post is not a Plaintiff but a named Defendant in this matter. Accordingly, Lexcel and MTSI will present evidence of their claims that they each own the software at issue, and Nelcela and Post may cross-examine. Nelcela will then present evidence that Nelcela owns the software at issue, and MTSI and Lexcel may cross-examine. Nelcela will also present evidence that Post is using software that belongs to Nelcela, and Post may cross-examine. After the evidence has been presented, the attorneys will make closing arguments and I will instruct you on the law that applies to the case. You will then go to the jury room to deliberate on your verdict.

Source: Ninth Circuit Model Civil Jury Instruction 1.12 (second paragraph modified consistent with proposed instruction I.B).

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Nelcela's Additional Proposed Jury Instruction No. 4 Preliminary Instruction re: Copyright Nelcela, Inc. and the various Lexcel entities each claim to own the software at issue. Nelcela claims that its software was written first in time and that Lexcel copyrighted its software after this litigation began. Nelcela also claims that Post copied and is using a portion of the software that belongs to Nelcela. Lexcel claims that Nelcela copied its software. To help you understand the evidence in this case, I will explain some of the legal terms you will hear during this trial. DEFINITION OF COPYRIGHT Copyright is the exclusive right to copy. The owner of a copyright has the right to exclude any other person from reproducing, preparing distributive works, distributing, performing, displaying, or using the work covered by copyright for a specific period of time. Facts, ideas, procedures, processes, systems, methods of operation, concepts, principles or discoveries cannot themselves be copyrighted. A computer program can be a copyrighted work. The copyrighted work must be original. An original work that closely resembles other works can be copyrighted so long as the similarity between the two works is not the result of copying. COPYRIGHT INTERESTS The copyright owner may transfer, sell, or convey to another person all or part of the owner's property interest in the copyright, that is, the right to exclude others from reproducing, preparing a derivative work from, distributing, performing, or displaying the copyrighted work. To be valid, the transfer, sale, or conveyance must be in writing. The person to whom a right is transferred is called an assignee. One who owns a copyright may agree to let another reproduce, prepare a derivative work of, distribute, perform, or display the copyrighted work. To be valid, the transfer, sale, or conveyance must be in writing. The person to whom this right is transferred is called an exclusive licensee. The exclusive licensee has the right to exclude others from copying the work to the extent of the rights granted in the license.
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HOW COPYRIGHT IS OBTAINED Copyright automatically exists in a work the moment it is fixed in any tangible medium of expression. The owner of the copyright may register the copyright by delivering to the Copyright Office of the Library of Congress a copy of the copyrighted work. After examination and a determination that the material deposited constitutes copyrightable subject matter and that legal and formal requirements are satisfied, the Register of Copyrights registers the work and issues a certificate of registration to the copyright owner. A Certificate of Registration issued by the Register of Copyrights acts as evidence of the validity of the copyrighted work and evidence of the facts provided in the Certificate. PARTIES' BURDEN OF PROOF The Lexcel Parties claim that Lexcel owns the copyright of the Lexcel computer software and that Nelcela has copied the Lexcel software. The Lexcel Parties have the burden of proving by a preponderance of the evidence that Lexcel is the owner of the copyright and that Nelcela copied original elements of the copyrighted work. The Nelcela Parties claim that Nelcela owns the copyright of the Nelcela computer software and that Lexcel has copied the Nelcela software. The Nelcela Parties have the burden of proving by a preponderance of the evidence that Nelcela is the owner of the copyright. The Nelcela Parties obtained their Certificate(s) of Registration prior to the Lexcel parties. Therefore, there is a legal presumption that the Nelcela certificates are valid. The Lexcel parties must overcome that presumption by a preponderance of the evidence in order to prevail on ownership. The Nelcela Parties also claim that the POST Parties have copied a file of the Nelcela computer software. The Nelcela Parties have the burden of proving by a preponderance of the evidence that Nelcela is the owner of the copyright and that POST copied original elements of the copyrighted work. Preponderance of the evidence means that you must be persuaded by the evidence that it is more probably true than not true that the copyrighted work was infringed. Source: Ninth Circuit Model Civil Jury Instruction 20.0
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Nelcela's Additional Proposed Jury Instruction No. 5 Copyright ­ Defined (17 U.S.C. § 106) Copyright is the exclusive right to copy. The right to copy includes the exclusive rights to: (1) authorize, or make additional copies, or otherwise reproduce the copyrighted work; (2) recast, transform, adapt the work, that is prepare derivative works based upon the copyrighted work; (3) distribute the copyrighted work to the public by sale or other transfer or ownership or lending; It is the owner of a copyright who may exercise these exclusive rights to copy. The term "owner" includes the author of a work, an assignee, and an exclusive licensee. In general, copyright law protects against production, adaptation, and distribution of substantially similar copies of the owner's copyrighted work without the owner's permission. An owner may enforce these rights to exclude others in an action for copyright infringement. Even though one may acquire a copy of the copyrighted work, the copyright owner retains rights and control of that copy, including uses that may result in additional copies or alterations of the work. The holder of a Certificate of Registration is the presumed owner of the work, and another party claiming ownership must overcome the presumption that the Certificate of Registration is valid. Source: Ninth Circuit Model Civil Jury Instruction 20.1 (only relevant parts included)

