Free Answer to Amended Complaint - District Court of Delaware - Delaware

Case 1:07-cv-00459-GMS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE INOVIS USA, INC., Plaintiff, v. CLASSIFIED INFORMATION, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 07-459-GMS

JURY TRIAL DEMANDED

ANSWER TO AMENDED COMPLAINT, COUNTERCLAIM AND DEMAND FOR JURY TRIAL Defendant Classified Information, Inc. ("Classified") responds as follows to the First Amended Complaint of Plaintiff Inovis USA, Inc. ("Inovis"). PARTIES 1. 2. 3. Classified admits the allegations of ¶ 1. Classified admits the allegations of ¶ 2. Classified admits the allegations of ¶ 3. JURISDICTION AND VENUE 4. Classified admits that Plaintiff purports to bring claims under the

Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, and the United States Patent Laws, 35 U.S.C. § 101 et seq., seeking declaratory relief of non-infringement, invalidity and/or unenforceability of U.S. Patent No. 5,812,669 (the "'669 Patent"). Classified denies that Inovis is entitled to such relief. Classified also admits that Plaintiff purports to bring claims for violations of the Lanham Act and state tort law, but denies that Inovis is entitled to relief under such claims. Classified admits that the Court has subject matter jurisdiction of this action.

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5.

Classified admits that Inovis seeks a declaration that Inovis has not

infringed any valid claims of the `669 Patent and/or that the `669 Patent is invalid and/or unenforceable, as well as relief under the federal and state laws that prohibit unfair business practices and unfair competition. Classified denies that Invois is entitled to any such relief. 6. 7. 8. Classified admits the allegations of ¶ 6. Classified admits the allegations of ¶ 7. Classified admits the allegations of ¶ 8. BACKGROUND 9. Classified admits that Inovis sells products that allow business-to-business

commerce and secure electronic data interchange over the Internet. Classified is without personal knowledge sufficient to admit or deny the remaining allegations of ¶ 9 and for that reason they are denied. 10. Classified admits that Inovis sells a product known as "BizManager."

Classified is without personal knowledge sufficient to admit or deny the remaining allegations of ¶ 10 and for that reason they are denied. 11. Classified admits that Inovis' product BizManager allows the secure

exchange of data between Inovis' computer systems and the computer systems of its customers or business partners over the Internet. Classified is without personal

knowledge sufficient to admit or deny the remaining allegations of ¶ 11 and for that reason they are denied. 12. On information and belief, Classified admits that BizManager allows the Classified is without personal

secure exchange of data between Inovis' customers.

knowledge sufficient to admit or deny the remaining allegations of ¶ 12 and for that reason they are denied. 13. Classified admits the allegations of ¶ 13.

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14.

Classified is without personal knowledge sufficient to admit or deny the

allegations of ¶ 14 and for that reason they are denied. THE 669 PATENT 15. 16. Classified admits the allegations of ¶ 15. Classified admits the allegations of ¶ 16.

CI'S ENFORCEMENT CAMPAIGN OF THE 669 PATENT AGAINST INOVIS AND INOVIS' CUSTOMERS 17. On information and belief, Classified admits that Bumble Bee Foods,

Morgan Foods, Inc. and Aspen Pet Products are customers of Inovis. Classified is without personal knowledge sufficient to admit or deny the remaining allegations of ¶ 17 and for that reason they are denied. 18. Classified admits that it contacted Bumble Bee Foods, Morgan Foods, Inc.

and Aspen Pet Products alleging that Classified owns and has the right to enforce the `669 Patent and, that by using BizManager, Bumble Bee Foods, Morgan Foods, Inc. and Aspen Pet Products infringe the `669 Patent. Classified denies the remaining allegations of ¶ 18. 19. 20. 21. 22. 23. 24. Classified admits the allegations of ¶ 19. Classified denies the allegations of ¶ 20. Classified denies the allegations of ¶ 21. Classified denies the allegations of ¶ 22. Classified admits the allegations of ¶ 23. Classified denies that the Assignment of Patent Rights to DD is valid and

further denies the remaining allegations of ¶ 24. 25. Classified is without personal knowledge sufficient to admit or deny the

allegations of ¶ 25 and for that reason they are denied.

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26.

Classified is without personal knowledge sufficient to admit or deny the

allegations of ¶ 26 and for that reason they are denied. 27. Classified is without personal knowledge sufficient to admit or deny the

allegations of ¶ 27 and for that reason they are denied. 28. Classified is without personal knowledge sufficient to admit or deny the

allegations of ¶ 28 and for that reason they are denied. 29. Classified is without personal knowledge sufficient to admit or deny the

allegations of ¶ 29 and for that reason they are denied. 30. Classified admits that a dispute exists between Classified and Inovis.

Classified denies the remaining allegations of ¶ 30. 31. Classified admits that a controversy exists between itself and Inovis.

