Court Denies Motion to Stay GeoTag Case
- August 30, 2012
August 30, 2012 – District Judge Michael Schneider of the Eastern District of Texas (EDTX) denied defendants’ collective motion to stay this litigation pending the resolution of a declaratory judgment action in Delaware. The plaintiff in this case, GeoTag [NPE], has filed 72 cases against over 400 defendants, alleging patent infringement of US Patent No. 5,930,474, which relates to providing various location-based services such as a map and listing of nearby store locations or services. In early March 2011, Google and Microsoft filed a collective declaratory judgment action in Delaware, followed by a separate action by Where 2 Get It, Inc. (W2GI), in order to, in the words of the Court, “protect their customers, many of whom were named by GeoTag as Defendants in the Texas case,” by claiming they as the suppliers are the “real parties in interest in the GeoTag litigation”. Shortly thereafter, the Delaware Court W2GI litigation was transferred to the EDTX due to a concurrently pending litigation filed by GeoTag, but denied transfer of the Microsoft/Google case. The defendants’ then sought to stay the litigation under the customer-suit exception contending, “the [Microsoft/Google] case would resolve the major issues in the customer suit in Texas, thereby conserving resources and avoiding duplicative litigation,” while GeoTag argued that the Delaware case, “would not resolve most of the issues in the customer cases, and thus a stay would needlessly prolong litigation.” The Court denied the request for stay in stating the Texas defendants had not: sufficiently shown they are, “merely resellers,” of the manufacturer’s accused technology; defendants did not agree to be bound by all rulings of the Delaware court, specifically rulings on infringement and claim construction; and failed to show that Google and Microsoft were, “the only sources of the allegedly infringing systems,” because, “approximately 64% of the customer defendants are customers of Microsoft, Google, or W2GI. Conversely, at least 36% of the customer defendants either independently established the accused systems or rely on other suppliers.” The Court consequently determined, “[a] partial stay only as to the moving customer defendants—with the remaining customer defendants proceeding in the litigation—would eliminate the efficiencies gained by a stay. Given the availability of the allegedly infringing systems, the Court finds this factor weighs heavily against issuing a stay,” and denied the stay based on the weight of all the factors. GeoTag is a patent holding entity created by Ubixo Limited (formerly known as M2 Global Ltd.) in July 2010 following a title dispute of the ‘474 patent with Cityhub.com. Under the settlement agreement, Cityhub.com assigned all rights, title, and interest regarding the ‘474 patent to Ubixo in exchange for one-sixth of net proceeds GeoTag generates under the ‘474 patent. In November 2010, GeoTag filed an S-1 with the SEC with a plan to raise $7.62 million through an initial public offering. Prior to the spin-off, no revenue had been generated from the ‘474 patent.
2-10-cv-569, 2-10-cv-570, 2-10-cv-571, 2-10-cv-572, 2-10-cv-573, 2-10-cv-574, 2-10-cv-575, 2-10-cv-587, 2-11-cv-175, 2-11-cv-403, 2-11-cv-404, 2-11-cv-405, 2-11-cv-424, 2-11-cv-43