AI
Thursday, February 25, 2010 9:58:04 AM
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. §
PLAINTIFFS’ RESPONSE TO T-MOBILE’S MOTION TO DISMISS
Come now Plaintiffs Calypso (“Calypso”), Drago Daic, and Jimmy Williamson, P.C.
(“Williamson”),1 and file this Response to T-Mobile USA Inc.’s Motion to Dismiss, and would
respectfully show the Court the following:
1. T-Mobile has moved to dismiss this case for lack of standing. T-Mobile’s motion should be denied as moot because all necessary parties2 are before the Court, and have filed claims of patent infringement against T-Mobile.3 As an owner of U.S. Patent No. 6,680,923 (the “‘923 Patent” or the “Patent-in-Suit”), Calypso had constitutional standing from the inception of this suit. Prudential standing can be and has been remedied with the addition of the co-owners of the Patent-in-Suit. Both the constitutional and prudential prongs of the standing inquiry are therefore satisfied, and T-Mobile’s Motion to Dismiss should be denied as moot.
1 On February 23, 2010, Jimmy Williamson, P.C. filed a cross claim for patent infringement against T-Mobile. See Answer and Cross Claim (Docket No. 118) at 7-10.
There is no dispute here that Calypso owns a 75% undivided interest in the ‘923 Patent, while Daic and Williamson jointly own an undivided 25% interest. See Motion to Dismiss at 5; Joint Stipulation at, e.g., ¶ 12. 3 See Joint Stipulation, ¶ 4; Doc. No. 103 (Second Amended Complaint wherein Calypso and Daic are plaintiffs); Doc. No. 118 (Williamson cross claim).
T-Mobile has also moved the Court to dismiss Calypso’s state law cross claims and third-party claims against Drago Daic, Jimmy Williamson, P.C., and Kelly D. Stephens. These claims were properly before the Court, and it was a proper use of the Court’s discretion to exercise supplemental jurisdiction over them. That said, Calypso has already agreed that it will dismiss those claims.4 T-Mobile’s request will therefore be moot once Calypso moves to dismiss its cross claims and third-party claims.
T-Mobile has also moved to dismiss this case for lack of prosecution. Dismissal for lack of prosecution is only appropriate where there is a pattern of “contumacious” conduct and where the Court has already imposed lesser sanctions (or found that lesser sanctions would be inadequate). Here, this case has been delayed because (1) a conflict which left Calypso without counsel, (2) a stay granted by the Court, and (3) a dispute that arose between Calypso and Daic. Throughout these delays, Calypso has worked diligently to secure new counsel and to resolve the conflict with Drago Daic. Furthermore, in negotiating a revised scheduling order – as the Parties were instructed to do post-stay – it was T-Mobile that requested moving all of the dates back, not Plaintiffs. This fact makes T-Mobile’s complaint regarding delay disingenuous. This is not a case where dismissal under Rule 41(b) is appropriate.
T-Mobile has moved, in the alternative, to stay this action until Plaintiffs can demonstrate standing, speak with one voice, and until the ownership dispute has been resolved. Each of these conditions is satisfied,5 so again, T-Mobile’s request is moot.
This case is finally in a position to move forward: Ownership of the ‘923 Patent is no longer in
dispute, all of the necessary parties are present claiming infringement by T-Mobile, and Daic and
Williamson have each agreed that Calypso is the party responsible for management of the patent
infringement claim against T-Mobile in this lawsuit in accordance with the terms and provisions
of the 2008 Agreement.6 The Court should deny T-Mobile’s Motion to Dismiss in its entirety,
and allow this case to go forward.
I. Relevant Factual Background
On February 8, 2010, Calypso, Daic, and Williamson filed with the Court a Joint
Stipulation in which they agreed, among other things, that the 2009 Agreement – the contract on
4 See Joint Stipulation, ¶ 5. 5 See generally id. 6 See id., ¶ 8.
which Daic and Williamson had based their claim of ownership as to the Patent-in-Suit – will not be considered an enforceable contract (as is more specifically provided in the Joint Stipulation).7
II. Argument & Authorities
A. T-Mobile’s Motion to Dismiss for Lack of Standing Should Be Dismissed as Moot.
T-Mobile has moved to dismiss on the basis of an alleged lack of standing. In doing so, T-Mobile glossed over an important distinction between constitutional and prudential standing, and ignored the crucial facts (1) Calypso had constitutional standing when it filed this suit, and
(2) that each of the co-owners of the Patent-in-Suit is already before the Court.8 Furthermore, since T-Mobile filed its Motion to Dismiss, the Plaintiffs reached an agreement under which Calypso has agreed to dismiss all of its state-law claims plead in this case against Daic and Williamson, while Williamson agreed to be joined as a patent infringement plaintiff against T-Mobile. T-Mobile’s Motion to Dismiss for lack of standing should therefore be dismissed as moot.
There are two components to the doctrine of standing in patent cases: (1) constitutional and (2) prudential.9 Constitutional standing exists where a plaintiff can establish (1) an injuryin-fact, (2) a causal connection between the injury and the conduct complained of, and (3) that the injury is likely to be redressed by a favorable decision.10 In patent cases, constitutional standing “is derived from the Patent Act, which provides: ‘A patentee shall have remedy by civil
7 See id., ¶1. 8 Prior to filing his cross claim against T-Mobile (Docket No. 118), Jimmy Williamson, P.C. was before the Court as a third-party defendant. 9 See Evident Corp. v. Church & Dwight Co., Inc., 399 F.3d 1310, 1313 (Fed. Cir. 2005) (“The doctrine of standing limits federal judicial power and has both constitutional and prudential components.”). 10 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).
