Vertical Computer Systems Inc (fka VCSY)

[lbman]

New Pacer out of SF.....


Sounds like a settlement is not likely. Vertical must be asking for "Big $$$$$"!!!!!!


BIJAL V. VAKIL (Cal. Bar No. 192878)
[e-mail]
NOAH A. BRUMFIELD (Cal. Bar No. 203653)
[e-mail]
JENNIFER P. GOSSAIN (Cal. Bar No. 254174)
[e-mail]
THOMAS C. FLYNN (Cal. Bar No. 257945)
[e-mail]
WHITE & CASE LLP
5 Palo Alto Square, 9th Floor
3000 El Camino Real
Palo Alto, CA 94306
Telephone: [phone]
Facsimile: 650.213.8158
Attorneys for Plaintiff and Counterclaim Defendant
Interwoven, Inc.
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
INTERWOVEN, INC.,
Plaintiff,
vs.
VERTICAL COMPUTER SYSTEMS, INC.,
Defendant.

No. 3:10-cv-4645-RS
AMENDED SUPPLEMENTAL JOINT
CASE MANAGEMENT STATEMENT
Pursuant to Federal Rule of Civil Procedure 26(f) and Northern District of California Local
Rule 16-9, Plaintiff Interwoven, Inc. (“Interwoven”) and Defendant Vertical Computer Systems,
Inc. (“Vertical”) submit the following Amended Supplemental Joint Case Management Statement.
The parties conducted teleconferences and exchanged proposed drafts during the week of October
29, 2012. Thomas Flynn participated in these conferences on behalf of Interwoven. Vasilios
Dossas participated on behalf of Vertical.
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2 JOINT CASE MANAGEMENT STATEMENT
CASE NO. 10-CV-4645-RS
1. Jurisdiction and Service
No supplement needed.
2. Facts
No supplement needed.
3. Legal Issues
Plaintiff’s Supplemental Statement: The principal legal issues in this case are the
invalidity and unenforceability of the Patents-In-Suit and the non-infringement of the
Patents-In-Suit by Interwoven’s products. Interwoven filed this declaratory judgment suit against
Vertical on October 14, 2010. Interwoven contends that the Patents-In-Suit are invalid under 35
U.S.C. §§ 101, 102, 103, and/or 112, and unenforceable as a result of inequitable conduct before the
United States Patent and Trademark Office (“PTO”). Vertical then filed a counterclaim for patent
infringement. Vertical purports to be the owner of the Patents-In-Suit and has counterclaimed that
Interwoven infringes the Patents-In-Suit. Interwoven denies Vertical’s allegations of infringement
and contends Vertical is not entitled to damages for patent infringement under either a reasonable
royalty, lost profits, or any other damages theory, and that Vertical is not entitled to any other form
of relief, including injunctive relief. Interwoven asserts this is an exceptional case under 35 U.S.C.
§ 285 and that Interwoven is entitled to attorneys’ fees and costs.
Requests for reexamination of the ’744 Patent and the ’629 Patent were filed on January 6,
2012, and March 5, 2012, respectively. In the reexamination of the ’744 Patent, independent
claims 1 and 26 were cancelled, claims 2-5, 7, 9-11, 18, 21, 23-25, 27-29, 31, 33, 40, 45-49, 52, and
52 were amended, new claims 54-57 were added and allowed, and the remaining claims subject to
reexamination were confirmed. A notice of intent to issue a reexamination certificate was issued in
the reexamination of the ’744 Patent on October 25, 2012. In the reexamination of the ’629 Patent,
claims 1-6, 8-17, 19, 20, 28, and 31 were amended, and the remaining claims subject to
reexamination were confirmed. A reexamination certificate was issued in the reexamination of
the’629 on October 12, 2012. Once a reexamination certificate issues in the reexamination of
the’744 Patent, based on the final versions of the claims added and amended during the
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3 JOINT CASE MANAGEMENT STATEMENT
CASE NO. 10-CV-4645-RS
reexaminations, Interwoven may move to limit damages based on the doctrine of intervening
rights.
In its February 22, 2011 counterclaim, Vertical initially asserted that Interwoven infringed
claims 1-11, 18-19, 21, 23-33, 40-41, and 45-53 of the ’744 Patent and claims 1-6, 8-17, 19-26, and
28-32 of the ’629 Patent. Eighteen months later, on August 31, 2012, and citing the same sources
that were publicly available to Vertical prior to the filing of this litigation, Vertical added
allegations that Interwoven also infringed claims 16-17, 22, 38-39, 43-44 of the ’744 Patent, as well
as new claims 56-57 from the still-pending reexamination of the’744 Patent. On October 16, 2012,
Judge Spero allowed the addition of the new claims to Vertical’s infringement contentions, but
rejected the addition of claims still in reexamination. Based on the PTO’s notice of intent to issue a
reexamination certification for the ’744 Patent, Interwoven is working in good faith with Vertical to
amend Vertical’s infringement contentions based on the reexamination so that the cancelled claims
can be replaced with the newly allowed amended claims. With respect to the additional claims,
