Datatreasury Corporation v. Wells Fargo & Company et al

Filing 220

REPLY to Response to Motion re #80 Joint MOTION to Dismiss Surreply filed by Datatreasury Corporation. (King, Richard)

Case 2:06-cv-00072-DF-CMC

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Filed 06/26/2006

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Datatreasury Corporation v. Wells Fargo & Company et al

Doc. 22

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION DATATREASURY CORPORATION PLAINTIFF v s. WELLS FARGO & COMPANY , et al. D EFENDANTS § § § § § § §

Civil Action No. 2:06cv72 JURY TRIAL DEMANDED

PLAINTIFF DATATREASURY CO RPORATION'S SURREPLY IN RESPONSE TO DEFENDANTS' VARIOUS MOTIONS TO DISMISS, OR IN THE ALTERNATIVE FOR MORE DEFINITE STATEMENT

I.

INTRODUCTION Comes now Plaintiff DataTreasury Corporation ("DataTreasury") and files its

Surreply in Response to Defendants '1 Reply in Support of Defendants' Motion to Dismiss or in the Alternative for More Definite Statement, and would respectfully show the Court: I I. DATATREASURY'S AMENDED COMPLAINT SATISFIES THE NOTICE PLEADING REQUIREMENT Despite the telling fact that MagTek found DataTreasury's complaint sufficient enough to file a responsive pleading Defendants continue in their quest to impose a heightened pleading burden on DataTreasury and avoid answering its Amended Complaint.
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Bank of America Corporation; Bank of America, N.A.; Bank of New York Co., Inc.; Bank of Tokyo-Mitsubishi UFJ, Ltd.; BB&T Corporation; Branch Banking and Trust Company; Citizens Financial Group, Inc.; Comerica Bank & Trust, N.A.; Comerica Incorporated; Cullen/Frost Bankers, Inc.; Deutsche Bank Trust Company Americas; First Data Corporation; LaSalle Bank Corporation; LaSalle Bank, N.A.; M&T Bank Corporation; M&T Bank; Remitco, LLC; TeleCheck Services, Inc.; The Bank of New York; The Frost National Bank; UBS Americas, Inc.; Union Bank of California, N.A.; Wachovia Bank, N.A.; Wachovia Corporation; Wells Fargo & Company; Wells Fargo Bank, N.A. Also, throu gh this Surreply, DataTreasury responds to the various other Defendants' Re plies in Support of the Motions to Dismiss and Motions for More Definite Statement filed by U.S. Bankcorp; U.S. Bank, National Association; National City Corporation; National City Bank; Zions Bancorporation; Zions First National Bank; SunTrust Banks, Inc.; SunTrust Bank; Bancorpsouth, Inc.; Bancorpsouth Bank; Compass Bancshares, Inc.; Compass Bank; First Horizon National Corporation; First Tennessee Bank, N.A.; HSBC North America Holdings, Inc.; HSBC Bank USA, N.A.; Harris Bancorp, Inc.; Harris N.A.; First Citizens Bancshares, Inc.; First Citizens Bank & Trust Company; KeyCorp; Keybank National Association; The PNC Financial Services Group, Inc.; PNC Bank, N.A.; Small Value Payments Company, LLC; The Clearing House Payments Co., LLC; and Electronic Data Systems Corp (all of the aforementioned entities are subsequently collectively referred to as "Defendants" unless noted otherwise). Plaintiff DataTreasury Corporation's Surreply in Response to Defendants' Various Motions to Dismiss, or in the Alternative for More Definite Statement Page 1 of 8

Dockets.Justia.com

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A.

