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May 2, 2005.

CIVIX-DDI, LLC, Plaintiff,

The opinion of the court was delivered by: AMY J. ST. EVE, District Judge


Plaintiff CIVIX-DDI, LLC ("Civix") filed this suit against Defendant Verizon Information Services, Inc. ("VIS"), Expedia, Inc. ("Expedia"), and Travelscape, Inc. ("Travelscape") alleging infringement of various claims of U.S. Patent Nos. 6,385,622 ("the '622 patent"), 6,408,307 ("the '307 patent), and 6,415,291 ("the 291 patent"), (collectively the "Patents-in-Suit"). Defendants move to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), or in the alternative to stay, Civix's patent infringement claims. The Court grants Defendants' motion to dismiss.


  In a separate action, currently pending before the Court, Civix filed suit against several defendants, including VIS, Expedia, and Travelscape alleging infringement of five patents, including the Patents-in-Suit. Civix-DDI, LLC v. Motorola et al., No. 03-C-3792, (N.D. Ill.) ("Initial Action"). In that action, Defendants filed a declaratory judgment counterclaim alleging noninfringement and invalidity of all of the claims of the Patents-in-Suit. (R. 26-1; Expedia and Travelscape's Counterclaims; R. 104-1; VIS's Counterclaims at 31-2.)*fn1

  At the Status Hearing on September 9, 2004, Defendants requested that the Court stay third party discovery on prior art issues pending the Court's decisions on Defendants' motions for summary judgment on their licensing defenses. One of the reasons cited by Defendants for requesting the stay was that they needed certainty on the identity of claims asserted by Civix prior to commencing third party discovery. (R. 198-1; Sept. 9, 2004 Transcript at 4:8-23.) In light of Defendants' concerns, the Court questioned counsel for Civix regarding whether it had identified the claims it was asserting against Defendants. (Id. at 8:22-9:2.) Civix represented to Defendants and the Court that it had identified the claims it was asserting against Defendants:
So, what we're talking about are five patents, approximately one independent — or two independent — claims per patent. So, I think we've tried to focus it and narrow it so they know. I think the problem, at least that I'm hearing from them is that they don't like what we've picked. They say, "Well, you've expanded, rather than narrowed, the scope." I think we've narrowed the scope considerably. At least that was the goal. Your Honor indicated that's where you wanted us to be, and that's what we did. So, I think, at least from our perspective, there's nothing else we can do except tell them which claims — ? and we've done that.
(R. 198-1; Sept. 9, 2004 Transcript at 5:12-25.) In direct response to the Court's questions, counsel for Civix later confirmed that its list of asserted claims provided to Defendants was not contingent on any proposal or deals:
Civix: Well, let me get rid of the deal business. I don't know about any details, but we're not proposing any deals. This is what we have. What [counsel] said in his letter was, "We understand now that this is going to narrow — "because we're narrowing" — this is going to narrow the invalidity contentions." If they don't want to narrow them, that's their business. Fine. They'll have to live with that at some point in time in this litigation. But as far as we're concerned, these are the claims. This is a summary chart that identifies the claims. We will have claim charts for every one of those claims, applying every one of the claims. Most of them we've done already, but we'll have the rest of them today or tomorrow at the latest. So, from our perspective as the plaintiff, we've identified with specificity what the claims are. We have narrowed it considerably from the number of claims that existed before. We've got five patents with nine independent claims. Dependent claims from those are also identified. They're more narrow. So, I don't think there's anything else we can do. And this is the summary chart.
Court: So, it is your position, ?, that putting aside everything else in the letter, which you handed to me, the claims at issue are those that are set forth on Page 2 of your —
Civix: That's correct.
Court: — letter?
Court: And that is not contingent on any deal or any —
Civix: No
Court: — kind of agreement?
Civix: No continencies. If they think there's a deal that we proposed, we'll eliminate that.
Court: Okay.
Civix: Just so you understand, the letter says, "we understand now that this is going to narrow the validity contentions." They're apparently concerned that it doesn't. They've cited all the prior art known to man. That's fine. If they want to do that, let them go ahead and do it. So, this is what our position is. No deals. Court: Okay.
(Id. at 7:24-9:20.)

  On September 30, 2004, at the close of fact discovery, VIS served its Supplemental Objections and Response to Civix's Interrogatory No. 3 identifying additional prior art. (No. 04-C-8031, R. 13-1; Civix's Resp. to Def.'s Mot. to Dismiss, Ex. B.) On November 22, 2004, Civix served on Defendants its Third Supplemental Interrogatory Response identifying additional claims it was asserting that Defendants had infringed. (Id. at Ex. 3.) On November 30, the Court lifted the stay on third party prior art discovery. (R. 201-1; Ct.'s Dec. 1, 2004 Minute Order.)

  After receiving Civix's newly asserted claims, VIS moved to strike Civix's Supplemental Interrogatory Response identifying those new claims. (R. 206-1; VIS's Mot. to Strike.) In response, Civix withdrew its new claims, indicating it would file a separate suit asserting those claims. (R. 207-1; Civix's Resp. to VIS's Mot. to Strike.) Civix proceeded to file this action (the "Second Action") on December 13, 2004.

  The Court issued its Markman Order in the Initial Action on April 6, 2005. Shortly thereafter, on April 13, 2005, Civix submitted to the Court a Supplemental Citation of Authority regarding its amendments to infringement contentions. (R. 275-1; Pl.'s Supp. Authority.) Civix included as exhibits its Supplemental Initial Disclosures to Defendants asserting additional patent claims against Defendants in the Initial Action. Many of these new claims are included in the patent claims asserted against Defendants in the Second Action.


  Defendants make two primary arguments in support of their motions to dismiss the Second Action. First, Defendants argue that Fed.R.Civ.P. 13(a) bars the Second Action because the newly asserted claims were compulsory counterclaims to Defendants's declaratory judgment claims in the Initial Action. Second, Defendants argue that the doctrine of claim splitting bars the Second Action. In the alternative, if the Court does not dismiss Civix's Second Action, Defendants request that the Court stay this Second Action pending resolution of the Initial Action. Civix opposes dismissal and moves to consolidate the Second Action with the Initial Action.*fn2

  I. Legal Standard

  The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of a complaint, not the merits of the case. Triad Assocs., Inc. v. Chicago Hous. Auth., 892 F.2d 583, 586 (7th Cir. 1989). When deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court views "the complaint in the light most favorable to the plaintiff, taking as true all well-pleaded factual allegations and making all possible inferences from those allegations in his or her favor." Lee v. City of Chicago, 330 F.3d 456, 459 (7th Cir. 2003).

  II. Rule 13 Prohibits Civix From Asserting Its New Claims In The Second Action

  Fed.R.Civ.P. 13(a) provides that:
A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim.
Fed.R.Civ.P. 13(a). Rule 13(a) promotes judicial economy by avoiding multiple actions ...

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