Vertical Computer Systems Inc (fka VCSY)

[lbman]

Thank You JonnyQwan: Raging Bull #335180
Fresh PACER out of SF.....


Interwoven should NEVER have medded with Vertical!!!!





September 28, 2012
BY ELECTRONIC FILING
Honorable Joseph C. Spero
United States Magistrate Judge
United States Courthouse
450 Golden Gate Avenue
Courtroom G, 15th Floor
San Francisco, CA 94102
Re: Interwoven, Inc. v. Vertical Computer Systems, Inc.
Case No. 3:10-cv-04645-RS (N.D. Cal.)
Joint Letter Regarding Vertical’s Amended Infringement Contentions
Dear Judge Spero:
INTERWOVEN’S INTRODUCTION
This litigation has advanced well-past the initial stages, with the close of fact discovery looming in
less than a month, on October 26, 2012. The initial complaint was filed almost two years ago, on
October 14, 2010. Judge Seeborg issued a Markman order construing the important terms of the
then-asserted claims on December 30, 2011. Reexaminations of the two Patents-In-Suit were filed on
January 1, 2012 and March 5, 2012. To date, Interwoven has produced more than 138,000 pages of
documents, including all of the technical documentation related to the accused product. Interwoven’s
source code has been available for inspection since July 11, 2012.1 The parties have identified
30(b)(6) deponents, prepared witnesses, and scheduled multiple party and third-party depositions for
the coming weeks.
Under the Northern District of California’s Patent Local Rules, amendments to infringement
contentions are allowed only with good cause to prevent unfair ambush. See Patent L.R. 3-6
(emphasis added). This is especially important at this late stage in the litigation. In this case,
Vertical’s amendments to its infringement contentions lack good cause, are baseless, improper,
unwarranted, and should accordingly, be stricken.
1 Despite the source code being available since July, Vertical has not inspected it.
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Vertical’s Amended Infringement Contentions lack good cause and must be stricken for three
reasons. First, they include new claims drafted during the reexamination of the Patents-In-Suit that
have not been allowed and have not yet issued. Second, they include seven additional claims from
the Patents-in-Suit that were not part of the Court’s claim construction process as governed by Patent
L.R. 3-1 and 4-1 to 4-6. Finally, Vertical’s failure to cite to any documents, source code, or witness
testimony from this litigation demonstrates that the amendments were not made based on good cause
as they were not based on the grounds for amendment Vertical asserted before this Court, or for any
reason permitted by Patent L.R. 3-6.
The sole disputed issue addressed in this letter is whether Vertical’s Amended Infringement
Contentions should be stricken.2 Such a dispute falls squarely within the realm of discovery, and is
entirely appropriate for resolution by Judge Spero, to whom all discovery disputes in this case have
been referred. See FusionArc, Inc. v. Solidus Networks, Inc., Case No. 6-cv-06760-RMW-RS, 2007
WL 1052900 (N.D. Cal. April 5, 2007), Shared Memory Graphics LLC v. Apple, Inc., 812 F. Supp.
2d 1022 (N.D. Cal. 2010) (finding disputes related to patent infringement contentions under Patent
L.R. 3-1 are properly considered discovery disputes). Whether this dispute is ultimately decided by
either Judge Spero or Judge Seeborg, Interwoven would be happy to provide any additional briefing,
or participate in oral argument, if it would be helpful to the Court.
Interwoven also proposes the following compromise position, as required by the Court’s Standing
Order. Should the Court allow Vertical to include additional claims, or claims yet to be confirmed by
the PTO, Interwoven proposes a stay of this litigation pending the completion of the reexaminations,
which Vertical has represented to be imminent. Upon the completion of the reexamination,
Interwoven request that the Court revisit claim construction to include a supplemental Markman
hearing, at which time Vertical should be able to present a clear and unchanging set of infringement
allegations against which Interwoven can adequately defend itself.
