craigslist, Inc. v. GraphOn Corporation

Filing 21

ANSWER to 15 Amended Complaint by GraphOn Corporation, GraphOn Corporation. (Rounds, Michael) (Filed on 5/24/2010) Modified on 5/25/2010 (mcl, COURT STAFF).

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WATSON ROUNDS Michael D. Rounds (California Bar No. 133972) Melissa P. Barnard (pro hac vice) Adam K. Yowell (pro hac vice) One Market-Steuart Tower Suite 1600 San Francisco, CA 94105 Telephone: [phone] Fax: [phone] Email: [e-mail] [e-mail] [e-mail] Attorneys for Defendant, Counter-Plaintiff GRAPHON CORPORATION

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ­ SAN FRANCISCO DIVISION MYSPACE, INC., Plaintiff, v. GRAPHON CORPORATION, Defendant. CRAIGSLIST, INC., Plaintiff, v. GRAPHON CORPORATION, Defendant. Defendant GraphOn Corporation ("GraphOn"), by and through its undersigned counsel, hereby answers the First Amended Complaint of Plaintiff craigslist, Inc. ("craigslist") as follows: THE PARTIES 1. GraphOn admits that craigslist is a Delaware corporation; GraphOn lacks 1
GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

Case No. 3:10-CV-00604-CRB Case No. 3:10-CV-01156-CRB Consolidated Actions ANSWER TO FIRST AMENDED COMPLAINT

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sufficient knowledge or information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 1 of the First Amended Complaint and on that basis, denies the same. 2. Admitted. JURISDICTION 3. With respect to Paragraph 3 of the First Amended Complaint, GraphOn admits

that this Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1338(a) inasmuch as the First Amended Complaint purports to state claims for declaratory relief under the patent laws of the United States. However, GraphOn denies that craigslist has in fact adequately stated such claims for relief or that craigslist's claims have any merit and as such denies the remaining allegations contained in Paragraph 3. 4. With respect to Paragraph 4, GraphOn will not contest venue in the Northern

District of California; GraphOn denies the remaining allegations of Paragraph 4 of the First Amended Complaint. INTRA-DISTRICT ASSIGNMENT 5. Admitted. BACKGROUND 6. GraphOn lacks sufficient knowledge or information sufficient to form a belief as

to the truth of the remaining allegations in Paragraph 6 of the First Amended Complaint and on that basis, denies the same. 7. Admitted. Admitted. In answer to the allegations contained in Paragraph 9 of the First Amended

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

8. 9.

Complaint, GraphOn admits only that it sent a letter to craigslist on January 18, 2010, and that

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the terms of the letter speak for themselves; GraphOn denies each and every other allegation contained in Paragraph 9 of the First Amended Complaint. 10. In answer to the allegations contained in Paragraph 10 of the First Amended

Complaint, GraphOn admits only that it sent a letter to craigslist on January 18, 2010, and that the terms of the letter speak for themselves; GraphOn denies each and every other allegation contained in Paragraph 10 of the First Amended Complaint. 11. In answer to the allegations contained in Paragraph 11 of the First Amended

Complaint, GraphOn admits only that it commenced litigation against other parties alleging infringement of some or all of its patents-in-suit as follows: a. b. c. 12. 13. 14. Admitted. Admitted. Admitted.

Admitted. Admitted. GraphOn admits that craigslist seeks a declaratory judgment and has alleged that

there is an actual and justiciable controversy between the parties, but otherwise denies each and every other allegation of Paragraph 14 of the First Amended Complaint. COUNT I DECLARATORY JUDGMENT OF NONINFRINGEMENT 15. Answering the allegations incorporated in Paragraph 15, GraphOn incorporates

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

herein by reference each and every allegation, admission and denial set forth in its Answer to Paragraphs 1 through 14 inclusive. 16. GraphOn denies the allegations contained in Paragraph 16 of the First Amended

