With so many suits in play it will be impractical to follow all of them, but that really shouldn't be necessary anyway. There are three critical parts that merit our attention: (1) the pending reexaminations before the USPTO; (2) the intervention by Apple; and (3) the declaratory judgment action by Oracle with its attendant invalidity contentions.

For its part, Lodsys has filed a motion to dismiss the Wisconsin action by Oracle and, if anything, force Oracle into the Eastern District of Texas. (14 [PDF; Text]) In its supporting brief (15 [PDF; Text]) Lodsys argues that it has preempted Oracle's Wisconsin filing with its own prior filing in the Eastern District of Texas against the Oracle clients which Oracle identifies as the basis for its DJ action. If Lodsys is successful with this motion, Oracle will likely seek to intervene on the part of its customers in the Eastern District of Texas action.

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Docket

Creative Mobile

07/10/2012 - 1 - COMPLAINT with Jury Demand; against Lodsys Group LLC by Creative Mobile OU. ( Filing Fee PAID $350 receipt number 0757-1515627) (Attachments: # 1 Exhibit A - U.S. Patent 5,999,908, # 2 Exhibit B - U.S. Patent 7,133,834, # 3 Exhibit C - U.S. Patent 7,222,078, # 4 Exhibit D - U.S. Patent 7,620,565, # 5 Exhibit E - Lodsys Letter dated 8-4-11, # 6 Exhibit F - Idessence email dated 4-12-12, # 7 Civil Cover Sheet, # 8 Summons)(Griggs, Michael)

07/10/2012 - NOTICE Regarding assignment of this matter to Magistrate Judge Aaron E Goodstein ;Consent/refusal forms for Magistrate Judge Goodstein to be filed within 21 days;the consent/refusal form is available on our web site ;pursuant to Civil Local Rule 7.1 a disclosure statement is to be filed upon the first filing of any paper and should be filed now if not already filed (jcl)

07/10/2012 - 2 - DISCLOSURE Statement by Creative Mobile OU. (Griggs, Michael)

07/10/2012 - Summons Issued as to Lodsys Group LLC. (vkb)

07/10/2012 - 3 - Report to the Commissioner of Patents and Trademarks (vkb)

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Documents

Creative Mobile - 1

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF WISCONSIN

CREATIVE MOBILE O.U.,
Plaintiff,
v.
LODSYS GROUP, LLC,
Defendant.

Case No. ________________________

COMPLAINT FOR DECLARATORY JUDGMENT
(JURY TRIAL DEMANDED)

Plaintiff Creative Mobile O.U. (“Creative Mobile”) hereby alleges for its Complaint for Declaratory Judgment against Defendant Lodsys Group, LLC (“Lodsys” or “Defendant”) as follows:

NATURE OF THE ACTION

1. This is an action for a declaratory judgment that Creative Mobile does not infringe any valid claim of United States Patent Nos. 5,999,908 (the „908 patent); 7,222,078 (the „078 patent); 7,620,565 (the „565 patent); or 7,133,834 (the „834 patent); (collectively, the “Asserted Patents”) and for a declaratory judgment that the claims of each of the Asserted patents are invalid.

2. A true and correct copy of the „908 patent is attached as Exhibit A.

3. A true and correct copy of the „078 patent is attached as Exhibit B.

4. A true and correct copy of the „565 patent is attached as Exhibit C.

5. A true and correct copy of the „834 patent is attached as Exhibit D.

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6. The United States Patent and Trademark Office has instituted reexamination proceedings for the „078 patent and the „565 patent.

THE PARTIES

7. Plaintiff Creative Mobile is an Estonia private limited company, with its principal place of business at Pärnu maantee 130-46, 11317 Tallinn, Estonia. Creative Mobile develops and publishes mobile games for use on mobile devices including but not limited to Apple, Inc.‟s (“Apple”) iPhone and iPad, as well as Android-based devices. Creative Mobile creates creative, fun, and entertaining gaming software solutions for the widespread enjoyment of mobile device users. Creative Mobile‟s products are distributed through Internet marketplaces such as Google Inc.‟s (“Google”) Android-based Google Play store and Apple's iOS-based iTunes App Store.

8. On information and belief, Defendant Lodsys Group, LLC, formerly Lodsys, LLC, is a Texas limited liability company and claims to have its principal place of business at 505 East Travis Street, Suite 207, Marshall, Texas 75670. On information and belief, Defendant is solely a patent licensing entity and does not create any products.

9. On information and belief, Lodsys owns the Asserted Patents.

10. On information and belief, Mark Small is the Chief Executive Officer at Lodsys.

11. On information and belief, Mr. Small conducts Lodsys‟ business from an office located in Oconomowoc, Wisconsin, within this jurisdictional district. Accordingly, on information and belief, Lodsys‟ primary place of business and/or headquarters is located within this jurisdictional district.

12. On information and belief, Mr. Small lives and works in Wisconsin, holds a Wisconsin driver‟s license, is registered to vote in Wisconsin, and is a resident and citizen of Wisconsin.

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JURISDICTION AND VENUE

13. This is an action under the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, for a declaration pursuant to the patent laws of the United States, 35 U.S.C. § 1 et seq., that the Asserted Patents are not infringed by Creative Mobile. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1338(a), 2201 and 2202.

15. Venue is proper in this judicial district pursuant to 28 U.S.C. §§ 1391(b), (c) and 1400(b).

ALLEGATIONS SUPPORTING DECLARATORY JUDGMENT JURISDICTION

16. Creative Mobile realleges and incorporates herein by reference each and every allegation contained in paragraphs 1-15.

17. On or about August 4, 2011, Defendant sent a threatening letter by Federal Express to Creative Mobile‟s founder, Mr. Vladimir Funtikov, at the Estonian office headquarters expressly charging that Creative Mobile had infringed Defendant‟s Asserted Patents (the “Threat Letter”). A true and correct copy of this letter is attached as Exhibit E.

18. The Threat Letter accused Creative Mobile of infringing the Asserted Patents. Specifically, the Threat Letter began by expressing that it regarded Creative Mobile‟s games as “Infringement[s] of U.S. Patent Nos. 5,998,908, 7,133,834, 7,222,078, and 7,620,565 (Abelow)” in the Threat Letter‟s subject line.

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19. The Threat Letter stated: “We have reviewed your use of the Lodsys Patents and have prepared the enclosed claim chart demonstrating at least one instance of how you utilize the inventions embodied in the Lodsys Patents. The images used in the charts are representative only and in addition to the charted claim of the referenced patent, you should consider the remaining claims of that patent and the other Lodsys Patents both with respect to the charted utilization and to other products and services offered by you.”

20. The Threat Letter demanded that Creative Mobile respond to Lodsys within twenty-one (21) days of the receipt of the letter.