VERTICAL’S INTRODUCTION
Defendant Vertical Computer Systems, Inc. (“Vertical”) opposes Plaintiff Interwoven, Inc.’s
(“Interwoven”) motion to strike Vertical’s Amended Infringement Contentions. Interwoven agreed
to allow Vertical to amend the infringement contentions and Vertical agreed to allow Interwoven to
amend its invalidity contentions. The parties did not place any limitation on the scope of the
amendments. The grounds that the parties presented to the Court for the amendments were the
Court’s claim construction order and the need for further discovery relating to the accused system.
The parties filed a proposed stipulation to allow the amendments. The Court entered it.
Interwoven now seeks to undo the agreement between the parties and the entered stipulation,
primarily because the reexaminations that it filed against the Patents-In-Suit have not accomplished
its objectives. It seeks to severely prejudice Vertical’s case and eliminate legitimate claims in the
context of a summary discovery procedure. Interwoven also seeks (without briefing and a hearing)
2 The parties met and conferred in person in Palo Alto, CA on Friday, September 21, 2012, as
required by Judge Spero’s standing order, but were unable to reach an agreement on this matter.
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alternative relief which would reverse the District Court's order denying a previous Interwoven
motion to stay the proceedings and which would open claim construction without a legitimate reason.
Thus, for the reasons outlined below, Vertical respectfully requests that the Magistrate deny this
motion and send this issue back to Judge Seeborg for formal briefing and hearing.
Interwoven filed this action on October 14, 2010, against Vertical for declaratory judgment of
invalidity, unenforceability, and non-infringement of Vertical’s Patent Nos. 6,826,744 (“the ‘744
patent”) and 7,716,629 (“the ‘629 patent”). (Dkt. No. 1.) Vertical filed its answer with a
counterclaim for patent infringement on February 22, 2011 seeking damages in the form of lost
profits and a permanent injunction against Interwoven. (Dkt. No. 45.) The parties fully briefed claim
construction, and on December 30, 2011, the Court issued its Claim Construction Order. (Dkt. No.
83).
Following that Order, on January 6, 2012, Interwoven filed requests for ex parte reexaminations of
both the ‘629 and ‘744 Patents with the Patent Office. Interwoven also filed a motion to stay this
litigation pending reexamination on January 8, 2012 (Dkt. No. 86), which the Court subsequently
denied on March 8, 2012, noting,“[t]hat Interwoven waited until after receiving an unfavorable ruling
to request reexamination lends credence to Vertical’s contention that the current motion is simply a
delaying strategy.” (Dkt. No. 102 at 4).
On July 24, 2012, the parties filed a Stipulated Request for Order Allowing Amendment of
Infringement and Invalidity Contentions and Clarifying Timing of Expert Testimony (Dkt. No. 122).
The parties agreed such amended contentions were necessary in light of the need for further
discovery and the Court’s Claim Construction Order. The Court granted the Stipulation the same
day, in no way limiting the amendments made to the Initial Contentions. (Dkt. No. 123). Vertical
attempted to depose Interwoven regarding the technical issues involved in the infringement
contentions without success. It also did not suspect Interwoven’s source code because it could not
identify and retain an expert. It nevertheless amended the infringement contentions with the better
understanding that discovery allowed. It also made clear to Interwoven that further amendments may
be necessary depending on the outcome of the reexaminations.
On August 31, 2012 and pursuant to the Court’s Order, Vertical served its Amended Infringement
Contention. It added claims 16-17, 22, 28-39, 43-44, and 53 of the ‘744 Patent. Further, in the
interest of judicial economy and preserving its claims against Interwoven, Vertical asserted claims
56-57, which it added the ‘744 Patent during reexamination. The Patent Office indicated these claims
are allowable in its September 13, 2012 Ex Parte Reexamination Advisory Action. (Defendant’s Exh.
A).
1. Vertical’s Proposed Amendments with Respect to Unissued Draft Claims of the ’744
Patent (Proposed in Reexamination)
Interwoven’s Statement: In this District, the purpose of infringement contentions is to “require the
party claiming infringement ‘to crystallize its theories of the case early in the litigation and to adhere
to those theories once disclosed.’” Id. (quoting Bender v. Advanced Micro Devices, Inc., 2010 WL
363341, at *1 (N.D. Cal. Feb. 1, 2010); see also LG Elecs. Inc. v. Q-Lity Computer Inc., 211 F.R.D.
