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To read comments to this article, go here
Novell Answers Lodsys - It's Sterling Brennan for Novell! ~ by pj
Friday, July 08 2011 @ 03:29 PM EDT

I thought you guys would want to know an intriguing detail in the Lodsys against the World litigations. Novell has filed its answer [PDF] to Lodsys in the Lodsys v. Brother et al case in Eastern Texas -- a patent infringement case, same patents, but not against apps developers -- and it's the mighty Sterling Brennan of Workman Nydegger listed on the team representing Novell. Lodsys is in trouble now, methinks. Brennan was also prominently on the team that won for Novell against SCO in the jury trial, if you recall. I thought he was stupendous.

Novell asserts four counterclaims regarding the two patents Lodsys asserts against Novell, asking for a declaratory judgment of invalidity and noninfringement. And its affirmative defenses include failure to mitigate damages. That makes me smile, because Lodsys is in what business, exactly, leading to what damages? And that's Novell's point, which it makes explicit in another affirmative defense: "Lodsys's Complaint, and each and every claim for relief therein, is barred because Lodsys has not suffered any damages."

Novell says Lodsys can't get damages prior to the date of filing, because of 35 U.S.C. 287, and you can find that here, the rule on limitation of damages. Novell also lists invalidity and noninfringement as affirmative defenses, and also "Prosecution History Estoppel" which it elaborates on like this:

Lodsys's claims for relief are barred under the doctrine of prosecution history estoppel. Lodsys is estopped from construing claims of the Asserted Patents in such a way as to cover any activity by Novell due to statements made to the United States Patent and Trademark Office during prosecution of the patent applications that led to the issuance of the Asserted Patents.
Not having the prosecution history, I can only guess what this means precisely, but normally it means something like this: the applicant told the examiner back in the day that the patent was just for X, and now it tells the court it covers X plus the known universe of modern technology.

Another affirmative defenses is "Unclean Hands, Waiver, Laches, and Estoppel" and finally Novell says that Lodsys isn't entitled to injunctive relief.

I confess, as boring as I find patent law, I'm interested *now* -- now that Novell has retained Workman Nydegger's Sterling Brennan. I'd love to see him at trial again. The fact that he's been retained tells me that Novell is serious about winning and it plans on going to trial. If Lodsys thought the world would just knuckle under and pay them off to make them go away, they appear to have miscalculated badly.

Update: I noticed something else. In paragraph 12, Novell says, "Novell admits that this Court has subject matter jurisdiction pursuant to 28 U.S.C. 1331 and 1338(a) if Lodsys has proper standing to assert United States Patent Nos. 5,999,908, 7,222,078, and 7,620,565 in its own name." That "if" is significant, and in fact, one affirmative defense I neglected to mention, the 9th, is that Lodsys lacks standing "to commence and maintain this Action." So, Novell has apparently noticed something about the chain of ownership that I haven't yet. This is paperclip, so to speak, to remind us to watch for this to unfold. No doubt we will hear more on this theme.

Here, then, is Novell's Answer with Counterclaims, as text:

************************

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

_________________

LODSYS, LLC,

Plaintiff,

v.

BROTHER INTERNATIONAL CORP.;
CANON U.S.A., INC.;
HEWLETT-PACKARD COMPANY;
HULU, LLC;
LENOVO (UNITED STATES), INC.;
LEXMARK INTERNATIONAL, INC.;
MOTOROLA MOBILITY, INC.;
NOVELL, INC.;
SAMSUNG ELECTRONICS CO., LTD.;
SAMSUNG ELECTRONICS AMERICA, INC.;
SAMSUNG TELECOMMUNICATIONS AMERICA, LLC;
TREND MICRO, INC.,

Defendants.

_______________________

Civil Action No. 2:11-cv-00090-TJW

JURY TRIAL DEMANDED

_______________________

DEFENDANT NOVELL, INC.'S ANSWER
TO PLAINTIFF'S COMPLAINT FOR PATENT INFRINGEMENT
AND COUNTERCLAIMS

Defendant Novell, Inc. ("Novell"), for itself alone and no other party, hereby responds as follows to the "Complaint for Patent Infringement" ("Complaint") filed in behalf of plaintiff Lodsys, LLC ("Lodsys") in the above-captioned action (the "Action"):

THE PARTIES

1. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 1 of the Complaint, and therefore denies the same.

2. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 2 of the Complaint concerning defendant Brother International Corporation ("Brother"), and therefore denies the same.

3. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 3 of the Complaint concerning defendant Canon U.S.A., Inc. ("Canon"), and therefore denies the same.

4. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 4 of the Complaint concerning defendant Hewlett -Packard Company ("HP"), and therefore denies the same.

5. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 5 of the Complaint concerning defendant Hulu, LLC ("Hulu"), and therefore denies the same.

6. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 6 of the Complaint concerning defendant Lenovo (United States), Inc. ("Lenovo"), and therefore denies the same.

7. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 7 of the Complaint concerning defendant Lexmark International, Inc. ("Lexmark"), and therefore denies the same.

8. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 8 of the Complaint concerning defendant Motorola Mobility, Inc. ("Motorola"), and therefore denies the same.

9. Novell admits that it is a Delaware corporation with its principal place of business in Waltham, Massachusetts. Novell admits that it may be served with process through its Texas

2

registered agent, Corporation Service Company d/b/a CSC-Lawyers Incorporating Service Company, 211 E. 7th Street, Suite 620, Austin, Texas 78701. Except as expressly admitted herein, Novell denies any remaining allegations in paragraph 9 of the Complaint.

10. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 10 of the Complaint concerning defendant Samsung Electronics Co., Ltd. ("Samsung"), and therefore denies the same.

11. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 11 of the Complaint concerning defendant Trend Micro, Inc. ("Trend Micro"), and therefore denies the same.

JURISDICTION AND VENUE

12. Novell admits that this Court has subject matter jurisdiction pursuant to 28 U.S.C. 1331 and 1338(a) if Lodsys has proper standing to assert United States Patent Nos. 5,999,908, 7,222,078, and 7,620,565 in its own name. Novell admits that this Action arises under the patent laws of the United States, 35 U.S.C. 1 et seq. Novell admits that venue is proper in this federal district pursuant to 28 U.S.C. 1391(b)-(c) and 1400(b), but denies that this judicial district is the most convenient venue or forum. Novell admits it has transacted business in this judicial district. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 12 of the Complaint concerning other defendants, and therefore denies the same. Novell denies the remaining allegations in paragraph 12 of the Complaint.

13. Novell admits that this Court has personal jurisdiction over it. Novell admits that it regularly conducts business in the State of Texas and this judicial district. Novell admits that it provides and/or markets products and services directly to consumers in the State of Texas and

3

this judicial district. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 13 of the Complaint concerning other defendants, and therefore denies the same. Novell denies the remaining allegations in paragraph 13 of the Complaint.

INFRINGEMENT OF U.S. PATENT NO. 7,620,565 B2

14. Based upon Exhibit A attached to the Complaint and the information recited on the face thereof, and in reliance upon the truthfulness and accuracy of Lodsys's allegations in this regard, Novell admits, subject to the foregoing qualifications, that United States Patent No. 7,620,565 ("the '565 Patent") appears to have issued on November 17, 2009 and that it appears to be entitled "Customer-Based Product Design Module." On that same basis and subject to the same qualifications, Novell admits that Exhibit A appears to be a true and correct copy of the '565 Patent. Novell lacks knowledge or information sufficient to form a belief about the truth of the remaining allegations in paragraph 14 of the Complaint, and therefore denies the same.

15. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 15 of the Complaint concerning Brother, and therefore denies the same.

16. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 16 of the Complaint concerning Canon, and therefore denies the same.

17. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 17 of the Complaint concerning HP, and therefore denies the same.

4

18. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 18 of the Complaint concerning Lenovo, and therefore denies the same.

19. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 19 of the Complaint concerning Lexmark, and therefore denies the same.

20. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 20 of the Complaint concerning Motorola, and therefore denies the same.

21. Novell denies the allegations in paragraph 21 of the Complaint.

22. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 22 of the Complaint concerning Samsung, and therefore denies the same.

23. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 23 of the Complaint concerning Trend Micro, and therefore denies the same.

24. Novell denies the allegations in paragraph 24 of the Complaint concerning itself alone and no other party. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 24 of the Complaint concerning other defendants, and therefore denies the same.