21. The Threat Letter also stated: “Lodsys LLC reserves all rights with regard to the „908, „834, „078, and „565 patents, including: (1) the right to seek damages anytime within the last six years that your company started to make use of Lodsys‟ patented technology; (2) the right to change its royalty rate at any time; (3) the right to change this licensing program at any time without notice, including variance to conform to applicable laws. You should not rely on any communication or lack of communication from Lodsys, Kelley, Donion, Gill, Huck & Goldfarb, PLLC, or The Davis Firm Group as a relinquishment of any of Lodsys‟ rights.”

22. The Threat Letter also included an “Infringement Claim Chart,” setting forth how Creative Mobile‟s Drag Racing game allegedly infringes claim 1 of the „078 patent.

23. On or about April 12, 2012, Defendant, through its licensing agent, sent a threatening email to Mr. Funtikov (the “Threat Email”). A true and correct copy of this email is attached as Exhibit F.

24. The Threat Email was sent by Michael Welley, Licensing Executive at Idessence AG. Mr. Welley wrote that he was contacting Mr. Funtikov “on behalf of Idessence AG, the

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licensing agent for Lodsys LLC, in regards to a patent infringement claim that was brought against Creative Mobile in August of 2011.”

25. The Threat Email also stated: “As you may already know patent infringement claims may carry legal implications and a [sic] serious matters.”

26. The Threat Email also stated: “Our licenses are calculated using a 0.575% license rate applied to infringing applications sold between 2007 and September of 2012 in the US.”

27. Through communications and conduct, Defendant has repeatedly threatened assertion of the „908 patent, the „565 patent, the „078 patent, and/or the „834 patent against Creative Mobile.

28. Upon information and belief, Lodsys is solely a licensing entity whose revenue is generated through its enforcement of the Asserted Patents. Defendant has commenced law suits against numerous entities in the Eastern District of Texas, alleging infringement of the Asserted Patents.

29. On February 11, 2011, Lodsys filed a lawsuit against twelve (12) companies alleging infringement of the Asserted Patents. The case is entitled Lodsys, LLC v. Brother International Corporation, et al., Case No. 2:11-cv-90 and is pending in the Eastern District of Texas, Marshall Division.

30. On May 31, 2011, Lodsys filed another lawsuit in the Eastern District of Texas against ten (10) additional companies, all of which are developers of mobile software applications, alleging infringement of the Asserted Patents. The case is entitled Lodsys, LLC v. Combay, Inc., et al., C.A. No. 2:11-cv-272.

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31. On June 10, 2011, Lodsys filed another lawsuit in the Eastern District of Texas against ten (10) additional companies, alleging infringement of the Asserted Patents. The case is entitled Lodsys, LLC v. Adidas America, Inc., et al., C.A. No. 2:11-cv-283.

32. On July 5, 2011, Lodsys filed another lawsuit in the Eastern District of Texas against six (6) additional companies, alleging infringement of the Asserted Patents. The case is entitled Lodsys, LLC v. DriveTime Automotive Group, Inc. et. al., C.A. No, 2:11-cv-309.

33. By virtue of Lodsys‟ actions towards Creative Mobile and other entities, Creative Mobile is in reasonable apprehension of an imminent patent infringement suit relating to the Asserted Patents.

34. Other entities have also sued Defendant for declaratory judgment on the Asserted Patents in this and other districts. 35. On June 13, 2011, The New York Times Company filed a complaint for declaratory judgment against Defendant in the Northern District of Illinois seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled The New York Times Co. v. Lodsys, LLC, No. 1:11-cv-04004 and has been dismissed.

36. On June 13, 2011, OpinionLab, Inc. filed a complaint for declaratory judgment against Defendant in the Northern District of Illinois seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled OpinionLab, Inc. v. Lodsys, LLC, No. 1:11-cv-04015 and has been dismissed.

37. On June 15, 2011, LivePerson, Inc. filed a complaint for declaratory judgment against Defendant in the Northern District of Illinois seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled LivePerson, Inc. v.

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Lodsys, LLC, No. 1:110-cv-04088 and was transferred on November 8, 2011 to the Eastern District of Wisconsin as LivePerson, Inc. v. Lodsys, LLC, No. 2:11-cv-01030.

38. On June 30, 2011, DriveTime Automotive Group Incorporated filed a complaint for declaratory judgment against Defendant in the District of Arizona seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled DriveTime Auto. Group Inc. v. Lodsys, LLC, No. 2:11-cv-01307-NVW and has been dismissed.

39. On July 6, 2011, ESET, LLC filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled ESET LLC v. Lodsys, LLC, No. 2:11-cv-00650-JPS and has been dismissed.

40. On August 4, 2011, Rightnow Technologies, Inc. filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Pa, No. 2:11-cv-00737-CNC.

41. On August 9, 2011, Wolfram Alpha, LLC filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled Wolfram Alpha LLC, et al. v. Lodsys, LLC, No. 2:11-cv-00750-LA.

42. On December 2, 2011, PC Drivers Headquarters 1, Inc. filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled PC Drivers Headquarters 1 Inc., et al. v. Lodsys, LLC, No. 2:11-cv-01099-LA and has been dismissed.

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43. On December 8, 2011, PCS Sales (USA) Inc. filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled PCS Sales (USA) Inc. v. Lodsys, LLC, No. 2:11-cv-01113-CNC.

44. On January 4, 2012, The JM Smucker Company filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled The JM Smucker Co. v. Lodsys, LLC, No. 2:11-cv-00012-CNC.

45. On June 1, 2012, Oracle America, Inc. filed a complaint for declaratory judgment against Defendant in the Eastern District of Wisconsin seeking a declaratory judgment of noninfringement and invalidity of the Asserted Patents. The case is entitled Oracle America Inc. v. Lodsys, LLC et al., No. 2:12-cv-00550-CNC.

46. On information and belief, third party Apple is licensed to the Asserted Patents (“Apple‟s License”) and is expressly permitted, among other things, to use, sell, offer to sell, or otherwise distribute to its developers, such as Creative Mobile, products and services that embody the technology covered by the Asserted Patents.

47. On information and belief, Defendant purchased the Asserted Patents subject to Apple‟s License. On information and belief, Apple‟s ability to use the technology embodied by the Asserted Patents is the purported value of Apple‟s License.

48. Apple offers products and services to Creative Mobile to enable Creative Mobile to offer its products to end users of Apple products. The products and services Apple provides to Creative Mobile consist, among other things, of Apple application program interfaces, Apple software development kits, and Apple‟s operating system through which Creative Mobile‟s

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programs access Apple hardware and software that permit interaction between Creative Mobile and Apple end users. Apple also provides a comprehensive set of Apple hosting, marketing, sales, agency, and delivery services that allow Creative Mobile to provide its products such as Drag Racing to millions of Apple end users.

