Beneficial Innovations, Inc. v. Blockdot, Inc. et al

Filing 78

ANSWER to Amended Complaint, COUNTERCLAIM against Beneficial Innovations, Inc. by The New York Times Company.(Baxter, Samuel)

Beneficial Innovations, Inc. v. Blockdot, Inc. et al

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION _________________________________________ ) BENEFICIAL INNOVATIONS, INC., ) ) Plaintiff, ) ) v. ) ) CASE No. 2:07-cv-263 BLOCKDOT, INC., CAREERBUILDER, ) LLC., CNET NETWORKS, INC., DIGG, ) INC., EBAUM'S WORLD, INC., JABEZ ) NETWORKS, INC., THE NEW YORK ) TIMES CO., WASHINGTONPOST.NEWSWEEK ) INTERACTIVE COMPANY, LLC, ) THE WEATHER CHANNEL INTERACTIVE, ) INC. ) ) ) Defendants. ) _________________________________________ ) ANSWER AND COUNTERCLAIMS OF THE NEW YORK TIMES COMPANY TO THE SECOND AMENDED COMPLAINT OF BENEFICIAL INNOVATIONS, INC. In response to Plaintiff's Second Amended Complaint (the "Complaint"), Defendant and Counterclaim-Plaintiff The New York Times Company (the "Times") submits this Answer and Counterclaims as follows: Introduction 1. Plaintiff Beneficial Innovations, inc. ("Beneficial Innovations") owns the

inventions described and claimed in United States Patent Nos. 6,712,702 entitled "Method and System for Playing Games on a Network" (the "`702 Patent") and 6,183,366 entitled "Network Gaming System" (the "`366 Patent") (collectively "the Patents). Defendants (a) have used and 1

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continue to use Plaintiff's patented technology in products that they make, use, import, sell, and offer to sell, and (b) have contributed to or induced, and continue to contribute to or induce, others to infringe the Patents. Beneficial Innovations seeks damages for patent infringement and an injunction preventing Defendants from making, using, selling or offering to sell, and from contributing to and inducing others to make, use, sell, or offer to sell, the technology claimed by the Patents without Plaintiff's permission. Answer: The Times: (a) admits that Beneficial Innovations seeks damages for

patent infringement and an injunction preventing Defendants from making, using, selling or offering to sell, and from contributing to and inducing others to make, use, sell, or offer to sell, the technology claimed by the Patents; (b) denies the allegations of Paragraph 1 of the Complaint with respect to its own activities; and (c) is without knowledge or information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 1 and therefore denies those allegations. Jurisdiction and Venue 2. This is an action for patent infringement arising under the patent laws of the

United States, 35 U.S.C. §§ 271 and 281, et seq. The Court has original jurisdiction over this patent infringement action under 28 U.S.C. § 1338(a). Answer: 3. Admitted.

Each of the Defendants has committed acts and continues to commit acts within

this judicial district giving rise to this action. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b) and § 1400. Answer: The Times (a) denies that it has committed acts and continues to commit

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acts within this judicial district giving rise to this action, (b) is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 3 with respect to the other Defendants and therefore denies those allegations, (c) denies that venue is proper in this district pursuant to 28 U.S.C. § 1391(b) and § 1400, and avers that this judicial district is not the most appropriate venue for this lawsuit.

Plaintiff Beneficial Innovations 4. Plaintiff Beneficial Innovations is a corporation existing under and by virtue of

the laws of the State of Nevada. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 4 of the Complaint and therefore denies those allegations. Defendants 5. Defendant Blockdot, Inc. is a corporation organized and existing under the laws

of the State of Texas, with its principal place of business in Dallas, Texas. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 5 of the Complaint and therefore denies those allegations. 6. Defendant Careerbuilder, LLC is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business in Chicago, Illinois. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 6 of the Complaint and therefore denies those

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allegations. 7. Defendant CNET Networks, Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business in San Francisco, California. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 7 of the Complaint and therefore denies those allegations. 8. Defendant Digg, Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business in San Francisco, California. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 8 of the Complaint and therefore denies those allegations. 9. Defendants Ebaum's World, Inc. is a corporation organized and existing under the laws of the State of New York, with its principal place of business in Rochester, New York. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 9 of the Complaint and therefore denies those allegations. 10. Defendant Jabez Networks, Inc. is a corporation organized and existing under the laws of the State of Tennessee, with its principal place of business in Brentwood. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 10 of the Complaint and therefore denies those allegations. 11. Defendant The New York Times Company is a corporation organized and existing

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under the laws of the State of New York, with its principal place of business in New York, New York. Answer: Admitted.

12. Defendant Washingtonpost.Newsweek Interactive Company, LLC is a corporation organized and existing under the laws of the State of Delaware. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 12 of the Complaint and therefore denies those allegations. 13. Defendant The Weather Channel Interactive, Inc. is a corporation organized and existing under the laws of the State of Georgia, with its principal place of business in Atlanta, Georgia. Answer: The Times is without knowledge or information sufficient to form a belief

as to the truth of the allegations of Paragraph 13 of the Complaint and therefore denies those allegations.

First Claim for Patent Infringement (infringement of the `702 patent) 14. Plaintiff incorporates by reference each of the allegations in paragraphs 1-13

above and further alleges as follows: Answer: The Times incorporates by reference each of the answers above and

further answers as follows: 15. The United States Patent and Trademark Office issued the `702 patent on March

30, 2004. Attached as Exhibit A is what is believed to be a copy of the text of the `702 patent.

