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Mapquest, Inc. v. CIVIX-DDI

February 11, 2009

MAPQUEST, INC., A DELAWARE CORPORATION, PLAINTIFF,
v.
CIVIX-DDI, LLC, A COLORADO CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge David H. Coar

MEMORANDUM OPINION AND ORDER

Plaintiff MapQuest, Inc. ("Plaintiff" or "MapQuest") brings this action against Defendant CIVIX-DDI ("Defendant" or "CIVIX"), alleging a breach of contract and a breach of the covenant of good faith and fair dealing, and seeking a declaratory judgment and a permanent injunction. In response, CIVIX has filed four counterclaims: Counterclaim I alleges unfair competition in violation of the Lanham Act, Counterclaim II alleges tortious interference with prospective economic advantage, Counterclaim III is a cause of action for breach of contract, and Counterclaim IV is a cause of action for breach of the covenant of good faith and fair dealing. MapQuest now moves to dismiss CIVIX's counterclaims pursuant to Fed. R. Civ. P. 12(b)(6).

BACKGROUND

For the purposes of this motion, the well-pleaded factual allegations in CIVIX's Answer and Counterclaims ("Counterclaims") are accepted as true. Fed. R. Civ. P. 12(b)(6). MapQuest is a corporation organized under the laws of the State of Delaware. CIVIX is a limited liability corporation organized under the State of Colorado. MapQuest originally filed the case in the Circuit Court of Cook County, Illinois, then CIVIX removed the state court action to this court, pursuant to 28 U.S.C. § 1441(b) and 28 U.S.C. § 1332.

CIVIX is the owner of U.S. Patent Nos. 6,385,622; 6,408,307; and 6,415,291 (the "CIVIX patents"), which are patents relating to geographical search technology. Counterclaims ¶ 6. CIVIX's current business is the licensing and enforcement of the CIVIX patents. Id. In 1999, CIVIX sued MapQuest for patent infringement. Id. at ¶ 8. On May 3, 1999, CIVIX and MapQuest settled that lawsuit, and entered into two integrated agreements (collectively, the "MapQuest Agreement"). Id.; Compl. ¶ 2.*fn1 The MapQuest Agreement includes a license that provides MapQuest with the right to "make, create, modify, improve, design, have made, import, use, sell or offer for sale, sublicense, transfer and/or assign any and all past, present, and future MAPQUEST Technology covered by any claim of the CIVIX Patents" and "to sublicense, transfer and/or assign to any MAPQUEST customer the right to undertake any and all past, present and future Permitted Uses with respect to the MAPQUEST Technology." Compl. ¶ 6. The MapQuest Agreement further grants a "concurrent right of use by MapQuest's end users, and by each such customer's customers and end users, of the MAPQUEST Technology and the Permitted Uses." Id. The license also was expressly confined to "proprietary" products that were both "created and developed" by MapQuest. Counterclaims ¶ 8.

The MapQuest Agreement also contained a covenant not to sue that prohibited CIVIX from suing MapQuest or MapQuest customers with respect to certain uses:

CIVIX hereby covenants and agrees that neither CIVIX not [sic] any successor or assign of CIVIX will bring any lawsuit, cause of action, claim or demand of any kind against (i) MAPQUEST, with respect to the creation, modification, improvement, design of, or any manufacture, importation, use, license, sale or offer for sale by MAPQUEST of, the MAPQUEST Technology or the Permitted Uses to any of its customers who sublicense, purchase or use MAPQUEST Technology, or (ii) any MAPQUEST customer, with respect to the creation, modification, improvement, design of, or any manufacture, importation, use, sale or offer for sale by any such customer, of the MAPQUEST Technology or the Permitted Uses, or (iii) any MAPQUEST end user, or any MAPQUEST customer's customer or end user, with respect to the MAPQUEST Technology or the Permitted Uses.

Compl. Ex. B at 3, ¶ 7 (emphasis added). MapQuest alleges that, despite the covenant not to sue, CIVIX has filed multiple lawsuits alleging infringement of the CIVIX patents against MapQuest customers based on their use of MapQuest products and services, thus violating the terms of the MapQuest Agreement. Compl. ¶ 15.

CIVIX denies MapQuest's allegations and counterclaims that MapQuest has directly interfered with CIVIX's efforts to license the CIVIX patents by improperly representing to infringers that by buying products sold by MapQuest, they are licensed under the CIVIX patents. Id. at ¶ 10. CIVIX alleges that MapQuest has made such representations even as to products that MapQuest did not "create and develop," that are not proprietary, or that are merely pass-through products created and developed by third parties. Id. One example CIVIX cites is MapQuest's resale of "geocodes," which MapQuest purchases from other vendors. Id. at ¶ 11. A "geocode" is the precise latitude/longitude that corresponds to the location of something, e.g. a hotel. Id. CIVIX argues that the sale or use of a geocode by itself would not infringe any claim of the CIVIX patents, but that geocodes are used in systems which infringe such patents. Id. CIVIX contends that such geocodes are not "created and developed by MapQuest," nor "proprietary."

Id.

CIVIX alleges that MapQuest has represented that the use of geocodes supplied by MapQuest confers a license of the CIVIX patents, and has encouraged infringers to make such a claim and not pay for a license under the CIVIX patents. Id. at ¶ 12. CIVIX also alleges that MapQuest has actively assisted infringers by serving as a conduit for geocodes supplied by other companies precisely to create infringers' claims that they are already licensed under the CIVIX patents. Id. As the result of MapQuest's conduct, CIVIX claims, infringers have refused to negotiate a license of the CIVIX patents. Id. at ¶ 13. MapQuest now moves to dismiss CIVIX's counterclaims.

STANDARD

On a motion to dismiss for failure to state a claim upon which relief can be granted, the district court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. Fed. R. Civ. P. 12(b)(6); Gastineau v. Fleet Mortg. Corp., 137 F.3d 490, 493 (7th Cir. 1998) (citation omitted). The purpose of a 12(b)(6) motion is to decide the adequacy of the complaint, not to determine the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990) (citation omitted). A complaint should not be dismissed pursuant to Rule 12(b)(6) unless it fails it provide fair notice of what the claim is and the grounds upon which it rests or it is apparent from the face of the complaint that under no plausible facts may relief be granted. St. John's United Church of Christ v. City of Chicago, 502 F.3d 616, 625. Although "[a]ll the complaint need do to withstand a motion to dismiss for failure to state a claim is outline or adumbrate a violation of the statute or constitutional provision upon which the plaintiff relies and connect the violation to the named defendants," Christensen v. County of Boone, Illinois, 483 F.3d 454, 459 (7th Cir. 2007) (quoting Brownlee v. Conine, 957 F.2d 353, 354 (7th Cir.1992) (internal citations and quotation marks ...


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