49. On information and belief, third party Google is licensed to the Asserted Patents (Google‟s License) and is expressly permitted, among other things, to use, sell, offer to sell, or otherwise distribute to its software developers, such as Creative Mobile, products and services that embody the technology covered by the Asserted Patents.

50. On information and belief, Defendant purchased the Asserted Patents subject to Google‟s License. On information and belief, Google‟s ability to use the technology embodied by the Asserted Patents is the purported value of Google‟s License.

51. Google offers products and services to Creative Mobile to enable Creative Mobile to offer its products to end users of Google products. The products and services Google provides to Creative Mobile consist, among other things, of Google application program interfaces, Google software development kits, and Google‟s operating system through which Creative Mobile‟s programs access Google hardware and software that permit interaction between Creative Mobile and Google end users. Google also provides a comprehensive set of Google hosting, marketing, sales, agency, and delivery services that allow Creative Mobile to provide its products such as Drag Racing to millions of Google end users.

COUNT I
DECLARATORY JUDGMENT OF NON-INFRINGMENT OF THE ‘908 PATENT

52. The allegations of paragraphs 1-51 are incorporated by reference as if fully set forth herein.

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53. Neither Drag Racing nor any other Creative Mobile product infringes any valid claim of the '908 patent asserted by Defendant.

54. An actual controversy exists between Creative Mobile and Defendant as to whether or not Creative Mobile has infringed, or is infringing, the '908 patent; has contributed to infringement, or is contributing to infringement of the '908 patent; and/or has induced infringement, or is inducing infringement of the '908 Patent.

55. This controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. §§ 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that Creative Mobile has not infringed and is not infringing any valid and enforceable claim of the '908 patent; has not contributed to the infringement and is not contributing to infringement of the „908 patent; and/or has not induced infringement and is not inducing infringement of the '908 patent. Such a declaration is necessary and appropriate at this time.

COUNT II
DECLARATORY JUDGMENT OF NON-INFRINGMENT OF THE ‘078 PATENT

56. The allegations of paragraphs 1-55 are incorporated by reference as if fully set forth herein.

57. Neither Drag Racing nor any other Creative Mobile product infringes any valid claim of the '078 patent asserted by Defendant.

58. An actual controversy exists between Creative Mobile and Defendant as to whether or not Creative Mobile has infringed, or is infringing, the '078 patent; has contributed to infringement, or is contributing to infringement of the '078 patent; and/or has induced infringement, or is inducing infringement of the '078 Patent.

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59. This controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. §§ 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that Creative Mobile has not infringed and is not infringing any valid and enforceable claim of the '078 patent; has not contributed to the infringement and is not contributing to infringement of the „078 patent; and/or has not induced infringement and is not inducing infringement of the '078 patent. Such a declaration is necessary and appropriate at this time.

COUNT III
DECLARATORY JUDGMENT OF NON-INFRINGMENT OF THE ‘565 PATENT

60. The allegations of paragraphs 1-59 are incorporated by reference as if fully set forth herein.

61. Neither Drag Racing nor any other Creative Mobile product infringes any valid claim of the '565 patent asserted by Defendant.

62. An actual controversy exists between Creative Mobile and Defendant as to whether or not Creative Mobile has infringed, or is infringing, the '565 patent; has contributed to infringement, or is contributing to infringement of the '565 patent; and/or has induced infringement, or is inducing infringement of the „565 Patent.

63. This controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. §§ 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that Creative Mobile has not infringed and is not infringing any valid and enforceable claim of the '565 patent; has not contributed to the infringement and is not contributing to infringement of the '565 patent; and/or has not induced infringement and is not inducing infringement of the '565 patent. Such a declaration is necessary and appropriate at this time.

COUNT IV

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DECLARATORY JUDGMENT OF NON-INFRINGMENT OF THE ‘834 PATENT

64. The allegations of paragraphs 1-63 are incorporated by reference as if fully set forth herein.

65. Neither Drag Racing nor any other Creative Mobile product infringes any valid claim of the '834 patent asserted by Defendant.

66. An actual controversy exists between Creative Mobile and Defendant as to whether or not Creative Mobile has infringed, or is infringing, the '834 patent; has contributed to infringement, or is contributing to infringement of the '834 patent; and/or has induced infringement, or is inducing infringement of the „834 Patent.

67. This controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. §§ 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that Creative Mobile has not infringed and is not infringing any valid and enforceable claim of the „834 patent; has not contributed to the infringement and is not contributing to infringement of the „834 patent; and/or has not induced infringement and is not inducing infringement of the „834 patent. Such a declaration is necessary and appropriate at this time.

COUNT V
DECLARATORY JUDGMENT OF INVALIDITY OF THE ‘908 PATENT

68. The allegations of paragraphs 1-67 are incorporated by reference as if fully set forth herein.

69. Based on the above-stated conduct, Creative Mobile is informed and believes that the Defendant contends that Creative Mobile infringes one or more claims of the '908 patent.

70. Creative Mobile denies that it infringes any valid and enforceable claim of the „908 patent, and avers that the assertions of infringement cannot be maintained consistently with

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statutory conditions of patentability and the statutory requirements for disclosure and claiming that must be satisfied for patent validity under at least one of 35 U.S.C. §§ 101, 102, 103, and 112.

71. Accordingly, an actual controversy exists between Creative Mobile and Defendant as to the validity of the '908 patent. The controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. § 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that the '908 patent is invalid. Such a declaration is necessary and appropriate at this time.

COUNT VI
DECLARATORY JUDGMENT OF INVALIDITY OF THE ‘078 PATENT

72. The allegations of paragraphs 1-71 are incorporated by reference as if fully set forth herein.

73. Based on the above-stated conduct, Creative Mobile is informed and believes that the Defendant contends that Creative Mobile infringes one or more claims of the '078 patent.

74. Creative Mobile denies that it infringes any valid and enforceable claim of the '078 patent, and avers that the assertions of infringement cannot be maintained consistently with statutory conditions of patentability and the statutory requirements for disclosure and claiming that must be satisfied for patent validity under at least one of 35 U.S.C. §§ 101, 102, 103, and 112.

75. Accordingly, an actual controversy exists between Creative Mobile and Defendant as to the validity of the '078 patent. The controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. § 2201 et. seq., Creative Mobile is entitled to a

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COUNT VII
DECLARATORY JUDGMENT OF INVALIDITY OF THE ‘565 PATENT

76. The allegations of paragraphs 1-75 are incorporated by reference as if fully set forth herein.

77. Based on the above-stated conduct, Creative Mobile is informed and believes that the Defendant contends that Creative Mobile infringes one or more claims of the '565 patent.

