`ESTTA160052
`ESTTA Tracking number:
`08/30/2007
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91165017
`Defendant
`Napster, LLC
`MICHAEL T. ZELLER
`QUINN EMANUEL URQUHART OLIVER & HEDGES
`865 SOUTH FIGUEROA ST., 10TH FLOOR
`LOS ANGELES, CA 90017
`UNITED STATES
`Response to Board Order/Inquiry
`Michael T. Zeller
`michaelzeller@quinnemanuel.com
`/Michael T. Zeller/
`08/30/2007
`Status Report.pdf ( 6 pages )(148686 bytes )
`Declaration.pdf ( 32 pages )(620517 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Application Serial No.
`For the Mark:
`
`Publication Date:
`
`78414770
`
`NAPSTER LIGHT
`
`March 29, 2005
`
`Trademark Registration No.
`For the Mark:
`
`78431602
`
`NAPSTER MOBILE
`
`Publication Date:
`
`May 17, 2002
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2575 170
`
`June 4, 2002
`NAPSTER
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2341431
`
`iAay11,2004
`NAPSTER
`
`Opposition No. 91 165017
`Opposition No. 91 165620
`Cancellation No. 92044347
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2843786
`
`hAay18,2004
`NAPSTER
`
`REGISTRANT/APPLICANT’S
`
`STATEMENT OF THE STATUS
`
`OF CASES OCCASIONING
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2843405
`
`SUSPENSION OF PROCEEDINGS
`
`May 18, 2004
`NAPSTER & Design
`
`PURSUANT TO ORDER DATED
`
`AUGUST 2, 2007
`
`SIGHTSOUND TECHNOLOGIES, INC.,
`
`Opposer,
`
`V.
`
`NAPSTER, L.L.C.,
`
`Applicant.
`
`
`
`Commissioner of Trademarks
`
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`04635/22000492
`
`STATUS REPORT
`
`
`
`Registrant/Applicant respectfully submits this “status of the civil action and bankruptcy
`
`case which occasioned the suspension of this proceeding,” as directed by the Board's Order dated
`
`August 2, 2007. The status of the civil action and the bankruptcy case is addressed in more
`
`detail below.
`
`In brief, however:
`
`(a) the bankruptcy proceeding has been fi.111y resolved in
`
`Registrant/Applicant's favor; and (b) the civil action that occasioned the suspension of the
`
`present Board proceedings remains pending.
`
`The Bankru tc Case: In re Enco Recove Cor .
`
`/Ir/a Na ster Inc. No. 02-11573
`
`On August 23, 2005, after fill} briefing and two hearings, the Bankruptcy Court for the
`
`District of Delaware (“Bankruptcy Court”) entered an Order granting Registrant/Applicant’s
`
`Motion to Reopen Chapter ll Case and Enforce Sale Order.‘
`
`In doing so, the Bankruptcy Court
`
`rejected the claims by Opposer/Petitioner that Registrant/Applicant's parent, Roxio, had acquired
`
`the relevant trademark rights "in gross" as alleged in its pleadings filed with the Board and held,
`
`among other things, that:
`
`0
`
`Roxio validly acquired the Debtor’s trademarks,
`
`trademark registration and
`
`pending applications for registration,
`
`including (i) United States Trademark
`
`Registration No. 257170 for the mark NAPSTER, registered on the Principal
`
`Register of the United States Trademark Office on June 4, 2002 (the “NAPSTER
`
`Registration”) and (ii) three then—pending Intent-to-Use applications that Napster,
`
`Inc. had filed with the United States Trademark Office (the “NAPSTER ITU
`
`‘ Declaration of Michael T. Zeiler, dated August 30, 2007 and filed concurrently herewith
`("Ze1ler Dec."), Exhibit 1 (Order of August 23, 2005) and Exhibit 2 (August 15, 2005 Transcript
`of Continued Hearing on Motion to Reopen Chapter 11 Case and Motion to Enforce Sale Order).
`
`04635/22ooo49.2
`
`2
`
`STATUS REPORT
`
`
`
`Applications”) which subsequently ripened into United States Trademark
`
`Registration Nos. 2841431, 2843786 and 2843405.
`
`-
`
`Roxio validly acquired the goodwill associated with the NAPSTER Registration
`
`and NAPSTER ITU Applications}
`
`The bankruptcy proceeding remains closed at this time,3 and the time for Opposer/Petitioner to
`
`appeal the Bankruptcy Court's Order granting Registrant/Applicant’s Motion to Reopen Chapter
`
`11 Case and Enforce Sale Order has long since run. E Fed. R. Bank. P. 800l(a), 8002(a)
`
`(requiring notice of appeal from bankruptcy court order or judgment be filed within ten days).
