Civix Case Returns With a Bang

| February 4, 2010

Trial judges typically stay a patent case pending resolution of a reexamination, with the expectation that the reexamination will simplify the issues. That has not happened in Civix v. Hotels.Com and Yahoo!, from the Northern District of Illinois, which involves systems for remotely locating stores, hotels, etc.

It is true that Complainant Civix has now dropped two of the four patents asserted in its 2006 Complaint – U.S. Patent No. 6,408,307 now on appeal and U.S. Patent No. 6,473,692 where certain independent claims were canceled. Defendants Hotels.com and Yahoo!, however, have amended their pleadings to accuse Civix of various acts of inequitable conduct before the PTO. Defendants’ allegations echo the cyber-space kerfuffle touched off by the comments of Dennis Crouch and Ken Burchfiel in PatentlyO last week regarding the citation of 900+ references in U.S. Patent No. 7,651,688.

The two remaining patents – U.S. Patent Nos. 6,415,291 and 6,385,622 – Defendants say, are unenforceable because Civix committed a series of distinct claims of inequitable conduct:

• In 1998 third party NavTech attempted to provoke an interference with U.S. Patent No. 5,682,525 (the grand-parent of the ‘291 and ‘622 patents), asserting that it was the first inventor of the subject matter disclosed in the ‘525 patent. The dispute was settled, with NavTech assigning its rights to Civix and giving Civix the documents purporting to establish NavTech’s prior conception and reduction to practice. Defendants allege that Civix intentionally failed to disclose the existence of this dispute or the relevant documents during the prosecution of the ‘291 and ‘622 patents.
• In an earlier law suit between Civix and Microsoft regarding the ‘525 patent, the court construed certain ‘525 claim terms that are also present in the ‘291 and ‘622 claims, and ordered summary judgment of non-infringement. Defendants allege that Civix intentionally failed to disclose this information in the ‘291 and ‘622 prosecutions.
• Microsoft filed a motion for summary judgment of invalidity based on three prior art references. Defendants allege that Civix “buried” the three Microsoft references among 598 references in an IDS in the parent ‘307 prosecution and the ‘291 prosecution, but did not file any IDS in the ‘622 prosecution – “instead of informing the Examiner which prior art was most relevant to the claimed invention, CIVIX chose to either bury the references or disclosed nothing at all with regards [sic] to the ‘622, ‘307 and ‘291 patents.”
• Yahoo! alleges that Civix misrepresented the disclosure of certain prior art references during the prosecution of the parent ‘307 patent.
• Defendants allege that in the reexaminations, Civix submitted a “swear-behind” declaration knowing that one of the declarants suffered memory loss and another declaration that was contradicted Civix’s litigation assertions.

Monday, Judge Amy St. Eve issued an order allowing Defendants to file amended pleadings making their inequitable conduct allegations. She did not state an opinion on the merits of those allegations, finding only that the Defendants’ charges were made with sufficient particularity under the “who, what, when, where, and how” standard in Exergen v. Wal-Mart.

Who knows whether the charges are true or false. The only certainty is the judicial process will resolve the dispute, rightly or wrongly.

Category: Stays/District Courts

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