PHONOMETRICS S ETS THE STANDARD I NFRINGEMENT C ASES

FOR

NOTICE PLEADING

IN

PATENT

Defendants attempt to avoid the standard for notice pleading in a patent case established by the Federal Circuit in Phonometrics v. Hospitality Franchise Sys. Inc., 203 F.3d 790 (Fed. Cir. 2000). Defendants suggest that Phonometrics does not support DataTreasury's position that its Amended Complaint complies with the notice pleading requirements. Defendants' interpretation is, at best, misleading. In the interests of clarity, Defendants' interpretation of Phonometrics3 warrants a brief explanation of the procedural history in that case. Phonometrics had previously filed separate suits against other entities alleging infringement of its patent, and the Federal Circuit had previously constru ed the claims of that patent in two separate cases. Phonometrics, 203 F.3d at 792 (the two previous cases were referred to by the court as Phonometrics I and II). The district court stayed the proceedings in Phonometrics during the pendency of Phonometri cs I and II. Id. Once the Federal Circuit issued its opinion in Phonometrics II, the district court dismissed Phonometric's claims against Hospitality Franchise Systems, Inc. ("Hospitality") under Federal Rule of Civil Procedure 12(b)(6), and required Ph onometrics to include in its complaint against Hospitality express allegations of infringement relating to each claim element in accordance with the Federal Circuit's interpretation of those claim elements as expressed in Phonometrics I and II . Id.
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Defendants state "[Phonometrics ] did not address the substance of the initial notice pleading, but instead reversed the trial court's requirement that the plaintiff tailor its amended complaint to conform to the court's interpretation of the meaning of the patent claims following a Markman hearing cons truing claims." See REPLY IN SUPPORT OF DEFENDANTS ' MOTI ON TO DI SMISS OR I N THE A LTERNATIVE FOR MORE D EFINITE STATEMENT , p. 3. Defendants' description of Phonometrics procedural history leads one to believe that the district court dismissed Phonometric's complaint well into the litigation after a Markman hearing in that same case. The district court dismissed Phonometric's complaint in light of claim construction hearings in two separate cases, not in light of a claim construction hearing in its case against Hospitality. 3 DataTreasury relies on the opinion of the Federal Circuit in Phonometrics, Inc. v. Hospitality Franchise Sys. Inc., 203 F.3d 790 (Fed. Cir. 2000) which DataTreasury refers to in this Surreply simply as "Phonometrics ." Phonometrics, Inc. had filed other lawsuits against other entities for infringement of the same patent at issue in Phonometrics, Inc. v. Hospitality Franchise Sys. Inc. Plaintiff DataTreasury Corporation's Surreply in Response to Defendants' Various Motions to Dismiss, or in the Alternative for More Definite Statement Page 2 of 8

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Co ntrary to Defendants' interpretation of Phonometrics, the Federal Circuit addressed the substance of the plaintiff's initial notice pleading in Phonometrics and found that the complaint complied with the notice pleading requirements. The court recognized that Phonometric 's complaint alleged ownership of the asserted patent, named the individual defendants, cited the patent that was infringed, described the means by which the defendants infringed, and pointed to the specific sections of the patent law that were invoked ­ just as DataTreasury has done in its Amended Complaint ­ and was therefore sufficient. Phonometrics, 203 F.3d at 794. It is disingenuous to suggest, as Defendants do, that Phonometrics does not set the standard for notice pleading for pat ent infringement. B. D ATATREASURY HAS A DEQUATELY DESCRIBED D EFENDANTS I NFRINGE
THE
4

MEANS

BY

WHICH

DataTreasury's description of "products and services" adequately describes the means by which Defendants infringe DataTreasury's patents. Phonometrics has been used as the benchmark for establishing the standard for notice pleading in multiple patent infringement cases. See, e.g. Jackson v. Ill. Bell Tel. Co. , 2002 U.S. Dist. LEXIS 13186 (N.D. Ill. July 3, 2002); One World Techs., Ltd. v. Robert Bosch Tool Corp., 2004 U.S. Dist. LEXIS 14035 (N.D. Ill. July 20, 2004). In both of these cases and also in OKI Elec. Indus. Co., Ltd. v. LG Semicon Co., Ltd., 1998 U.S. Dist. LEXIS 22507 (N.D. Cal. Feb. 25, 1998), the courts held that the plaintiffs had adequately described the means by which the various defendants infringed the patents at issue in their use of allegations similar to those made by DataTreasury in its Amended Complaint. Defendants' attempts to distinguish the infringement allegations made in these cases are off the mark and misleading to this Court.
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In Phonometrics, the defendant had not even filed an answer before the court stayed the proceedings. Phonometrics, 203 F.3d at 794 (stating "Phonometrics complaint contains enough detail to allow the defendants to answer."). Therefore, the only pleading that the court could have considered was Phonometrics initial notice pleading. Plaintiff DataTreasury Corporation's Surreply in Response to Defendants' Various Motions to Dismiss, or in the Alternative for More Definite Statement Page 3 of 8