`
`The Civil Action: SightS0und Technologies, Inc. v. Roxio, Inc. and Napster, L.L.C.
`
`The relevant civil action was brought by Opposer/Petitioner in the United States District
`
`Court
`
`for
`
`the Western District of Pennsylvania
`
`(the
`
`“District Court Case"),
`
`and
`
`Registrant/Applicant filed counterclaimsfi The District Court Case remains pending.
`
`More specifically, prior to the initiation of the instant proceedings before the Board and
`
`prior to the Board's Order suspending them, the District Court had entered an Order staying the
`
`District Court Case pending the Patent Office's reexamination of the patents at issue.5 On March
`
`17, 2007, the Patent Office's Central Reexamination Unit issued a Final Office Action that
`
`rejected all pending claims of Opposer/Petitioner's patents. Opposer/Petitioner filed responses to
`
`2 Zeller Dec., Exhibit 1, at 2.
`3 Zeller Dec., Exhibit 2 at 20:17-21 :6.
`4 A more complete history of the District Court Case, the nature of the claims at issue and the
`District Court's original stay Order was set forth in Registrant/Applicants‘ Petition for Stay, and
`accompanying Declaration of Michael T. Zeller in support thereof, filed in Opposition No.
`91165017 on June 6, 2006.
`5 Zeller Dec.,1] 4. The patents-in-suit that are the subject of reexamination are U.S. Patent Nos.
`5,191,573, 5,675,734, and 5,966,440. Q
`
`04535/22000492
`
`3
`
`STATUS REPORT
`
`
`
`the Final Office Action on May 17, 2007.6 On July 30, 2007, the Patent Office issued Advisory
`
`Actions rejecting the Opposer/Petitioner's May 2007 responses to the Final Office Action. The
`
`Opposer/Petitioner filed notices of appeal on May 31, 2007, followed by appeals of the Final
`
`Office Action to the PTO Board of Appeals on July 31, 2007.7 These appeals are currently
`
`pending}
`
`In addition to the stay Order, on May 31, 2007, the District Court entered an Order
`
`closing the District Court Case as an administrative matter.9 However, the District Court's Order
`
`makes clear
`
`that
`
`the administrative closing of the matter
`
`is only "pending the final
`
`determination" of the reexamination proceedings.
`
`Furthermore, under the law, such "an
`
`administrative closure is the functional equivalent of a stay" and did not serve to terminate the
`
`District Court Case or constitute the entry of judgment.
`
`International Ass'n of Machinists and
`
`Aerospace Workers Local Lodge 2121 AFL-CIO v. Goodrich Corp, 410 F.3d 204, 209 (5th Cir.
`
`2005).") The District Court Case accordingly remains pending,
`
`including with respect to
`
`‘H 5.
`
`Lc_l,,
`Li-
`
`E Z
`
`\ObO-.IO\
`
`eller Dec., Exh. 3.
`"’ See also CitiFinancial Corp. v. Harrison, 453 F.3d 245, 250 (5th Cir. 2006) ("administratively
`closing a case is merely a case-management tool used by district court judges to obtain an
`accurate count of active cases" and is "equivalent to a stay"); Dees V. Billy, 394 F.3d 1290, 1293-
`94 (9th Cir. 2005) (the “effect of an administrative closure is no different from a simple stay,
`except that it affects the count of active cases pending on the court's docket; i.e., administratively
`closed cases are not counted as active. .
`.
`. That situation is the functional equivalent of a stay,
`not a dismissal'".) (quoting Mire v. Full Spectrum Lending Inc., 389 F.3d 163, 167 (5th Cir.