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360, 367 (N.D. Cal. 2002) (summarizing the general philosophy of preventing the ‘shifting sands’
approach to claim construction). Despite the Patent Local Rules and the clear case law on point in
this District, Vertical’s late stage amendments ignore this directive. Vertical has further asserted that
it intends to amend its infringement contentions again once the reexaminations of the Patents-In-Suit
are complete.
In its amended infringement contentions, received mere weeks before the close of fact discovery
Vertical has alleged infringement of draft claims proposed in the ongoing reexamination of the ’744
Patent. Vertical has added newly-drafted (not yet issued) claims 56 and 57, which were submitted to
the Patent Office on August 21, 2012 in response to the Final Rejection issued by the Patent Office
on June 21, 2012. These claims have not yet issued, and thus, they are not ripe for adjudication in
these proceedings. See 37 C.F.R. 1.530 (stating that “[a]lthough amendments will be entered for
purposes of examination, the amendments are not legally effective until the reexamination certificate
is issued and published”) (emphasis added).
For the simple reason that these draft claims have yet to be found patentable by the Patent Office,
they are inappropriate for inclusion in Vertical’s Amended Infringement Contentions. Vertical
cannot assert that Interwoven’s products infringe patent claims that do not exist and have not issued
in a final form.3 It is impossible for Interwoven to defend itself against these allegations.
Vertical’s Statement:
A. Vertical will be Severely Prejudiced if its Amended Infringement Contentions are
Stricken Because Res Judicata Bars Vertical from Bringing a Subsequent Action against
Interwoven on Claims 56 and 57 of the ‘744 Patent
In the interest of judicial economy and preserving its claims against Interwoven, Vertical asserted
newly added claims 56-57 of the ‘744 Patent, which the Patent Office explained were allowable in its
September 13, 2012 Ex Parte Reexamination Advisory Action. (Defendant’s Exh. A at page 3). The
Advisory Action indicates that proposed new claims 54-57 are allowable “if submitted in a separate,
timely filed amendment canceling the non-allowable claim(s).” Vertical is required to assert newly
added claims 56 and 57 in this action, otherwise res judicata will bar Vertical from bringing the
claims against Interwoven in a separate, subsequent action.
In Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., the Federal Circuit agreed with the District Court
that a patentee is barred from bringing a second, later lawsuit against an alleged infringer based on
new versions of claims that were part of the patent-in-suit prior to its reexamination. 672 F.3d 1335,
1341 (Fed. Cir. 2012). Amended and new claims of the reexamined patent-in-suit did not create new
causes of action for the patentee, separate from the causes of action created by the original patent. Id.
at 1341. The court provided that the changes made to the amended claim in reexamination were
insubstantial, and the wholly new claim contained only an insignificant change that “at most, narrows
3 The Patent Office has said that the new claims could be allowed if Vertical cancels the other,
rejected claims (which they have not done).
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the scope of the claim in a way that does not affect the product [] at issue.” Id. Here, Vertical has
taken the previous independent claims and added the Court’s claim construction.
Claims 56 and 57 read as follows:
56. A method for generating a computer application on a host system in an
arbitrary object framework that separates a content of said computer
application, a form of said computer application and a functionality of said
computer application, said method comprising:
creating arbitrary objects with corresponding arbitrary names of various
object types for generating said content of said computer application, said form
of said computer application, and said functionality of said computer
application, said arbitrary objects being objects that can be created
independently by individual preference, that are interchangeable, and that may
be, but need not be, accessed solely by name, the object being an entity that
can have form, content, or functionality or any combination of form, content
and functionality;
managing said arbitrary objects in an object library; and
deploying said arbitrary objects from said object library into a design
framework to create said computer application.
57. A method for generating a web site on a host system in an arbitrary object
framework that separates a content of said web site, a form of said web site,
and a functionality of said web site, said method comprising:
creating arbitrary objects with corresponding arbitrary names of various
object types for generating said content of said web site, said form of said web
site, and said functionality of said web site, said arbitrary objects being objects
that can be created independently by individual preference, that are
interchangeable, and that may be, but need not be, accessed solely by name,
the object being an entity that can have form, content, or functionality or any
combination of form, content and functionality;
managing said arbitrary objects in an object library; and
deploying said arbitrary objects from said object library to a container
page to create said web site.