INFRINGEMENT OF U.S. PATENT NO. 7,222,078 B2

25. Based upon Exhibit B attached to the Complaint and the information recited on the face thereof, and in reliance upon the truthfulness and accuracy of Lodsys's allegations in

5

this regard, Novell admits, subject to the foregoing qualifications, that United States Patent No. 7,222,078 ("the '078 Patent") appears to have issued on May 22, 2007 an d that it appears to be entitled "Methods and Systems for Gathering Information from Units of a Commodity Across a Network." On that same basis and subject to the same qualifications, Novell admits that Exhibit B appears to be a true and correct copy of the '078 Patent. Novell lacks knowledge or information sufficient to form a belief about the truth of the remaining allegations in paragraph 25 of the Complaint, and therefore denies the same.

26. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 26 of the Complaint concerning Brother, and therefore denies the same.

27. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 27 of the Complaint concerning Canon, and therefore denies the same.

28. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 28 of the Complaint concerning HP, and therefore denies the same.

29. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 29 of the Complaint concerning Hulu, and therefore denies the same.

30. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 30 of the Complaint concerning Lenovo, and therefore denies the same.

6

31. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 31 of the Complaint concerning Lexmark, and therefore denies the same.

32. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 32 of the Complaint concerning Motorola, and therefore denies the same.

33. Novell denies the allegations in paragraph 33 of the Complaint.

34. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 34 of the Complaint concerning Samsung, and therefore denies the same.

35. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 35 of the Complaint concerning Trend Micro, and therefore denies the same.

36. Novell denies the allegations in paragraph 36 of the Complaint concerning itself alone and no other party. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 36 of the Complaint concerning other defendants, and therefore denies the same.

INFRINGEMENT OF U.S. PATENT NO. 5,999,908

37. Based upon Exhibit C attached to the Complaint and the information recited on the face thereof, and in reliance upon the truthfulness and accuracy of Lodsys's allegations in this regard, Novell admits, subject to the foregoing qualifications, that United States Patent No. 5,999,908 ("the '908 Patent") appears to have issued on December 7, 1999 and that it appears to be entitled "Customer-Based Product Design Module." On that same basis and subject to the

7

same qualifications, Novell admits that Exhibit C appears to be a true and correct copy of t he '908 Patent. Novell lacks knowledge or information sufficient to form a belief about the truth of the remaining allegations in paragraph 37 of the Complaint, and therefore denies the same.

38. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 38 of the Complaint concerning Samsung, and therefore denies the same.

39. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 39 of the Complaint concerning Trend Micro, and therefore denies the same.

40. Novell lacks knowledge or information sufficient to form a belief about the truth of the allegations in paragraph 40 of the Complaint concerning other defendants, and therefore denies the same.

JURY DEMAND AND PRAYER FOR RELIEF

Responses to the remainder of the Complaint are neither necessary nor required, as the remainder of the Complaint is Lodsys's demand for jury trial and prayer for relief. However, to the extent a response is required, Novell lacks knowledge or information sufficient to form a belief about the truth of allegations concerning other defendants, and therefore denies the same. Novell denies that Lodsys is entitled to any relief whatsoever.

Novell denies all allegations of the Complaint not expressly admitted to above.

AFFIRMATIVE DEFENSES

Novell asserts the following separate and distinct affirmative defenses to the claims for relief involving the '565 and '078 patents (collectively "the Asserted Patents") as set forth in the Complaint. Novell's affirmative defenses are made without assuming any burden of proof other

8

than those dictated by applicable law. Novell reserves the right to assert additional defenses that may be discovered or become supported during the course of this litigation. The '908 Patent is not asserted against Novell in the Complaint. Novell reserves the right to assert defenses against the '908 Patent in the event that, at some point in the future, it is asserted against Novell.

FIRST AFFIRMATIVE DEFENSE
(Failure to State a Claim)

Lodsys's Complaint, and each and every claim for relief therein, fails to state a claim upon which relief can be granted.

SECOND AFFIRMATIVE DEFENSE
(No Infringement of the Asserted Patents)

Novell is not infringing and has not infringed any valid and enforceable claim of the Asserted Patents, either literally, directly or indirectly, under the doctrine of equivalents, contributorily, by inducement, or in any other manner.