`2004)); Lehman v. Revolution Portfolio LLC, 166 F.3d 389, 392 (1st Cir. 1999) (“an
`administrative closing has no effect other than to remove a case from the court's active docket
`and permit the transfer of records associated with the case to an appropriate storage repository”);
`Corion Com. v. Chen, 964 F.2d 55, 56-57 (1st Cir. 1992) (holding that a district court's order that
`a proceeding be administratively closed pending arbitration was not equivalent to a final
`judgment of dismissal); Quinn v. CGR, 828 F.2d 1463, 1464-1465 (10th Cir. 1987) (district
`
`04535/22000492
`
`4
`
`STATUS REPORT
`
`
`
`Registrant/Applicant's counterclaims that could result in rulings having a bearing on the Board's
`
`proceedings here. ”
`
`Dated: August 30, 2007
`
`Respectfully submitted,
`
`5 /
`
`By: Mama» I - gr‘-
`
`QUINN EMANUEL URQUHART
`OLIVER & HBDGES, LLP
`Michael T. Zeller
`
`865 South Figueroa Street, 10th Floor
`Los Angeles, California 90017
`Telephone: (213) 443-3000
`Facsimile: (213) 443-3100
`
`Attorneysfor Respondent Napster, 15.15. C.
`
`court order stating that the case is “ordered closed, to be reopened upon a showing of good
`cause” was not a final decision because it contemplated further proceedings in district court
`following arbitration).
`" §_e_e_ Registrant/Applicants’ Petition for Stay, at pages 3-4, and accompanying Declaration of
`Michael T. Zeller in support thereof, at 111] 4-6, filed in Opposition No. 91165017 on June 6,
`2006.
`
`04535122000492
`
`5
`
`STATUS REPORT
`
`
`
`Proof of Service
`
`I hereby certify that a true and complete copy of the foregoing Registrant/Applicant’s
`
`Statement of the Status of Cases Occasioning Suspension of Proceedings Pursuant to Order
`
`Dated August 2, 2007 has been served on William K. Wells by mailing said copy on August 30,
`
`2007, via First Class Mail, postage prepaid to:
`
`William K. Wells
`
`Brian S. Mudge
`Susan A. Smith
`
`KBNYON & KENYON
`
`1500 K Street, N.W., Suite 700
`Washington, DC 20005
`Tel.: (202) 220-4200
`Fax: (202) 220-4201
`
`o4e35x22ooo49.2
`
`6
`
`STATUS REPORT
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the Matter of:
`
`Application Serial No.
`For the Mark:
`
`Publication Date:
`
`78414770
`
`NAPSTER LIGHT
`
`March 29, 2005
`
`Trademark Registration No.
`For the Mark:
`Publication Date:
`
`78431602
`
`NAPSTER MOBILE
`
`May 17, 2002
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2575170
`
`June 4, 2002
`NAPSTER
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2841431
`
`May 11, 2004
`NAPSTER
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2843786
`
`May 18, 2004
`NAPSTER
`
`Trademark Registration No.
`Registration Date:
`For the Mark:
`
`2843405
`
`May 18, 2004
`NAPSTER & Design
`
`SIGHTSOUND TECHNOLOGIES, INC.,
`
`Opposer,
`
`V.
`
`NAPSTER, L.L.C.,
`
`Applicant.
`
`Opposition No. 91 165017
`Opposition No. 91 165620
`Cancellation No. 92044347
`
`DECLARATION OF MICHAEL T.
`
`ZELLER SUBMITTED WITH
`
`APPLICANT’S STATEMENT OF
`
`THE STATUS OF CASES
`
`OCCASIONING SUSPENSION OF
`
`PROCEEDINGS PURSUANT TO
`
`ORDER DATED AUGUST 2, 2907
`
`
`
`Commissioner of Trademarks
`
`P.O. Box 1451
`
`Arlington, Virginia 22313-1451
`
`04635/2201 157.1
`
`ZELLER DECL.
`
`
`
`1, Michael T. Zeller, do hereby declare and state as follows:
`
`1.
`
`I am a member of the State Bars of California, New York and lllinois and am
`
`counsel for Napster, LLC in these proceedings and for Napster, LLC and Roxio, Inc. in
`
`Sz'ghrSound Technologies, Inc. v. Roxio, Inc. and Napster, LLC, Civil Action No. 04-1549
`
`(W.D. Pa.), and In re: Enco Recovery Corp. f/k/a Napster, Inc., No. 02-11573 (PJW) (Bankr. D.
`
`Del.).
`
`I have personal knowledge of the facts stated herein and, if sworn as a witness, could and
`
`would testify competently thereto.
`
`2.
`
`A true and correct copy of the August 23, 2005 Order in In re: Enco Recovery
`
`Corp. f/k/a Napster, Inc., No. 02-11573 is attached hereto as Exhibit 1.
`
`3.
`
`A true and correct copy of the Transcript of the August 15, 2005 Continued
`
`Hearing on Motion to Reopen Chapter 11 Case and Motion to Enforce Sale Order in In re: Enco
`
`Recovery Corp. flk/a Napster, Inc, No. 02-11573 is attached hereto as Exhibit 2.