Interwoven may seek additional claim construction on additional, disputed terms.
Defendant’s Supplemental Statement:
Vertical contends that Interwoven manufactures, makes, uses, sells and/or offers for sale
software such as the Interwoven TeamSite product that infringes all the claims identified in its
amended infringement contentions, including newly added claims 56 and 57 of the '744 patent.
Interwoven has also induced others to infringe and/or has contributorily infringed those claims of
the '744 and '629 patents. Vertical contends that Interwoven intentionally concealed its
infringement of the '744 patent and that Interwoven continues to infringe the '744 and '629 patentss.
Acocordingly, Interwoven is a willful inringer of the '744 and '629 patents. Thus, this case is
exceptional under 35 U.S.C. § 285, and Vertical is entitled to multiplication of its damages, up to
three times, and to its attorneys' fees and costs. Vertical also seeks a permanent injunction.
Interwoven moved to strike the amended infringement contentions served by Vertical
pursuant to the Stipulation between the parties. Magistate Spero denied that motion as to all claims,
except the two newly added claims, because the Patent Office had not yet issued a notice of intent to
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4 JOINT CASE MANAGEMENT STATEMENT
CASE NO. 10-CV-4645-RS
allow those claims. He suggested that Vertical file a motion to reinstate the infringement
contentions for claims 56 and 57 as soon as the Patent Ofrice issued the notice. Those claims
merely include the previous claims of the '744 patent with this Court's claim construction for
"arbitrary objects" embedded into them. Should Interwoven oppose the reinstatement of those
contentions, Vertical will file the motion suggested by Magistrate Spero and will oppose any
motion for a new claim construction, as the new claims do not add any new claimed subject matter
into this case. Vertical will also oppose any motion based on intervening rights.
4. Motions
Plaintiff’s Supplemental Statement: Interwoven filed a motion for summary judgment of
unenforceability due to inequitable conduct and invalidity due to violation of the on-sale bar on
October 22, 2012. Interwoven anticipates filing additional motions for summary judgment and
motions in limine on the issues of invalidity and/or non-infringement as well as a motion for
summary judgment on the issue of damages.
There are no other pending motions.
Defendant's Supplemental Statement: Vertical does not plan to file any dispositive
motions.
5. Amendment of Pleadings
No supplement needed.
6. Evidence Preservation
No supplement needed.
7. Disclosures
No supplement needed.
8. Discovery
Fact discovery is complete. The parties have reached an agreement for the depositions three
witnesses, namely Rajib SenGupta, Jack Stone, and Ivan Posey, to take place after the close of fact
discovery in order to accommodate the schedules of these witnesses.
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5 JOINT CASE MANAGEMENT STATEMENT
CASE NO. 10-CV-4645-RS
The parties expect expert discovery to be completed by February 15, 2013 in accordance
with the Court’s September 11, 2012 Order. See Dkt. No. 125.
9. Class Actions
No supplement needed.
10. Related Cases
No supplement needed.
11. Relief
No supplement needed.
12. Settlement and ADR
The Parties remain far apart on settlement and have not engaged in further ADR.
Plaintiff’s Supplemental Statement: Interwoven remains open to ADR options, and to
additional court-ordered mediation.
Defendant’s Supplemental Statement: Vertical has made various settlement proposals,
including cross-licensing, payment of money, and other business solutions. Vertical believes that
further ADR attempts will be fruitless as Interwoven has not reacted positively to any proposal
offered by Vertical.
13. Consent to Magistrate Judge for All Purposes
No supplement needed.
14. Other References
No supplement needed.
15. Narrowing of Issues
No supplement needed.
16. Scheduling
The Court set a schedule through trial in its May 25, 2012 Order, as modified by the
September 11, 2012 Order. See Dkt. Nos. 117, 125. Trial is set to begin on August 12, 2013. The
Parties do not anticipate any changes to the schedule at this time.
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6 JOINT CASE MANAGEMENT STATEMENT
CASE NO. 10-CV-4645-RS
17. Trial
No supplement needed.
18. Disclosure of Non-Party Interested Entities or Persons
No supplement needed.
Dated: November 1, 2012
Respectfully submitted,
WHITE & CASE LLP
By: /s/ Bijal V. Vakil
Bijal V. Vakil
ATTORNEYS FOR PLAINTIFF
INTERWOVEN, INC.
Respectfully submitted,
NIRO, HALLER & NIRO
By: /s/ Vasilios Dossas
Vasilios Dossas
ATTORNEYS FOR DEFENDANT
VERTICAL COMPUTER SYSTEMS, INC.