Court Grants Stay in Pragmatus Telecom Case

  • July 16, 2012

July 15, 2012 – Judge Richard Andrews of the District of Delaware granted defendants’ motion to stay the litigation pending the declaratory judgment action filed by the companies’ supplier, LivePerson, against Pragmatus Telecom [NPE].  Pragmatus accused the defendants of infringing US Patent Nos. 6,311,231, 6,668,286, and 7,159,043, which all generally relate to the use of “live chat and related customer service communication channels” through their usage of LivePerson’s online customer support software.  Defendants Advanced Store Company‘s and E-Advanced‘s motion to stay was “based on the interests of judicial economy and efficiency, and, separately, on the ‘customer suit exception’ to the ‘first to file rule.’ ”  The Court agreed with the defendants and in granting the motion also stated, “Pragmatus is solely in the business of monetizing patents, and since Customers are not ‘direct competitors’, injunctive relief is not available.  Any purported harm that Pragmatus suffers from a stay can be fully compensated by monetary damages.”  However, the judge noted that the first-to-file rule and corresponding “customer suit exception” were not applicable to this case because “both the LivePerson action and Pragmatus’s suit against the Customers are before this Court, and no ‘form favoring’ is needed.  Thus, the Customer Suit Exception also does not directly apply to these cases.  . . . Granting a stay in the Customers’ suits while the [supplier's] Action proceeds will simplify the issues for trial and will not cause undue prejudice for either party.”  Since November 2011, Pragmatus Telecom has filed 11 prior suits against more than 20 LivePerson customers (including Advance Auto Parts, E*TRADE Financial, Estee Lauder, Federal Express, Ford, North Face Apparel, Overstock.com, Scottrade Financial, Sirius XM Radio, and United Parcel Service among others).  In August 2011, RPX obtained pre-litigation sublicense rights to the Pragmatus Telecom (Bell Aliant) portfolio for clients.  7/10, District of Delaware, assigned to Judge Richard G. Andrews, 1:2012cv00088.


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