Calypso Wireless (fka CLYW)

[conagra]

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

CALYPSO WIRELESS, INC., §
Plaintiff, §
§
and §
§
DRAGO DAIC, §
Co-Plaintiff and Cross-Claim Defendant, §
§
and JIMMY WILLIAMSON, PC, and § § § Case No. 2:08-CV-00441 Jury Demanded
KELLY D. STEPHENS, §
Third-Party Defendants, §
§
v. §
§
T-Mobile USA, Inc. §
§
Defendant. §

PLAINTIFF’S SUR-REPLY IN OPPOSITION TO T-MOBILE’S MOTION TO DISMISS
Come now Calypso Wireless, Inc. (“Calypso”), Drago Daic, and Jimmy Williamson, P.C. (together “Plaintiffs”) and file this Sur-Reply in Opposition to T-Mobile’s Motion to Dismiss, and would respectfully show the Court the following:

In its Reply1 in support of its Motion to Dismiss2, T-Mobile completely ignores the distinction between constitutional and prudential standing, and mischaracterizes Plaintiffs’ response. Calypso has not admitted that it never had standing. On the contrary, Calypso had constitutional standing from the start of this case, and the prudential standing requirement has been satisfied at least since the Court granted Calypso leave to file its Second Amended

1 Docket No. 133. 2 Docket No. 109.

Complaint adding Drago Daic and Jimmy Williamson, P.C. as parties to this suit.3 Thus, as explained at length in Calypso’s Response in Opposition to T-Mobile’s Motion to Dismiss4, there has never been any question of constitutional standing. The undisputed existence of constitutional standing at the outset of this case negates T-Mobile's argument that a dismissal for lack of standing is in any way justified or required.5

T-Mobile attempts to create a question of standing (without regard to the distinction between constitutional or prudential standing) by misconstruing the holding in Jim Arnold v. Hydrotech Sys.6 According to T-Mobile, the Jim Arnold case stands for the proposition that “if the ownership of the patent cannot be determined before resolving a dispute, then the court cannot exercise jurisdiction over the claim for patent infringement and must dismiss.”7 That is incorrect.

In Jim Arnold, the plaintiff admitted from the start that the status quo was that he did not own the patent, and needed the Court’s help to get it back from Hydrotech so that he could have a claim for patent infringement against Hydrotech.8 That is crucially different from the facts in this case or a case like Air Prods. & Chems. v. Reichhold Chems.9, is the procedural posture. In both this case and the Air Products case, the plaintiff filed its infringement claim as an owner of the patent.10 In Air Products, the defendant raised a licensing defense – i.e., Air Products had granted a license to the defendant – which would undermine any question of injury (and hence

3 See Docket No. 101.

4 See Docket No. 120.

5 Israel Bio-Engineering Project v. Amgen, Inc., 475 F.3d 1256, 1264 (Fed. Cir. 2007)(Joint owner has constitutional standing and can satisfy prudential standing by joining other owners of an undivided interest).

6 109 F.3d 1567 (Fed. Cir. 1997).

7 Docket No. 133 at 8 (emphasis in original).

8 See id. at 1572-73 (“[H]is complaint to the state court clearly showed that he had assigned all right, title, and interest in the patents at issue to Hughes; that he had no ownership interest in the patents on which to sue unless and until the state-provided remedy of rescission was granted”).

9 755 F.2d 1559, 1563 (Fed. Cir. 1985) (“[T]he fact that a question of contract law must be decided prior to reaching the infringement question does not defeat federal subject matter jurisdiction.”).