THIRD AFFIRMATIVE DEFENSE
(Invalidity of the Asserted Patents)

Some or all of the claims of the Asserted Patents are invalid for failure to satisfy one or more of the requirements for patentability of Title 35 of the United States Code, including, but not limited to, 35 U.S.C. 101, 102, 103, and/or 112.

FOURTH AFFIRMATIVE DEFENSE
(Prosecution History Estoppel)

Lodsys's claims for relief are barred under the doctrine of prosecution history estoppel. Lodsys is estopped from construing claims of the Asserted Patents in such a way as to cover any activity by Novell due to statements made to the United States Patent and Trademark Office during prosecution of the patent applications that led to the issuance of the Asserted Patents.

9

FIFTH AFFIRMATIVE DEFENSE
(Unclean Hands, Waiver, Laches, and Estoppel)

Lodsys's claims for relief are barred, in whole or in part, by one or more of the doctrines of unclean hands, waiver, laches, estoppel, and/or other equitable doctrines.

SIXTH AFFIRMATIVE DEFENSE
(Not Entitled to Injunctive Relief)

Lodsys is not entitled to injunctive relief because any purported injury to Lodsys is not immediate or irreparable, Lodsys has an adequate remedy at law, the balance of the hardships between Lodsys and Novell does not warrant an equitable remedy, and the public interest would be disserved by injunctive relief.

SEVENTH AFFIRMATIVE DEFENSE
(No Damages)

Lodsys's Complaint, and each and every claim for relief therein, is barred because Lodsys has not suffered any damages.

EIGHTH AFFIRMATIVE DEFENSE
(Limitation on Damages)

Lodsys is barred from recovering damages for any alleged infringement occurring prior to the date on which it filed the Complaint, due to Lodsys's failure to comply with 35 U.S.C. 287.

NINTH AFFIRMATIVE DEFENSE
(Lack of Standing)

Lodsys lacks standing to commence and maintain this Action.

TENTH AFFIRMATIVE DEFENSE
(Failure to Mitigate)

Lodsys's claims for relief are barred, in whole or in part, because it has failed to mitigate its damages, if any.

10

ELEVENTH AFFIRMATIVE DEFENSE
(Additional Affirmative Defenses)

Novell has or may have additional affirmative defenses which are not known at this time, but may become known through discovery or further investigation. Novell asserts herein each and every other affirmative defense that may be ascertained through future discover y or further investigation.

NOVELL'S COUNTERCLAIMS

Novell counterclaims against Lodsys in the Action as follows:

PARTIES

1. Novell is a Delaware corporation having a principal place of business at 404 Wyman Street, Suite 500, Waltham, Massachusetts 02451.

2. Lodsys is a limited liability company organized under the laws of Texas. On information and belief, Lodsys is wholly-owned by Lodsys Holdings, LLC, a limited liability company organized under the laws of Delaware. On information and belief, Lodsys purports to maintain a principal place of business at 505 East Travis Street, Suite 207, Marshall, Texas 75670. On information and belief, Lodsys is a non-practicing entity that does not make, sell, or offer for sale any products or services of any kind. On information and belief, Lodsys is organized for the sole purpose of licensing the patents it purports to own through litigation in this judicial district. On information and belief, Lodsys's only employee is its CEO, Mark Small, who is not located in this judicial district, but rather in the Chicago area.

JURISDICTION AND VENUE

3. This Action arises under the patent laws of the United States, Title 35 of the United States Code. This Court has jurisdiction pursuant to 28 U.S.C. 1331, 1338, 2201, and 2202.

11

4. Lodsys has commenced litigation against Novell by filing this Action and alleging that Novell infringes the '565 Patent and the '078 Patent (collectively "the Asserted Patents"). Since at least as early as the commencement of this Action, and continuing to this date, an actual and justiciable controversy exists between Novell and Lodsys with regard to the validity, enforceability, and infringement of the Asserted Patents.

5. Lodsys purports to maintain a principal place of business located in the Eastern District of Texas and it invoked and consented to the jurisdiction of this Court by filing this Action. Therefore, this Court has personal jurisdiction over Lodsys.

6. Venue is proper in this jurisdiction, with respect to Novell's counterclaims, pursuant to 28 U.S.C. 1391 and 1400.

FIRST COUNTERCLAIM FOR RELIEF
(Declaratory Judgment of Invalidity of the '565 Patent)

7. Novell restates, realleges, and incorporates by reference the allegations contained in paragraphs 1 through 6 of these Counterclaims, as if fully set forth hereat.