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Nelcela's Additional Proposed Jury Instruction No. 6 Copyright ­ Subject Matter (17 U.S.C. § 102) The works involved in this trial are known as computer programs, that is, a literary work composed of a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result. You are instructed that a copyright may be obtained in the software at issue in this case. Source: Ninth Circuit Model Civil Jury Instruction 20.2 (only relevant parts included)

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Nelcela's Additional Proposed Jury Instruction No. 7 Copyright Infringement ­ Elements ­ Ownership and Copying (17 U.S.C. § 501(A)-(B)) Anyone who copies original elements of a copyrighted work during the term of the copyright without the owner's permission infringes the copyright. On a copyright infringement claim, the party claiming infringement has the burden of proving both of the following by a preponderance of the evidence: 1. 2. the plaintiff is the owner of a valid copyright; and the defendant copied original elements from the copyrighted work.

If you find that both of the elements on which the party claiming infringement has the burden of proof have been proved, your verdict should be for the party claiming infringement. If, on the other hand, the party claiming infringement has failed to prove either of these elements, your verdict should be for the other party.

Source:

Ninth Circuit Model Civil Jury Instruction 20.4 (references to parties changed to reflect present case)

[Nelcela requests this instruction to the extent the court permits evidence on the infringement by Post during this Phase I trial.]

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Nelcela's Additional Proposed Jury Instruction No. 8 Copyright Infringement ­ Ownership Of Valid Copyright ­ Definition (17 U.S.C. §§ 201-205) A party is the owner of a valid copyright if the party proves by a preponderance of the evidence that: 1. the party's work is original; and 2. the party is the author or creator of the work or received a transfer of the copyright.

Source:

Ninth Circuit Model Civil Jury Instruction 20.5 (reference to "plaintiff" changed to reflect present case)

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Nelcela's Additional Proposed Jury Instruction No. 9 Copyright Interests ­ Authorship (17 U.S.C. § 201(A)) The creator of an original work is called the author of that work. An author originates or "masterminds" the original work, controlling the whole work's creation and causing it to come into being. Others may help or make valuable or creative contributions to a work. However, such contributors cannot be the authors of the work unless they caused the work to come into being. One must translate an idea into a fixed, tangible expression in order to be the author of the work. Merely giving an idea to another does not make the giver an author of a work embodying that idea. Source: Ninth Circuit Model Civil Jury Instruction 20.6 (verbatim).

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Nelcela's Additional Proposed Jury Instruction No. 10 Copyright Interests ­ Works Made For Hire A copyright owner is entitled to exclude others from copying a work made for hire. A work made for hire is one that is prepared by an employee in carrying out the employer's business. The employer is considered to be the author of the work and owns the copyright unless the employer and employee have agreed otherwise in writing. A copyright owner of a work made for hire may enforce the right to exclude others in an action for copyright infringement. Source: Ninth Circuit Model Civil Jury Instruction 20.9 (verbatim).