Claims 56 and 57 differ only from the previous independent claims 1 and 26 in that they adopt
additional language from the Court’s Claim Construction Order, indicated by underscore above.
Specifically, the additional language includes the Court’s construction of the term “arbitrary
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object[s].” (Dkt No. 83 at 17-18.) These changes do not substantially change the claims at all but
merely clarify the scope of the claims using language provided by the Court. Thus, it is indisputable
that res judicata would bar Vertical from asserting claims 56 and 57 against Interwoven in a separate,
later lawsuit.
Further, the Patent Office’s Advisory Opinion has clearly indicated that claims 56 and 57 are
allowable, and it is therefore immaterial that a Reexamination Certificate has not yet issued. Indeed,
courts in this District have allowed parties to amend infringement contentions to include claims in
reexamination prior to issuance of a certificate. See Acer, Inc. v. Tech. Props., 2011 U.S. Dist.
LEXIS 55774, at *4, 15 (N.D. Cal. May 13, 2011) (granting patentees motion to amend its
infringement contentions to replace claims amended or cancelled during reexamination after the
USPTO issued Notice of Intent to Issue Reexamination Certificate but prior to issuance of the
certificate). Moreover, even where leave to amend contentions has not already been granted, courts
have regularly allowed amendment of infringement contentions following reexamination. See, e.g.,
id; Zilog, Inc. v. Quicklogic Corp., 2006 U.S. Dist. LEXIS 12844, at **3-5 (N.D. Cal. Mar. 6, 2006).
B. Vertical’s Inclusion of Claims 56 and 57 is in the Interest of Judicial Economy
Judicial efficiency supports inclusion of claims 56 and 57 in Vertical’s Amended Infringement
Contentions. If the Court strikes Vertical’s Amended Infringement Contentions, Vertical will be
required to later move for leave to amend after the Patent Office issues a Reexamination Certificate
on claims 56 and 57 in order to preserve its claims against Interwoven. Rather than burden the Court
with yet more motion practice, the Court should allow Vertical’s infringement contentions against
Interwoven with respect to claims 56 and 57 at this juncture in the litigation. See, e.g., Acer, Inc.,
2011 U.S. Dist. LEXIS 55774, at *15 (holding that “[patentee’s] right to assert new claims [after
reexamination] and the Court’s interest in resolving the parties’ disputes as comprehensively as is
possible” outweighed any prejudice to accused infringer caused by additional discovery or prior art
research).
2. Vertical’s Proposed Assertions of Additional Existing Claims of the ’744 Patent
Interwoven’s Statement: Vertical has also asserted infringement of additional, existing claims 16,
17, 22, 38, 39, 43, and 44 of the ’744 Patent, which had not previously been asserted by Vertical in
this case. Vertical’s introduction of existing claims for the first time at this stage of litigation
contravenes both the Patent Local Rules and the spirit in which they were drafted, not to mention the
case law of this Court that prohibits just such a “shifting sands” approach to patent litigation. See LG
Elecs., 211 F.R.D. at 367. Vertical never mentioned these claims to Interwoven or to the Court at any
point prior to August 31, 2012. The parties did not consider these claims when discussing terms in
need of claim construction, and the Court did not have any opportunity to consider any potentially
disputed claim terms during the Markman hearing on December 14, 2012, or in its December 30,
2012 Markman order.
The substance of these claims was well-known to Vertical before this litigation. Further, because
Vertical’s amended infringement contentions are not based on discovery revealed for the first time
here, such inclusion of new claims at this point is entirely groundless. As explained by this Court, the
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Patent Local Rules regarding infringement contentions are intended to provide “structure to discovery
and enable the parties to move efficiently toward claim construction and the eventual resolution of
their dispute.” Shared Memory Graphics LLC v. Apple, Inc., 812 F. Supp. 2d 1022, 1024 (N.D. Cal.
2010). Vertical’s attempt to bring in additional claims at this stage of litigation defies at least the
articulated purpose of the infringement contentions to assist in structuring the claim construction
process—long since completed.
