Imx, Inc. v. Lendingtree, LLC

• Decision Date: 10 January 2007
• Docket Number: No. CIV. 03-1067-SLR.,CIV. 03-1067-SLR.
• Citation: 469 F.Supp.2d 203
• Parties: IMX, INC., Plaintiff, v. LENDINGTREE, LLC, Defendant.
• Court: U.S. District Court — District of Delaware

469 F.Supp.2d 203

IMX, INC., Plaintiff, v. LENDINGTREE, LLC, Defendant.

No. CIV. 03-1067-SLR.

United States District Court, D. Delaware.

January 10, 2007.

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Potter Anderson & Corroon LLP, Wilmington, DE (Richard L. Horwitz, David E. Moore, of counsel) John Allcock, M Elizabeth Day, William G. Goldman, Christine K. Corbett, Thomas A. Burg, of DLA Piper Rudnick Gray Cary U.S. LLP, East Palo Alto, CA, for plaintiff.

Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE (Jack B. Blumenfeld, Julia Heaney, of counsel), Holmes J. Hawkins III, A. Shane Nichols, James J. Mayberry, of King & Spalding LLP, Atlanta, GA, for defendant.

MEMORANDUM OPINION

SUE L. ROBINSON, Chief Judge.

I. INTRODUCTION

IMX, Inc. ("plaintiff") filed the above-captioned action for infringement of U.S. Patent No. 5,995,947 ("the '947 patent") on November 24, 2003. (D.I.1) A jury trial on issues of infringement, validity, willfulness, and damages was held from January 11, 2006 through January 20, 2006. A bench trial was also held on defendant's defense and counterclaim that the '947 patent is unenforceable as a result of inequitable conduct. The jury returned a verdict for plaintiff of literal infringement of the '947 patent, against LendingTree LLC ("defendant") on invalidity of the '947 patent, and for plaintiff on willfulness. (D.I.246)

Currently before the court is defendant's motion for judgment as a matter of law or, in the alternative, for a new trial.¹ (D.I.263) Also before the court are plaintiffs motions for a permanent injunction (D.I.260) and for enhanced damages, attorneys' fees and other related expenses and interest (D.I.264)

II. BACKGROUND

The '947 patent generally relates to a method and system for trading loans in real time by making loan applications and placing them up for bid by potential lenders. The '947 patent was originally filed as U.S. Application No. 08/928,559 on September 12, 1997 and was issued on November 30, 1999.

In this case, defendant was accused of infringing claims 1-8, 11-12, 18-27, 30-31, and 38 of the '947 patent. Claims 2-18 depend from claim 1, which reads:²

A method for processing loan applications, said method including steps of maintaining a database of pending loan applications and their statuses at a database server, wherein each party to a loan can search and modify that database consistent with their role in the transaction by requests to said server from a client device identified with their role.

The accused system, the LendingTree Exchange, is an online system designed to connect borrowers to lenders for the purpose of exchanging loan products. The LendingTree Exchange is operated at www.lendingtree.com, wherein potential borrowers complete LendingTree's Qualification Form in furtherance of obtaining a loan.

Prior to trial, the court construed several disputed claim limitations. (D.I.224) The court construed "loan application" to mean "a request for an extension of credit in a format that contains sufficiently detailed information to enable a lender to grant or deny the request." (Id.) The, court construed "bid" to mean "an offer to make a loan." (Id.) In view of these meanings, the jury found that defendant's LendingTree. Exchange literally infringed each of the asserted claims of the '947 patent. (D.I.246)

III. STANDARD OF REVIEW

A. Motion for Judgment as a Matter of Law

To prevail on a renewed motion for judgment as a matter of law following a jury trial under Federal Rule of Civil Procedure 50(b), the moving party "`must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusions implied [by] the jury's verdict cannot in law be supported by those findings.'" Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed.Cir.1998) (quoting Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed.Cir.1984)). "`Substantial' evidence is such relevant evidence from the record taken as a whole as might be acceptable by a reasonable mind as adequate to support the finding under review." Perkin-Elmer Corp., 732 F.2d at 893. In assessing the sufficiency of the evidence, the court must give the nonmoving party, "as [the] verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in the evidence in his favor, and in general, view the record in the light most favorable to him." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1348 (3d Cir.1991); Perkin-Elmer Corp., 732 F.2d at 893. The court may not determine the credibility of the witnesses nor "substitute its choice for that of the jury between conflicting elements of the evidence." Id. In summary, the court must determine, whether the evidence reasonably supports the jury's, verdict. See Dawn Equip. Co. v. Kentucky Farms Inc., 140 F.3d 1009, 1014 (Fed.Cir.1998).

