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Commentary by Scott Tatro

RISMEDIA, Nov. 19, 2007-On September 21st, Judge Golden of the Eastern District of Pennsylvania denied a request for certification of a Class Action Motion filed in the patent infringement suit, REAL v. Diane Sarkisian. The plaintiff/patent holder, REAL Inc, filed the motion in support of its ongoing 2005 patent enforcement efforts for USPTO 5032989 “Real Estate Search and Location System and Method.. REAL claims ownership of the invention of an interactive mapping methodology that plots properties on graphical maps, a practice that industry leaders acknowledge appears to be utilized by many of today’s advanced location-based Web sites to locate available properties.

According to documents submitted to the court earlier this year, if the court had approved the class action certification, it would have likely implicated hundreds of thousands of real estate agents and brokers all across America. The reason for this wide-reaching effect was that the motion sought certification of a class definition that would have included all customers of REALTOR.com over the past 3-5 years who contracted for enhanced listing promotion.

According to the motion submitted by the patent holder plaintiff, this certification was an attempt to identify and streamline the enforcement actions against a pervasive user-base of infringers in this space. A Class Action is a legal administrative protocol that is designed to avoid redundant and repetitive filings, similar to this initial case filed against this individual Pennsylvania agent, by or against multiple parties with essentially the same legal circumstances.

In its denial of certification, the court indicated that a key element of its decision relied upon the premise that the defendant “Sarkisian’s interests did not necessarily align with the proposed class at large”. In its decision the court sites that “the level of personal animus that Sarkisian displays toward REAL, however, suggests that her goals for this litigation stretch beyond simply determining whether REAL’S patent is valid and has been infringed”. The decision goes on to further state, “To an impartial observer, this appears to be a commercial dispute that might be settled for a reasonable sum per class member; Sarkisian’s countersuits suggests that she, and the legal team that represent her in both matters, would be unable to represent the class effectively in settlement negotiations.”

Although the court found that certification of this Class Action would not create a superior method for resolving this dispute, it seemed clear that a resolution that included REAL’S ability to continue enforcing its patent rights against large numbers of real estate professionals throughout the US remained very much in tact.

What once appeared to be an industry-lead and financed legal defense of a specific defendant that was clearly invested to protect the greater interests of real estate professionals around the country, may have just been removed as a legal focal point of defense by this courts decision not to certify the Class Action Motion. It appears to leave the door open for a threat of litigations being launched independently against individual agents and brokers all across the country. From an industry perspective, it is difficult to determine if this denial of a class action motion for the patent holder is good news or bad.

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