78. Creative Mobile denies that it infringes any valid and enforceable claim of the '565 patent, and avers that the assertions of infringement cannot be maintained consistently with statutory conditions of patentability and the statutory requirements for disclosure and claiming that must be satisfied for patent validity under at least one of 35 U.S.C. §§ 101, 102, 103, and 112.

79. Accordingly, an actual controversy exists between Creative Mobile and Defendant as to the validity of the '565 patent. The controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. § 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that the '565 patent is invalid. Such a declaration is necessary and appropriate at this time.

COUNT VIII
DECLARATORY JUDGMENT OF INVALIDITY OF THE ‘834 PATENT

80. The allegations of paragraphs 1-79 are incorporated by reference as if fully set forth herein.

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81. Based on the above-stated conduct, Creative Mobile is informed and believes that the Defendant contends that Creative Mobile infringes one or more claims of the '834 patent.

82. Creative Mobile denies that it infringes any valid and enforceable claim of the '834 patent, and avers that the assertions of infringement cannot be maintained consistently with statutory conditions of patentability and the statutory requirements for disclosure and claiming that must be satisfied for patent validity under at least one of 35 U.S.C. §§ 101, 102, 103, and 112.

83. Accordingly, an actual controversy exists between Creative Mobile and Defendant as to the validity of the '834 patent. The controversy is such that, pursuant to Federal Rule of Civil Procedure 57 and 28 U.S.C. § 2201 et. seq., Creative Mobile is entitled to a declaration, in the form of a judgment, that the '834 patent is invalid. Such a declaration is necessary and appropriate at this time.

COUNT IX
PATENT EXHAUSTION AND FIRST SALE

84. On information and belief, Apple is a licensee to the Asserted Patents. On information and belief, Apple‟s License expressly permits Apple to offer and otherwise make available to its developers, such as Creative Mobile, products and services that relate to the inventions disclosed in the Asserted Patents. On information and belief, Defendant‟s infringement claims against Creative Mobile are based on Creative Mobile‟s use of products and services that Apple is authorized to provide to Creative Mobile under Apple‟s License.

85. On information and belief, Google is a licensee to the Asserted Patents. On information and belief, Google‟s License expressly permits Google to offer and otherwise make available to its developers, such as Creative Mobile, products and services that relate to the

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inventions contained in the Asserted Patents. On information and belief, Defendant‟s infringement claims against Creative Mobile are based on Creative Mobile‟s use of products and services that Google is authorized to provide to Creative Mobile under Google‟s License.

86. Under the patent law doctrines of exhaustion and first sale, Creative Mobile can use the products and services that Apple and Google provide to Creative Mobile free from claims of infringement of the Asserted Patents. Therefore, Creative Mobile is entitled to a declaration that Lodsys‟ claims of infringement of the Asserted Patents are barred by at least the doctrines of patent exhaustion and first sale.

PRAYER FOR RELIEF

WHEREFORE, plaintiff Creative Mobile prays that:

A. The Court declares that Creative Mobile‟s Drag Racing or any other products do not infringe any valid claim of the Asserted Patents;

B. The Court declares that one or more claims of the Asserted Patents are invalid under one or more of 35 U.S.C. §§ 101, 102, 103, and 112;

C. The Court makes a determination declaring that Defendant‟s claims against Creative Mobile are barred by the doctrines of patent exhaustion and first sale;

D. Creative Mobile be awarded for reasonable attorneys‟ fees and costs, including costs for experts, pursuant to state and federal law, including 35 U.S.C. § 285;

E. Creative Mobile be awarded such other and further relief as this Court deems just and proper.

DEMAND FOR A JURY TRIAL

Plaintiff hereby demands a trial by jury on all counts so triable.

Dated: July 10, 2012

Respectfully Submitted,

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John P. Fredrickson, Esq.
[email]
Michael T. Griggs
[email]
BOYLE FREDRICKSON S.C.
[address telephone fax]

Of Counsel:
Benjamin Ashurov, Esq.
[email]
Samik Bhattacharyya, Esq.
[email]
Bruce McCubbrey, Esq.
[email]
KB ASH LAW GROUP
[address telephone fax]

Attorneys for Plaintiff Creative Mobile, O.U.

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Oracle-14

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

ORACLE AMERICA, INC.,
Plaintiff
v.
LODSYS, LLC, and
LODSYS GROUP, LLC
Defendants

Civil Action No. 2:12-cv-00550-CNC

DEFENDANTS LODSYS, LLC’S AND LODSYS GROUP, LLC’S
MOTION TO DISMISS OR, IN THE ALTERNATIVE, TRANSFER OR STAY

Pursuant to the first-to-file rule, defendants Lodsys, LLC and Lodsys Group, LLC (collectively, “Lodsys”) hereby move, to dismiss or, in the alternative, transfer or stay this action in favor of the first-filed actions in the Eastern District of Texas. In addition, and also in the alternative, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, Lodsys moves to dismiss the “Second Claim for Relief” and “Sixth Claim for Relief” of plaintiff Oracle America, Inc.’s (“Oracle”) Complaint for Declaratory Judgment (the “Complaint”) for lack of subject matter jurisdiction. As permitted by Rule 12(b), Lodsys files this motion in lieu of an answer and without waiving its right to answer the allegations in Oracle’s Complaint and assert any applicable defenses, affirmative defenses, and counterclaims.

The grounds for this motion are set forth fully in the accompanying Memorandum in Support of Defendants Lodsys, LLC’s and Lodsys Group, LLC’s Motion to Dismiss Or, in the Alternative, Transfer or Stay.

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Dated this 27th day of July, 2012.

s/Aaron T. Olejniczak
Aaron T. Olejniczak (#1034997)
ANDRUS, SCEALES, STARKE & SAWALL, LLP
[address telephone fax email]

Michael A. Goldfarb
Christopher M. Huck
Kit W. Roth
KELLEY, GOLDFARB, GILL, HUCK & ROTH, PLLC
[address telephone fax email]

Attorneys for Defendants

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Oracle-15

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

ORACLE AMERICA, INC.,
Plaintiff
v.
LODSYS, LLC, and
LODSYS GROUP, LLC
Defendants

Civil Action No. 2:12-cv-00550-CNC

DEFENDANTS LODSYS, LLC’S AND LODSYS GROUP, LLC’S
MEMORANDUM IN SUPPORT OF MOTION TO DISMISS OR, IN THE
ALTERNATIVE, TRANSFER OR STAY

Pursuant to the first-to-file rule, defendants Lodsys, LLC and Lodsys Group, LLC (collectively “Lodsys”) hereby move, to dismiss or, in the alternative, transfer or stay this action in favor of the first-filed actions in the Eastern District of Texas. In addition, and also in the alternative, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, Lodsys moves to dismiss the “Second Claim for Relief” and “Sixth Claim for Relief” of plaintiff Oracle America, Inc.’s (“Oracle”) Complaint for Declaratory Judgment (the “Complaint”) for lack of subject matter jurisdiction. As permitted by Rule 12(b), Lodsys files this motion in lieu of an answer and without waiving its right to answer the allegations in Oracle’s Complaint and assert any applicable defenses, affirmative defenses, and counterclaims.

