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Frontline Technologies, Inc v. Crs

December 22, 2011

FRONTLINE TECHNOLOGIES, INC.,
PLAINTIFF,
v.
CRS, INC., DEFENDANT.



The opinion of the court was delivered by: Eduardo C. Robreno, J.

MEMORANDUM

TABLE OF CONTENTS

I. INTRODUCTION.............................................. 2

II. BACKGROUND................................................ 2

III. DISCUSSION................................................ 6

A. Motion to Amend...................................... 7

B. Motion to Dismiss.................................... 7

1. Standard of Review.............................. 7

2. Applicable Law.................................. 8

3. Application.................................... 10

a. Covenant's Limitation to Portion of CRS's Products....................................... 11

b. Covenant's Limitation to CRS Under Present Ownership...................................... 14

IV. CONCLUSION............................................... 18

I.INTRODUCTION

Before the Court is a motion to dismiss certain counterclaims for non-infringement and invalidity of a disputed patent. The Court must determine whether, under the Declaratory Judgment Act, there remains a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment after a patent holder granted a limited covenant not to sue a competitor regarding the disputed patent.

II.BACKGROUND

On June 18, 2006, Frontline Technologies, Inc. ("Frontline") filed this patent infringement and breach-of-contract action against CRS, Inc. ("CRS") over a service/technology that facilitates replacement of absent workers with substitute workers. Frontline maintains a product named "Aesop," which is a labor database wherein customers access a website to post worker absences for which substitutes are needed. Am. Compl. ¶ 9, ECF No. 29. Substitute workers then access Aesop to search for posted worker absences and to commit to filling vacancies. Id. Users access Aesop via the Internet using a web interface or via a telephone interactive voice response ("IVR") system. Id.

On January 6, 2004, the U.S. Patent and Trademark Office ("PTO") issued U.S. Patent No. 6,675,151 ("the '151 Patent") for the substitute worker technology. Id. ¶ 12. Frontline is the assignee and owner of the '151 Patent. Id. ¶ 13. In February 2004, Frontline Data, Frontline's predecessor, filed a patent infringement suit against CRS and the two reached a settlement agreement in November 2004 whereby Frontline Data agreed to license its technology to CRS in return for royalties. Id. ¶¶ 15-16. ...


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