Free Proposed Pretrial Order - District Court of Delaware - Delaware

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EXHIBIT 1

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Exhibit 1 STATEMENT OF ADMITTED FACTS 1. Affinion Net Patents, Inc. ("Affinion" or "Plaintiff") is a corporation organized

under the laws of the State of Delaware. 2. Affinion Loyalty Group, Inc. ("Affinion Loyalty") is a Delaware corporation,

with its principal place of business in Richmond, Virginia. Affinion Loyalty operates loyalty programs that utilize the Internet. 3. Maritz Inc. ("Maritz" or "Defendant") is a Missouri corporation, with its principal

place of business in Fenton, Missouri. Maritz's business includes the development and operation of loyalty and incentive programs, some of which have Internet-related aspects. 4. The `412 Patent, entitled "Fully Integrated, On-Line Interactive Frequency and

Award Redemption Program," was issued by the U.S. Patent and Trademark Office on December 28, 1999. 5. 6. 7. line. 8. Thomas Storey is listed as the sole inventor of U.S. Patent No. 5,774,870 ("the Thomas Storey is named as the sole inventor of the `412 Patent. Maritz uses its VAULT system in the operation of loyalty programs. Maritz's AwardHQ system does not permit a user to apply for membership on-

`870 patent"), which issued on June 30, 1998 from U.S. Patent Application No. 08/572,017, which was filed on December 14, 1995. 9. Mr. Storey began working for Radisson Hotels as an Executive Vice President of

Sales and Marketing in approximately August 1989 and left Radisson in August 1994.

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10.

Mr. Storey is listed as one of five inventors on U.S. Patent No. 5,483,444, entitled

SYSTEM FOR AWARDING CREDITS TO PERSONS W HO BOOK TRAVEL-RELATED RESERVATIONS ("the `444 patent"). The `444 patent was filed on February 7, 1995, claims priority to an application filed on October 26, 1993, and issued on January 9, 1996. The five inventors listed on the `444 patent assigned it to Radisson Hotels. 11. Mr. Storey took a position with Doubletree Hotels after his employment with

Radisson, working for Doubletree Hotels for approximately five and one-half years. 12. In 1995, while employed by Doubletree Hotels, Mr. Storey established and was

co-owner of Interactive Promotions Online, Inc. 13. Joseph Bach was retained as patent counsel to assist in preparing and filing the

application which later issued as the `870 patent. That application, U.S. Patent Application No. 08/572,017 ("the `017 application"), was filed on December 14, 1995. 14. Netcentives. 15. On or about March 19, 1999, Mypoints.com, Inc. ("Mypoints") filed a Complaint On or about July 21, 1997, Mr. Storey assigned the '017 patent application to

for Declaratory and Injunctive Relief in the United States District Court for the Northern District of California, alleging that the `870 patent was invalid. 16. U.S. Patent No. 5,794,210 was filed on December 11, 1995 and issued on

August 11, 1998. 17. 1997. 18. The book Incentives in Marketing, by George Meredith and Robert Fried, was U.S. Patent No. 5,592,378 was filed on August 19, 1994 and issued on January 7,

published in 1977.

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19.

The article Despite Prodigy's Shortcomings, You Can Still Reap Big Bonuses was

published in the September 1990 issue of PC Computing. 20. The article Mall Hopping on the Internet was published in the October 10, 1994

issue of Network World. 21. The article Power Vision and LA Online Share a Common Goal: Let Your Fingers

do the Shopping was published in the February 1993 issue of Computer Shopper. 22. The article Is It Time for Web Surfers to Fill Out Frequent Browser Point

Applications was published in the November 1995 issue of Adweek. 23. Hilton released the press release Welcome to HiltonNet! New Hilton Internet

Concierge Rolls Out the "Virtual" Red Carpet in PR Newswire on August 21, 1995. 24. The article The Interactive Revolution--How do you get consumers to respond to

your promotions? Through new high-tech routes on the emerging information superhighway was published in the February 1994 issue of Incentive magazine. 25. The article A Shopping Spree in Cyberspace was published in the September 1,

1995 issue of Catalog Age. 26. The article The Internet ­ How it Will Change the Way You Do Business was

published in the November 14, 1994 issue of Business Week. 27. The article Give Cyber-Ready Consumers the Once Over--Computer-Savvy

Home-Shopping Segments May Drive Online Sales, Offer Marketing Clues was published in the June 23, 1995 issue of Interactive Marketing News.

