Software Rights Archive, LLC v. Google Inc. et al

Filing 119

NOTICE by Software Rights Archive, LLC re 113 Notice (Other) (Kaplan, Lee)

Software Rights Archive, LLC v. Google Inc. et al

Doc. 119

..~. --IN'l'HEUNITED-STATES-DISTRICT-COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

SOFTWARE RIGHTS ARCHIVE, LLC,
Plaintiff,
v.

§ § §
§ Civil Action No. 2:07-cv-511-CE

GOOGLE INC., YAHOO! INC., lAC SEARCH & MEDIA, INC., AOL LLC, and LYCOS, INC.,
Defendants.

§ § §

§ JURY TRIAL DEMANDED
§ § §

PLAINTIFF'S COMMENT ON DEFENDANTS' "NOTICE OF RE-OPENING OF CHAPTER 11 CASE"
TO THE HONORABLE COURT:

Defendants allude to the possibilty that the patents-in-suit may be property of Site
Technology, Inc.'s bankruptcy estate, and therefore, that the stay arising by operation of 11

U.S.C. §362(a)(3) precludes this Court from proceeding to resolve the question of standing
currently before it. Software Rights Archive, LLC responds briefly to point out that any such
contention is incorrect.

Plaintiff offers the following short history of this litigation. Since the above-captioned
case was fied in November 2007, Defendants have sought to multiply the proceedings in this

case and have fied two additional proceedings to boot. In July 2008, Defendants fied a Motion

to Dismiss for Lack of Standing in this case. Upon receiving Plaintiffs Reply in August 2008
disposing of all their arguments, Defendants sought and obtained extensive discovery, including

thousands of documents and three depositions. That Motion is now fully briefed and submitted

and ripe for decision in this Court. However, Defendants, relying upon the same arguments

advanced in their Motion and their Reply Brief, also fied suÍt in the Northern District of

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Dockets.Justia.com

California, seeking-a-deelaratory~judgment- See. ..Google.-Ine;, A()L--bLÇ;,-Yahoo!-Ine'i~IAC---Search & Media, Inc., and Lycos, Inc. v. L. Daniel Egger, Software Rights Archive, LLC and Site

Technologies, Inc. Case No. CV 08-3172 RMW (RS), U.S.D.C., N.D. California, San Jose
Division. Now, presenting virtually the same arguments that are presented before this Cour and

are briefed and ready for decision, at least two of the same Defendants have taken steps very
recently to re-open the bankuptcy of Site Technologies, Inc., the company that sold the patents

long before it declared bankptcy. See In re Site Technologies, Inc., Case No. 99-50736 RLE,

U.S. Banptcy Court, N.D. California, San Jose Division. Defendants have moved beyond
duplicative litigation to proceeding in triplicate.

First, assuming arguendo that the patents-in-suit ever were property of Site Technology's

1 the automatic stay that operates during the pendency of a case terminates
bankuptcy estate,

when an asset ceases to be property of the estate. 11 U.S.C. §362(c)(I). It is well recognized
that confirmation of a Chapter 11 plan terminates the bankptcy estate, unless the provisions of
the plan provide otherwise. II U.S.C. §1141(b); Tighe v. Celebrity Home, 210 F.3d 995, 998

(9th Cir. 2000) ("(planJ confirmation terminates the existence ofthe banruptcy estate unless the

plan provides for the estate to continue"); In re H White Const. Co., Inc., 92 B.R. 656 (Bank.

