ECeipt LLC v. Old Navy, LLC

Western District of Texas, txwd-6:2019-cv-00258

Defendant Old Navy, LLC's ANSWER to {{1}} Complaint with Jury Demand and Additional Defenses, COUNTERCLAIM against eCeipt LLC by Old Navy, LLC.

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2 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION ECEIPT LLC, Plaintiff, Case No.: 6:19-cv-00258-ADA v. JURY TRIAL DEMANDED OLD NAVY, LLC, Defendant. DEFENDANT OLD NAVY, LLC'S ANSWER, DEFENSES, AND COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT Defendant Old Navy, LLC ("Old Navy") answers the Complaint for Patent Infringement ("complaint") of plaintiff eCeipt LLC ("eCeipt" or "plaintiff") and for each numbered paragraph of the complaint answers as follows: THE PARTIES 1. Old Navy lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 1 of the complaint. 2. Old Navy is a Delaware limited liability company with a principal place of business located at Two Folsom Street, San Francisco, California 94105. Old Navy denies the remaining allegations of paragraph 2 of the complaint. JURISDICTION AND VENUE 3. Old Navy admits that this action purports to be for patent infringement arising under the provisions of 35 U.S.C. §1, et. seq., but Old Navy denies that it has infringed the 1 2 patent-in-suit. Old Navy admits that this Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a), but denies that plaintiff has stated a valid claim of patent infringement. 4. Denied. 5. Admitted. 6. Old Navy does not contest personal jurisdiction for purposes of this action only. Old Navy denies the remaining allegations of paragraph 6. 7. Old Navy denies that plaintiff's allegations even suggest that Old Navy is importing, offering for sale, or selling in this District any instrumentalities alleged to infringe. Old Navy admits that plaintiff appears to accuse point-of-sale devices, and that point-of-sale devices are used in this district, but Old Navy denies those devices infringe any claim of the patent-in-suit. Other elements of the instrumentalities plaintiff accuses Old Navy of using (which Old Navy denies infringe any claim of the patent-in-suit) are not used in this district. Old Navy denies the allegations of paragraph 7 of the complaint in all other respects. 8. Old Navy does not contest that venue is proper in this district for purposes of this action only, but Old Navy denies that venue is convenient. THE PATENT-IN-SUIT 9. Old Navy admits that Exhibit "A" purports to be a copy of United States Patent No. 8,643,875 (the "'875 patent" or the "patent-in-suit"), entitled Receipt Handling Systems, Print Drivers And Methods Thereof; and that the '875 patent states that it was issued on February 4, 2014. Old Navy denies that the patent was duly and lawfully issued. 10. Old Navy admits that the quoted passage appears in the patent-in-suit, but denies the allegations of paragraph 10 of the complaint in all other respects. 2 2 11. Old Navy denies that the patent-in-suit technologically improved point-of-sale systems or overcame the shortcomings identified. Old Navy lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 11 of the complaint. 12. Denied. 13. Paragraph 13 of the complaint paraphrases claim 1 of the patent-in-suit, but otherwise appears to be an incomplete sentence such that Old Navy is without sufficient information to admit or deny the allegations of Paragraph 13 in all respects. 14. Denied. 15. Denied. 16. Old Navy admits that the quoted passages appear in the patent-in-suit, but denies the remaining allegations of paragraph 16 of the complaint in all respects. 17. Old Navy lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 17 of the complaint. COUNT I – INFRINGEMENT OF U.S. PATENT NO. 8,643,875 18. Old Navy realleges and incorporates its responses to the allegations of paragraphs 1 through 17 of the complaint. 19. Admitted. 20. Denied. 21. Denied. 22. Old Navy admits that point-of-sale devices used in its stores transmit certain data regarding transactions in which customers engage at its stores. Old Navy denies the remaining allegations of paragraph 22. 3 2 23. Denied. 24. Old Navy denies it performs the claim element at issue. Old Navy lacks information and belief whether the image displayed in paragraph 24 of the complaint shows an email address that has been retrieved from a database. Old Navy denies the allegations of paragraph 24 of the complaint in all other respects. 25. Old Navy admits that customers completing transactions in stores may choose to receive a printed receipt, a gift receipt, an emailed receipt, or no receipt. Old Navy denies that it performs the claim element at issue and denies the remaining allegations of paragraph 25. 26. Old Navy admits that customers completing transactions in stores may choose to receive a printed receipt, a gift receipt, an emailed receipt, or no receipt by making selections on a point-of-sale device. Old Navy is unsure what is meant by "operable to obtain a selection" in paragraph 26, and therefore lacks sufficient information to admit or deny the allegation. Old Navy denies all other allegations of paragraph 26. 27. Denied. 28. Denied. 