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Complaint. 17. 18. Admitted. GraphOn admits that craigslist seeks a declaratory judgment of noninfringement

of the claims of the patents-in-suit, but otherwise denies each and every other allegation of Paragraph 18 of the First Amended Complaint. COUNT II DECLARATORY JUDGMENT OF INVALIDITY 19. Answering the allegations incorporated in Paragraph 19, GraphOn incorporates

herein by reference each and every allegation, admission and denial set forth in its Answer to Paragraphs 1 through 18 inclusive. 20. 21. Complaint. 22. GraphOn admits that craigslist seeks a declaratory judgment that the patents-inAdmitted. GraphOn denies the allegations contained in Paragraph 21 of the First Amended

suit are invalid, but otherwise denies each and every other allegation of Paragraph 22 of the First Amended Complaint. COUNT III DECLARATORY JUDGMENT OF UNENFORCEABILITY 23. Answering the allegations incorporated in Paragraph 23, GraphOn incorporates

herein by reference each and every allegation, admission and denial set forth in its Answer to 23 24 25 26 27 4 28
GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

Paragraphs 1 through 22 inclusive. 24. 25. Admitted. On information and belief, GraphOn admits that Robert J. Irvine of McDonnell

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Boehnen Hulbert Berghoff LLP ("MBHB") was involved in prosecuting the `956 application; but otherwise denies each and every other allegation of Paragraph 25 of the First Amended Complaint. 26. GraphOn lacks sufficient knowledge or information sufficient to form a belief as

to the truth of the allegations contained in Paragraph 26 of the First Amended Complaint and on that basis, denies the same. 27. GraphOn admits that Timothy Brisson left Sierra Patent Group to work as in-

house counsel for GraphOn in or around July of 2005. On information and belief, GraphOn admits that the Cardinal Law Group and the Sierra Patent Group prosecuted the application that issued as the `940 patent; GraphOn lacks sufficient knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 27 of the First Amended Complaint and on that basis, denies the same. 28. On information and belief, GraphOn admits that the Sierra Patent Group

prosecuted the application that issued as the `034 patent; GraphOn lacks sufficient knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 28 of the First Amended Complaint and on that basis, denies the same. 29. On information and belief, GraphOn admits that the Sierra Patent Group

prosecuted the application that issued as the `591 patent; GraphOn lacks sufficient knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 29 of the First Amended Complaint and on that basis, denies the same.

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

30. Complaint. 31.

GraphOn denies the allegations contained in Paragraph 30 of the First Amended

GraphOn denies the allegations contained in Paragraph 31 of the First Amended

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Complaint. 32. On information and belief, GraphOn admits that the `034 and `591 patents issued

as continuations of the `538 and `940 patents and that all four patents belong to the same family, share a specification, and claim priority from the filing date of the `367 patent; GraphOn denies the remaining allegations in Paragraph 32 of the First Amended Complaint. 33. 34. 35. Admitted. Admitted. GraphOn admits that the application for the `538 patent was filed in July 1998,

and assigned to a different examiner than the `956 application; GraphOn denies the remaining allegations in Paragraph 35 of the First Amended Complaint. 36. 37. Admitted. GraphOn admits that the U.S. Patent and Trademark Office issued a Notice of

Allowance for the `538 patent in April 1999. GraphOn also admits that Wesinger and Coley requested acceptance of a Continued Prosecution Application, abandoned the allowed application, and filed a preliminary amendment; GraphOn denies the remaining allegations in Paragraph 37 of the First Amended Complaint. 38. GraphOn admits only that abandonment occurred; GraphOn denies each and

every other allegation in Paragraph 38 of the First Amended Complaint. 39. In answer to the allegations contained in Paragraph 39 of the First Amended

Complaint, GraphOn admits that the terms and claims of the `538, `940, `034 and `591 patents 23 24 25 26 27 6 28
GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

speak for themselves. GraphOn also admits that its Interrogatory Responses, which also speak for themselves, pertained only to the `538 and `940 patents involved in the Autotrader suit and