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Defendants first attempt to distinguish OKI where the court found that plaintiff 's complaint exemplified the simplicity and brevity of statement that the Federal Rules of Civil Procedure co ntemplate. 1998 U.S. Dist. LEXIS 22507, at *10. Defendants rely on the fact that the plaintiff in OKI described the means of infringement as "using devices that embody the patented methods, including 4 megabit and higher density DRAMs." Notably, the court determined that plaintiff's allegation was sufficient even if plaintiff had not further clarified its allegations by using the phrase "including 4 megabit and higher density DRAMs." See id. (stating "[t]he phrase `devices that embody the patented methods' from OKI's allegation is substantially similar to the phrase `electric motors embodying the patented invention' found in Form 16 [of the Federal Rules of Civil Procedure]. The similarity between the two allegations makes it clear that OKI's FAC is sufficient under the Rules."). The allegations made by DataTreasury in its Amended Complaint are just as clear, and also exemplify the simplicity and brevity of statement that the Rules invision. Defendants' attempt to distinguish One World also misses the mark. Defen dants are correct in stating that the plaintiff in One World sued three defendants for patent infringement of one patent entitled "Ergonomic Miter Saw Handle." However, the court does not consider the title of the patent in determining that plaintiff adeq uately described the means by which the defendants infringed. All patents are required to have a title, and this information can be obtained by simply referring to the patent itself .5 infringement allegations, the plaintiff in One World simply all eged: In its

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If Defendants assert they cannot answer DataTreasury's Amended Complaint because DataTreasury did not state the title of the patents at issue in its Amended Complaint, then Defendants' use of Rule 12(b)(6) or 12(e) is abusive and a waste of this Court's time and resource s. Defendants have been provided with the patent
numbers of the patents that DataTreasury alleges they have infringed, and Defendants can use that information to obtain the name of these patents by simply accessing the United States Patent and Trademark Office's website at www.uspto.gov . DataTreasury is simply required to put the Defendants on notice as to the claims against them, and Plaintiff DataTreasury Corporation's Surreply in Response to Defendants' Various Motions to Dismiss, or in the Alternative for More Definite Statement Page 4 of 8

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Defendants have infringed and are now directly infringing, inducing infringement by others, and/or contributorily infringing one or more claims of the '976 patent within this District or elsewhere within the United States by making, u s ing, selling, and/or offering to sell pro ducts falling within the scope of such claims, all without authority or license from Plaintiffs. One World, 2004 U.S. Dist. LEXIS 14035, at *6 -7. Instead of focusing on peripheral and irrelevant issues such as whether or not plaintiff stated the name of its patent in its complaint , the court focused on the actual language of the plaintiff's infringement allegations. The infringement allegation in One World is substantially similar (and almost identical except for the patent na med) to the infringement allegations made by DataTreasury in the instant matter. The court in One World stated that this was an

adequate allegation of infringement that properly put the defendant on notice of the claims against it and denied defendant's m otion to dismiss under 12(b)(6). In their final attempt to refute DataTreasury's position, Defendants attempt to distinguish the infringement allegations made in Jackson from those made by DataTreasury. Again, however, Defendants' "distinction" rings hollow. The court in Jackson clearly and unequivocally stated that "Jackson d escribes the means by which Defendants allegedly infringe by pleading that `each of the defendants has infringed the patent in suit either directly or through acts of contributory i nfringement or inducement.'" Jackson , 2002 U.S. Dist. LEXIS 13186, at *8-9. III. CONCLUSION

