RISMEDIA, April 4th, 2007- Recently, notice of the "Class Action Motion" filed in the REAL vs. Diane Sarkisian et. al. patent infringement case in the U.S. District Court for the Eastern District of Pennsylvania regained some national attention. The motion filed by the patent holder-plaintiff (REAL) seeks to extend the infringement liability found against Sarkisian, a real estate agent, to apply to perhaps as many as hundreds of thousands of real estate agents and brokers across the country. Now with the stakes higher, filings of "Summary Judgment Motions" make it possible for real estate professionals to examine the evidence from both sides.
The case, filed in June 2005, alleges that Sarkisian, an agent in the Philadelphia area, infringed United States Patents 5032989 and 4870576, "Real Estate Search and Location System and Method," which claim the use of interactive "zoomable" maps to locate available real estate.
"Summary Judgment Motions" were filed on March 7th and responses followed on March 28th from both the plaintiff and defendant. Court guidelines and civil procedures mandate that the parties base their Summary Judgment Motions upon undisputed facts in a manner that facilitates the courts ability to focus on issues of liability. These documents along with their responses should give a strong indication as to how this case is progressing.
The defense's Summary Judgment Motion provided by the firm DLA Piper, one of the world's largest and most prestigious legal organizations, was both descriptive and detailed. The NAR and various industry organizations have done a fantastic job in stepping-up to ensure the very best defense for their member, and to protect against any potential exposure that might be assessed to the rest of the industry.
The defendant's motion seeks to establish two distinct battle lines. First, that the defendant is not infringing the steps of the patent based on her actions. Secondly, that the patent is invalidated by the existence of a previous mapping system ("prior art"). If either of these points can be shown to be factual, the defendants would likely be awarded a Summary Judgment in a matter of as little as a few weeks.
In the non-infringement defense, counsel cited case law that states that direct infringement can occur if the defendant performs some of the steps of the patent, while others with whom she would have to have "some connection" performed the balance of the steps.
The defense concedes that Sarkisian may participate in the step of "creating a database of available properties" through her submission of listing data in the regional Trend MLS located in King of Prussia, Pennsylvania. However; the defendant contends that since there is no connection whatsoever between the defendant and the other Trend MLS members, several of whom admit to performing all of the steps of the patent on a regular basis, she can therefore not be a direct joint infringer.
The defense also conceded that there were 800 or so direct e-mails sent by the defendant from the Trend system to her customers, which admittedly contained links and directions to zoomable maps of specific available properties. However; this action does not actually constitute "enabling or directing" others to use the patented steps, according to the responses, and therefore contributory infringement or inducement does not apply.
The defense further stated in its motion that Sarkisian in no way "directs, encourages, instructs or enables" clients to go to Web sites that permit map-based property location. Her own site, her broker's site, and Realtor.com are part of Sarkisian's marketing, acknowledges the defendant, and while they may provide that type of activity the defense contends that since she does not directly control the actions of other agents or customers she therefore does not infringe.
According to sources close to the case, the assertion of prior art seems like the best possible defense. A substantial portion of the motion is devoted to this topic. Although multiple expert witnesses for the plaintiff have testified to the contrary, one defense witness claims that they have evidence of prior art (MIDAS 1.2 software, an early desktop mapping product of MapInfo of Troy, NY).
Upon review of the manual, which is submitted as evidence, this prior art submission appears to contain some of the features of the patented claims and would certainly need to be studied carefully by the judge. However, even if the MIDAS software can be shown to match the claims point for point, it appears to have been created too late according to the court documents, and undisputed facts concerning the original filing date of the plaintiff's original patent. The CIP Continuation-in-Part for the plaintiff's first patent appears to place the date more than a year before the MIDAS product.
REAL is represented by a boutique intellectual property firm, Lipton Weinberger, & Husick. Much of their summary judgment motion establishes the plain language terms of the claims. Their multi-page table of undisputed facts is nearly three times that of the defense. It appears that no undisputed facts of a "material" nature submitted by the defense remained undisputed by the plaintiff following the responses on the 28th while more than 100 of the plaintiff's own undisputed facts remain substantially undisputed by the defense.
It is clear that the filing of a Class Action Motion in late February was a guiding factor as the plaintiff sets forth the direct, contributory, and inducement aspects of the patent enforcement being sought.
In addressing the issue of infringement, the plaintiffs make the case that Sarkisian directly infringes both individually and jointly. Citing the following Federal District court
"It is not necessary for the acts that constitute infringement to be performed by one person or entity. When infringement results from the participation and combined action(s) of more than one person or entity, they are all joint infringers and jointly liable for patent infringement. Infringement of a patented process or method cannot be avoided by having another perform one step of the process or method."
Through several affidavits from other Trend MLS subscribers, and copies of MLS policies, and association regulations, the plaintiff contends to establish a "connection" between Trend members and the defendant. Since this relationship is well established in the industry, it seems difficult to conceive of a ruling that would deny that connection.
One undisputed entry cites testimony from Sarkisian herself which appears to affirm her practice of the claims of the patent on her Mercedes in-car mapping navigation system. This would form the basis for the direct infringement as an individual which is separate and distinct from the joint infringement.
If the case citations and legal references are accurate, the admission that the defendant helps to create a database of available real estate, which is the first step of the patent, and then benefits from the marketing practices of sharing that data with other licensed agents and consumers who are able to use the map-based location methods, may be difficult to overcome for the defense.
Regarding the issue of prior art, the plaintiffs simply point to the appropriate filing date established by the United States Patent office. The MIDAS software in question was apparently provided by the plaintiffs in this case after a comprehensive and aggressive independent review that disqualified it both on the grounds of not performing the claims of the patent and not having a date prior to March 19th 1986.
Summary Judgment Motions are not designed to address the issue of damages, and so there is not an indication of the degree of liabilities that might be assigned to the defendant if found guilty. According to the defense, this case could extend to countless thousands of real estate professionals across the country, perhaps reaching beyond the hundreds of millions in liability. Based on that fact alone it is quite doubtful that the court would forego a jury trial even if the plaintiffs prevail.
In most lawsuits this Summary Judgment Motion and the subsequent responses form a large part of the factual testimony that would eventually be presented in front of a jury. Interested parties may want to review for themselves the litigants' summary motions and final responses.
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