Neither Interwoven nor the Court has had an adequate chance to consider these claims. The addition
of these claims is entirely improper and severely prejudicial to Interwoven. Interwoven therefore
requests that the Court strike Vertical’s infringement contentions with respect to the untimely
addition of these existing claims 16, 17, 22, 38, 39, 43, and 44 of the ’744 Patent.
Vertical’s Statement: As Interwoven acknowledged in the parties’ Stipulated Request for Order
Allowing Amendment of Infringement and Invalidity Contentions and Clarifying Timing of Expert
Testimony (Dkt. No. 122), leave to amend was necessary in light of the Court’s Claim Construction
Order, which was entered on December 30, 2011. Vertical agreed and amended its Contentions
accordingly. Indeed, the Patent Local Rules provide that “[a] claim construction by the Court
different from that proposed by the party seeking amendment” constitutes a showing of good cause to
amend. N.D. Cal. P.L.R. 3-6. Further, other Courts have granted parties leave to amend their
infringement contentions after the court has held a claim construction hearing or entered a claim
construction order. Syntrix Biosystems, Inc. v. Illumina, Inc., 2012 U.S. Dist. LEXIS 102944, at **4-
5 (W.D. Wash. July 24, 2012).
Additionally, after further discovery, Vertical concluded that additional claims could be asserted
against the accused system. Courts have found new information yielded during discovery enough to
grant a patentee leave to amend its contentions, even where there is no stipulation or order already on
file. See, e.g.,Vasudevan Software, Inc. v. Int’l Bus. Machines Corp., 2011 U.S. Dist. LEXIS 33132
(N.D. Cal. Feb. 18, 2011); Life Techs. Corp. v. Biosearch Techs., Inc., 2012 U.S. Dist. LEXIS 69976,
at **6-8 (S.D. Cal. May 18, 2012). Because of the Court’s Claim Construction Order and further
discovery relating to the accused system, the addition of existing claims of the ‘744 patent was
necessary.
Further, it would be improper to limit Vertical to its Initial Infringement Contentions because, as
provided above, Vertical would be barred from asserting these claims in a later action. In light of the
Court’s order granting the Parties’ stipulation to amend their Infringement and Invalidity
Contentions, the Court should not strike any additional existing claims of the ‘744 patent.
3. Vertical’s Remaining Proposed Amendments to Already-Asserted Claims of the ’744
Patent
Interwoven’s Statement: Vertical has proposed amendments to already-asserted claims of the ’744
Patent based on information available to it well before the filing of this action, and contain absolutely
no new material despite the pendency of this action (and ongoing discovery) since October 2010.
Interwoven has produced more than 138,000 pages of documents, has made the source code for
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TeamSite available for many months, and yet Vertical has declined to use any of this information in
its amended contentions.
Vertical thus lacks good cause to make amendments to the remaining, already-asserted claims of the
’744 Patent, in view of the Patent Local Rules and the parties’ Stipulated Request for Order Allowing
Amendment of Infringement and Invalidity Contentions and Clarifying Timing of Expert Testimony,
submitted July 24, 2012. Dkt. No. 122 (order granted Dkt. No. 123).
The amendments proposed in Vertical’s Amended Infringement Contentions are all based on the
exact same publicly available source of information upon which Vertical relied to put forth its
original Infringement Contentions on May 26, 2011. In Vertical’s response to Interrogatory No. 3,
Vertical even admitted that it was aware of this same information source, at the latest, by some point
within the time period between March 17, 2009 and August 12, 2010. Def.’s Response to
Interrogatories, pp. 6-7, Sept. 12, 2011.
As discussed above, a patentee “is required to include in its infringement contentions all facts known
to it, including those discovered in its pre-filing inquiry.” Shared Memory Graphics, 812 F. Supp. 2d
at 1024. The infringement contentions are intended to “require the party claiming infringement ‘to
crystallize its theories of the case early in the litigation and to adhere to those theories once
disclosed.’” Id. (quoting Bender v. Advanced Micro Devices, Inc., 2010 WL 363341, at *1 (N.D.
