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Motion to Stay Based on Customer Suit Exception Denied as Premature Where Infringement Contentions Had Not Yet Been Served

The plaintiff sued over 500 defendants for patent infringement in multiple actions in the United States District Court for the Eastern District of Texas. The patent-at-issue claims a “‘software interface’ that may provide a ‘map of a selected geographic area’ such that ‘information which is associated with particular geographic locations,’ such as ‘good and services,’ ‘can be readily accessed.'” Eighty-one defendants in the various actions moved to stay the case pursuant to the “customer suit exception” to the first-to-file rule.

The moving defendants contended that their case should be stayed pending the outcome of a later filed declaratory judgment action brought by Microsoft and Google, among others, in the District of Delaware, because the declaratory judgment actions were manufacturer suits. The moving defendants contended that they merely license the relevant software from the manufacturers. Accordingly, the moving defendants contended a resolution of those lawsuits may resolve the cases against the licensees.

The plaintiff responded by arguing that the moving defendants failed to provide evidence that they are customers of Microsoft and Google or that Microsoft and Google had provided the accused methods and systems during the potential damages period. The plaintiff also explained that it accused each of the moving defendants’ specific implementation of a “locator” or “finder” database management system that involves “geographical hierarchies,” a search engine,” and results sorted according to the geographical hierarchies.

The district court denied the motion to stay, finding that the moving defendants’ motion was premature because the parties had not yet proceeded far enough in the litigation to know the scope of plaintiff’s infringement contentions. “On balance, Movants’ motion is premature, as evidenced by the parties’ disagreement about the scope of GeoTag’s infringement allegations. The Local Patent Rules provide for infringement contentions as a mechanism to avoid or resolve this type of dispute. . . . Because the above-captioned cases are at an early stage, GeoTag has not yet been required to serve infringement contentions.”

Accordingly, the district court denied the moving defendants motion to stay without prejudice and permitted the refilling of the motion after plaintiff served its infringement contentions.

Geotag, Inc. v. Georgio Armani S.P.A., et al., Case No. 2:10-CV-569 (E.D. Tex. Nov. 14, 2011)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or