`
`4.
`
`Prior to the initiation of the instant proceedings before the Board and prior to the
`
`Board's Order suspending them, the United States District Court for the Western District of
`
`Pennsylvania entered an Order staying SightSound Technologies, Inc. v. Roxio, Inc. and Napster,
`
`L.L.C., Case No. 04-1549, pending the Patent Office's reexamination of the patents at issue in
`
`that action. The patents-in-suit that are the subject of reexamination are U.S. Patent Nos.
`
`5,191,573, 5,675,734, and 5,966,440.
`
`5.
`
`On March 17, 2007, the Patent Office's Central Reexamination Unit issued a Final
`
`Office Action that rejected all pending claims of Opposer/Applicant's patents.
`
`Opposer/Petitioner filed responses to the Final Office Action on May 17, 2007. On July 30,
`
`2007, the Patent Office issued Advisory Actions in rejecting the Opposer/Petitioner's May 2007
`
`0463512201 151.1
`
`2
`
`ZELLER DECL.
`
`
`
`responses to the Final Office Action. Opposer/Petitioner filed notices of appeal on May 31,
`
`2007, followed by appeals of the Final Office Action to the PTO Board of Appeals on July 31,
`
`2007. These appeals are currently pending.
`
`6.
`
`A true and correct copy of the District Court's May 31, 2006 Order in S1'ghtSound
`
`Technologies, Inc. v. Roxio, Inc. and Napster, L.L.C., Case No. 04-1549 is attached hereto as
`
`Exhibit 3.
`
`I declare under penalty of perjury under the law of the United States of America
`
`that the foregoing is true and correct.
`
`Executed this 30th day of August, 2007, at Los Angeles, California.
`
`/Iidu-. 7’:
`
`/‘B
`ichael T. Zeller
`
`04635/2201 157.1
`
`3
`
`ZELLER DECL.
`
`
`
`EXHIBIT 1
`
`
`
`
`
`IN THE UNITED STATES BANKRUPTCY COURT
`
`FOR THE DISTRICT OF DELAWARE
`
`IN ‘RE: ENCO RECOVERY CORP.
`Hide NAPSTER, INC.,
`a Delaware corporation, et 3].,
`
`)
`)
`)
`)
`)
`)
`Debtors.
`_______________._.._._._______)
`
`Chapter 1]
`
`Jointly Administered
`Case No. 02-41573 (PJVV)
`
`Re: Docket No. 972
`
`ORDER REOPENING CHAPTER 11 CASE AND
`AFFIRMTNG THE INTENT AND EFFECT OF THE SALE ORDER
`
`Upon the motion (the “Motion”)' of Roxie, Inc. (“Roxie”) and Napster, LLC for
`
`the entry of an order pursuant to sections 105, 350(b) and 363 of title 11 of the United States
`
`Code and Rule 3020(d) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules")
`
`reopening the chapter 11 cases of Enco Recovery Corp. (ffldal Napster, Ino.), Eneo-2 Recovery
`
`Corp. (f/Ida Napster Music Company, Inc.) and Enco-3 Recovery Corp. (f/Ida Napster Mobile
`
`Company, Inc.) (collectively, the “Debtors“) and enforcing the Court's Order Under l 1 U3.0.
`
`§§ i05(a), 363, 365 and 11450;), and Fed. R. Ba11kr.P. 2002, 6004, 6006, and 9014 (A)
`
`Approving Asset Purchase Agreement; (B) Authorizing the Sale of Substantially All of Debtors’
`
`Assets; (C) Authorizing Assumption and Assignment of Certain Executory Contract; and (D)
`
`Granting Other Related Relief (the “Sale Order"); the Court having reviewed the Motion, and
`
`having heard the statements of counsel regarding the Motion at the hearings before the Court on
`
`June 13, 2005 and August 15, 2005 (the ‘‘Hearings’‘); and the Court finding that (i) the Court has
`
`jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334, (ii) this is a core proceeding
`
`pursuant to 28 U.S.C. § 157(b)(2); and (iii) that notice of this Motion and the Hearings was
`
`sufficient and that no other or further notice need be provided; and the Court having determined
`
`LA3: I0935':'3.3
`RLFI-2908633-2
`
`
`
`
`
`that the legal and factual basis set forth in die Motion establish just cause for the reiicf granted
`
`herein; and the Court and after due deliberation and sufficient cause appearing therefor,
`
`IT is HEREBY FOUND AND oansaao THAT?