Classified denies that Inovis is entitled to relief. Classified also denies the remaining allegations of ¶ 31. 32. 33. Classified admits the allegations of ¶ 32. Classified admits that Inovis must cease making, using and selling its

Bizmanager products or risk actual and treble damages in an infringement suit against Inovis. The remaining allegations of ¶ 33 are denied. COUNT I DECLARATORY JUDGMENT COUNT: AGAINST CI AND DD (NONINFRINGEMENT, INVALIDITY AND/OR UNFORCEABILITY OF THE 669 PATENT) 34. Classified restates and realleges its answers set forth in paragraphs 1

through 33 above and incorporates them by reference. 35. 36. 37. 38. Classified denies the allegations of ¶ 35. Classified denies the allegations of ¶ 36. Classified denies the allegations of ¶ 37. Classified denies the allegations of ¶ 38.

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COUNT II: AGAINST CI UNFAIR COMPETITION: VIOLATION OF SECTION 43 OF THE LANHAM ACT 39. Classified restates and realleges its answers set forth in paragraphs 1

through 38 above and incorporates them by reference. 40. 41. 42. 43. Classified denies the allegations of ¶ 40. Classified denies the allegations of ¶ 41. Classified denies the allegations of ¶ 42. Classified denies the allegations of ¶ 43. COUNT III: AGAINST CI TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIPS 44. Classified restates and realleges its answers set forth in paragraphs 1

through 43 above and incorporates them by reference. 45. 46. 47. 48. 49. 50. 51. Classified denies the allegations of ¶ 45. Classified denies the allegations of ¶ 46. Classified denies the allegations of ¶ 47. Classified denies the allegations of ¶ 48. Classified denies the allegations of ¶ 49. Classified denies the allegations of ¶ 50. Classified denies the allegations of ¶ 51.

AFFIRMATIVE DEFENSES In further answer to Inovis' First Amended Complaint, Classified hereby pleads and affirmatively sets forth the following defenses: FIRST AFFIRMATIVE DEFENSE 52. Classified has a right to enforce the `669 Patent against any entity

making, using, selling or offering to sell infringing products or services in the United

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States. Inovis, as well as certain of its customers, make, use, sell or offer for sale an infringing product or service. Classified's enforcement campaign merely sought to

prevent Inovis' continued infringement, contributory infringement, and inducement to infringe the `669 Patent and has not unlawfully or improperly interfered with Invois' business relationships. 53. Classified had and continues to have a good faith belief that Inovis, as

well as certain of Inovis' customers, infringe, contribute to infringe, or induce others to infringe the `669 Patent. 54. Classified has not knowingly or recklessly made any false statements with

regard to Inovis or its customers. SECOND AFFIRMATIVE DEFENSE 55. Inovis is precluded from recovery, in whole or in part, because it has

failed to properly or adequately mitigate its damages. THIRD AFFIRMATIVE DEFENSE 56. Any damages suffered by Inovis are the result of its infringement,

contribution of infringement, and inducement of infringement of Classified's patent, and accordingly, Inovis is not entitled to recover damages from Classified.

PRAYER FOR RELIEF 1. Classified admits that Inovis purports to seek a judgment and declaration

that neither Inovis nor any of its customers have infringed and do infringe in any manner any claim of the 669 Patent, directly, contributorily or by inducement, and have not otherwise infringed or violated any rights of Classified. Classified denies that Inovis is entitled to any such relief. 2. Classified admits that Inovis purports to seek a judgment that each claim

of the 669 Patent is invalid and unenforceable. Classified denies that Inovis is entitled to any such relief.

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3.

Classified admits that Inovis purports to seek an injunction against

Classified seeking to prevent Classified from asserting the `669 Patent against Inovis and certain of its customers. Classified denies that Inovis is entitled to any such relief. 4. Classified admits that Inovis purports to seek an injunction against

Classified seeking to prevent Classified from interfering with Inovis business. Classified denies that Inovis is entitled to any such relief. 5. Classified admits that Inovis purports to seek an award of damages to

compensate Inovis for damages allegedly suffered as a result of Classified's actions. Classified denies that Inovis is entitled to any such relief. 6. Classified admits that Inovis purports to seek an award of treble damages

to Inovis pursuant to 15 U.S.C. § 1117(a). Classified denies that Inovis is entitled to any such relief. 7. Classified admits that Inovis purports to seek an award of punitive

damages to Inovis. Classified denies that Inovis is entitled to any such relief. 8. Classified admits that Inovis purports to seek a judgment and declaration

that this is an exceptional case within the meaning of 35 U.S.C. § 285. Classified denies that Inovis is entitled to any such relief. 9. Classified admits that Inovis purports to seek a judgment for "such other

and further relief in law or in equity as this Court deems just or proper." Classified denies that Inovis is entitled to any relief whatsoever in connection with this action. In further answer to Inovis' First Amended Complaint in this action, Classified denies each and every allegation contained in Inovis' First Amended Complaint directed to Classified that was not specifically admitted, denied or otherwise responded to in this Answer and Counterclaims.