Cal. Feb. 1, 2010); see also LG Elecs. Inc., 211 F.R.D. at 367 (summarizing the general philosophy
behind amending claim charts as being “decidedly conservative, and designed to prevent the ‘shifting
sands’ approach to claim construction”). By relying on the same source of information for these
amendments and failing to include even a single citation to the voluminous evidence produced and
available to Vertical in this litigation, Vertical either neglected to disclose everything known to it in
its original infringement contentions, or did not conduct a diligent investigation of what it already had
available. By proposing these amendments, Vertical has failed to crystallize its theories of the case
or to adhere to those theories.
Vertical’s decision not to rely on other information sources could not have been driven by necessity;
vast quantities of other information have been available to Vertical. During the discovery process,
Interwoven has produced more than 138,000 pages of highly confidential documents, including all
technical documents for TeamSite in Interwoven’s possession. Interwoven has also made its source
code available for inspection since the July 11, 2012 entry of a protective order in this case.
Moreover, above and beyond its obligations in this case, Interwoven made available a copy of the
TeamSite software for inspection starting August 20, 2012. Finally, Interwoven has made a party
witness available for deposition on the technical topics listed in Vertical’s Rule 30(b)(6) notice
served on Interwoven. Vertical has also been aware of the availability of non-party witnesses
potentially possessing technical knowledge.
Vertical elected to ignore these other information sources and go back to the same publicly available
information, on which Vertical had already relied, to amend its infringement contentions. Vertical
did not cite to a single page of Interwoven’s production. Vertical did not review Interwoven’s source
code prior to seeking amendment of its infringement contentions. Vertical did not review the
TeamSite software until after seeking amendment of its infringement contentions. And finally,
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Vertical chose not to take any depositions of witnesses possessing technical information about the
accused products. These actions fly in the face of the Federal Circuit’s guidance on the Northern
District of California’s Patent Local Rules regarding contentions—that the rules “seek to balance the
right to develop new information in discovery with the need for certainty as to the legal theories.”
O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1366 (Fed. Cir. 2006) (emphasis
added). Vertical has upset this balance by providing no certainty as to its legal theories and by failing
to develop any new information in discovery.
Moreover, in the July 24, 2012 stipulation to permit amendment of contentions, Vertical itself stated
that “amendment is proper because it has not yet reviewed certain highly confidential Interwoven
technical information, including the TeamSite source code, or taken the deposition of any technical
witnesses for Interwoven.” Dkt. No. 122, at 2. As stated above, Vertical has neither inspected source
code nor deposed technical witnesses, and Vertical’s amendments do not refer to any highly
confidential Interwoven technical information, whether or not Vertical has conducted such review.
Therefore, Vertical’s stated bases for amendment either never occurred or are irrelevant to its
proposed amendments.
Vertical’s proposed amendments were not made in good faith, are inconsistent with the principles
guiding patent litigation as set forth in the Patent Local Rules, and contradict Vertical’s own positions
regarding the propriety of amendment. Accordingly, Interwoven requests that the Court strike
Vertical’s infringement contentions with respect to the amendments proposed for the already-asserted
claims of the ’744 Patent.
Vertical’s Statement: Again, Interwoven reads limitations into the Court’s Order granting the parties
leave to amend their respective contentions. The Court did not impose restrictions on the
amendments nor did the parties agree to any such limitations. Vertical amended its contentions with
respect to the already-asserted claims of the ‘744 patent to clarify and add meat to its infringement
position after further discovery and claim construction. Interwoven has not articulated a basis to
prevent Vertical from adding new material to its Amended Infringement Contentions, nor does one
exist.