`
`1.
`
`Pursuant to the Sale Order, the Court approved that certain Asset Purchase
`
`Agreement dated as ofNovernber 15, 2002 between Napster, Inc., Napster Music Company, Inc,
`
`Napster Mobile Company. Inc. and Roxie, Inc. (the “Asset Purchase Agreement") and the
`
`transactions contemplated by the Asset Purchase Agreement.
`
`2.
`
`Pursuant to the Sale Order and Asset Purchase Agreement, as of the
`
`closing of the transaction Roxie validly acquired the Purchased Assets (as defined in the Asset
`
`Purchase Agreement) and the goodwill associated with them.
`
`3.
`
`Pursuant to the Sale Order and Asset Purchase Agreement, as of the
`
`closing of the transaction Roxie validly acquired the Debtors’ trademarks, trademark
`
`registrations and pending applications for registration, including (i) United States Trademark
`
`Registration No. 2575170 for the mark NAPSTBR, registered on the Principal Register ofthe
`
`United States Trademark Office on June 4, 2002 (the “NAPSTER Registration") and (ii) three
`
`then-pending Intent—to—Use applications that Napster, Inc. had filed with the United States
`
`Trademark Office (the "NAPSTBR ITU Applications") which subsequently ripened into United
`
`States Trademark Registration Nos. 2841431, 2343786 and 2843405.
`
`4.
`
`Pursuant to the Sale Order and Asset Purchase Agreement, as of the
`
`closing of the transaction Roxie validly acquired the goodwili associated with the NAPSTER
`
`Registration and NAPSTER ITU Appiications.
`
`
`
`' Capitalized tenrts used but not defined herein shall have the meaning assigned to them in the Motion.
`1 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as fndings of
`fact when appropriate. fig Fed. R. Ban!-tr. P. 7052.
`
`144311093573 3
`RLF I-2905633-2
`
`2
`
`
`
`
`
`5.
`
`Pursuant to the Sale Order and Asset Purchase Agreement, as of the
`
`closing ofthe transaction Roxio validly acquired the right to represent to third perti es that it was
`
`the successor to the Debtors‘ secure online subscription service for the distribution and sharing
`
`of music and other content.
`
`6.
`
`In the Sale Order, the Court found and ordered that the transfer of the
`
`Napster Assets to Rcxio pursuant to the Asset Purchase Agreement constituted a legal, vaiid, and
`
`effective transfer of the Purchased Assets, and vested Roxio with all right, title, and interest of
`
`the Debtors in and to the Purchased Assets.
`
`7.
`
`The Debtors’ bankruptcy case is hereby reopened pursuant to 1 1 U.S.C.
`
`§ 35003) for the purpose of granting the relief set forth herein.
`
`Dated: August 33. 2005
`Wilmington, Delaware
`
`The Honorable PeiterJ. Walsh
`
`United States Bankruptcy Judge
`
`I..A3:10935‘I3 3
`RLF1-2908683-1
`
`3
`
`
`
`EXHIBIT 2
`
`
`
`UNITED STATES BANKRUPTCY COURT
`DISTRICT OF DELAWARE
`
`IN RE:
`
`ENCO RECOVERY CORP.,
`f/k/a NAPSTER,
`INC.,
`a Delaware corporation,
`et a1.,
`
`Debtors.
`
`Case No. 02-11573
`
`Chapter 11
`
`Courtroom No. 2
`824 Market Street
`
`Wilmington, Delaware 19801
`
`August 15, 2005
`1:29 P.M.
`
`-_a-up-up-..rw..a-up-_d-.4-.4
`
`TRANSCRIPT OF CONTINUED HEARING ON MOTION TO REOPEN CHAPTER 11
`CASE AND MOTION TO ENFORCE SALE ORDER (Docket 972, 976, 977 AND
`ADDITIONAL BRIEFING)
`BEFORE HONORABLE PETER J. WALSH
`UNITED STATES BANKRUPTCY JUDGE
`
`APPEARANCES:
`
`For Roxie/Napster, LLC: Richards Layton & Finger, PA
`By: MARK COLLINS, ESQ.
`one Rodney Square, P.0. Box 551
`Wilmington, Delaware 19899
`
`Quinn Emanuel Urquhart Oliver
`& Hedges, LLP
`By: MICHAEL ZELLER, ESQ.