action for infringement of his patent.’”11 Furthermore, “[t]he term ‘patentee’ comprises ‘not
only the patentee to whom the patent was issued but also the successors in title to the
patentee.’”12 “Constitutional injury in fact occurs when a party performs at least one prohibited
action with respect to the patented invention that violates these exclusionary rights.”13 At the
time of filing, Calypso was an owner of an undivided, 75% interest in the ‘923 Patent – a fact
that T-Mobile apparently does not dispute. There is therefore no legitimate dispute as to whether
the constitutional standing requirement was and is satisfied here. Further, Daic and
Williamson’s 25% interest is subject to Calypso’s right to control the litigation.14
The prudential component of the standing inquiry relates to the right of defendants to
avoid the possibility of having to defend against multiple suits based on the same alleged
infringement of the same patent.15 According to the Supreme Court:
The presence of the owner of the patent as a party is indispensable, not only to give jurisdiction under the patent laws, but also in most cases to enable the alleged infringer to respond in one action to all claims of infringement for his act, and thus either to defeat all claims in the one action, or by satisfying one adverse decree to bar all subsequent actions.16
Unlike constitutional standing, prudential standing may be remedied by adding necessary
parties.17 T-Mobile’s attempt to claim otherwise – that Calypso needs to prove that all patent
11 Intellectual Prop. Dev., 248 F.3d at 1345 (quoting 35 U.S.C. § 281); see also Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007). 12 Intellectual Prop. Dev., 248 F.3d at 1345 (quoting 35 U.S.C. § 100(d)); see also 35 U.S.C. § 281 (A “patentee” is entitled to bring a “civil action for infringement of his patent.”); 35 U.S.C. § 100(d) (“[P]atentee” includes the patentee to whom the patent was issued and the “successors in title to the patentee.”); Enzo Apa & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998) (the “successor[] in title” is the party holding legal title to the patent); Prima Tek II LLC v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000) (noting the assignee of all substantial rights under the patent becomes the effective patentee and can sue in its own name for infringement). 13 Morrow, 499 F.3d at 1339. 14 See Declaration of Cristian Turrini in Support of Calypso’s Request for Preliminary Injunction (Docket No. 106), filed February 2, 2010; Joint Stipulation, ¶ 8. 15 Schwarz Pharma, Inc. v. Paddock Labs., Inc., 504 F.3d 1371, 1374 (Fed. Cir. 2007). 16 Schwarz Pharma, 504 F.3d 1371, 1374 (Fed. Cir. 2007) (quoting Independent Wireless Telegraph Co. v. Radio Corp. of America, 269 U.S. 459, 46 S. Ct. 166, 70 L. Ed. 357 (1926)). 17“‘[A] plaintiff with constitutional standing may cure prudential standing defects after it files suit.’” Adv. Tech. Incubator, Inc. v. Sharp Corp., No. 2:07-CV-468, 2009 U.S. Dist. LEXIS 69736, *16 (E.D. Tex. August 10, 2009)
owners were parties “from the inception of the suit” – is flatly contrary to case law, and is based on a failure to distinguish between constitutional and prudential standing.18
Here, there are three co-owners of the Patent-in-Suit – Calypso, Daic, and Williamson.19 Each is already a party to this suit,20 and each has filed a claim for infringement against TMobile.21 Furthermore, each has agreed that Calypso will be the party responsible for management of this case against T-Mobile, and Daic and Williamson have already joined in the infringement contentions served by Calypso back in January on T-Mobile.22 Finally, Daic’s and Williamsons’ limited rights to patent-infringement proceeds under the Plaintiffs’ 2008 Agreement does not divest Calypso of prudential standing.23 Thus, there is no question of either constitutional standing or prudential standing, and T-Mobile’s Motion to Dismiss – which hinges
(Love, J.) (quoting VirnetX, Inc. v. Microsoft Corp., No. 6:07-cv-80, 2008 U.S. Dist. LEXIS 94854, at *7 (E.D. Tex. June 3, 2008) (Davis, J.)); Intellectual Property Dev., Inc., 248 F.3d at 1348; IPVenture, Inc. v. Prostar Computer, Inc., 503 F.3d 1324, 1326-27 (Fed. Cir. 2007); Morrow, 499 F.3d 1332, 1344 (Fed. Cir. 2007)); see also Positive Techs., Inc. v. LG Display Co., No. 2:07-CV-67, 2008 U.S. Dist. LEXIS 73087, 2008 WL 4425372, at *3 (E.D. Tex. Sept. 24, 2008) (Ward, J.) (noting that “the Federal Circuit has recognized on many occasions the ability to cure prudential standing defects post filing”)); VirnetX, Inc., 2008 U.S. Dist. LEXIS 94854, at *11-21 (analyzing grantor’s retained equity interest and rights, finding that grantee did not receive all substantial rights, and requiring joinder of grantor pursuant to Rule 19 in light of policy of “avoid[ing] the potential for multiple litigations and multiple recoveries against the same alleged infringer.”); cf. Propat Int’l. Corp. v. Rpost, Inc., 473 F.3d 1187, 1193 (Fed. Cir. 2007) (“[A]n action brought by the exclusive licensee alone may be maintained as long as the licensee joins the patent owner in the course of the litigation.”). 18 The case that T-Mobile relies on deals with constitutional standing, stating that “[l]egal title, which confers standing, must be held at the inception of the lawsuit.” See MHL TEK. LLC v. General Motors Corp., 622 F.Supp. 2d 400, 404 (E.D. Tex. 2009) (Ward, J.) (emphasis added). As explained above, the question of whether a plaintiff holds legal title is a question of constitutional standing, not prudential standing. 19 See Motion to Dismiss at 5. 20 Drago Daic is a named plaintiff. See, e.g., Drago Daic’s Answer to T-Mobile USA, Inc.’s Counterclaims (Docket No. 46), filed September 22, 2009. Williamson has also appeared before the Court (and is represented by the same counsel as Daic). See, e.g., Motion for Protective Order Concerning the Deposition Notice to Jimmy Williamson,
P.C. (Docket No. 94), filed January 18, 2010; Joint Stipulation (Docket No. 111), filed February 8, 2010. Finally, on February 23, 2010, Williamson filed a cross claim for patent infringement against T-Mobile. See Jimmy Williamson, P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010. 21 See Plaintiffs’ Amended Original Complaint and Demand for Jury Trial (Docket No. 14), filed March 16, 2009; Joint Stipulation (Docket No. 111), filed February 8, 2010, ¶ 4; Jimmy Williamson P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010. 22 Counsel for Drago Daic and Jimmy Williamson, P.C. have indicated that each joins in the infringement contentions served on T-Mobile by Calypso in January of this year, and has communicated this fact telephonically to counsel for T-Mobile. The Plaintiffs plan to file an amended set of infringement contentions in which Daic and Williamson join either contemporaneously with this brief or shortly thereafter. 23 Vaupel Textilmaschinen KG v. Meccanica Euro Italia, 944 F.2d 870, 875 (Fed. Cir. 1991); Positive Techs., Inc. v. LG Display Co., No. 2:07-CV-67, 2008 U.S. Dist. LEXIS 73087, 2008 WL 4425372, at *3 (E.D. Tex. Sept. 24, 2008) (Ward, J.).
on the notion that “resolution of [the Plaintiffs’] dispute is a necessary prerequisite to federal
jurisdiction over this action…”24 – should be denied as moot.