4. Further Issues Presented By Vertical
Vertical’s Statement:
A. The Issues are not Properly Before the Magistrate Because They are not Discovery
Disputes
The present dispute is not properly before the Magistrate Judge, but rather is a matter that should be
heard by the District Court Judge. The Court’s Order of Reference to Magistrate Judge provides that
“any further discovery disputes in this action [are referred to] a randomly assigned Magistrate Judge
for resolution.” (Dkt. No. 106). The present dispute is outside the scope of referral as it is not a
discovery dispute. Rather, the issue at hand concerns the Patent Office’s Reexamination of the
patents-in-suit and issues of claim construction, including whether the reissued claims of the ‘744
patent are substantially the same as the original claims. Further, this dispute also requires a
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potentially dispositive ruling because, as presented above, Vertical will be barred by res judicata from
relitigating any reissued claims against Interwoven in a separate, subsequent infringement action. See
36 U.S.C. (b)(1)(a) (providing that a judge may not designate a magistrate judge to hear and
determine a matter that includes an involuntary dismissal of an action). Therefore, this issue is not
properly in front of Magistrate Spero, and this matter should be referred back to Judge Seeborg.
B. The Issues Presented Require Full Briefing
The parties met and conferred on these issues on September 21, 2012, and Vertical did not receive
even a rough outline from Interwoven until yesterday afternoon. Interwoven had the benefit of
reviewing and responding to Vertical’s arguments prior to filing this letter. Vertical sent Interwoven
its inserts for this letter at 10:30 am PDT under the assumption that Interwoven would merely insert
its arguments into the letter and shortly thereafter the parties would agree to file the letter with the
Court. Instead, Interwoven waited almost five hours after receiving Vertical’s draft before revealing
its arguments to Vertical, which Vertical presumes took into consideration Vertical’s position. At no
point was Vertical given the opportunity to consider Interwoven’s arguments, let alone respond to
them. This is particularly problematic because Interwoven is the party seeking relief from the Court.
The issues presented, especially those implicating res judicata, are so critical that further briefing is
absolutely necessary to allow Vertical the opportunity to consider and specifically respond to
Interwoven’s arguments. Thus, Vertical respectfully requests a formal briefing schedule.
Interwoven also proposes alternative relief in the form of a stay and a supplemental Markman
hearing. Vertical further opposes the extraordinary relief which Interwoven seeks without briefing
and without a hearing. This request for alternative relief is essentially a request to reverse the District
Court's denial of the previous motion to stay. And, for the reasons stated above (relating to the nature
of Vertical's claim amendments in the Patent Office), a supplemental Markman hearing is completely
unnecessary. Interwoven's request is yet another attempt to delay these proceedings. The Patent
Office’s Reexamination of the patents-in-suit is nearly complete and this case should continue as
scheduled. The Patent Office issued a Notice of Intent to Issue Reexamination Certificate on
September 18, 2012. (See Defendant’s Exh. B). Vertical suspects that the Patent Office will be
issuing a Reexamination Certificate shortly. The Patent Office’s issued an Ex Parte Reexamination
Advisory Action on September 13. (Defendant’s Exh. A). This Reexam is close to completion as
evidenced by the Patent Office’s inidcation of the rejected and allowable claims. (See Id. at page 3).
Principal counsel for Vertical will be out of the country between October 3 and October 13, 2012. A
formal briefing schedule or referral back to Judge Seeborg will allow participation of principal
counsel for Vertical who will be out of communication for a majority of that time.
CONCLUSION
If the Court so requests, the parties are happy to provide additional briefing on this issue, and are
available for oral argument if it would be helpful to the Court. The parties and their counsel thank the
Court for its assistance in this matter.
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Respectfully submitted,
/s/ Bijal V. Vakil
Bijal V. Vakil
White & Case LLP
3000 El Camino Real, Bldg. 5, 9th Floor
Palo Alto, CA 94306
/s/ Thomas Flynn
Thomas Flynn
White & Case LLP
3000 El Camino Real, Bldg. 5, 9th Floor
Palo Alto, CA 94306
Attorneys for Interwoven, Inc.
/s/ Vasilios D Dossas
Vasilios D. Dossas
Niro, Haller & Niro
181 W. Madison Street Ste. 4600
Chicago, IL 60602
Attorneys for Vertical Computer Systems, Inc.
ATTESTATION CLAUSE
I, Bijal V. Vakil, hereby attest in accordance with General Order No. 45.X.B that Vasilios D.
Dossas, counsel for Vertical Computer Systems, Inc., has provided his concurrence with the
electronic filing of the foregoing letter brief.
Dated: September 28, 2012
/s/ Bijal V. Vakil
Bijal V. Vakil