I. INTRODUCTION

Nearly a month before Oracle filed this declaratory judgment action, Lodsys filed two patent infringement actions in the Eastern District of Texas against at least four customers of Oracle — i.e., Foster and Smith, Inc. (“F&S”); Epicor Software Corporation (“Epicor”); Recreational Equipment, Inc. (“REI”); and Walgreen Co. (“Walgreen”). The issues on which

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Oracle seeks declaratory relief in this second-filed action are the same issues that Lodsys raised in the first-filed actions against F&S, Epicor, REI, and Walgreen. In fact, Oracle admits in its Complaint that its allegations are based entirely on Lodsys’s “assertion of the Patents-in-Suit” against “Oracle customers” (see Complaint at ¶ 12), including “Oracle customers” that were “recently named as defendants in lawsuits brought by Lodsys in the United States District Court for the Eastern District of Texas.” See id. at ¶ 13. Accordingly, because “duplicative” and/or “substantially overlapping” issues were first presented to the Eastern District of Texas, this Court should dismiss or, in the alternative, transfer or stay Oracle’s second-filed declaratory judgment action based on the first-to-file rule.

Moreover, the Second Claim for Relief and Sixth Claim for Relief of Oracle’s Complaint seek a declaration of non-infringement and invalidity of U.S. Patent No. 7,133,834 (the “‘834 patent”). But those claims fail to present a case or controversy among the parties regarding the ‘834 patent. At the very least, therefore, those claims must be dismissed under Rule 12(b)(1) for lack of declaratory judgment subject matter jurisdiction.

II. STATEMENT OF FACTS

A. Lodsys’s First-Filed Actions

Lodsys is a Texas limited liability company. See Complaint at ¶¶ 3-4. Lodsys maintains an office at its headquarters located at 505 East Travis Street, Suite 207, Marshall, Texas. See id.

On May 10, 2012 — nearly a month before Oracle filed its second-filed declaratory judgment action — Lodsys filed two patent infringement actions in the Eastern District of Texas against several defendants, including F&S, Epicor, REI, and Walgreen. See First Declaration of Aaron T. Olejniczak in Support of Defendant Lodsys, LLC’s Motion to Dismiss Or, in the Alternative, Transfer or Stay (the “Olejniczak Decl.”) at Exs. A-B. In those first-filed actions, Lodsys alleges that “Epicor manufactures, uses, sells, imports, and/or offers to sell infringing

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website(s) with live interactive chat, including but not limited to live interactive chat on www.epicor.com, which infringes at least claim 1 of the ‘078 patent under 35 U.S.C. § 271.” See id. at Ex. A (¶ 15). Lodsys also alleges that each of F&S, REI, and Walgreen “manufactures, uses, sells, imports, and/or offers to sell infringing website(s) with live interactive chat, … which infringes at least claim 1 of the ‘078 patent under 35 U.S.C. § 271.” See id. at Ex. B (¶¶ 9-11).

A status conference as already been scheduled in the first-filed actions against F&S, Epicor, REI, and Walgreen. The Eastern District of Texas declared that “[t]he purpose of the status conference will be to assign a claim construction hearing date and a trial setting.” See id. at Exs. C-D. In addition, the Eastern District of Texas has already entered orders setting the deadlines for, among other items, infringement contentions and invalidity contentions. See id.

B. Lodsys’s Related Actions

In addition to the actions against F&S, Epicor, REI, and Walgreen, Lodsys also filed nine related patent infringement actions in the Eastern District of Texas. Specifically, on February 11, 2011 — more than a year before Oracle filed its declaratory judgment action — Lodsys filed a patent infringement lawsuit against twelve companies in the Eastern District of Texas. See id. at Ex. E. On May 31, 2011 — also more than a year before Oracle filed its declaratory judgment action — Lodsys filed a patent infringement lawsuit against seven additional persons and/or companies in the Eastern District of Texas. See id. at Ex. F.¹ On June 10, 2011 — nearly a year before Oracle filed its second-filed declaratory judgment action — Lodsys filed a patent infringement action in the Eastern District of Texas against ten additional defendants. See id. at Ex. H. On July 5, 2011 — also nearly a year before Oracle filed its declaratory judgment action — Lodsys filed a patent infringement lawsuit against five additional companies in the Eastern

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¹ Lodsys filed an amended complaint adding five companies as defendants on July 21, 2011. See Olejniczak Decl. at Ex. G.

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District of Texas. See id. at Ex. I.² On May 10, 2012 — nearly a month before Oracle filed its declaratory judgment action — Lodsys filed five additional patent infringement lawsuits against a total of twenty-two additional companies. See id. at Exs. L-P.

All eleven actions in the Eastern District of Texas are pending before the Honorable James Rodney Gilstrap. Docket control orders have already been entered in three of the related actions. See id. at Exs. Q-S. In fact, Lodsys has already served its infringement contentions and certain defendants have served their invalidity contentions in those related actions. In addition, the Eastern District of Texas has already scheduled a claim construction hearing (including all related deadlines) and trial. See id. The claim construction hearing already scheduled in the Eastern District of Texas will concern the same patents (except the ‘834 patent) and the same commodities (e.g., live chat) at issue in this second-filed action.

C. Oracle’s Second-Filed Action

Oracle is a Delaware corporation. See Complaint at ¶ 2. Oracle maintains an office at its headquarters located at 500 Oracle Parkway, Redwood City, California. See id.

On June 1, 2012 — nearly a month after Lodsys filed its first-filed actions against Oracle’s customers in the Eastern District of Texas — Oracle filed a declaratory judgment action against Lodsys. See Complaint for Declaratory Judgment [dkt. no. 1]. In that second-filed action, Oracle alleges that “Oracle develops and licenses a suite of e-commerce enhancement software which Oracle provides, typically on a software-as-a-service basis, through servers that Oracle owns or controls (‘Web Commerce Products’).” Id. at ¶ 8. Oracle alleges that the “Web Commerce Products, including Oracle Live Help Chat on Demand (‘Chat’) and Oracle Contact on Demand (‘COD’), are products, that enhance the websites of Oracle’s customers by providing

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² Lodsys Group, LLC was substituted for, or joined with, Lodsys, LLC for all purposes in all of the related actions filed in the Eastern District of Texas prior to January 31, 2012 (see, e.g., Olejniczak Decl. at Ex. J), based on an assignment of the patents. See id. at Ex. K.

