It's both choices. I can't speak for Texas, but for OH and MI it's common not to reply to an appeal unless the court indicates a reply is needed. The court is indicating the K&L has at least some basis for their appeal so they requested a response. It doesn't mean anything beyond that. Though the fact that this is taking so long just to see if there will even ever be a trial makes me wonder how long this could go on. K&L may just be waiting for the lights to go dark.
I'm not a lawyer, but it seems obvious to me that the case should not be dismissed. K&L's arguments strike me as ludicrous, if not desperate.
What I find funny is that the genius marketing consultants don't realize this is simply action on a motion to dismiss, and the facts of the case have not been argued yet.