B. T-Mobile’s Motion to Dismiss Calypso’s Cross Claims and Third-Party Claims Should Be Denied as Moot.
T-Mobile has also moved the Court to dismiss Calypso’s state law cross claims and third-
party claims against Drago Daic, Jimmy Williamson, P.C., and Kelly D. Stephens. These claims
were properly before the Court, and it was a proper use of the Court’s discretion to exercise
supplemental jurisdiction over them.25 As stated above, however, Calypso has already agreed
that it will dismiss those claims (and will do so once Jimmy Williamson, P.C. has been added as
a patent-infringement plaintiff).26 T-Mobile’s request will therefore be moot once Calypso
moves to dismiss its cross claims and third-party claims.
C. The Court Should Not Impose the Death Penalty Sanction for Calypso’s Alleged “Failure to Prosecute.”
T-Mobile has also moved for dismissal under Rule 41(b) for want of prosecution.
Dismissal under Rule 41(b) for lack of prosecution – which is, by default, with prejudice – “‘is
an extreme sanction that deprives the litigant of the opportunity to pursue his claim.’”27 The
facts here do not merit such a sanction. Calypso is not solely responsible for the delays in this
24 The case that T-Mobile relies on in support of this proposition is one in which the Federal Circuit, acting sua sponte, dismissed a patent infringement claim for lack of jurisdiction, holding that “it is necessary that plaintiff allege facts that demonstrate that he, and not the defendant, owns the patent rights on which the infringement suit is premised.” Jim Arnold Corp. v. Hydrotech Sys., 109 F.3d 1567, 1571-1572 (Fed. Cir. 1997). There the plaintiff had actually alleged that he was not the patent owner, and had, in fact, plead a state-court cause of action for rescission of the deal that had given the defendant the relevant patent. See id. at 1572 (“[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”). The Jim Arnold case does not, as T-Mobile suggests, stand for the general proposition that any non-patent question that might moot the question of infringement deprives a federal court of jurisdiction. See, e.g., Air Prods. & Chems. v. Reichhold Chems., 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.”). 25 See 28 U.S.C. § 1367 (supplemental jurisdiction). 26 See Joint Stipulation (Docket No. 111), filed February 8, 2010, ¶ 5. 27 Callip v. Harris County Child Welfare Dept., 757 F.2d 1513, 1519 (5th Cir. 1985) (quoting McGowan v. Faulkner Concrete Pipe Co., 659 F.2d 554, 556 (5th Cir. 1981)).
case; the delays have not been unreasonable; and the delays are not the result of any untoward or improper conduct by Calypso that amounts to the sort of “contumacious” conduct that merits dismissal under Rule 41(b).
Dismissal under Rule 41(b) is only appropriate where there is evidence of “purposeful delay or contumaciousness …”28 Here there has been no “purposeful delay or contumaciousness.” The Fifth Circuit also considers factors such as whether there was “delay caused by [the] plaintiff himself and not his attorney,” whether there was “actual prejudice to the defendant; or whether there was “delay caused by intentional conduct.”29 Here, at least a portion of the delay was caused by the withdrawal of Calypso’s attorney (as permitted by the Court), there has been no actual prejudice to T-Mobile, and the delay was not caused by intentional conduct.
Even if there were some behavior at issue here, dismissal under Rule 41(b) would not be warranted. The Fifth Circuit requires a district court to “expressly determine[] that lesser sanctions would not prompt diligent prosecution, or … employ[] lesser sanctions that proved to be futile.”30 Thus, even if sanctions were warranted – and they are not – It would be an abuse of the Court’s discretion to proceed immediately to dismissal.31 T-Mobile’s request that this case be dismissed for want of prosecution should therefore be denied.
There has been no purposeful delay here. In fact, most of the delay has been completely out of Calypso’s control. For example, T-Mobile complains that this case has been on file for fourteen months, but fails to note that it filed two unopposed motions to extend the deadline to
28 Long v. Simmons, 77 F.3d 878, 880 (5th Cir. Miss. 1996) (emphasis added). 29 Berry v. CIGNA/RSI-CIGNA, 975 F.2d 1188, 1191 (5th Cir. 1992). 30 CIGNA/RSI-CIGNA, 975 F.2d 1188, 1191 (5th Cir. 1992); see also Long, 77 F.3d at 556. 31 See Long v. Simmons, 77 F.3d 878, 880 (5th Cir. 1996) (finding a dismissal to have been an abuse of discretion in the absence of a record of contumaciousness or the employment of lesser sanctions).
file its answer, and, in fact, did not answer32 for almost five months after Calypso’s original complaint.33 After T-Mobile answered, the Court set the case for a status conference on July 28, 2009,34 and entered its docket control and discovery orders in early August, 2009.35 The first deadline under the Court’s docket control order – for Local P.R. 3-2 and 3-3 disclosures – was not until September 11, 2009.
T-Mobile agreed to this deadline, and even agreed to extend it further, but then counsel for Plaintiffs withdrew due to a conflict.36 The Court stayed the case for a total of 51 days, during which time Calypso struggled to find counsel to replace the attorneys who had represented Calypso on a contingency basis. Before the stay was lifted,37 Co-Plaintiff Drago Daic moved to assign the Patent-in-Suit, which only increased the difficulty of Calypso attempting to obtain replacement counsel, and created additional issues to be resolved – i.e., who owned the Patent-in-Suit, and, on the day after the Court’s 51-day stay ended, moved to substitute Kelly D. Stephens as plaintiff. Calypso, which was finally able to secure counsel in December 200938, moved quickly to try to resolve these questions by securing temporary restraining orders in this Court and in state court.39 On February 8, 2010 – less than a month after Calypso filed its request for a temporary restraining order, and prior to the Court’s scheduled hearing on whether to grant a preliminary injunction – Calypso and Daic resolved the issues, and Daic agreed to undo the purported assignment and cease any further claims on the
32 See T-Mobile USA, Inc.’s Answer and Counterclaims (Docket No. 15) filed April 6, 2009. 33 See Plaintiff’s Original Complaint and Demand for Jury Trial (Docket No. 1) filed November 13, 2008. 34 See Order (Docket No. 22) dated June 22, 2009. 35 See Docket Control Order (Docket No. 34) dated August 13, 2009; Discovery Order (Docket no. 35), dated August 25, 2009. 36 See Plaintiff’s Opposed Motion to Withdraw (Docket No. 40), filed September 18, 2009. 37 See Motion to Substitute a Party and Temporarily Stay the Case (Docket No. 57), filed November 19, 2009, Ex. 2, Patent Assignment (executed on October 17, 2009 by Plaintiff Drago Daic). 38 See Notice of Appearance of Paul Storm (Docket No. 65), filed December 4, 2009; Notice of Appearance of Anthony Miller (Docket No. 66), filed December 4, 2009 39 See Calypso’s Emergency Motion for Clarification of Temporary Restraining Order (Docket No. 98), filed January 20, 2010.