B. Motion for a New Trial

The decision to grant or deny a new trial is within the sound discretion of the trial court and, unlike the standard for determining judgment as a matter of law, the court need not view the evidence in the light most favorable to the verdict winner. See Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980). Federal Rule of Civil Procedure 59(a) provides, in pertinent part:

A new trial may be granted to all or any of the parties and on all or part of the issues in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States.

New trials are commonly granted in the following situations: (1) where the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) where newly-discovered evidence surfaces that would likely alter the outcome of the trial; (3) where improper conduct by an attorney or the court unfairly influenced the verdict; or (4) where the jury's verdict was facially inconsistent. See Zarow-Smith v. N.J. Transit Rail Operations, 953 F.Supp. 581, 584 (D.N.J.1997) (citations omitted). The court, however, must proceed cautiously and not substitute its own judgment of the facts and assessment of the witnesses' credibility for the jury's independent evaluation. Nevertheless [w]here a trial is long and complicated and deals with a subject matter not lying within the ordinary knowledge of jurors a verdict should be scrutinized more closely by the trial judge than is necessary where the litigation deals with material which is familiar and simple, the evidence relating to ordinary commercial practices. An example of subject matter unfamiliar to a layman would be a case requiring a jury to pass upon the nature of an alleged newly discovered organic compound in an infringement action.

Lind v. Schenley Indus. Inc., 278 F.2d 79, 90-91 (3d Cir.1960).

IV. DISCUSSION

A. Defendant's Renewed Motion for Judgment as a Matter of Law or, in the Alternative, a New Trial

Defendant alleges that judgment as a matter of law is appropriate on the following issues: (1) defendant cannot infringe any of the asserted claims of the '947 patent because plaintiff has not proven that defendant maintained a database of "loan applications" as required by the claims since defendant's Qualification Forms are not loan applications; (2) defendant presented uncontradicted evidence that the Mortgage Analysis Reporting System ("MARS"), prior art under 35 U.S.C. § 102(b), anticipates every asserted claim of the '947 patent; and (3) the evidence introduced at trial is insufficient to support a finding of willful infringement. (D.I.269) Defendant further argues that, even if there is sufficient evidence to support the jury's verdict, a new trial is warranted because the verdict is against the great weight of the evidence. (Id. at 38)

1. Timeliness of Defendant's Motion

As a threshold matter, plaintiff claims that, by failing to move for judgment as a matter of law at the close of plaintiff's case, defendant waived its argument that plaintiffs evidence was insufficient. (D.I. 279 at 10-11) Plaintiff reasons in this regard that it was denied meaningful notice, as contemplated by Rule 50,³ with respect to issues on which plaintiff had the burden of proof (infringement and willfulness). Defendant's motion, therefore, is procedurally improper. (Id.)

Plaintiff asserts that Third Circuit precedent supports its argument that a defendant must move for judgment as a matter of law ("JMOL") at the close of plaintiffs case. (D.I. 279 at 8) In Kutner Buick, Inc. v. American Motors Corp., the Third Circuit stated that "[t]he rule that a post-trial Rule 50 motion can only be made on grounds specifically advanced in a motion for a directed verdict at the end of plaintiffs case is the settled law of this circuit." 868 F.2d 614, 617 (3d Cir.1989) (collecting cases).⁴

More recent Third Circuit authority closely follows the plain language of Rule 50(a), which states that a party can move for JMOL at any time prior to the verdict. See e.g. Greenleaf v. Garlock, Inc., 174 F.3d 352, 364 (3d Cir.1999) ("It is well settled that a party who does not file a Rule 50 motion for judgment as a matter of law at the end of the evidence is not thereafter entitled to have judgment entered in its favor"); Easter v. Grassi, 51 Fed.Appx. 84, 87 (3d Cir.2002) (non-precedential) (citing "well established" rule of the Third Circuit that a party must move for JMOL "at the close of all the evidence") (citing Greenleaf supra).

In the case at bar, defendant rested its case on January 19, 2006. Each party filed Rule 50(a) motions on January 20, 2006. (D.I.241, 244) Counsel for defendant advised the court on that same date that it would be filing a JMOL in paper form, to which the court responded that "[A]ll your JMOLs are reserved." (D.I. 257 at 1586:6-9) The jury, thereafter, was charged and sent to...