Defendants' Motion to Dismiss for a Lack This issue has been extensively briefed in Plaintiffs Sur-Response to of Standing. First, the 1998 Bankptcy plan disclosure statement and schedules specifically provided that Daniel
Egger owned the patents and that consequently the patents were not part of

the banuptcy estate. Sur-Response at

2. Second, it is well recognized that with exceptions not applicable here, "propert of the estate" includes only
propert owned by a debtor at the time it fies for bankptcy. 11 U.S.C. §541(a). Even if

the Defendants' theory

were accepted, the patents in suit remained Site/Technology/Inc.'s propert at the time its parent company fied for bankptcy. Hence, those assets never passed into the Debtor's estate. The Debtor's asserted "acquisition" of an
interest in the patents as a result of the post-confirmation Site/Tech - Site Tech merger also would not bring the

patents within the protection of the automatic stay because the automatic stay does not apply to propert acquired by a debtor post-confirmatíon, See In re Toth, 193 B.R. 992, 997 (Bank. N.D. Ga. 1996) ("Property which Debtors

acquired post-confiration did not become propert of the estate and is not protected by the automatic stay of §
362."). See Sur-Response at 20-23. Thus the premise is wrong.

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W.D. La. 1988) (same). In this case, Site Technology, Inc.'s confirmed plan expressly provides
that confirmation revested all property of the estate in the Debtor. See First Amended Plan of

Reorganization at iĄ14.2. Accordingly, assuming the stay ever applied to the patents, the stay
terminated in July 2000 when the Bankptcy Court confirmed the Debtor's plan.
Reopening the bankuptcy case does nothing to change this. Reopening has no

substantive impact - it merely permits paries to request relief from the Bankuptcy Court. 11
U.S.C. §350; In re DeVore, 223 B.R. 193, 198 (9th Cir. BAP 1998). It does not reimpose the

automatic stay or revest property in the estate. In re Menk, 24l B.R. 896, 914 (9th Cir. BAP
1999) ("Likewise, to the extent that the automatic stay expired in conjunction with closing, it
does not automatically spring back into effect. If protection is warranted after a case is reopened,
then an injunction would need to be imposed"). Thus, the reopening of Site Technology's

bankuptcy case in and of itself does not alter the status quo that existed prior to reopening.

Finally, this Court unquestionably has jurisdiction to determine the applicability of the

automatic stay to the instant proceedings. Arnold v. Garlock, Inc., 288 FJd 234, 236 (5th Cir.
2002). Accordingly, nothing precludes this Cour from resolving the question of who owns the
patents-in-suit in connection with its ruling on the Defendants' challenge to Plaintiffs standing.
Defendants have had ample discovery and the issue is fully briefed.

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-_._--._~---~

Respectfully submitted,

L~ l:.i (\1 ~M,Ç~lQA /rf))

Lee L. iZ=
LEAD ATTORNEY

State Bar No. 11094400
SMYSER KAPLAN & VESELKA, L.L.P.

700 Louisiana, Suite 2300
Houston, Texas 77002

[phone] (7l3) 22l-2320 (fax)

lkaplanęskv.com
Victor G. Hardy State Bar No. 00790821
(Requesting Admission Pro Hac Vice)

Andrew G. DiNovo State Bar No. 00790594 Adam G. Price State Bar No. 24027750 Jay D. Ellwanger State Bar No. 24036522
DiNovo PRICE ELLWANGER LLP

P.O. Box 201690 Austin, Texas 78720 (5l2) 681-4060
[phone] (fax)

vhardyędpelaw.com
Of counsel:

S. Calvin Capshaw State Bar No. 03783900 Elizabeth L. DeRieux State Bar No. 05770585
CAPSHAW DERIEUX
ll27 Judson Road, Suite 220

P.O. Box 3999 Longview, TX 75606-3999 [phone]
[phone] (fax)

ccapshawęcapshawlaw.com

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Robert M. Parker State Bar No. l5498000
Robert C. Bunt

State Bar No. 00787165 Charles Ainsworth State Bar No. 0078352
PARKER, BUNT & AINSWORTH, P.C.
100 East Ferguson, Suite 1 1 14

Tyler, Texas 75702 (903) 53l-3535
[phone] (fax)

CERTIFICATE OF SERVICE

The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court's
CM/ECF system per Local Rule CV-5(a)(3) on December \5 ,2008.

k t~ I~ (tJ puMlsS"~ ((If)) Lee L. Kaplan

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