Case5:14-cv-03112-PSG Document97 Filed02/27/15 Page1 of 4

[COUNSEL LISTED ON SIGNATURE BLOCK]

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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ADAPTIX, Inc.,
Plaintiff,
v.

Case No. 5:14-cv-03112-PSG

ADAPTIXS OPPOSITION TO MOTION
TO ENFORCE SETTLEMENT
AGREEMENT

ASUSTEK COMPUTER INC., ASUS

COMPUTER INTERNATIONAL, et al.,
Defendants.

Hearing Date: March 17, 2015, 10 a.m.

Courtroom 5, 4th Floor
Honorable Magistrate Judge Paul S. Grewal

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I.

INTRODUCTION

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Adaptix filed its complaint against ASUSTeK Computer Inc. and ASUS Computer International

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(collectively ASUS or Defendant) on May 28, 2014 alleging infringement of U.S. Patent Nos.

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7,454,212 and 6,947, 748. Dkt. No. 1. This case was transferred to the Northern District of California

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on July 8, 2014 from the Eastern District of Texas. Dkt. No. 42.

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Since this cases transfer, the parties have engaged in numerous settlement discussions. Those

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discussions only started to become serious during November 2014. During mid-December, the parties

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started to exchange proposals and were close to reaching agreement. See Declaration of Curtis Dodd

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in Support of Adaptixs Opposition to Motion To Enforce Settlement Agreement (Dodd Dec.) at 3.

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The conversations made clear that a deal must be done by December 31, 2014. See Exh. A to Dodd

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Dec. (Email dated Dec. 17 from C. Dodd to R. Liao). As that date approached, Adaptix again

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confirmed the understanding of the parties that a deal would be done by the end of the year. See Exh.

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B to Dodd Dec. (Email dated Dec. 25 from C. Dodd to R. Liao). When a proposal was finally sent by

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ASUS, Adaptix made clear its revisions and the importance of getting the agreement signed by the end

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of the year. See Exh. C to Dodd Dec. (Email dated Dec. 30 from C. Dodd to R. Liao).

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06085590ADAPTIX OPPOSITION TO MOTION TO
ENFORCE PATENT LICENSE AGREEMENT

CASE NO. 5:14-CV-03112

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On December 30, 2014, Adaptix sent a copy of the signed agreement to ASUS with several

changes and expected a signed copy to be returned that day. See Exh. 2 to Declaration of Ricky Liao

in Support of Defendants Motion to Enforce Settlement Agreement (Liao Dec.). ASUS responded

the same day that they would get the agreement signed immediately and send a copy back to Adaptix.

See Exh. D to Dodd Dec. (Email dated Dec. 30 from R. Liao to C. Dodd). Adaptix again confirmed

that a signed agreement must be executed by December 31. See Exh. E to Dodd Dec. (Email dated

Dec. 30 from C. Dodd to R. Liao). Further, ASUS expressly acknowledged that an agreement was not

fully executed noting: I have to let you know I already do my best [sic], but I cannot give you the

fully executed [sic] before 2014/12/31. I will scan/email the fully executed agreement to you when it

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complete [sic]. See Exh. F to Dodd Dec. (Email dated Dec. 31 from R. Liao to C. Dodd). Adpatix

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further wrote to ASUS expressing their strong desire to continue with the agreement, but when no

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agreement was sent to Adaptix, they withdrew their counteroffer. See Exh. G to Dodd Dec. (Email

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dated Dec. 31 from C. Dodd to R. Liao).

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On January 19, 2015, ASUS finally signed the agreement. See Liao Dec. at 9. Furthermore, it

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was not until ASUS insisted on bringing the instant motion that they produced a copy of the signed

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agreement to Adaptix. See Dodd Dec. at 11.

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II.

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1) ADAPTIX SHOULD BE AFFORDED A FULL EVIDENTIARY HEARING GIVEN

THE FACTUAL NATURE OF THIS INQUIRY.

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ARGUMENT

It is well settled that a district court has the equitable power to enforce summarily an

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agreement to settle a case pending before it. Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987);

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Russell v. Puget Sound Tug & Barge Co., 737 F.2d 1510, 1511 (9th Cir. 1984) (finding summary

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enforcement of settlement agreement not appropriate in situations presenting complex factual issues).

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However, the district court may enforce only complete settlement agreements. Callie, 829 F.2d at

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890. Where material facts concerning the existence or terms of an agreement to settle are in dispute,

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the parties must be allowed an evidentiary hearing. Id.