10 755 F.2d at 1563.

standing).11 Here, Calypso’s co-plaintiffs raised a question of patent ownership. Neither the licensing defense allegation nor the ownership allegation, however, is (or was) sufficient to threaten the court’s subject matter jurisdiction.12 Moreover, the question of ownership previously raised has now been resolved by a stipulation whereby all parties involved in that question expressly stipulated that Calypso's ownership when it filed this suit has not subsequently been changed. 13

Additionally, T-Mobile’s attempt to stretch the Jim Arnold holding to cases like the present case or the Air Products case would result in the absurd situation where any infringement defendant could automatically deprive a patent infringement plaintiff of standing simply by asserting a defense that calls into question ownership of the patent or the existence of an actionable injury.

T-Mobile’s assertion that the defendant’s licensing defense in Air Products “did not implicate standing or the court’s jurisdiction in any way” is just wrong: We recognize that in cases where a license is plead as a defense, or where the license defense is anticipated in the complaint, that the most expeditious conduct of the trial would necessitate that the license issue be resolved first, for if the license issue is resolved in the defendant’s favor the infringement issue is mooted. In this sense, infringement is conditional upon a license defense when raised. A district court, however, is not precluded in patent suits from resolving non-patent questions, and the fact that a question of contract law must be decided prior to reaching the infringement question does not defeat federal subject matter

jurisdiction.14 Constitutional standing exists where a plaintiff can establish (1) an injury-in-fact, (2) a causal connection between the injury and the conduct complained of, and (3) that the injury is likely to

11 See id. 12 See id. (“[T]he fact that a question of contract law must be decided prior to reaching the infringement

question does not defeat federal subject matter jurisdiction.”). 13 See Docket No. 111. 14 755 F.2d at 1563 (emphasis added).

be redressed by a favorable decision.15 In patent cases where the accused infringer is licensed under the patent, there can be no recovery against the licensed defendant, but a ruling for the defendant on its affirmative defense (license) would not deprive the court of subject matter jurisdiction over the case.

The remainder of T-Mobile’s Reply simply re-hashes a laundry list of allegedly prejudicial delays, without articulating any actual prejudice. It is ironic that a defendant – who might ordinarily be expected to take, and indeed has previously taken, a dilatory posture in a case such as this – is complaining about delays. In any case, T-Mobile’s lengthy recitations are not relevant to the question of standing, and should be disregarded.

For the foregoing reasons, Plaintiffs respectfully request that the Court deny each and every form of relief sought by T-Mobile in its Motion to Dismiss.

15 See Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1346 (Fed. Cir. 2001), cert. denied 534 U.S. 895, 122 S. Ct. 216, 151 L. Ed. 2d 154 (2001).

Dated: March 26, 2010 Respectfully submitted,
/s/ Anthony Miller
Paul V. Storm (lead counsel)
[e-mail]
State Bar No. 19325350
Anthony P. Miller
[e-mail]
State Bar No. 24041484
Michael Leach
[e-mail]
State Bar No. 24065598
Storm LLP
901 Main Street, Suite 7100
Phone: [phone]
Fax: [phone]
ATTORNEYS FOR CALYPSO
WIRELESS, INC.
Agreed to by:
/s Timothy W. Johnson s/
Guy E. Matthews (lead counsel)
State Bar No. 13207000
Timothy W. Johnson
State Bar No. 24002366
Matthew C. Juren
State Bar No. 24065530
Matthews, Lawson & Bowick, PLLC
2000 Bering Drive, Suite 700
Houston, Texas 77057
[phone] (Telephone)
[phone] (Facsimile)
Email: [e-mail]
[e-mail]
[e-mail]
ATTORNEYS FOR PLAINTIFFS
JIMMY WILLIAMSON, P.C. AND
DRAGO DAIC

CERTIFICATE OF SERVICE
I hereby certify that on March 26, 2010, I caused a true and correct copy of the foregoing to be served on all counsel of record via the Court’s CM/ECF system, pursuant to Local Rule CV-5(a)(3). Jimmy Williamson, P.C. and Kelly D. Stephens are represented by attorneys who are already counsel of record (the same attorneys who represent Drago Daic), and will therefore be served via the Court’s CM/ECF system.

/s/ Anthony Miller Anthony Miller