`865 South Figueroa Street, 10th Floor
`Los Angeles, California 90017
`
`0'Melveny & Myers LLP
`By:
`SUZZANNE UHLAND, ESQ.
`610 Newport Center Drive
`Newport Beach, California 92660-6429
`
`Proceedings recorded by electronic sound recording,
`transcript produced by transcription service.
`
`TRANSCRIPTS PLUS
`HSMWWEWCm%J%wHwqPmmflmmam%8
`e-m ail courttranscripts@a0l.c0m
`
`215-862-11 15 (FAX) 215-862-6639
`
`
`
`Appearances:
`(Continued)
`
`For former Chapter 11
`Trustee,
`former Plan
`Administrator:
`
`For Sightsound
`Technologies:
`
`Ashby & Geddes
`By:
`DON BESKRONE, ESQ.
`222 Delaware Avenue, 17th Floor
`Wilmington, Delaware 19801
`
`Saul Ewing, LLP
`By: MARK MINUTI, ESQ.
`222 Delaware Avenue, Suite 1200
`P.O. Box 1266
`
`Wilmington, Delaware 19899
`
`Kenyon & Kenyon
`By:
`SUSAN SMITH, ESQ.
`1500 K Street, N.W., Suite 700
`Washington, District of Columbia 20005
`
`
`
`THE COURT:
`
`Please be seated.
`
`MR. COLLINS: Good afternoon, Your Honor.
`
`For the
`
`record, Mark Collins of Richard Layton and Finger on behalf of
`
`Roxio,
`
`Inc.
`
`and Napster,
`
`LLC.
`
`Your Honor, this is the continued hearing on our
`
`motion to reopen a Chapter 11 case and to enforce the sale
`
`order.
`
`Pursuant to Your Honor's request at the last hearing on
`
`this matter, we did file supplemental pleadings, as did
`
`Sightsound Technologies.
`
`So, with that, Your Honor, what I would do —- propose
`
`to do is simply turn the podium over to Ms. Uhland for some
`
`additional argument.
`
`THE COURT: Okay.
`
`MS. UHLAND: Your Honor,
`
`I believe today's hearing
`
`our issues before the Court are quite narrow, as is the order
`
`that Roxio, or the movants, now Napster, seeks from the Court.
`
`As Sightsound has stated in its surreply,
`
`the
`
`position -- our position that we acquired the Napster marks --
`
`the intent to use application and the trademark flows from our
`
`argument that we acquired the good will of Napster, as well.
`
`And, as again,
`
`they state in their surreply our --
`
`our position rises and falls on whether we acquired all the
`
`good will of Napster, that's at Page 5 of their surreply.
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`All of their trademark arguments flow from their
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`position that the movants acquired something less than what we
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`believed we acquired, and what the Trustee believes he sold us.
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`We believe we acquired substantially all the assets
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`of Napster, i.e., all of the assets of Napster, except for the
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`excluded assets that are enumerated in the asset purchase
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`agreement.
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`If we did acquire all those assets,
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`there is not an
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`issue with respect to the abandonment and position taken by
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`Sightsound. Our need for this clarifying order is that,
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`indeed, Sightsound is directly attacking the A.P.A.
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`Put simply, we say we acquired —— let's call it A, B,
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`C and D, we acquired everything. And they are saying that we
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`acquired A and B, something less than that.
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`They are saying we
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`did not acquire all of the assets and the good will associated
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`with all the assets.
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`They’re taking a position that there was a limitation
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`on the assets we acquired by use of the phrase, “Used in the
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`intended business.”
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`Now, we could debate here whether if the assets we
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`acquired were,
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`in fact, qualified by that phrase, whether we
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`would still meet all those -- the trademark requirements. And
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`we believe we do -- we would meet those if we got into that
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`line of argument and reasoning.
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`However,
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`the agreement is clear.
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`The parties to the
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`agreement,
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`the buyer and the seller understood it to mean that
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`we were acquiring all the assets.
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`So,
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`the Court need not get
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`into an analysis of assignment and gross and trademark.
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`Whereas Sightsound itself admits if we acquired all the assets,
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`there's not an issue here.
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`We have prepared a further revised form of order, and
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`if the Court doesn't have it before it I'd be happy to pass it
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`up,
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`in which we set out a more,
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`in terms, tied more closely to
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`the asset purchase agreement. That all we are -- the only
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`purpose of this order, and presenting it to this Court, is to
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`clarify that we acquired the good will and the purchased assets
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`associated -— I'm sorry.
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`The purchased assets and the good
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`ll
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`will associated with this.