Patent-in-Suit under the 2009 Agreement (as is more specifically provided in the Joint Stipulation).40 Because this case was stayed for 51 days, it is not clear which deadlines have passed. The original deadline for Calypso’s infringement contentions was in September – before the stay
– and the deadline for T-Mobile’s invalidity contentions was December. Both have obviously passed (Calypso has since served infringement contentions), but per the Court’s oral instruction during the hearing on Calypso’s attorney’s Motion to Withdraw, the Parties have conferred and agreed to a revised schedule under which neither deadline has passed, thereby providing a remedy for the delay for which T-Mobile complains.41
This is hardly a story that can be characterized as a pattern of “purposeful delay or contumaciousness …”42 Furthermore, setting aside all the flurry of activity in the last few months, a delay of just about three months (from the ending of the Court’s 51-day stay), is not the sort of delay that justifies a dismissal under Rule 41(b).43 “The word ‘contumacious’ is defined as ‘obstinately disobedient or insubordinate: recalcitrant’”44 Losing one’s counsel to conflict and then having to fight off a claim of ownership of the Patent-in-Suit does not really qualify as “behavior,” let alone behavior that is “obstinately disobedient” or “recalcitrant.” Finally, because the only deadlines that have been missed are Plaintiff’s deadline for filing infringement contentions, this case is not the sort of case where courts typically dismiss claims
40 See Joint Stipulation (Docket No. 111), filed February 8, 2010. 41 On February 22, 2010, the counsel for all parties had agreed on a Joint Motion to Extend Schedule and Reset Markman Hearing and Trial Dates and to Permit the Parties to Renegotiate the Docket Control and Discovery Orders (the “New Proposed Schedule”) extending all dates, including those for Plaintiffs’ Local P.R. 3-2 and 3-3 disclosures. Anne Champion, counsel for T-Mobile, indicated that she would be filing that document on February 23, 2010. 42 Simmons, 77 F.3d at 880 (emphasis added). 43 See, e.g., Morris v. Ocean Systems, Inc., 730 F.2d 248, 252 (5th Cir. 1984) (“The facts before us simply do not exhibit a clear record of either delay or contumacious conduct. Only eight months elapsed from the date of the first status conference on Morris’s suit to the date of its dismissal. … “). 44 Gist v. Lugo, 165 F.R.D. 474, 478 (E.D. Tex. 1996).
under Rule 41(b).45 T-Mobile’s request for a dismissal under Rule 41(b) should therefore be
denied.
D. T-Mobile has moved, in the alternative, to stay this action until Plaintiffs can demonstrate standing and speak with one voice. Each of these conditions is satisfied,46 so again, T-Mobile’s request is moot.
T-Mobile has also requested alternative relief in the form of a stay “until Plaintiffs can
demonstrate standing and speak with one voice.” As explained above, there is no legitimate
dispute that Calypso had constitutional standing at the time of the filing of this suit, and
prudential standing has been remedied. Each of the three co-owners of the Patent-in-Suit is
already a party to this suit,47 and each has filed a claim for infringement against T-Mobile.48
Furthermore, each has agreed that Calypso is the party responsible for management of this case
against T-Mobile, and Daic and Williamson have already joined in the infringement contentions
served by Calypso back in January on T-Mobile.49 Because Plaintiffs can demonstrate standing,
and are speaking through Calypso with one voice, T-Mobile’s request for a stay should be
dismissed as moot.
45 See, e.g., CIGNA/RSI-CIGNA, 975 F.2d 1188, 1192 (5th Cir. Tex. 1992) (“[W]here a plaintiff has failed only to comply with a few court orders or rules, we have held that the district court abused its discretion in dismissing the suit with prejudice.”); Morris v. Ocean Systems, 730 F.2d 248, 252 (5th Cir.1984) (no clear record of delay or contumacious conduct where counsel failed twice to comply with court-imposed deadlines requiring counsel to notify court of plaintiff’s rejection of settlement offers); Burden v. Yates, 644 F.2d 503, 504-05 (5th Cir.1981) (no clear record of delay or contumacious conduct where counsel failed to file three documents on time); McGowan, 659 F.2d at 556-58 (no clear record of delay or contumacious conduct where counsel failed to comply with scheduling and other pretrial orders); Silas v. Sears, Roebuck & Co., 586 F.2d 382, 384-85 (5th Cir.1978) (no clear record of delay or contumacious conduct where counsel failed to answer interrogatories, failed to confer with defendant on pretrial order, and failed to appear at a pretrial conference). 46 See generally Joint Stipulation (Docket No. 111), filed February 8, 2010. 47 Drago Daic is a named plaintiff. See, e.g., Drago Daic’s Answer to T-Mobile USA, Inc.’s Counterclaims (Docket No. 46), filed September 22, 2009. Williamson has also appeared before the Court (and is represented by the same counsel as Daic) and has filed a cross claim for patent infringement against T-Mobile. See Jimmy Williamson P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010. 48 See Plaintiffs’ Amended Original Complaint and Demand for Jury Trial (Docket No. 14), filed March 16, 2009; Joint Stipulation (Docket No. 111), filed February 8, 2010, ¶ 4; see also Jimmy Williamson P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010.49 Counsel for Drago Daic and Jimmy Williamson, P.C. have indicated that each joins in the infringement contentions served on T-Mobile by Calypso in January of this year, and has communicated this fact telephonically to counsel for T-Mobile.
III. Conclusion & Prayer
For the foregoing reasons, Plaintiffs respectfully request that the Court deny T-Mobile’s Motion to Dismiss and grant Plaintiffs any and all further relief to which they may be entitled.
Dated: February 23, 2010 Respectfully submitted,
/s/ Anthony Miller
Paul V. Storm (lead counsel)
paulstorm@stormllp.com
State Bar No. 19325350
Anthony P. Miller
amiller@stormllp.com
State Bar No. 24041484
Michael Leach
mleach@stormllp.com
State Bar No. 24065598
Storm LLP
901 Main Street, Suite 7100
Phone: 214-347-4700
Fax: 214-347-4799
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
(713) 355-4200 (Telephone)
(713) 355-9689 (Facsimile)
Email: gmatthews@matthewsfirm.com
tjohnson@matthewsfirm.com
mjuren@matthewsfirm.com
ATTORNEYS FOR PLAINTIFFS
JIMMY WILLIAMSON, P.C.