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that they were not GraphOn's final position in that litigation; GraphOn denies each and every other remaining allegation in Paragraph 39 of the First Amended Complaint. The `538 Patent 40. 41. GraphOn denies the allegations in Paragraph 40 of the First Amended Complaint. GraphOn admits that the `538 patent issued on November 27, 2001 and that the

terms and claims of the patent speak for themselves; GraphOn denies each and every other remaining allegation in Paragraph 41 of the First Amended Complaint. The `940 Patent 42. 43. GraphOn denies the allegations in Paragraph 42 of the First Amended Complaint. GraphOn admits that the application for the `940 patent was filed on September

14, 2001 and was assigned to a different examiner than the examiner on the `956 application; GraphOn denies each and every other remaining allegation in Paragraph 43 of the First Amended Complaint. 44. GraphOn admits that any response made to the U.S. Patent and Trademark Office

is the best evidence of said response and that the allegations contained in Paragraph 44 of the Complaint only contain a portion of said response; GraphOn denies each and every other allegation contained in Paragraph 44 of the First Amended Complaint. 45. GraphOn denies the allegations in Paragraph 45 of the First Amended Complaint. The `034 and `591 Patent 46. GraphOn admits only that the `034 and `591 patent applications were filed on

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

May 11, 2004 after the `956 application was abandoned; but otherwise denies each and every other allegation contained in Paragraph 46 of the First Amended Complaint. 47. In answer to the allegations contained in Paragraph 47 of the First Amended

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Complaint, GraphOn admits only that the terms and claims of the `034 and `591 patents speak for themselves; GraphOn denies each and every other allegation contained in Paragraph 47 of the First Amended Complaint. 48. In answer to the allegations contained in Paragraph 48 of the First Amended

Complaint, GraphOn admits only that the terms and claims of the `034 and `591 patents speak for themselves; GraphOn denies each and every other allegation contained in Paragraph 48 of the First Amended Complaint. 49. 50. 51. 52. GraphOn denies the allegations in Paragraph 49 of the First Amended Complaint. GraphOn denies the allegations in Paragraph 50 of the First Amended Complaint. GraphOn admits the allegations in Paragraph 51 of the First Amended Complaint. GraphOn admits that craigslist seeks a declaratory judgment that the `538, `940,

`034 and `591 patents are unenforceable, but otherwise denies each and every other allegation of Paragraph 52 of the First Amended Complaint. 51. 52. Admitted. GraphOn admits that craigslist seeks a declaratory judgment that the patents are

unenforceable, but otherwise denies each and every other allegation of Paragraph 52 of the First Amended Complaint. COUNT IV DECLARATORY JUDGMENT OF UNENFORCEABILITY 53. Answering the allegations incorporated in Paragraph 53, GraphOn incorporates

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

herein by reference each and every allegation, admission and denial set forth in its Answer to Paragraphs 1 through 52 inclusive. 54. GraphOn denies the allegations contained in Paragraph 54 of the First Amended

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Complaint. 55. Complaint. 56. On information and belief, GraphOn admits that the `034 and `591 patents issued GraphOn denies the allegations contained in Paragraph 55 of the First Amended

as continuations of the `538 and `940 patents and that all four patents belong to the same family, share a specification, and claim priority from the filing date of the `367 patent; GraphOn denies the remaining allegations in Paragraph 56 of the First Amended Complaint. Duty to Disclose Related Litigation 57. With respect to Paragraph 57 of the First Amended Complaint, GraphOn admits

only that the regulations of the PTO, if any such exist as alleged by craigslist in Paragraph 57, speak for themselves; the remaining allegations of Paragraph 57 call for a legal conclusion, and on that basis, GraphOn lacks sufficient knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 57 of the First Amended Complaint and denies the same. The eBay Litigation 58. On information and belief, GraphOn admits that NES filed a complaint against

eBay during prosecution of the `538 patent. GraphOn also admits on information and belief, that MBHB was NES's litigation counsel in the eBay litigation and its prosecution counsel for its patent applications and that Robert J. Irvine was involved in prosecuting the `956 application and signed some of the office action responses. GraphOn denies each and every other allegation in