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Here, the dispute is whether a contract exists. There is no complete agreement and Adaptix

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ADAPTIX OPPOSITION TO DEFENDANTS MOTION
FOR ATTORNEYS FEES

CASE NOS. 5:13-CV-01776; 01777; 01778; 01844; 02023

Case5:14-cv-03112-PSG Document97 Filed02/27/15 Page3 of 4

should be afforded an evidentiary hearing. The Court should not be rushed into a decision by a

summary proceeding. Rather, it should be given a full factual record with which to make its

determination.

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2) DEFENDANTS MOTION SHOULD BE DENIED BECAUSE THERE WAS NO

CONTRACT.
California law requires that acceptance must be absolute and unqualified. Cal. Civ. Code

1585. Even stating that [a] qualified acceptance is a new proposal. Id. [T]erms proposed in an

offer must be met exactly, precisely and unequivocally for its acceptance to result in the formation of a

binding contract; and a qualified acceptance amounts to a new proposal or counteroffer putting an end

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to the original offer. Panagotacos v. Bank of Am., 70 Cal.Rptr.2d 595, 597 (1998)(internal citations

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omitted); The Siegel v. Warner Bros. Entm't Inc., 542 F. Supp. 2d 1098, 1137 (C.D. Cal. 2008).

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In Panagotacos, the sellers wrote to the buyer offering their property subject to certain terms.

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70 Cal.Rptr.2d at 596. The buyer responded to the sellers enclosing a signed copy of the offer with a

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cover letter depicting certain terms not contained in the offer. Id. The court held that no contract

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existed reasoning that the proposal constituted a counteroffer because of the additional terms included

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in the cover letter. Id. at 597.

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Here, when the signed agreement was sent to ASUS, it is undisputed that changes were made

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to the offer that were still subject to approval by ASUS. Additionally, Adaptix made clear that an

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executed copy of the agreement must be received by December 31, 2014. Therefore, a court hearing

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these facts should hold similarly to the court in Panagotacos that additional terms proposed in

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conjunction with a signed agreement constitute a counteroffer.

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3) THE PAROL EVIDENCE RULE DOES NOT EXCLUDE EVIDENCE TO PROVE

THAT NO CONTRACT EXISTED.
The California Code of Civil Procedure provides, in pertinent part, that [w]here the validity of

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the agreement is the fact in dispute the parol evidence rule does not exclude evidence relevant to

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that issue. Code Civ. Proc. 1856(f). Parol evidence is always competent to show the nonexistence

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of the contract. Halldin v. Usher, 321 P.2d 746, 752 (1958); see also San Diego Cnty. v. Viloria, 80

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ADAPTIX OPPOSITION TO DEFENDANTS MOTION
FOR ATTORNEYS FEES

CASE NOS. 5:13-CV-01776; 01777; 01778; 01844; 02023

Case5:14-cv-03112-PSG Document97 Filed02/27/15 Page4 of 4

Cal. Rptr. 869, 869 (Cal. Ct. App. 1969)(recognizing that application of the parol evidence rule is not

involved in determining whether a contract exists).

Here, the dispute between the parties is whether there is an enforceable contract. Therefore,

parol evidence should be admissible to prove the existence of a contract. On December 30, Adaptix

confirmed to ASUS that they were still waiting on the executed agreement and that if one is not

received by December 31 then their counteroffer is withdrawn. This course of conduct proves

Adaptix was never under the impression that a contract ever existed and confirms that the act of

sending a signed agreement to ASUS operated as a counteroffer. ASUS confirmed this fact when,

after having received the signed agreement, they acknowledged that there was no fully executed

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agreement. A court hearing this matter should find that the parties did not intend for the signed

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agreement sent by Adaptix to operate as a fully executed agreement.

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III.

CONCLUSION

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For the foregoing reasons, Adaptix respectfully prays that the Court allow a full evidentiary

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hearing to determine whether a contract existed. Moreover, Adaptix respectfully asks this court to

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deny Defendants motion and find that no contract existed between the parties.

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Dated: February 27, 2015

ADAPTIX, INC.

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By:
/s/ Paul J. Hayes
Paul J. Hayes (pro hac vice)
Kevin Gannon (pro hac vice)
HAYES MESSINA GILMAN HAYES, LLC
200 State Street, 6th Floor
Boston, MA 02109
phayes@hayesmessina.com
kgannon@hayesmessina.com
Telephone: (617) 439-4200

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Christopher D. Banys
Jennifer L. Gilbert
Banys, P.C.
1032 Elwell Court, Suite 100
Palo Alto, CA 04303
cdb@banyspc.com
jlg@banyspc.com
Telephone: (650) 308-8505

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ADAPTIX OPPOSITION TO DEFENDANTS MOTION
FOR ATTORNEYS FEES

CASE NOS. 5:13-CV-01776; 01777; 01778; 01844; 02023