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EXHIBIT 2

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EXHIBIT 3

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EXHIBIT 3 MARITZ'S STATEMENT OF THE CONTESTED ISSUES OF FACT 1. Whether any of Maritz's Vault programs perform each and every step set forth in

independent claims 10, 27, and 36 and/or dependent claims 11-17 and 28-34 so as to directly infringe the `412 patent. 2. Whether any of Maritz's AwardHQ programs perform each and every step set

forth in independent claims 10, 27, and 36 and/or dependent claims 11-17 and 28-34 so as to directly infringe the `412 patent. 3. definite. 4. Whether any or all claims of the `412 patent are invalid because of a failure to Whether claims 12, 13, 29, and/or 30 are invalid because they are not sufficiently

name all of the inventors. 5. Whether any or all claims of the `412 patent are entitled to claim priority to the

filing date of U.S. Patent No. 5,774,870. 6. Whether any or all claims of the `412 patent are invalid because it was known or

used by others in this country, or patented or described in a printed publication in this or a foreign country, before the date of invention of the `412 patent. 7. Whether any claim or all claims of the `412 patent are invalid because it was

patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for the `412 patent in the United States.

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8.

Whether any or all claims of the `412 patent are invalid because it was described

in a patent granted on an application for patent by another filed in the United States before the invention of the `412 patent. 9. Whether any or all claims of the `412 patent are invalid because it was made by

another, prior inventor who did not abandon, suppress, or conceal the invention. 10. Whether any or all claims of the `412 patent are invalid because it was derived

from another or would have been obvious based on a combination of the derived information and the prior art. 11. Whether any or all claims of the `412 patent are invalid because the difference

between it and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which the subject matter pertains. 12. 13. 14. 15. The scope and content of the prior art. The differences between the prior art and the claims at issue. The level of ordinary skill in the art. Whether any secondary considerations exist, which relate to obviousness, and, if

so, whether these considerations have a sufficient nexus with the claimed invention. 16. Whether the `412 patent is unenforceable because the applicant failed to disclose

material information to the U.S. Patent Office during the prosecution of the patent application that issued as the `412 patent. 17. Whether inequitable conduct occurred during the prosecution of one or more

patent applications related to `870 patent, and, if so, whether the `412 patent is unenforceable due to the infectious unenforceability impact of this inequitable conduct.

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18.

Whether the `412 patent is unenforceable because the plaintiff and its

predecessors in interest have engaged in patent misuse by knowingly enforcing and attempting to enforce the `412 patent while knowing it was unenforceable and/or invalid. 19. Whether the `412 patent is unenforceable on account of the unclean hands of

Affinion and others, which has pervaded the `412 patent and related patents, and continued into this litigation, including but not limited to during the prosecution of the patent application leading to the `412 patent. 20. Whether plaintiff is barred from enforcing the `412 patent because it and/or its

predecessors in interest committed laches in enforcing the `412 patent against Maritz. 21. 22. Whether plaintiff is estopped from enforcing the `412 patent against Maritz. Whether plaintiff, its predecessors in interest, and all licensees of the `412 patent

gave sufficient notice to the public of the `412 patent by consistently and continuously marking the appropriate subject matter with the word "patent" or the abbreviation "pat.", together with the patent number 6,009,412 and/or by giving Maritz actual notice sufficient under 35 U.S.C. § 287 with respect to VAULT or AwardHQ. 23. Arguendo, if a finding of infringement is made, and the `412 patent is not found

invalid and unenforceable, whether Maritz had a good faith belief that is did not infringe, and whether Maritz's belief was reasonable under all the circumstances so as to preclude a finding of willful infringement. 24. Arguendo, if a finding of willful infringement is made, whether enhanced

damages are justified. 25. Arguendo, if a finding of willful infringement is made, whether this constitutes an

exceptional case.

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26.

Arguendo, if a finding of infringement is made, and the `412 patent is not found

invalid and unenforceable, is plaintiff entitled to any lost profits damages, and, if so for which customers, over what period of time and in what amount. 27. Arguendo, if a finding of infringement is made, and the `412 patent is not found

invalid and unenforceable, what is a reasonable rate of royalty. 28. Arguendo, if a finding of infringement is made, and the `412 patent is not found

invalid and unenforceable, what is the amount of sales to which the reasonable royalty rate applies. 29. Whether Maritz falsely marked advertising "patent pending" in connection with

its VAULT system. 30. Whether--if, arguendo, Maritz falsely marked advertising "patent pending" in

connection with its VAULT system -- Maritz acted with the purpose of deceiving the public. 31. any damages. 32. 33. 34. Whether plaintiff has standing to assert claims of false patent marking. Whether plaintiff has standing to assert a Lanham Act violation. Whether--if the `412 patent is found to be unenforceable, invalid, or not If, arguendo, a finding of false marking is made, whether plaintiff is entitled to

infringed--this constitutes an exceptional case. To the extent any issue of law in Exhibit 5 is deemed to be an issue of fact, it is hereby incorporated as if fully set forth herein. Maritz also incorporates by reference its Brief Statement of What Maritz Intends to Prove at Trial.

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