29. Old Navy admits that point-of-sale devices utilized in its stores may display customer email addresses, but denies it performs the claim element at issue. 30. Old Navy avers that point-of-sale devices utilized in its stores offer customers the ability to confirm an email address. Old Navy denies the remaining allegations of paragraph 29 of the complaint. 31. Old Navy is unsure what is meant by "operable to obtain a selection" in paragraph 31, and therefore lacks sufficient information to admit or deny the allegation. Old Navy denies all other allegations of paragraph 31. 4 2 32. Denied. 33. Denied. 34. Denied. 35. Denied. 36. Denied. GENERAL DENIAL Old Navy denies any and all allegations of the complaint not specifically admitted hereinabove. It denies that it is liable to eCeipt on any of the claims alleged above and denies that eCeipt is entitled to damages, treble or punitive damages, equitable relief, attorneys' fees, costs, disbursements, interest, or any relief whatsoever. ADDITIONAL DEFENSES Further answering and as additional defenses, Old Navy states the following without admitting any allegation of the complaint not otherwise admitted above and without assuming the burden of proving any fact that is otherwise eCeipt's burden to prove. Old Navy reserves the right to amend or augment these defenses based on further investigation and discovery. FIRST DEFENSE (Non-Infringement) 1. Old Navy does not and has not infringed, either literally or under the doctrine of equivalents, directly or indirectly, any valid and enforceable claim of the '875 patent. SECOND DEFENSE (Patent Invalidity) 2. One or more claims of the '875 patent are invalid under one or more sections of Title 35 of the United States Code, including without limitation 35 U.S.C. §§ 101, 102, 103, 5 2 and/or 112 et seq. For example, the '875 patent is invalid for failure to claim patent eligible subject matter, and is invalid under §102 or §103 based on prior art, patents, and patent publications. THIRD DEFENSE (Waiver, Equitable Estoppel or Laches) 3. Some or all of eCeipt's claims are barred by waiver, equitable estoppel or laches. FOURTH DEFENSE (Damages Limited) 4. Some or all of eCeipt's claims for damages are statutorily barred, in whole or in part, based on 35 U.S.C. § 286 and/or §287. FIFTH DEFENSE (Failure to State Sufficient Facts to Constitute Claims) 5. eCeipt fails to state a claim upon which relief may be granted. For example, eCeipt's patent allegations fail to sufficiently plead that eCeipt's alleged patent is nonfunctional. SIXTH DEFENSE (Failure to Mitigate Damages) 6. eCeipt's claims are barred, in whole or in part, by its failure to mitigate damages. SEVENTH DEFENSE (Injunctive Relief Unavailable) 7. eCeipt is not entitled to injunctive relief because any alleged injury to eCeipt is not immediate or irreparable, and eCeipt has an adequate remedy at law. EIGHTH DEFENSE (Dedication to the Public) 6 2 8. Plaintiff has dedicated to the public any method, system, and/or product disclosed in the patent-in-suit but not literally claimed therein and is therefore estopped from claiming infringement by any such public domain method, system, and/or product. COUNTERCLAIMS Counterclaim-plaintiff Old Navy, LLC ("Old Navy"), for its counter-claims against eCeipt LLC ("eCeipt") alleges as follows: THE PARTIES 1. According to the complaint, eCeipt is a limited liability company organized and existing under the laws of the Texas with its principal place of business at 17330 Preston Road, Suite 200, Dallas, Texas 75252. 2. Old Navy is a Delaware limited liability company with a principal place of business located at Two Folsom Street, San Francisco, California 94105. JURISDICTION AND VENUE 3. This is an action for a declaration of non-infringement and invalidity of United States Patent No. 8,643,875 (the "'875 patent"). This Court has jurisdiction over these counterclaims pursuant to 28 U.S.C. §§ 1331, 1338, and 2201. 4. Plaintiff is subject to personal jurisdiction in this District. 5. By filing suit in this district, plaintiff has asserted that venue is proper in this district. Old Navy disputes that venue is convenient, and reserves all rights to seek transfer to a more appropriate forum. COUNT I – NONINFRINGEMENT OF U.S. PATENT NO. 8,643,875 6. Old Navy incorporates and realleges the allegations of paragraphs 1-5 of these counterclaims. 7 2 7. Plaintiff alleges that it is the owner of the '875 patent, and plaintiff has brought suit against Old Navy for infringement of the '875 patent. 8. Plaintiff has no reasonable basis on which it may assert that Old Navy directly infringes, contributes to the infringement of, or induces infringement of any claim of the '875 patent, either literally or under the doctrine of equivalents. 9. Claim 1 of the '875 patent, the only independent claim, requires that a POS (point-of-sale) system at a store location obtains "image data. . . representing a receipt corresponding to the purchasing transaction of the customer at the store location…" 10. Claim 1 further requires that the POS system transmit a "file name corresponding to the image data" to a server as part of a data file that is generated. 