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

Paragraph 58 of the First Amended Complaint. 59. The allegations of Paragraph 59 call for a legal conclusion, and on that basis,

GraphOn lacks sufficient knowledge or information sufficient to form a belief as to the truth of

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the allegations in Paragraph 59 of the First Amended Complaint and on that basis, denies the same. 60. GraphOn admits that Robert J. Irvine signed a terminal disclaimer for the `538

patent, but otherwise denies the allegations in Paragraph 60 of the First Amended Complaint. 61. GraphOn admits that 238 references were submitted to the U.S. Patent and

Trademark Office, but otherwise denies the allegations contained in Paragraph 61 of the First Amended Complaint. 62. On information and belief, GraphOn admits that NES filed a patent infringement

action against eBay on March 13, 1999 regarding the `367 patent and that the applicants filed terminal disclaimers in the applications for the `538 and `034 patents over the `367 patent. GraphOn denies each and every other allegation in Paragraph 62 of the First Amended Complaint. 63. 64. GraphOn admits the allegations in Paragraph 63 of the First Amended Complaint. GraphOn admits that the motions described in Paragraph 64 of the First Amended

Complaint were not addressed by the court and that the eBay litigation was ultimately dismissed by stipulation. GraphOn denies the remaining allegations in Paragraph 64 of the First Amended Complaint. 65. On information and belief, GraphOn admits that the applicants and their patent

counsel apparently did not rely on the court's refusal to consider the summary judgment motions in connection with any decision to submit material prior art to the Examiner. Otherwise,

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

GraphOn denies the remaining allegations in Paragraph 65 of the First Amended Complaint. 66. Complaint. GraphOn denies the allegations contained in Paragraph 66 of the First Amended

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67. Complaint. 68. Complaint.

GraphOn denies the allegations contained in Paragraph 67 of the First Amended

GraphOn denies the allegations contained in Paragraph 68 of the First Amended

The Autotrader.com Litigation 69. 70. 71. Admitted. Admitted. GraphOn admits that Brisson, D'Alessandro, Wesinger and Coley were deposed

in the AutoTrader.com litigation; GraphOn lacks sufficient knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 71 of the First Amended Complaint and on that basis, denies the same. 72. GraphOn admits that the `034 patent issued on April 11, 2006, from an

application that continued from the applications for the `538 and `940 patents and that the patents share a specification. GraphOn denies each and every other allegation in Paragraph 72 of the First Amended Complaint. 73. 74. Admitted. GraphOn admits the `591 patent issued on September 11, 2007, and was

continued from the applications for the `538 and `940 patents, and that the patents share an identical specification. GraphOn denies each and every other allegation in Paragraph 74 of the First Amended Complaint.

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

75. Complaint. 76.

GraphOn denies the allegations contained in Paragraph 75 of the First Amended

GraphOn admits that an actual controversy exists as to the enforceability of the

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`538, `940, `034 and `591 patents, but denies the remaining allegations in Paragraph 76 of the First Amended Complaint. 77. GraphOn admits that craigslist seeks a declaratory judgment that the patents are

unenforceable, but otherwise denies each and every other allegation of Paragraph 77 of the First Amended Complaint. COUNT V DECLARATORY JUDGMENT OF UNENFORCEABILITY 78. Answering the allegations incorporated in Paragraph 78, GraphOn incorporates

herein by reference each and every allegation, admission and denial set forth in its Answer to Paragraphs 1 through 77 inclusive. 79. Complaint. 80. Complaint. 81. Complaint. 82. 83. Admitted. GraphOn admits that craigslist seeks a declaratory judgment that the Patents are GraphOn denies the allegations contained in Paragraph 81 of the First Amended GraphOn denies the allegations contained in Paragraph 80 of the First Amended GraphOn denies the allegations contained in Paragraph 79 of the First Amended

unenforceable, but otherwise denies each and every other allegation of Paragraph 83 of the First Amended Complaint.