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`l5
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`pleading?
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`Exhibit A.
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`Would it be helpful if I --
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`THE COURT: Didn't you attach it as —— to your
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`MS. UHLAND: Yes, it's attached to our pleading as
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`1?
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`THE COURT: Okay.
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`I have it.
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`MS. UHLAND:
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`If we could walk through this very
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`briefly.
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`On Page 2 where the operative provisions begin, we
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`are simply providing in the finding B that we validly acquired
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`the purchased assets as defined in the asset purchase
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`agreement. We're not attempting to expand or redefine what was
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`acquired.
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`And in C, pursuant to the sale order and the asset
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`purchase agreement, at the closing of the transaction —— to
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`address their concern about post sale contact, we're saying at
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`the closing of our transaction, Roxio validly acquired the
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`enumerated trademarks -- trademark registrations and pending
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`applications for registration, all of which are listed, and I
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`can walk through them, and expressly in the A.P.A. and the
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`schedules attached to the A.P.A. We're just clearly
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`enumerating that those trademarks were part of the purchased
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`assets.
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`And that we acquired the good will in Paragraph D
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`associated with those registrations and applications. We can
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`walk Your Honor through the A.P.A., but the A.P.A.
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`is clear
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`that we acquired the good will associated with the purchased
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`assets. Therefore, if these specific marks are included in the
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`purchased assets, we acquired the good will associated with
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`them.
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`Again,
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`in Paragraph E, we are simply mirroring
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`language from the asset purchase agreement about our right to
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`represent ourselves as successors to the debtors, secure on-
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`line subscription service and ask that those were validly —— it
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`was a legal, valid and effective transfer.
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`Paragraph F is not an expansion, but is just,
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`in
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`effect, a reiteration of the sale order.
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`It seems in some ways strange that we would,
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`in
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`effect, ask for an order that mirrors in almost every respect
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`and just simply moves into the form of the order the terms that
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`were within defined terms in our asset purchase agreement and,
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`therefore, part of the original sale order. And,
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`in fact,
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`we're not seeking to expand the sale order in any way. But we
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`have a party, a stranger to our contract, Sightsound, who is
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`saying that the A.P.A. and the sale order means something
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`different than the parties to that agreement and this Court in
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`approving the order intended and thought it to mean at the time
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`of the transaction.
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`So, we're seeking narrow relief, but it’s necessary
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`relief in light of the positions that Sightsound is taking in
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`this Court about the terms of our transaction and the position
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`that Sightsound is taking in other courts.
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`Again, as we set forth at our prior hearing, we are
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`not trying to take this Court into any scope of time beyond the
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`closing of our transaction and have qualified these findings by
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`the Court to when we walked out of this courtroom or at the
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`time of the closing that we had validly acquired substantially
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`all the assets which include these marks and registrations and
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`intent to use applications.
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`Finally, we, again, believe —- I think the Court
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`addressed it quite clear,
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`this Court has jurisdiction to enter
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`this order. First, there's a retention of jurisdiction
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`provision contained in these documents.
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`(Pause)
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`MS. UHLAND:
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`It looks like the Court's looking for
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`something -- are you okay?
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`THE COURT: Yes.
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`MS. UHLAND: But, second,
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`I think the 7th Circuit and
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`several other Circuits have made clear that when a party
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`acquires assets in a bankruptcy sale, their intent is to get
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`title and an order that is good against the world, it is,
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`in
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`effect, a title transfer and a title order.
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`It's a grant deed
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`when the Court enters a sale order and it is good against all
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`parties, even though not present at the hearing, as the 7th
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`Circuit made clear in Metalwood and I think all of us who
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`represent buyers and sellers in Bankruptcy Courts are here to
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`assume and operate under that premise.
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`Finally,
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`the Court has jurisdiction. There's many
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`good policy reasons for the Court to exercise that
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`jurisdiction. Again,
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`as the 7th Circuit said in Metalwood,
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`to
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`encourage people to come and bid at bankruptcy sales,
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`they have
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`to -- buyers have to be assured of their title and protect it
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`from future attacks, even against parties who were not present
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`at the sale hearing.
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`Accordingly, given our —-
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`the narrow scope of the
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`relief we are seeking,
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`there is no expansion of the rights or
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`the assets that we're seeking to acquire or limitation of this
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`Court’s order to a clarification of what was acquired as of the
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`closing of the transaction, we request that the Court deny
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`Sightsound —— or overrule Sightsound opposition and enter our
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`limited order that we requested.