11. Old Navy does not perform these elements of claim 1. 12. The accused system plaintiff calls the POS system ("POS system") does not transmit image data representing a receipt to a server. 13. The POS system does not obtain, generate or capture image data representing a receipt corresponding to a purchasing transaction of a customer at a store location. 14. Claim 1 further requires transmitting the file name of the image data to a server: transmitting the image data and the transaction data to a server in communication with one or more POS systems at one or more store locations, including generating a data file, the data file including the transaction data, the correct e- mail address of the customer and a file name corresponding to the image data; Cl. 1, 14:11-16 (emphasis added). 15. Old Navy does not transmit a file name corresponding to image data to a server in communication with a POS system. 16. For at least the reasons set forth above, Old Navy has not infringed and is not infringing, directly, by inducement, or contributorily, any claim of the '875 patent asserted 8 2 against it, either literally or under the doctrine of equivalents, and is not liable for infringement thereof. 17. Plaintiff had no evidence that Old Navy performed the elements identified above at the time it filed suit against Old Navy. 18. Notwithstanding its lack of evidence, plaintiff proceeded to file suit contending Old Navy infringed the '875 patent. 19. Old Navy has informed plaintiff that Old Navy does not perform the elements identified above since the time it was served with the complaint, and demanded that plaintiff dismiss the case against Old Navy. Old Navy informed plaintiff that if plaintiff did not dismiss the case, Old Navy would seek attorneys' fees when it ultimately prevails in establishing it does not infringe the '875 patent. 20. After receiving notice that Old Navy does not infringe, plaintiff has failed to dismiss the case against Old Navy. 21. An actual case and controversy exists between plaintiff and Old Navy based on plaintiff having filed a complaint alleging infringement of the '875 patent, and that controversy is ripe for adjudication by this Court. 22. To resolve the legal and factual questions raised by plaintiff and to afford relief from the uncertainty and controversy that plaintiff's accusations have precipitated, Old Navy is entitled to a declaratory judgment that it does not infringe and has not infringed any claim of the '875 patent. COUNT II – INVALIDITY OF U.S. PATENT NO. 8,643,875 23. Old Navy incorporates and realleges the allegations of paragraphs 1-22 of these counterclaims. 9 2 24. Plaintiff alleges that it is the owner of the '875 patent, and plaintiff has brought suit against Old Navy for infringement of the '875 patent. 25. One or more claims of the '875 patent are invalid under one or more sections of Title 35 of the United States Code, including without limitation 35 U.S.C. §§ 101, 102, 103, and/or 112 et seq. 26. An actual case and controversy exists between plaintiff and Old Navy based on plaintiff having filed a Complaint alleging infringement of the '875 patent, and that controversy is ripe for adjudication by this Court. 27. To resolve the legal and factual questions raised by plaintiff and to afford relief from the uncertainty and controversy that plaintiff's accusations have precipitated, Old Navy is entitled to a declaratory judgment that one or more claims of the '875 patent are invalid. PRAYER FOR RELIEF WHEREFORE, Old Navy prays for the following relief: A. That eCeipt receive a take-nothing judgment on all its claims and causes of action asserted herein, or alternatively, that the Court issue a judgment dismissing eCeipt's complaint in its entirety, with prejudice, and finding that eCeipt recovers nothing thereon; B. A judgment declaring that the '875 patent asserted against Old Navy has not been infringed by Old Navy; C. A judgment declaring that the '875 patent is invalid; D. A judgment that this case is exceptional and awarding Old Navy its costs (including expert fees), disbursements, and reasonable attorneys' fees in this action, pursuant to 35 U.S.C. § 285, together with interest, including prejudgment interest, thereon; and E. Such further relief to Old Navy as is just and proper. 10 2 JURY DEMAND In accordance with Fed. R. Civ. P. 38(b), Old Navy hereby demands a jury trial on all issues so triable. June 7, 2019 Respectfully submitted, /s/ John A. Powell John A. "Andy" Powell Texas State Bar No. 24029775 powell@namanhowell.com NAMAN HOWELL SMITH & LEE, PLLC 400 Austin Ave., Suite 800 Waco, Texas 76701 Telephone: (254) 755-4245 Fax: (254) 754-6331 Robert T. Cruzen (Admitted Pro Hac Vice) Oregon State Bar No. 080167 rob.cruzen@klarquist.com Klaus H. Hamm (Admitted Pro Hac Vice) Oregon State Bar No. 091730 klaus.hamm@klarquist.com KLARQUIST SPARKMAN, LLP 121 S.W. Salmon Street, Suite 1600 Portland, OR 97204 Telephone: (503) 595-5300 Fax: (503) 595-5301 Counsel for OLD NAVY, LLC 11 2 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing document has been served on all counsel of record via the Court's ECF system on this 7th day of June, 2019. /s/ John A. Powell John A. Powell 1