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Judge Andrews denies GeoTag’s motion to dismiss for lack of subject matter jurisdiction

Judge Richard G. Andrews recently considered GeoTag, Inc.’s motion to dismiss Microsoft and Google’s (“Plaintiffs”) amended complaint for lack of subject matter jurisdiction.  Microsoft Corp. et al. v GeoTag, Inc., C.A. No. 11-175-RGA (D. Del. Aug. 29, 2014).  Judge Andrews considered an earlier motion on similar grounds but gave Plaintiffs leave to amend their complaint.  GeoTag renewed its motion in opposition to Plaintiffs’ amended complaint.  Id. at 1.  This declaratory judgment action was filed by Plaintiffs in response to GeoTag’s suits filed in the Eastern District of Texas against Plaintiffs’ customers.  Plaintiffs argued that the Court had subject matter jurisdiction  because “‘GeoTag’s Texas lawsuits implied an assertion of both indirect and direct infringement against Google and Microsoft, and a live controversy therefore existed as to the Google and Microsoft products accused by GeoTag’s Texas lawsuits against their customers.'”  Id. at 2.  Under MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), this implied assertion of infringement “created a justiciable dispute.”  Id. at 3.

GeoTag disputed “Plaintiffs’ implied assertion of direct infringement,” arguing that it “‘would mean that the patentee made incorrect allegations of direct infringement against a customer that, unbeknownst to the patentee, would constitute implied assertions of direct infringement against the supplier.'”  Id.  Judge Andrew disagreed because, under 35 U.S.C. § 271, a customer and vendor can both directly infringe a patent based on the same conduct.  Id.  3-4.  Judge Andrews determined that subject matter jurisdiction was present because an express accusation need not occur, only whether there was “‘a reasonable potential that such a claim could be brought.'”  Id.  at 4. (quoting Microsoft Corp. v. DataTern, Inc., 755 F.3d 899, 905 (Fed. Cir. 2014)).  Because “reasonable potential” existed, Judge Andrews denied GeoTag’s motion as to direct infringement.  Judge Andrews also determined that subject matter jurisdiction existed based upon an implied assumption of induced infringement because, despite being aware of allegations against its customers, Google provided articles to customers on how to create store locators.  Id. at 5.  In Judge Andrews view, Plaintiffs’ actions “established a ‘reasonable potential’ GeoTag could have brought induced infringement claims.”  Id.

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