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COUNTERCLAIM AND DEMAND FOR JURY TRIAL CLASSIFIED INFORMATION, INC. ("Classified"), by and through its undersigned counsel, for their claims for relief against INOVIS USA, INC. ("Inovis"), allege as follows: JURISDICTION AND VENUE 1. This is a counterclaim for patent infringement arising under the United

States Patent Act, 35 U.S.C. §§ 100 et seq., including §§ 271 and 281. 2. This Court has subject matter jurisdiction over this counterclaim under

28 U.S.C. §§ 1331 and 1338(a). 3. 1400(b). THE PARTIES 4. Classified is a Delaware corporation with its principal place of business in Venue is proper in this judicial district under 28 U.S.C. §§ 1391(c) and

San Marcos, CA. 5. Inovis is Delaware corporation with its principal place of business in

Alpharetta, GA. PATENT IN SUIT 6. United States Patent No. 5,812,669 (the "'669 patent"), entitled "Method

And System For Providing Secure EDI Over An Open Network," was duly and legally issued on September 22, 1998. A true and correct copy of the `669 Patent is attached as Exhibit A. 7. Classified is the assignee and sole owner of all right, title and interest in,

and to the '669 patent. BACKGROUND 8. Classified, through its predecessors in interest, is a recognized innovator in

the area of EDI over the internet. In fact, Classified's Templar software, released in May of 1995, was the first commercially available software product to offer businesses secure

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EDI over the Internet. Inovis' BizManager software was not released by Inovis until August of 2005, over 8 years after Templar, and 7 years after the issuance of the `669 Patent. 9. Classified continues to sell its flagship product ­ Templar. Classified has

lost and continues to lose sales as a result of Inovis' infringement. 10. Classified and Inovis are direct competitors. More specifically, Inovis'

infringing BizManager products and related services directly compete with Classified's Templar product. PATENT INFRINGEMENT BY INOVIS 11. Classified incorporates herein by this reference paragraphs 1 through 10 of

its Counterclaim as if set forth in full. 12. Inovis has infringed and continues to infringe the `669 Patent by its

manufacture, testing, use, sale and/or offer to sell Inovis' BizManager product, and other products and services related to providing secure EDI transmissions over the Internet. In addition Inovis actively contributes and induces others to infringe the `669 Patent through its sales, offers to sell, and support of BizManager and other products and services related to providing secure EDI transmissions over the Internet. Inovis is liable for its

infringement, contributory infringement, and inducement to infringe the `669 Patent pursuant to 35 U.S.C. § 271. 13. to Classified. 14. Inovis will continue to infringe, contribute to, or induce others to infringe Inovis' acts of infringement are irreparably harming and causing damage

the `669 Patent unless enjoined. 15. Inovis' conduct is willful and deliberate. On information and belief,

Inovis had full knowledge of the `669 Patent since its formation in 2002. With full knowledge that it did not have any rights under the `669 Patent, Inovis made, used, sold

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and offered for sale products and services that infringed, contributed to infringe, or induced others to infringe the `669 Patent. 16. As a result of Inovis' willful and deliberate misconduct, Classified seeks

an enhancement of its damages pursuant to 35 U.S.C. § 284.

PRAYER FOR RELIEF A. Classified seeks a judgment that Inovis has infringed United States Patent

No. 5,812,669 and that its infringement is willful. B. Classified seeks a judgment that Inovis has contributed to infringe, and

induced others to infringe United States Patent No. 5,812,669 and that its conduct is willful. C. Classified seeks an order permanently enjoining Inovis and its officers,

agents, employees, and those acting in privity with it, from further infringement, contributory infringement, and inducement of infringement of U.S. Patent No. 5,812,669. D. Classified seeks an award of damages arising out of Inovis' infringement,

contributory infringement, and inducement of infringement of United States Patent No. 5,812,669, including enhanced damages pursuant to 35 U.S.C. § 284, together with prejudgment and post-judgment interest, in an amount according to proof. E. Classified seeks an award of its attorney fees, costs, and expenses pursuant

to 35 U.S.C. § 285 or as otherwise permitted by law. F. and proper. DEMAND FOR JURY TRIAL Classified hereby respectfully requests a trial by jury on any and all issues in its answer or counterclaim triable of right by a jury. Classified seeks such other and further relief as the Court may deem just

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ASHBY & GEDDES /s/ Tiffany Geyer Lydon _____________________________ Steven J. Balick (I.D. #2114) John G. Day (I.D. #2403) Tiffany Geyer Lydon (I.D. #3950) 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 (302) 654-1888 [email protected] [email protected] [email protected] Attorneys for Defendant/CounterPlaintiff Classified Information, Inc. Of Counsel: Michael A. Lee Vineet Bhatia Stephen F. Schlather SUSMAN GODFREY L.L.P. 1000 Louisiana, Suite 5100 Houston, Texas 77002 (713) 651-9366 Dated: February 19, 2008
188370.1

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