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

PRAYER FOR RELIEF GraphOn denies that craigslist is entitled to the relief requested or to any relief whatsoever.

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AFFIRMATIVE DEFENSES All possible affirmative defenses may or may not have been asserted herein insofar as sufficient facts were not available to GraphOn after reasonable inquiry upon the filing of this pleading and therefore, GraphOn asserts the following defenses based in fact or upon reasonable belief and hereby reserves the right to amend this Answer to allege appropriate or additional defenses, if subsequent investigation or discovery so warrants. First Affirmative Defense The First Amended Complaint of craigslist fails to state a claim upon which relief may be granted. Second Affirmative Defense The claims of craigslist are barred, in whole or in part, because the patents are valid and enforceable. Third Affirmative Defense

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

The claims of craigslist are barred, in whole or in part, because craigslist has infringed and continues to infringe GraphOn's patents. Fourth Affirmative Defense The relief sought by craigslist is barred, in whole or in part, because at all times, GraphOn's conduct was lawful and privileged. Fifth Affirmative Defense

required to disclose prior art or information which is not material to a determination of patentability. Sixth Affirmative Defense

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

The claims of craigslist are barred, in whole or in part, to the extent that the conduct of GraphOn toward the U.S. Patent and Trademark Office was reasonable, justified, equitable, lawful and in good faith and without fraud. Seventh Affirmative Defense The claims of craigslist are barred, in whole or in part, to the extent that GraphOn at all times acted in good faith with reasonable and probable cause. Eighth Affirmative Defense The claims of craigslist for attorneys' fees are barred, in whole or in part, to the extent that craigslist has failed to allege an exceptional case as to support an award of attorneys' fees pursuant to 35 U.S.C. § 285. PRAYER FOR RELIEF WHEREFORE, GraphOn respectfully requests that this Court enter judgment against craigslist as follows: (a) That craigslist take nothing by its First Amended Complaint and that craigslist's

First Amended Complaint be dismissed with prejudice; (b) '591 patents; (c) For preliminary and permanent injunctions under 35 U.S.C. § 283 against That craigslist has infringed and continues to infringe the `538, `940, `034 and

persons acting in concert, on behalf of, in joint venture, or in partnership with craigslist from further acts of infringement; (d) For damages to be paid by craigslist adequate to compensate GraphOn for its

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infringement of the patents-in-suit, including interests, costs and disbursements as the Court may deem appropriate under 35 U.S.C. § 284; (e) That this is an exceptional case and awarding GraphOn attorneys' fees under 35

U.S.C. § 285; and (f) and proper. DEMAND FOR JURY TRIAL Pursuant to the Federal Rules of Civil Procedure Rule 38, GraphOn Corporation hereby demands a trial by jury on all issues. Dated: May 24, 2010 For such other and further relief at law and in equity as the Court may deem just

By:

/s/ Michael D. Rounds

Michael D. Rounds Melissa P. Barnard Adam Yowell WATSON ROUNDS One Market-Steuart Tower Suite 1600 San Francisco, CA 94105 Telephone: [phone] Fax: [phone] Email: [e-mail] Email: [e-mail] Email: [e-mail] Attorneys for GraphOn Corporation

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB

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CERTIFICATE OF SERVICE The undersigned certifies that, on this date, he caused this document to be electronically filed with the Clerk of Court using the CM/ECF system, which will send notification of filing to counsel of record for each party. Dated: May 24, 2010 /s/ Robert Hunter An Employee of Watson Rounds

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GRAPHON CORPORATION'S ANSWER TO FIRST AMENDED COMPLAINT 3:10-CV-01156-CRB