AND DRAGO DAIC
CERTIFICATE OF SERVICE
I hereby certify that on February 23, 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
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. §
PLAINTIFFS’ RESPONSE TO T-MOBILE’S MOTION TO DISMISS
Come now Plaintiffs Calypso (“Calypso”), Drago Daic, and Jimmy Williamson, P.C.
(“Williamson”),1 and file this Response to T-Mobile USA Inc.’s Motion to Dismiss, and would
respectfully show the Court the following:
1. T-Mobile has moved to dismiss this case for lack of standing. T-Mobile’s motion should be denied as moot because all necessary parties2 are before the Court, and have filed claims of patent infringement against T-Mobile.3 As an owner of U.S. Patent No. 6,680,923 (the “‘923 Patent” or the “Patent-in-Suit”), Calypso had constitutional standing from the inception of this suit. Prudential standing can be and has been remedied with the addition of the co-owners of the Patent-in-Suit. Both the constitutional and prudential prongs of the standing inquiry are therefore satisfied, and T-Mobile’s Motion to Dismiss should be denied as moot.
1 On February 23, 2010, Jimmy Williamson, P.C. filed a cross claim for patent infringement against T-Mobile. See Answer and Cross Claim (Docket No. 118) at 7-10.
There is no dispute here that Calypso owns a 75% undivided interest in the ‘923 Patent, while Daic and Williamson jointly own an undivided 25% interest. See Motion to Dismiss at 5; Joint Stipulation at, e.g., ¶ 12. 3 See Joint Stipulation, ¶ 4; Doc. No. 103 (Second Amended Complaint wherein Calypso and Daic are plaintiffs); Doc. No. 118 (Williamson cross claim).
T-Mobile has also moved the Court to dismiss Calypso’s state law cross claims and third-party claims against Drago Daic, Jimmy Williamson, P.C., and Kelly D. Stephens. These claims were properly before the Court, and it was a proper use of the Court’s discretion to exercise supplemental jurisdiction over them. That said, Calypso has already agreed that it will dismiss those claims.4 T-Mobile’s request will therefore be moot once Calypso moves to dismiss its cross claims and third-party claims.
T-Mobile has also moved to dismiss this case for lack of prosecution. Dismissal for lack of prosecution is only appropriate where there is a pattern of “contumacious” conduct and where the Court has already imposed lesser sanctions (or found that lesser sanctions would be inadequate). Here, this case has been delayed because (1) a conflict which left Calypso without counsel, (2) a stay granted by the Court, and (3) a dispute that arose between Calypso and Daic. Throughout these delays, Calypso has worked diligently to secure new counsel and to resolve the conflict with Drago Daic. Furthermore, in negotiating a revised scheduling order – as the Parties were instructed to do post-stay – it was T-Mobile that requested moving all of the dates back, not Plaintiffs. This fact makes T-Mobile’s complaint regarding delay disingenuous. This is not a case where dismissal under Rule 41(b) is appropriate.
T-Mobile has moved, in the alternative, to stay this action until Plaintiffs can demonstrate standing, speak with one voice, and until the ownership dispute has been resolved. Each of these conditions is satisfied,5 so again, T-Mobile’s request is moot.
This case is finally in a position to move forward: Ownership of the ‘923 Patent is no longer in
dispute, all of the necessary parties are present claiming infringement by T-Mobile, and Daic and
Williamson have each agreed that Calypso is the party responsible for management of the patent
infringement claim against T-Mobile in this lawsuit in accordance with the terms and provisions
of the 2008 Agreement.6 The Court should deny T-Mobile’s Motion to Dismiss in its entirety,
and allow this case to go forward.
I. Relevant Factual Background
On February 8, 2010, Calypso, Daic, and Williamson filed with the Court a Joint
Stipulation in which they agreed, among other things, that the 2009 Agreement – the contract on
4 See Joint Stipulation, ¶ 5. 5 See generally id. 6 See id., ¶ 8.
which Daic and Williamson had based their claim of ownership as to the Patent-in-Suit – will not be considered an enforceable contract (as is more specifically provided in the Joint Stipulation).7
II. Argument & Authorities
A. T-Mobile’s Motion to Dismiss for Lack of Standing Should Be Dismissed as Moot.
T-Mobile has moved to dismiss on the basis of an alleged lack of standing. In doing so, T-Mobile glossed over an important distinction between constitutional and prudential standing, and ignored the crucial facts (1) Calypso had constitutional standing when it filed this suit, and
(2) that each of the co-owners of the Patent-in-Suit is already before the Court.8 Furthermore, since T-Mobile filed its Motion to Dismiss, the Plaintiffs reached an agreement under which Calypso has agreed to dismiss all of its state-law claims plead in this case against Daic and Williamson, while Williamson agreed to be joined as a patent infringement plaintiff against T-Mobile. T-Mobile’s Motion to Dismiss for lack of standing should therefore be dismissed as moot.
There are two components to the doctrine of standing in patent cases: (1) constitutional and (2) prudential.9 Constitutional standing exists where a plaintiff can establish (1) an injuryin-fact, (2) a causal connection between the injury and the conduct complained of, and (3) that the injury is likely to be redressed by a favorable decision.10 In patent cases, constitutional standing “is derived from the Patent Act, which provides: ‘A patentee shall have remedy by civil
7 See id., ¶1. 8 Prior to filing his cross claim against T-Mobile (Docket No. 118), Jimmy Williamson, P.C. was before the Court as a third-party defendant. 9 See Evident Corp. v. Church & Dwight Co., Inc., 399 F.3d 1310, 1313 (Fed. Cir. 2005) (“The doctrine of standing limits federal judicial power and has both constitutional and prudential components.”). 10 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).