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features such as chat sessions between website visitors and customer service representatives associated with such websites.” Id. (emphasis added).

Moreover, Oracle alleges that “[t]hrough communications and conduct, Lodsys has repeatedly threatened numerous Oracle customers with assertion of the Patents-in-Suit against Oracle’s Web Commerce Products.” Id. at ¶ 12 (emphasis added). Oracle also specifically alleges that “[s]ome of the threatened Oracle customers, including Walgreen Co., Recreational Equipment, Inc. and Epicor, Inc. were recently named as defendants in lawsuits brought by Lodsys in the United States District Court for the Eastern District of Texas.” Id. at ¶ 13 (emphasis added).³

In its Complaint, Oracle seeks a declaratory judgment regarding four patents — the ‘834 patent, U.S. Patent No. 5,999,908 (the “‘908 patent”), U.S. Patent No. 7,222,078 (the “‘078 patent”), and U.S. Patent No. 7,620,565 (the “‘565 patent”). See id. at ¶¶ 22-53. In particular, Oracle’s First Claim for Relief, Second Claim for Relief, Third Claim for Relief, and Fourth Claim for Relief of the Complaint seek a declaratory judgment that Oracle does not infringe the ‘908 patent, the ‘834 patent, the ‘078 patent, and the ‘565 patent, respectively. See id. at ¶¶ 22-25, 26-29, 30-33, and 34-37. And Oracle’s Fifth Claim for Relief, Sixth Claim for Relief, Seventh Claim for Relief, and Eighth Claim for Relief of the Complaint seek a declaratory judgment of invalidity of the ‘908 patent, the ‘834 patent, the ‘078 patent, and the ‘565 patent, respectively. See id. at ¶¶ 38-41, 42-45, 46-49, 50-53.

In contending there is an actual controversy between the parties sufficient to furnish this Court with declaratory judgment subject matter jurisdiction, Oracle alleges generally that Lodsys

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³ Oracle also notes that RightNow Technologies, Inc. (“RightNow”) is an “Oracle subsidiary.” Complaint at ¶ 13. Nearly a year before Oracle filed this declaratory judgment action, Lodsys filed a patent infringement action in the Eastern District of Texas against a customer of RightNow (i.e., Sam’s West, Inc.). See Olejniczak Decl. at Ex. H.

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has lodged accusations of infringement of the patents against a number of Oracle’s customers. See id. at ¶¶ 12-14. But Oracle has not alleged that Lodsys has made specific allegations of infringement of the ‘834 patent against an Oracle customer based on that customer’s use of a Oracle product. At most, Oracle merely alleges that the “Re” heading in Lodsys’s letters include the ‘834 patent. See id. at ¶ 12.

III. ARGUMENT

Under the first-to-file rule, “[w]hen a federal suit is duplicative of a parallel action already pending in another federal court, the suit may be stayed, transferred or dismissed in the interest of wise judicial administration.” Eragen Biosciences, Inc. v. Nucleic Acids Licensing, LLC, 447 F. Supp. 2d 930, 940 (W.D. Wis. 2006). “The first-to-file rule at once eliminates duplicative litigation and adheres to ‘the inherently fair concept that the party who commenced the first suit should generally be the party to attain its choice of venue.’” Barrington Group, Ltd. v. Genesys Software Sys., Inc., 239 F. Supp. 2d 870, 873 (E.D. Wis. 2003).

“In patent infringement actions the Federal Circuit has strongly endorsed the first-to-file doctrine.” Trading Technologies Int'l, Inc. v. CQG, Inc., No. 05 C 4811, 2005 WL 3601936, *2 (N.D. Ill. Oct. 31, 2005) (citing Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931 (Fed. Cir. 1993). While courts may grant exceptions to the first-to-file rule in special situations, “[r]estraint of the first-filed suit is made only to prevent wrong or injustice.” Kahn v. General Motors Corp., 889 F.2d 1078, 1081 (Fed. Cir. 1989).

As discussed below, this action should be dismissed or, in the alternative, transferred or stayed because Lodsys filed the first actions in the Eastern District of Texas. Allowing this action to proceed in this Court, therefore, would unnecessarily fragment related cases, waste judicial resources and risk inconsistent claim constructions. In the alternative, at the very least

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the Second Claim for Relief and Sixth Claim for Relief of Oracle’s Complaint should be dismissed for lack of subject matter jurisdiction.

A. This Action Should be Dismissed Or, in the Alternative, Transferred or Stayed
Because Lodsys Filed the First Actions in the Eastern District of Texas.

“When two or more patent infringement suits are commenced and each suit involves the same or similar parties and issues, courts will normally grant priority to the first-filed suit and enjoin or stay subsequent suits in order to avoid duplicative litigation and inefficient use of judicial resources.” Alloc, Inc. v. Unilin Decor N.V., No. 02-C-1266, 2005 WL 3448060, *2 (E.D. Wis. Dec. 15, 2005). “To properly apply the first-to-file rule, the district court need only find that substantial overlap is likely between its case and a pending case in another federal court that was filed previously.” Luckett v. Peco Foods, Inc., No. 3:07-CV-85-KS-MTP, 2008 WL 534760, *3 (S.D. Miss. Feb. 22, 2008).

“District courts are accorded ‘a great deal of latitude and discretion’ in determining whether one action is duplicative of another, but generally, a suit is duplicative if the “claims, parties, and available relief do not significantly differ between the two actions.” Serlin v. Arthur Andersen & Co., 3 F.3d 221, 233 (7th Cir.1993). “Acting within its discretion, a court may stay an action in deference to an earlier lawsuit even if the parties and issues are not identical.” Hill v. Chase Bank, NA, No. 2:07-CV-82-RLM, 2008 WL 1882735 (N.D. Ind. Apr. 24, 2008). And claims are considered “duplicative” or “substantially overlap” if they “arise out of essentially the same core of operative facts.” Doyle v. Fairman, No. 96 C 2574, 1996 WL 312096, at *2 (N.D. Ill. June 7, 1996).

