11 / 01 / 2012

Prevails In Patent License Dispute

United States District Court Judge David Hittner ruled in favor of the Vethan Law Firm’s (“VLF”) client, David Homoki d/b/a Global Check Services (“Global Check”), on Friday, October 26, 2012, in the case of David Homoki d.b.a. Global Check Services v. Conversion Services Inc. and Electronic Payment Systems Inc. The ruling came after a contentious October 15, 2012 evidentiary hearing wherein Electronic Payment Systems (“EPS”) claimed Global Check entered into a post-judgment agreement to settle its claims. The ruling preserves a $2,850,000 judgment in favor of VLF’s client.

After a complex trial involving breach of contract, breach of fiduciary duty, interference with contracts, and conspiracy claims against EPS and its co-defendant, Conversion Services, Inc., (“CSI”), VLF obtained the 2.85 million dollar verdict on behalf of Global Check Services. After the verdict, the parties initiated mediation. Although no settlement was accomplished, the parties did leave the mediator’s office in a spirit of “agreeing to agree.” However, to effectuate a binding settlement, the parties would be required to engage in further, more considered discussions on the scope and limits on the license to be granted by Global Check in favor of Electronic Payment Systems. Shortly after mediation, EPS appealed the judgment.

Although no settlement agreement was ultimately reached, EPS filed a lawsuit in a Colorado federal court claiming that Global Check had breached a settlement agreement reached with EPS. Additionally, during oral arguments before the Federal Fifth Circuit Court of Appeals, counsel for EPS claimed the case was essentially moot because of the alleged settlement agreement.  EPS claimed that a paper with outlined points that contained its signature only constituted the parties’ settlement agreement. On the other hand, VLF hotly contested EPS’ assertions, pointing to the fact that the “paper” produced by EPS was never signed by its client, Global Check. According to EPS, this paper embodied Global Check’s agreement to grant EPS an exclusive license of Global Check’s highly sought-after patent, which it could even assign to third parties in its sole discretion. Because of the novel posture of case in light of EPS’s announced settlement of the case while on appeal, the federal appeals court remanded the case to United States District Court to conduct a hearing and issue findings on the sole issue whether the parties had “confected” a settlement.

On October 15, 2012, U.S. District Judge David Hitter conducted a lengthy hearing which included the testimony of witnesses from Austin, California and Colorado.  On October 26, 2012, Judge Hitter issued his finding that, because the parties never agreed on the scope or limits of Global Check’s patent license in favor of EPS, the parties never achieved a binding settlement agreement. Hence, the United States District Court’s ruling preserves the original judgment against EPS. In addition, and as observed by Judge Hitter, as a result of the hearing, VLF may ask for additional attorney’s fees and costs for its client.

VLF continues to represent its clients in the most contentious claims filed in state and federal courts at both the trial and appellate levels, and to aggressively pursue vindication of its clients’ legal rights.

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Tel: (713) 526-2222

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