action for infringement of his patent.’”11 Furthermore, “[t]he term ‘patentee’ comprises ‘not
only the patentee to whom the patent was issued but also the successors in title to the
patentee.’”12 “Constitutional injury in fact occurs when a party performs at least one prohibited
action with respect to the patented invention that violates these exclusionary rights.”13 At the
time of filing, Calypso was an owner of an undivided, 75% interest in the ‘923 Patent – a fact
that T-Mobile apparently does not dispute. There is therefore no legitimate dispute as to whether
the constitutional standing requirement was and is satisfied here. Further, Daic and
Williamson’s 25% interest is subject to Calypso’s right to control the litigation.14
The prudential component of the standing inquiry relates to the right of defendants to
avoid the possibility of having to defend against multiple suits based on the same alleged
infringement of the same patent.15 According to the Supreme Court:
The presence of the owner of the patent as a party is indispensable, not only to give jurisdiction under the patent laws, but also in most cases to enable the alleged infringer to respond in one action to all claims of infringement for his act, and thus either to defeat all claims in the one action, or by satisfying one adverse decree to bar all subsequent actions.16
Unlike constitutional standing, prudential standing may be remedied by adding necessary
parties.17 T-Mobile’s attempt to claim otherwise – that Calypso needs to prove that all patent
11 Intellectual Prop. Dev., 248 F.3d at 1345 (quoting 35 U.S.C. § 281); see also Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007). 12 Intellectual Prop. Dev., 248 F.3d at 1345 (quoting 35 U.S.C. § 100(d)); see also 35 U.S.C. § 281 (A “patentee” is entitled to bring a “civil action for infringement of his patent.”); 35 U.S.C. § 100(d) (“[P]atentee” includes the patentee to whom the patent was issued and the “successors in title to the patentee.”); Enzo Apa & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998) (the “successor[] in title” is the party holding legal title to the patent); Prima Tek II LLC v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000) (noting the assignee of all substantial rights under the patent becomes the effective patentee and can sue in its own name for infringement). 13 Morrow, 499 F.3d at 1339. 14 See Declaration of Cristian Turrini in Support of Calypso’s Request for Preliminary Injunction (Docket No. 106), filed February 2, 2010; Joint Stipulation, ¶ 8. 15 Schwarz Pharma, Inc. v. Paddock Labs., Inc., 504 F.3d 1371, 1374 (Fed. Cir. 2007). 16 Schwarz Pharma, 504 F.3d 1371, 1374 (Fed. Cir. 2007) (quoting Independent Wireless Telegraph Co. v. Radio Corp. of America, 269 U.S. 459, 46 S. Ct. 166, 70 L. Ed. 357 (1926)). 17“‘[A] plaintiff with constitutional standing may cure prudential standing defects after it files suit.’” Adv. Tech. Incubator, Inc. v. Sharp Corp., No. 2:07-CV-468, 2009 U.S. Dist. LEXIS 69736, *16 (E.D. Tex. August 10, 2009)
owners were parties “from the inception of the suit” – is flatly contrary to case law, and is based on a failure to distinguish between constitutional and prudential standing.18
Here, there are three co-owners of the Patent-in-Suit – Calypso, Daic, and Williamson.19 Each is already a party to this suit,20 and each has filed a claim for infringement against TMobile.21 Furthermore, each has agreed that Calypso will be the party responsible for management of this case against T-Mobile, and Daic and Williamson have already joined in the infringement contentions served by Calypso back in January on T-Mobile.22 Finally, Daic’s and Williamsons’ limited rights to patent-infringement proceeds under the Plaintiffs’ 2008 Agreement does not divest Calypso of prudential standing.23 Thus, there is no question of either constitutional standing or prudential standing, and T-Mobile’s Motion to Dismiss – which hinges
(Love, J.) (quoting VirnetX, Inc. v. Microsoft Corp., No. 6:07-cv-80, 2008 U.S. Dist. LEXIS 94854, at *7 (E.D. Tex. June 3, 2008) (Davis, J.)); Intellectual Property Dev., Inc., 248 F.3d at 1348; IPVenture, Inc. v. Prostar Computer, Inc., 503 F.3d 1324, 1326-27 (Fed. Cir. 2007); Morrow, 499 F.3d 1332, 1344 (Fed. Cir. 2007)); see also Positive Techs., Inc. v. LG Display Co., No. 2:07-CV-67, 2008 U.S. Dist. LEXIS 73087, 2008 WL 4425372, at *3 (E.D. Tex. Sept. 24, 2008) (Ward, J.) (noting that “the Federal Circuit has recognized on many occasions the ability to cure prudential standing defects post filing”)); VirnetX, Inc., 2008 U.S. Dist. LEXIS 94854, at *11-21 (analyzing grantor’s retained equity interest and rights, finding that grantee did not receive all substantial rights, and requiring joinder of grantor pursuant to Rule 19 in light of policy of “avoid[ing] the potential for multiple litigations and multiple recoveries against the same alleged infringer.”); cf. Propat Int’l. Corp. v. Rpost, Inc., 473 F.3d 1187, 1193 (Fed. Cir. 2007) (“[A]n action brought by the exclusive licensee alone may be maintained as long as the licensee joins the patent owner in the course of the litigation.”). 18 The case that T-Mobile relies on deals with constitutional standing, stating that “[l]egal title, which confers standing, must be held at the inception of the lawsuit.” See MHL TEK. LLC v. General Motors Corp., 622 F.Supp. 2d 400, 404 (E.D. Tex. 2009) (Ward, J.) (emphasis added). As explained above, the question of whether a plaintiff holds legal title is a question of constitutional standing, not prudential standing. 19 See Motion to Dismiss at 5. 20 Drago Daic is a named plaintiff. See, e.g., Drago Daic’s Answer to T-Mobile USA, Inc.’s Counterclaims (Docket No. 46), filed September 22, 2009. Williamson has also appeared before the Court (and is represented by the same counsel as Daic). See, e.g., Motion for Protective Order Concerning the Deposition Notice to Jimmy Williamson,
P.C. (Docket No. 94), filed January 18, 2010; Joint Stipulation (Docket No. 111), filed February 8, 2010. Finally, on February 23, 2010, Williamson filed a cross claim for patent infringement against T-Mobile. See Jimmy Williamson, P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010. 21 See Plaintiffs’ Amended Original Complaint and Demand for Jury Trial (Docket No. 14), filed March 16, 2009; Joint Stipulation (Docket No. 111), filed February 8, 2010, ¶ 4; Jimmy Williamson P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010. 22 Counsel for Drago Daic and Jimmy Williamson, P.C. have indicated that each joins in the infringement contentions served on T-Mobile by Calypso in January of this year, and has communicated this fact telephonically to counsel for T-Mobile. The Plaintiffs plan to file an amended set of infringement contentions in which Daic and Williamson join either contemporaneously with this brief or shortly thereafter. 23 Vaupel Textilmaschinen KG v. Meccanica Euro Italia, 944 F.2d 870, 875 (Fed. Cir. 1991); Positive Techs., Inc. v. LG Display Co., No. 2:07-CV-67, 2008 U.S. Dist. LEXIS 73087, 2008 WL 4425372, at *3 (E.D. Tex. Sept. 24, 2008) (Ward, J.).
on the notion that “resolution of [the Plaintiffs’] dispute is a necessary prerequisite to federal
jurisdiction over this action…”24 – should be denied as moot.