Here, there can be no serious dispute that the issues in Lodsys’s first-filed actions against F&S, Epicor, REI, and Walgreen and Oracle’s second-filed declaratory judgment action are “duplicative” or “substantially overlap.” All of those actions involve the validity of Lodsys’s patents and whether F&S’s, Epicor’s, REI’s, and Walgreen’s websites with live chat infringe

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Lodsys’s patents. There is also no dispute that F&S, Epicor, REI, and Walgreen are Oracle customers. In fact, Oracle admits in its Complaint that its allegations are based on Lodsys’s “assertion of the Patents-in-Suit” against “Oracle customers” (see Complaint at ¶ 12), including “Oracle customers” that were “recently named as defendants in lawsuits brought by Lodsys in the United States District Court for the Eastern District of Texas.” See id. at ¶ 13. Accordingly, this action should be dismissed or, in the alternative, transferred or stayed, because Lodsys filed the first actions in the Eastern District of Texas. See Eragen Biosciences, Inc., 447 F. Supp. 2d at 940 (“Under the rule, when related cases are pending before two federal courts, the court in which the case was last filed may refuse to hear it if the issues raised by the cases substantially overlap”).

Moreover, the fact that Lodsys’s first-filed actions were against F&S, Epicor, REI, and Walgreen (rather than Oracle) does not preclude application of the first-to-file rule. In fact, courts have “found no requirement that the parties in the concurrent actions be the same in order for the first-to-file rule to apply;” rather, the “‘subject matter’ requirement of the first-to-file rule is satisfied in patent infringement matters where the actions in question involve the same patent and the same allegedly infringing product, though not necessarily the same parties.” Shire U.S., Inc. v. Johnson Matthey, Inc., 543 F. Supp. 2d 404, 408 (E.D. Pa. 2008); see also Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997) (rejecting argument that the two actions must involve “identical” parties).

In fact, courts have repeatedly applied the first-to-file rule in relationships analogous to F&S’s, Epicor’s, REI’s, Walgreen’s and Oracle’s relationship. See e.g., Microchip Tech., Inc. v. United Module Corp., No. CV-10-04241-LHK, 2011 WL 2669627, at *3 (N.D. Cal. July 7, 2011) (transferring manufacturer’s declaratory judgment action to forum of pre-existing suit against related entities and customers); Horton Archery, LLC v. Am. Hunting Innovations, LLC,

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No. 5:09CV1604, 2010 WL 395572, *2 (N.D. Ohio Jan. 27, 2010) (“The first-to-file rule does not require that the issues and parties in the two actions be identical.”); Interactive Fitness Holdings, LLC, v. Icon Health & Fitness, Inc., No. 10-CV-04628-LHK, 2011 WL 1302633, *3 (N.D. Cal. Apr. 5, 2011) (“If the Utah action and the instant case were to proceed in both courts, duplicative and potentially inconsistent claim construction and infringement analyses would inevitably result. The first-to-file rule exists to prevent this situation, and the Court finds that it is properly applicable here.”).

Shire is particularly instructive. There, Johnson Matthey (the holder of a pharmaceutical patent) filed an infringement action in the Eastern District of Texas against Noven, a manufacturer. A month later, Shire (the distributor of Noven’s product) filed a declaratory judgment action for non-infringement in the Eastern District of Pennsylvania. Johnson Matthey then amended its complaint in Texas to add Shire as a defendant, and moved to dismiss the Pennsylvania declaratory judgment action. 543 F. Supp. 2d at 406. The court held that the first-to-file rule should apply against Shire, even though it was not originally a party to the Texas action, because the Texas action was the first to raise the relevant issues:

However, the timing of the addition of Shire as a party to the Texas suit is not material to the determination of which action was first-filed. Rather, as previously noted, the substantive touchstone of the first-to-file inquiry is subject matter. As such, because the Texas court obtained possession of the subject of this dispute on June 19, 2007, nearly a month before this Court obtained possession of the same, the first-to-file rule compels dismissal of the instant declaratory judgment action in favor of the Texas Action, unless some exception to the rule applies.

Id. at 409-10 (emphasis added).

Similarly here, Oracle was not named as a party in Lodsys’s first-filed actions against F&S, Epicor, REI, and Walgreen, however, F&S, Epicor, REI, and Walgreen are customers of Oracle and live chat is among the “suite” of Oracle’ “Web Commerce Products.” See Complaint

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at ¶ 8. Accordingly, this action should be dismissed or, in the alternative, stayed or transferred, because the issue of whether Oracle’s customers infringe Lodsys’s patents was first raised in the Eastern District of Texas. See Pierce Mfg. Inc. v. First In Inc., 10-C-393, 2010 WL 2854258, *3 (E.D. Wis. July 19, 2010) (“Under the ‘first to file” rule, questions about the propriety of a claim or defense, or about proper venue, are left to the court who has received the case first.”).

B. Allowing This Action to Proceed Would Unnecessarily Fragment Related Actions,
Waste Judicial Resources, and Risk Inconsistent Claim Constructions.

“As between federal district courts … the general principle is to avoid duplicative litigation.” Colorado River Water Conservation Dist. v. U. S., 424 U.S. 800, 817 (1976). Indeed, the Federal Circuit has found that in patent cases “judicial economy plays a paramount role in trying to maintain an orderly, effective, administration of justice and having one trial court decide all of these claims clearly furthers that objective.” In re Google Inc., 412 F. App’x. 295, 296, 2011 WL 772875 (Fed. Cir. Mar. 4, 2011). To that end, the first-to-file rule seeks “to maximize judicial economy and minimize embarrassing inconsistencies by prophylactically refusing to hear a case raising issues that might substantially duplicate those raised by a case pending in another court.” Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 604 (5th Cir. 1999).

Here, if this action is allowed to proceed, the Eastern District of Texas will simultaneously adjudicate nearly identical issues in Lodsys’s first-filed actions against F&S, Epicor, REI, and Walgreen. The Eastern District of Texas will also adjudicate nearly identical issues in Lodsys’s other nine related actions, which were also filed before Oracle’s declaratory judgment action, and which concern live chat and the same patents (except the ‘834 patent). But dismissing or, in the alternative, staying or transferring this action eliminates the evils that the first-to-file rule seeks to avoid: unnecessarily fragmented related actions, wasted judicial resources, and the risk of inconsistent claim constructions. See Askin v. Quaker Oats Co., No. 11 CV 111, 2011 WL 5008524, *4 (N.D. Ill. Oct. 20, 2011) (“the first-to-file rule exists to prevent duplicative litigation and to minimize waste”); Trafficcast, Inc. v. Pritchard, No. 05-C-557-S,

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2005 WL 3002267, *3 (W.D. Wis. Nov. 7, 2005) (“There is no question the possibility of inconsistent judgments is present here.”); see also In re Volkswagen of Am., Inc., 566 F.3d 1349, 1351 (Fed. Cir. 2009) (“In this case, the existence of multiple lawsuits involving the same issues is a paramount consideration when determining whether a transfer is in the interest of justice…. Although these cases may not involve precisely the same issues, there will be significant overlap and a familiarity with the patents could preserve time and resources.”).

C. At the Very Least, the Court Should Dismiss the Second Claim for Relief and Sixth
Claim for Relief of Oracle’s Complaint For Lack of Subject Matter Jurisdiction.