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`THE COURT: Okay.
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`M. MINUTI: Good afternoon, Your Honor. Mark
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`Minuti.
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`I'm here today for Sightsound Technologies. With me
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`today at counsel table is Susan Smith from the Kenyon & Kenyon,
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`IP counsel to Sightsound.
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`Your Honor, I'm extremely pleased that counsel for
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`Roxio has agreed that we've narrowed the scope of this hearing
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`considerably to really what I think is the main issue, which is
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`what exactly are the assets that Roxio acquired here.
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`By doing so, Your Honor, we've done away with, I
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`think, a lot of the arguments and a lot of the red herrings
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`that were contained in the pleadings because I think when we
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`look at this narrow issue, Your Honor will conclude that,
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`number one,
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`the asset purchase agreement is clear. And since
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`it is clear, Your Honor doesn't really need to interpret it.
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`And,
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`therefore,
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`the Court does lack jurisdiction to decide
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`these issues.
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`But let me go to the issue of the asset purchase
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`agreement and what was acquired because I think that's really
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`going to carry the day here today.
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`Your Honor will recall that the reason we are here is
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`because we -— Roxio is claiming that we are attacking the sale
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`order. And I think what's pretty clear now is we're not
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`attacking anything in the sale order. We clearly recognize
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`there was a transfer of assets from the debtors before Your
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`Honor and Roxio.
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`The real issue focuses on the asset purchase
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`agreement and what assets it is that Roxio acquired pursuant to
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`that asset purchase agreement.
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`As we have argued, we accept that the asset purchase
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`agreement transferred the marks and we have never argued that
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`the marks were not transferred.
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`The real issue in the case is
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`whether,
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`in fact, Roxio purchased all of the good will of the
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`debtors because we submit under substantive trademark law, if
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`you accept a transfer of the marks but you don’t take all of
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`the good will, that has affect on your ability to use those
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`trademarks in the future.
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`So,
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`the issue I think is really even a little more
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`narrower than maybe counsel has suggested.
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`The question is did
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`they acquire all of the good will of the debtors. And we
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`believe when you look at the asset purchase agreement,
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`the
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`asset purchase agreement is clear that they did not acquire all
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`of the good will of the debtors.
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`They limited the good will
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`that they acquired to the good will of the intended business.
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`And Your Honor, no doubt,
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`has looked at our
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`pleadings. You’ve looked at Roxio’s pleadings. But 2.1, Your
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`Honor,
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`I would submit cannot be clearer.
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`In the introductory
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`paragraph of Section 2.1 of asset purchase agreement where we
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`are defining what the purchase assets are, or where Roxio is
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`defining what the purchase assets are, it is defined to
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`specifically provide -- bear with me, Your Honor.
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`(Pause)
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`MR. MINUTI: —- that they are acquiring,
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`they list
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`the assets. And then the —- Section 2.1 specifically includes
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`the limitation language, quote, “owned, held or used by the
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`sellers in the conduct of their intended business.”
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`Intended
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`business is a defined term in the agreement as, “The seller's
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`intended business of operating a legal secure on—line
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`subscription service for the definition and sharing of music
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`and other content."
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`When Your Honor goes to Section 2.1B, when they
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`describe the intellectual property rights that are being
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`transferred, it says, “Including the good will of the," capital
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`I, “Intended business.”
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`And then when Your Honor goes to the operative
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`section 2.1F, which is the general section assigning good will,
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`the good will contained in Section 2.1F is limited to the good
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`will of the, quote, “purchased assets," again, which is a
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`defined term,
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`in the introductory paragraph to 2.1, which is
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`limited by the language, quote, “owned, held or used by the
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`sellers in the conduct of their intended business.”
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`Your Honor will recall that when we were originally
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`before you in the last hearing, we had filed our petition to
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`invalidate these marks before the TTAB because we believed that
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`Roxio had rejected the good will of old Napster. Well,
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`I
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`think, Your Honor, we got it wrong at that time. At that time,
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`we didn’t have the asset purchase agreement, we didn't have the
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`sale order.
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`It's not that they rejected it, it's that they never
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`acquired it, Your Honor. And I think that's clear from the
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`language of the A.P.A. itself. And, Your Honor, because we
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`think it is crystal clear, we don't think there’s a need for
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`Your Honor to interpret the sale order or the asset purchase
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`agreement. We don't think Your Honor has to enforce the asset
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`purchase agreement or the sale order.
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`And for th