Two of three DealerTrack patents thrown out by Court
FARMINGTON HILLS, Mich. – October 1, 2008 – RouteOne LLC, which operates a web-based credit application management system for use by automotive dealers, announced today that it has obtained a significant victory in its five-year patent dispute with DealerTrack.
DealerTrack sued RouteOne, first in the Eastern District of New York in January 2004, and then in California in 2006, for alleged infringement of three patents owned by DealerTrack that are directed to certain aspects of computerized credit application systems. After several years of discovery, on September 30 the United States District Court for the Central District of California filed an opinion providing patent claim construction (so-called “Markman”) rulings, which determine the meaning of disputed patent claim language. Based on its claim constructions, the Court then issued a further decision granting summary judgment in favor of RouteOne on two of the three patents in suit. As a result of the summary judgment decision, all of DealerTrack’s charges of infringement with respect to DealerTrack’s '403 and '841 patents are out of the case.
The Court ruled as follows:
'403 Patent: All claims asserted against RouteOne are invalid.
'841 Patent: All asserted claims are not infringed by the RouteOne system. Any system using the Internet for application transmission does not infringe the '841 patent.
The Court also ruled that the RouteOne Messenger system does not infringe any asserted claim of any of DealerTrack’s three patents.
The Court’s decisions, which leave only DealerTrack's recently issued '427 patent for a jury trial in February 2009, eliminate nearly three years of potential damages and also eliminate DealerTrack's claim of willful infringement or any possibility of resulting trebling of damages. In response to another of RouteOne’s summary judgment motions, DealerTrack conceded that it had no case for willful infringement with respect to the '427 patent.
In addition to resulting in the dismissal from the suit of two of DealerTrack’s patents, the Court’s September 30 decision on claim construction issues leaves RouteOne well positioned for any trial on the remaining '427 patent. RouteOne at that trial still has not only its invalidity defenses but also all of its inequitable conduct defenses against the '427 patent. In a previous decision announced in July 2008, the Court denied in its entirety a DealerTrack motion seeking summary judgment dismissal of RouteOne’s inequitable conduct defenses, which are based on RouteOne’s assertion that DealerTrack withheld from the Patent Office known, highly material prior art with an intent to deceive. Should RouteOne prevail on any of its several grounds for inequitable conduct, DealerTrack may be liable to RouteOne for RouteOne’s attorney fees.
“We are gratified by the Court’s decision,” said Mike Jurecki, RouteOne’s CEO. “It greatly simplifies this litigation, reducing the dispute from three patents to only one patent. We are very comfortable with our defenses to the remaining patent claims and, if necessary, will deal with this remnant of the case at trial,” Jurecki continued. “We continue to believe that there was no basis for DealerTrack to sue RouteOne, and intend to press our inequitable conduct defenses at trial and to recover from DealerTrack our attorney fees for having to defend the case,” added Jurecki. Trial of the case is now scheduled for February 2009 as a result of the court, on its own, having twice moved the trial date because of other matters pending on the Court’s calendar.
“We remain convinced, as we have been from the outset that RouteOne does not infringe any valid patent claim owned by DealerTrack. We remain focused on providing valuable products and services for our dealer and finance source customers."
RouteOne was formed in 2002 by DaimlerChrysler Financial Services, Ford Motor Credit Company, GMAC, and Toyota Financial Services to create a more streamlined credit application for automobile dealers and their customers. Providing access to more than 21,500 dealers in North America, RouteOne’s web-based system allows automotive dealers to submit credit applications to the largest indirect lenders, request credit reports, and increase profitability with RouteOne’s free Dealer Reporting Suite. RouteOne’s open integration business model also allows the dealer to integrate with their choice of a wide variety of best in class providers, including DSPs, CRM systems, F& I modules and menu providers. RouteOne offers dealers a common platform for all their credit application financing needs. More information is available at