DataTreasury has done this by specifically naming the patents in suit. However, eve n though the title of the patents at issue in this matter can be readily obtained by Defendants, DataTreasury will provide Defendants with the title of the patents at issue in this matter: Patent No. 5,910,988 ­ Remote Image Capture with Centralized Processing and Storage; 6,032,137 ­ Remote Image Capture with Centralized Processing and Storage; 5,265,007 ­ Central Check Clearing System; 5,583,759 - Mechanism for Expediting the Deposit, Transport and Submission of Checks Into the Payment System; 5,717,868 ­ Electronic Payment Interchange Concentrator; and 5,930,778 - System for Expediting the Clearing of Financial Instruments and Coordinating the Same with Invoice Processing at the Point of Receipt. Plaintiff DataTreasury Corporation's Surreply in Response to Defendants' Various Motions to Dismiss, or in the Alternative for More Definite Statement Page 5 of 8

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DataTreasury's Amended Complaint provides the Defendants with fair notice of the claims against them, complies with the notice pleading requirements established by the Federal Circuit in Phonometrics, and complies with Form 16 of the Rules . The sufficiency of DataTreasury's Amended Complaint is made even more apparent in light of the fact that MagTek , Inc. filed a responsive pleading thereto . Furthermore, additional detail sought by Defendants is more appropriately obtained through formal discovery mechanisms. For the reasons stated herein, and for those previously stated in its R esponse, DataTreasury respectfully asks that this Court deny Defendants' respective motions to dismiss and for more definite statement. Respectfully submitted, /s/ R. BENJAMIN KING C. CARY PATTERSON State Bar No. 15587000 A NTHONY BRUSTER State Bar No. 24036280 BRADY PADDOCK State Bar No. 00791394 R. BENJAMIN KING State Bar No. 24048592 N IX PATTERSON & ROACH L.L.P. 2900 St. Michael Drive, Suite 500 Texarkana, Texas 75503 Tel. [phone]; Fax [phone] ROD A. COOPER Texas Bar No. 90001628 THE COOPER LAW FIRM 545 E. John Carpenter Freeway, Ste .1460 Irving, Texas 75062 Tel. [phone]; Fax [phone] [e-mail]

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EDWARD L. HOHN Texas Bar No. 09813240 N IX PATTERSON & ROACH, L.L.P. 205 Linda Drive Daingerfield, Texas 75638 Tel. [phone]; Fax [phone] [e-mail] J OE KENDALL Texas Bar No. 11260700 K ARL RUPP Texas Bar No. 24035243 PROVOST UMPHREY , L.L.P. 3232 McKinney Avenue, Suite 700 Dallas, Texas 75204 Tel. [phone]; Fax [phone] [e-mail] EDWARD CHIN State Bar No. 50511688 THE CHIN LAW FIRM 11602 Island Breeze St. Pearland, Texas 77584 [phone]; [phone] (fax) [e-mail] ERIC M. ALBRITTON Texas Bar No. 00790215 A LBRITTON LAW FIRM P.O. Box 2649 Longview, Texas 75606 Tel. [phone]; Fax [phone] [e-mail] T. JOHNNY WARD JR. Texas Bar No. 00794818 THE LAW OFFICE OF T. JOHN WARD, JR. P.O. Box 1231 Longview, Texas 75606 Tel. [phone]; Fax [phone] [e-mail] Counsel for Plaintiff DataTrea sury Corporation

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CERTIFICATE OF SERVICE The undersigned certifies that the foregoing document was filed electronically in compliance with Local Rule CV-5(a) and served via the Court's electronic filing system on all counsel who have consented to elec tronic service on this the 26th day of June, 2006. /s/ R. BENJAMIN KING Nix, Patterson & Roach LLP

Plaintiff DataTreasury Corporation's Surreply in Response to Defendants' Various Motions to Dismiss, or in the Alternative for More Definite Statement Page 8 of 8