B. T-Mobile’s Motion to Dismiss Calypso’s Cross Claims and Third-Party Claims Should Be Denied as Moot.
T-Mobile has also moved the Court to dismiss Calypso’s state law cross claims and third-
party claims against Drago Daic, Jimmy Williamson, P.C., and Kelly D. Stephens. These claims
were properly before the Court, and it was a proper use of the Court’s discretion to exercise
supplemental jurisdiction over them.25 As stated above, however, Calypso has already agreed
that it will dismiss those claims (and will do so once Jimmy Williamson, P.C. has been added as
a patent-infringement plaintiff).26 T-Mobile’s request will therefore be moot once Calypso
moves to dismiss its cross claims and third-party claims.
C. The Court Should Not Impose the Death Penalty Sanction for Calypso’s Alleged “Failure to Prosecute.”
T-Mobile has also moved for dismissal under Rule 41(b) for want of prosecution.
Dismissal under Rule 41(b) for lack of prosecution – which is, by default, with prejudice – “‘is
an extreme sanction that deprives the litigant of the opportunity to pursue his claim.’”27 The
facts here do not merit such a sanction. Calypso is not solely responsible for the delays in this
24 The case that T-Mobile relies on in support of this proposition is one in which the Federal Circuit, acting sua sponte, dismissed a patent infringement claim for lack of jurisdiction, holding that “it is necessary that plaintiff allege facts that demonstrate that he, and not the defendant, owns the patent rights on which the infringement suit is premised.” Jim Arnold Corp. v. Hydrotech Sys., 109 F.3d 1567, 1571-1572 (Fed. Cir. 1997). There the plaintiff had actually alleged that he was not the patent owner, and had, in fact, plead a state-court cause of action for rescission of the deal that had given the defendant the relevant patent. See id. at 1572 (“[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”). The Jim Arnold case does not, as T-Mobile suggests, stand for the general proposition that any non-patent question that might moot the question of infringement deprives a federal court of jurisdiction. See, e.g., Air Prods. & Chems. v. Reichhold Chems., 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.”). 25 See 28 U.S.C. § 1367 (supplemental jurisdiction). 26 See Joint Stipulation (Docket No. 111), filed February 8, 2010, ¶ 5. 27 Callip v. Harris County Child Welfare Dept., 757 F.2d 1513, 1519 (5th Cir. 1985) (quoting McGowan v. Faulkner Concrete Pipe Co., 659 F.2d 554, 556 (5th Cir. 1981)).
case; the delays have not been unreasonable; and the delays are not the result of any untoward or improper conduct by Calypso that amounts to the sort of “contumacious” conduct that merits dismissal under Rule 41(b).
Dismissal under Rule 41(b) is only appropriate where there is evidence of “purposeful delay or contumaciousness …”28 Here there has been no “purposeful delay or contumaciousness.” The Fifth Circuit also considers factors such as whether there was “delay caused by [the] plaintiff himself and not his attorney,” whether there was “actual prejudice to the defendant; or whether there was “delay caused by intentional conduct.”29 Here, at least a portion of the delay was caused by the withdrawal of Calypso’s attorney (as permitted by the Court), there has been no actual prejudice to T-Mobile, and the delay was not caused by intentional conduct.
Even if there were some behavior at issue here, dismissal under Rule 41(b) would not be warranted. The Fifth Circuit requires a district court to “expressly determine[] that lesser sanctions would not prompt diligent prosecution, or … employ[] lesser sanctions that proved to be futile.”30 Thus, even if sanctions were warranted – and they are not – It would be an abuse of the Court’s discretion to proceed immediately to dismissal.31 T-Mobile’s request that this case be dismissed for want of prosecution should therefore be denied.
There has been no purposeful delay here. In fact, most of the delay has been completely out of Calypso’s control. For example, T-Mobile complains that this case has been on file for fourteen months, but fails to note that it filed two unopposed motions to extend the deadline to
28 Long v. Simmons, 77 F.3d 878, 880 (5th Cir. Miss. 1996) (emphasis added). 29 Berry v. CIGNA/RSI-CIGNA, 975 F.2d 1188, 1191 (5th Cir. 1992). 30 CIGNA/RSI-CIGNA, 975 F.2d 1188, 1191 (5th Cir. 1992); see also Long, 77 F.3d at 556. 31 See Long v. Simmons, 77 F.3d 878, 880 (5th Cir. 1996) (finding a dismissal to have been an abuse of discretion in the absence of a record of contumaciousness or the employment of lesser sanctions).
file its answer, and, in fact, did not answer32 for almost five months after Calypso’s original complaint.33 After T-Mobile answered, the Court set the case for a status conference on July 28, 2009,34 and entered its docket control and discovery orders in early August, 2009.35 The first deadline under the Court’s docket control order – for Local P.R. 3-2 and 3-3 disclosures – was not until September 11, 2009.
T-Mobile agreed to this deadline, and even agreed to extend it further, but then counsel for Plaintiffs withdrew due to a conflict.36 The Court stayed the case for a total of 51 days, during which time Calypso struggled to find counsel to replace the attorneys who had represented Calypso on a contingency basis. Before the stay was lifted,37 Co-Plaintiff Drago Daic moved to assign the Patent-in-Suit, which only increased the difficulty of Calypso attempting to obtain replacement counsel, and created additional issues to be resolved – i.e., who owned the Patent-in-Suit, and, on the day after the Court’s 51-day stay ended, moved to substitute Kelly D. Stephens as plaintiff. Calypso, which was finally able to secure counsel in December 200938, moved quickly to try to resolve these questions by securing temporary restraining orders in this Court and in state court.39 On February 8, 2010 – less than a month after Calypso filed its request for a temporary restraining order, and prior to the Court’s scheduled hearing on whether to grant a preliminary injunction – Calypso and Daic resolved the issues, and Daic agreed to undo the purported assignment and cease any further claims on the
32 See T-Mobile USA, Inc.’s Answer and Counterclaims (Docket No. 15) filed April 6, 2009. 33 See Plaintiff’s Original Complaint and Demand for Jury Trial (Docket No. 1) filed November 13, 2008. 34 See Order (Docket No. 22) dated June 22, 2009. 35 See Docket Control Order (Docket No. 34) dated August 13, 2009; Discovery Order (Docket no. 35), dated August 25, 2009. 36 See Plaintiff’s Opposed Motion to Withdraw (Docket No. 40), filed September 18, 2009. 37 See Motion to Substitute a Party and Temporarily Stay the Case (Docket No. 57), filed November 19, 2009, Ex. 2, Patent Assignment (executed on October 17, 2009 by Plaintiff Drago Daic). 38 See Notice of Appearance of Paul Storm (Docket No. 65), filed December 4, 2009; Notice of Appearance of Anthony Miller (Docket No. 66), filed December 4, 2009 39 See Calypso’s Emergency Motion for Clarification of Temporary Restraining Order (Docket No. 98), filed January 20, 2010.