As discussed above, this entire action should be dismissed or, in the alternative, transferred or stayed because Lodsys filed the first actions in the Eastern District of Texas. In the alternative, the Court should dismiss the Second Claim for Relief and Sixth Claim for Relief of Oracle’s Complaint, because Oracle has failed to present the requisite case or controversy between the parties with respect to the ‘834 patent.

For the Court to have subject matter jurisdiction to award declaratory relief, there must be “a case of actual controversy” among the parties. See, e.g., 28 U.S.C. § 2201(a); MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764, 770-71 (2007). In particular, “the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. at 771 (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 61 S. Ct. 510, 512 (1941)). A party seeking a declaratory judgment bears the burden of showing there is an actual case or controversy adequate to support jurisdiction. See Benitec Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1344 (Fed. Cir. 2007) (“The burden is on the party claiming declaratory judgment jurisdiction to establish that such jurisdiction existed at the time the claim for declaratory relief was filed and that it has continued since.”); see also

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Applera Corp. v. Michigan Diagnostics, LLC, 594 F. Supp. 2d 150, 158 (D. Mass. 2009); Furminator, Inc. v. Ontel Prods. Corp., 246 F.R.D. 579, 584-85 (E.D. Mo. 2007).

Here, the Second Claim for Relief and Sixth Claim for Relief of Oracle’s Complaint seek a declaratory judgment regarding non-infringement and invalidity of the ‘834 patent. See Complaint at ¶¶ 26-29, 42-45. But Oracle has not met its burden of showing there is an actual case or controversy between Oracle and Lodsys regarding that particular patent. Instead, Oracle has alleged generally and imprecisely that Lodsys has lodged accusations of infringement of the patents against a number of Oracle’s customers, including vague allegations that Lodsys has allegedly sent letters that merely reference the ‘834 patent in the “Re” heading. Id. at ¶ 12. Tellingly however, Oracle has not alleged that Lodsys has made any specific allegations of infringement of the ‘834 patent against a Oracle customer, let alone specifically asserted infringement of the ‘834 patent based on that customer’s use of a Oracle product.

Oracle’s allegations are not sufficient to create an actual case or controversy between the parties regarding the ‘834 patent. For example, in Applera Corporation, Applied Biosystems, the owner of sixty-two patents, sent letters to Michigan Diagnostics, in which Applied Biosystems (1) advised of its extensive patent portfolio; (2) listed the sixty-two patents; (3) urged Michigan Diagnostics to review those patents; (4) notified Michigan Diagnostics that it may be infringing Applied Biosystems’ patents; and (5) suggested that the parties enter into licensing discussions. See 594 F. Supp. 2d at 158-59. After the parties’ further discussions regarding the patents, Applied Biosystems sued Michigan Diagnostics for infringement of seven of the sixty-two patents. See id. at 159-60. Michigan Diagnostics counterclaimed for declaratory judgment of non-infringement as to all sixty-two Applied Biosystems patents. See id. at 155. But since Applied Biosystems had not made any specific allegations of infringement beyond the seven

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patents upon which it sued, the court dismissed Michigan Diagnostics’ declaratory judgment counterclaim as to all but those seven patents. See id. at 160.

The court in Applera Corporation held that it was “far from clear” from the parties’ interactions “that any dispute actually exists as to the fifty-five patents [and that a]s to them it may be fairly said that Michigan Diagnostics is essentially seeking an advisory opinion.” Id.; see also SanDisk Corp. v. Audio MPEG, Inc., C06-02655 RMW, 2007 WL 30598, *4 (N.D. Cal. Jan. 3, 2007) (“The letter makes no specific assertion that any of the nine patents-in-suit here were being infringed or that infringement action would be brought as to the nine patents-in-suit. SanDisk’s emphasis that the notice accused all of its MP3 products and made general references to the need for a patent license is not adequate to show that there was an objectively reasonable apprehension of suit as to the specific nine patents at issue.”); Research Elecs. & Devices Co. v. Neptune Meter Co., 156 F. Supp. 484, 485 (S.D.N.Y. 1957) (“The law is sufficiently clear that the mere act of calling a competitor’s attention to his alleged infringement of a specific patent does not by itself call into contest the infringement of other patents, and as to these other patents no justiciable controversy exists.”).

More is needed to create declaratory judgment jurisdiction — namely a patent owner must make specific, particularized assertions of infringement, which are not present here regarding the ‘834 patent. See Applera, 594 F. Supp. 2d at 160 (“The problem that arises when the other side does not sue … is not a problem, or at least not the same problem, when the other side has not made any particularized suggestion of infringement and may never sue. [The patent owner] broadly, and with some palpable bravura, suggested a review of its entire patent portfolio, but it did not make any specific allegations of infringement except within its pleading in this lawsuit.”) (internal quotation omitted); Furminator, Inc., 246 F.R.D. at 589-90 (dismissing declaratory judgment counterclaims as to plaintiff’s patents that plaintiff had not

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explicitly indicated defendant was infringing, since “there is no evidence plaintiff has made a demand to the defendants that identifies how any new product infringes specific claims of any of plaintiff’s patents … there is no evidence in this case that plaintiff has explicitly identified the patents it believes the defendants are infringing, the relevant claims of those patents, or the relevant product that it alleges infringes those patents”) (emphasis added); Black & Decker Inc. v. Robert Bosch Tool Corp., 371 F. Supp. 2d 965, 968-69 (N.D. Ill. 2005) (“Courts have found that no actual controversy existed regarding patent claims that the patentee did not assert, even when the patentee was asserting other claims from that same patent.”) (emphasis added).

Because Oracle has failed to meet its burden of showing a sufficient case or controversy for declaratory relief jurisdiction regarding the ‘834 patent, Oracle’s Second Claim for Relief and Sixth Claim for Relief regarding that patent should therefore be dismissed under Rule 12(b)(1).

IV. CONCLUSION

For all of the above reasons, Lodsys respectfully requests that the Court dismiss or, in the alternative, transfer or stay this action in favor of the first-filed actions in the Eastern District of Texas. In the alternative, Lodsys respectfully requests that the Court dismiss the Second Claim for Relief and Sixth Claim for Relief of Oracle’s Complaint for lack of subject matter jurisdiction.

Respectfully Submitted this 27th day of July, 2012.

s/Aaron T. Olejniczak
Aaron T. Olejniczak (#1034997)
ANDRUS, SCEALES, STARKE & SAWALL, LLP
[address telephone fax email]

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Michael A. Goldfarb
Christopher M. Huck
Kit W. Roth
KELLEY, GOLDFARB, GILL, HUCK & ROTH, PLLC
[address telephone fax email]

Attorneys for Defendants

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