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Nelcela's Additional Proposed Jury Instruction No. 11 Copyright Interests ­ Derivative Works (17 U.S.C. §§ 101, 106(2)) A copyright owner is entitled to exclude others from creating derivative works based upon the owner's copyrighted work. The term derivative work refers to a work based on one or more pre-existing works, such as a translation, abridgement, condensation, or any other form in which the pre-existing work is recast, transformed, or adapted. Accordingly, the owner of a copyrighted work is entitled to exclude others from recasting, transforming or adapting the copyrighted work without the owner's permission. If the copyright owner exercises the right to create or allow others to create a derivative work based on the copyrighted work, this derivative work may also be copyrighted. The original works of authorship in the derivation, such as the editorial revisions, annotations, elaboration, or other modifications to the preexisting work are considered to be the derivative work. Source: Ninth Circuit Model Civil Jury Instruction 20.13 (only relevant portions included).

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Nelcela's Additional Proposed Jury Instruction No. 12 Copyright Infringement­Definition­Copying­Access and Substantial Similarity Lexcel's Claim For Infringement The Lexcel Parties claim that the Nelcela Parties copied original elements of the Lexcel Parties' copyrighted work. The Lexcel Parties have the burden of proving the following elements by a preponderance of the evidence: 1. who, specifically, had access to copyrighted work; and 2. which Lexcel entity, specifically, owned and/or copyrighted the work; and 3. that there are substantial similarities between the Nelcela's copyrighted work and original elements of the copyrighted work of Lexcel, Inc. or Lexcel Solutions, Inc.; and 4. that Nelcela's copyrighted work was not independently created. The Lexcel entities must show by a preponderance of the evidence that Nelcela had access to the software. You may find that the Nelcela had access to Lexcel's software if Nelcela had a reasonable opportunity to copy Lexcel's software before Nelcela's software was created. This reasonable opportunity or access is not based on mere speculation or conjecture. Reasonable opportunity or access means that there was a reasonable possibility to access the software.

Source:

Ninth Circuit Model Civil Jury Instruction 20.15 & 20.16 (changed to reflect specific claims in the case).

[Nelcela requests this instruction to the extent the court permits evidence on the infringement by Post during this Phase I trial.]

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Nelcela's Additional Proposed Jury Instruction No. 13 Copyright Infringement­Presumed Validity Nelcela's Claim for Ownership Nelcela, Inc. claims ownership of the software it created. Particularly, the Nelcela Merchant System, which is the software at issue in this matter. Nelcela was granted a Certificate of Registration by the United States Registrar of Copyrights on May 18, 1999 for its Merchant System. As the holder of the Certificate of Registration, Nelcela is presumed to be the owner of the work. The Lexcel entities must overcome the presumed validity of Nelcela's Certificate of Registration when claiming ownership of the software. The Lexcel parties must show by a preponderance of the evidence that the Nelcela copyright(s), which were granted in 1999, are invalid. The Lexcel parties must also prove by a preponderance of the evidence which Lexcel entity owns the software claimed and that the copyright(s), which were not granted until 2001, are valid.

Source: Ninth Circuit Model Civil Jury Instruction 20.5 (changed to reflect specific facts/claims in the case).

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Nelcela's Additional Proposed Jury Instruction No. 14 Copyright Infringement ­ Definition ­ Copying ­ Access and Substantial Similarity ­ Nelcela's Claim For Infringement Against the POST Parties Nelcela, Inc. claims that the POST Parties copied original elements of the Nelcela copyrighted work. Nelcela has the burden of proving by a preponderance of the evidence: 1. that Nelcela holds a valid copyright; and 2. that the POST Parties possess or use any original elements of the Nelcela copyrighted work without Nelcela's authority to do so. Source: Ninth Circuit Model Civil Jury Instructions 20.4, 20.15 (modified to reflect issues on this claim).

[Nelcela requests this instruction to the extent the court permits evidence on the infringement by Post during this Phase I trial.]

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