Patent-in-Suit under the 2009 Agreement (as is more specifically provided in the Joint Stipulation).40 Because this case was stayed for 51 days, it is not clear which deadlines have passed. The original deadline for Calypso’s infringement contentions was in September – before the stay
– and the deadline for T-Mobile’s invalidity contentions was December. Both have obviously passed (Calypso has since served infringement contentions), but per the Court’s oral instruction during the hearing on Calypso’s attorney’s Motion to Withdraw, the Parties have conferred and agreed to a revised schedule under which neither deadline has passed, thereby providing a remedy for the delay for which T-Mobile complains.41
This is hardly a story that can be characterized as a pattern of “purposeful delay or contumaciousness …”42 Furthermore, setting aside all the flurry of activity in the last few months, a delay of just about three months (from the ending of the Court’s 51-day stay), is not the sort of delay that justifies a dismissal under Rule 41(b).43 “The word ‘contumacious’ is defined as ‘obstinately disobedient or insubordinate: recalcitrant’”44 Losing one’s counsel to conflict and then having to fight off a claim of ownership of the Patent-in-Suit does not really qualify as “behavior,” let alone behavior that is “obstinately disobedient” or “recalcitrant.” Finally, because the only deadlines that have been missed are Plaintiff’s deadline for filing infringement contentions, this case is not the sort of case where courts typically dismiss claims
40 See Joint Stipulation (Docket No. 111), filed February 8, 2010. 41 On February 22, 2010, the counsel for all parties had agreed on a Joint Motion to Extend Schedule and Reset Markman Hearing and Trial Dates and to Permit the Parties to Renegotiate the Docket Control and Discovery Orders (the “New Proposed Schedule”) extending all dates, including those for Plaintiffs’ Local P.R. 3-2 and 3-3 disclosures. Anne Champion, counsel for T-Mobile, indicated that she would be filing that document on February 23, 2010. 42 Simmons, 77 F.3d at 880 (emphasis added). 43 See, e.g., Morris v. Ocean Systems, Inc., 730 F.2d 248, 252 (5th Cir. 1984) (“The facts before us simply do not exhibit a clear record of either delay or contumacious conduct. Only eight months elapsed from the date of the first status conference on Morris’s suit to the date of its dismissal. … “). 44 Gist v. Lugo, 165 F.R.D. 474, 478 (E.D. Tex. 1996).
under Rule 41(b).45 T-Mobile’s request for a dismissal under Rule 41(b) should therefore be
denied.
D. T-Mobile has moved, in the alternative, to stay this action until Plaintiffs can demonstrate standing and speak with one voice. Each of these conditions is satisfied,46 so again, T-Mobile’s request is moot.
T-Mobile has also requested alternative relief in the form of a stay “until Plaintiffs can
demonstrate standing and speak with one voice.” As explained above, there is no legitimate
dispute that Calypso had constitutional standing at the time of the filing of this suit, and
prudential standing has been remedied. Each of the three co-owners of the Patent-in-Suit is
already a party to this suit,47 and each has filed a claim for infringement against T-Mobile.48
Furthermore, each has agreed that Calypso is the party responsible for management of this case
against T-Mobile, and Daic and Williamson have already joined in the infringement contentions
served by Calypso back in January on T-Mobile.49 Because Plaintiffs can demonstrate standing,
and are speaking through Calypso with one voice, T-Mobile’s request for a stay should be
dismissed as moot.
45 See, e.g., CIGNA/RSI-CIGNA, 975 F.2d 1188, 1192 (5th Cir. Tex. 1992) (“[W]here a plaintiff has failed only to comply with a few court orders or rules, we have held that the district court abused its discretion in dismissing the suit with prejudice.”); Morris v. Ocean Systems, 730 F.2d 248, 252 (5th Cir.1984) (no clear record of delay or contumacious conduct where counsel failed twice to comply with court-imposed deadlines requiring counsel to notify court of plaintiff’s rejection of settlement offers); Burden v. Yates, 644 F.2d 503, 504-05 (5th Cir.1981) (no clear record of delay or contumacious conduct where counsel failed to file three documents on time); McGowan, 659 F.2d at 556-58 (no clear record of delay or contumacious conduct where counsel failed to comply with scheduling and other pretrial orders); Silas v. Sears, Roebuck & Co., 586 F.2d 382, 384-85 (5th Cir.1978) (no clear record of delay or contumacious conduct where counsel failed to answer interrogatories, failed to confer with defendant on pretrial order, and failed to appear at a pretrial conference). 46 See generally Joint Stipulation (Docket No. 111), filed February 8, 2010. 47 Drago Daic is a named plaintiff. See, e.g., Drago Daic’s Answer to T-Mobile USA, Inc.’s Counterclaims (Docket No. 46), filed September 22, 2009. Williamson has also appeared before the Court (and is represented by the same counsel as Daic) and has filed a cross claim for patent infringement against T-Mobile. See Jimmy Williamson P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010. 48 See Plaintiffs’ Amended Original Complaint and Demand for Jury Trial (Docket No. 14), filed March 16, 2009; Joint Stipulation (Docket No. 111), filed February 8, 2010, ¶ 4; see also Jimmy Williamson P.C.’s Answer and Cross Claim (Docket No. 118), filed February 23, 2010.49 Counsel for Drago Daic and Jimmy Williamson, P.C. have indicated that each joins in the infringement contentions served on T-Mobile by Calypso in January of this year, and has communicated this fact telephonically to counsel for T-Mobile.
III. Conclusion & Prayer
For the foregoing reasons, Plaintiffs respectfully request that the Court deny T-Mobile’s Motion to Dismiss and grant Plaintiffs any and all further relief to which they may be entitled.
Dated: February 23, 2010 Respectfully submitted,
/s/ Anthony Miller
Paul V. Storm (lead counsel)
paulstorm@stormllp.com
State Bar No. 19325350
Anthony P. Miller
amiller@stormllp.com
State Bar No. 24041484
Michael Leach
mleach@stormllp.com
State Bar No. 24065598
Storm LLP
901 Main Street, Suite 7100
Phone: 214-347-4700
Fax: 214-347-4799
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
(713) 355-4200 (Telephone)
(713) 355-9689 (Facsimile)
Email: gmatthews@matthewsfirm.com
tjohnson@matthewsfirm.com
mjuren@matthewsfirm.com
ATTORNEYS FOR PLAINTIFFS
JIMMY WILLIAMSON, P.C.
AND DRAGO DAIC
CERTIFICATE OF SERVICE
I hereby certify that on February 23, 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
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