8. Each of the asserted claims of the '565 Patent is invalid for failure to comply with the requirements of patentability set forth in 35 U.S.C. 101, 102, 103, and/or 112.

9. An actual and justiciable controversy exists between Novell and Lodsys regarding the validity of the '565 Patent.

10. Novell is entitled to a declaration of this Court stating that the asserted claims of the '565 Patent, and the '565 Patent itself, are invalid.

SECOND COUNTERCLAIM FOR RELIEF
(Declaratory Judgment of Non-Infringement of the '565 Patent)

11. Novell restates, realleges, and incorporates by reference the allegations contained in paragraphs 1 through 10 of these Counterclaims, as if fully set forth hereat.

12

12. Novell has not infringed and does not infringe, either literally or under the doctrine of equivalents, any valid and enforceable asserted claim of the '565 Patent.

13. Novell has not infringed and does not infringe, either contributorily, by inducement, or in any other manner, any valid and enforceable asserted claim of the '565 Patent.

14. An actual and justiciable controversy exists between Novell and Lodsys regarding Lodsys's allegations that Novell infringes the '565 Patent.

15. Novell is entitled to a declaration of this Court stating that it has not infringed and does not infringe the '565 Patent in any manner whatsoever.

THIRD COUNTERCLAIM FOR RELIEF
(Declaratory Judgment of Invalidity of the '078 Patent)

16. Novell restates, realleges, and incorporates by reference the allegations contained in paragraphs 1 through 15 of these Counterclaims, as if fully set forth hereat.

17. Each of the asserted claims of the '078 Patent is invalid for failure to comply with the requirements of patentability set forth in 35 U.S.C. 101, 102, 103, and/or 112.

18. An actual and justiciable controversy exists between Novell and Lodsys regarding the validity of the '078 Patent.

19. Novell is entitled to a declaration of this Court stating that the asserted claims of the '078 Patent, and the '078 Patent itself, are invalid.

FOURTH COUNTERCLAIM FOR RELIEF
(Declaratory Judgment of Non-Infringement of the '078 Patent)

20. Novell restates, realleges, and incorporates by reference the allegations contained in paragraphs 1 through 19 of these Counterclaims, as if fully set forth hereat.

21. Novell has not infringed and does not infringe, either literally or under the doctrine of equivalents, any valid and enforceable asserted claim of the '078 Patent.

13

22. Novell has not infringed and does not infringe, either contributorily, by inducement, or in any other manner, any valid and enforceable asserted claim of the '078 Patent.

23. An actual and justiciable controversy exists between Novell and Lodsys regarding Lodsys's allegations that Novell infringes the '078 Patent.

24. Novell is entitled to a declaration of this Court stating that it has not infringed and does not infringe the '078 Patent in any manner whatsoever.

PRAYER FOR RELIEF

WHEREFORE, Novell prays for the following relief:

A. For a judgment dismissing each of the claims of the Complaint with prejudice, and entering judgment in favor of Novell on said claims;

B. For a judgment declaring the '565 Patent and each of its claims invalid;

C. For a judgment that Novell does not infringe, induce infringement, or contributorily infringe any valid and enforceable claim of the '565 Patent;

D. For a judgment declaring the '078 Patent and each of its claims invalid;

E. For a judgment that Novell does not infringe, induce infringement, or contributorily infringe any valid and enforceable claim of the '078 Patent;

F. That this case be declared exceptional pursuant to 35 U.S.C. 285 and that Novell be awarded all of its attorneys' fees, costs, and expenses related to this Action;

G. For such other and further relief as the Court deems just and proper.

DEMAND FOR JURY TRIAL

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Novell demands a trial by jury on all claims and issues so triable.

14

Dated: June 20, 2011
Respectfully submitted,

/s/ Seth W. Black
Sterling A. Brennan
[E-mail]
David R. Wright
[E-mail]
Seth W. Black
[E-mail]
WORKMAN NYDEGGER
A PROFESSIONAL CORPORATION

15

CERTIFICATE OF SERVICE

I hereby certify that all counsel of record who 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 this 20th day of June, 2011. Any other counsel of record will be served by First Class U.S. mail on this same date.

/s/ Seth W. Black
Seth W. Black

16


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