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Through assignment, Plaintiff is the owner of all right, title, and interest in the `702 patent, including all rights to pursue and collect damages for past infringements of the patent. Answer: The Times admits that the United States Patent and Trademark Office

issued the `702 patent on March 30, 2004 and that what purports to be a copy of the text of the `702 patent is attached to the Complaint as Exhibit A. The Times is without knowledge or information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 15 of the Complaint and therefore denies those allegations. 16. Defendants Blockdot, Inc. Careerbuilder, LLC, CNET Networks, Inc., Digg, Inc.,

Ebaum's World, Inc. Jabez Networks, Inc., The New York Times Company, The Washington Post Company, and the Weather Channel Interactive have infringed, contributed to the infringement, or induced others to infringe the `702 Patent and, unless enjoined, will continue to infringe the `702 Patent by using the method(s) claimed in the `702 Patent or by contributing to or inducing others to use the claimed method(s), including at least the use of the patented methods on the following websites, without a license or permission from Plaintiff: Defendant Blockdot, Inc. Careerbuilder, LLC CNET Networks, Inc. Digg, Inc. Ebaum's World, Inc. Jabez Networks, Inc. The New York Times Company Washingtonpost.Newsweek Interactive Company, LLC The Weather Channel Interactive Answer: Infringing website www.kewlbox.com; www.boxerjam.com www.careerbuilder.com www.gamespot.com; www.download.com; www.cnet.com www.digg.com www.ebaumsworld.com www.rivals.com www.nytimes.com www.washingtonpost.com www.weather.com

The Times denies the allegations of Paragraph 16 of the Complaint with 6

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respect to its own activities and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 16 with respect to the other Defendants and therefore denies those allegations. 17. Plaintiff has been damaged by Defendants' infringement of the `702 patent and

will suffer additional irreparable damage and impairment of the value of its patent rights unless Defendants are enjoined from continuing to infringe the `702 patent. Answer: The Times denies the allegations of Paragraph 17 of the Complaint with

respect to its own activities and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 17 with respect to the other Defendants and therefore denies those allegations. 18. `702 patent. Answer: The Times denies the allegations of Paragraph 18 of the Complaint with The Defendants are and have been willfully infringing one or more claims of the

respect to its own activities and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 18 with respect to the other Defendants and therefore denies those allegations. 19. Plaintiff is entitled to recover damages from the Defendants to compensate them

for the infringement. Answer: The Times denies that Plaintiff is entitled to recover damages from the

Times and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 19 with respect to the other Defendants and therefore denies those allegations.

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20.

Plaintiff demands trial by jury of all issues relating to this claim. No response is required.

Answer:

Second Claim for Patent Infringement (infringement of the `366 patent) 21. Plaintiff incorporates by reference each of the allegations in paragraphs 1-20 above and further alleges as follows: Answer: The Times incorporates by reference each of the answers above and

further answers as follows: 22. The United States Patent and Trademark Office issued the `366 patent on February 6, 2001. Attached as Exhibit B is what is believed to be a copy of the text of the `366 patent. Through assignment, Plaintiff is the owner of all right, title, and interest in the `366 patent, including all rights to pursue and collect damages for past infringements of the patent. Answer: The Times admits that: (a) the United States Patent and Trademark Office

issued the `366 patent on February 6, 2001; and (b) what is believed to be a copy of the text of the `366 patent is attached to the Complaint as Exhibit B. The Times is without knowledge or information sufficient to form a belief as to the truth of the remainder of the allegations of Paragraph 22 of the Complaint and therefore denies those allegations. 23. Defendants, Blockdot, Inc., Careerbuilder, LLC, CNET Networks, Inc., Digg, Inc., Ebaum's World, Inc., Jabez Networks, Inc., The New York Times Company, The Washington Post Company, and the Weather Channel Interactive have infringed, contributed to the infringement, or induced others to infringe the `366 Patent and, unless enjoined, will continue to infringe the `366 Patent by using the method(s) claimed in the `366 Patent or by contributing to or inducing others to use the claimed method(s), including at least the use of the patented

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methods on the following websites, without a license or permission from Plaintiff: Defendant Blockdot, Inc. Careerbuilder, LLC CNET Networks, Inc. Digg, Inc. Ebaum's World, Inc. Jabez Networks, Inc. The New York Times Company Washingtonpost.Newsweek Interactive Company, LLC The Weather Channel Interactive Answer: Infringing website www.kewlbox.com; www.boxerjam.com www.careerbuilder.com www.gamespot.com; www.download.com; www.cnet.com www.digg.com www.ebaumsworld.com www.rivals.com www.nytimes.com www.washingtonpost.com www.weather.com

The Times denies the allegations of Paragraph 23 of the Complaint with

respect to its own activities and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 23 with respect to the other Defendants and therefore denies those allegations. 24. Plaintiff has been damaged by Defendants' infringement of the `366 patent and will suffer additional irreparable damage and impairment of the value of its patent rights unless Defendants are enjoined from continuing to infringe the `366 patent. Answer: The Times denies the allegations of Paragraph 24 of the Complaint with

respect to its own activities and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 24 with respect to the other Defendants and therefore denies those allegations. 25. The Defendants are and have been willfully infringing one or more claims of the `366 patent. Answer: The Times denies the allegations of Paragraph 25 of the Complaint with 9

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respect to its own activities and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 25 with respect to the other Defendants and therefore denies those allegations. 26. Plaintiff is entitled to recover damages from the Defendants to compensate them for the infringement. Answer: The Times denies that Plaintiff is entitled to recover damages from the

Times and is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 26 with respect to the other Defendants and therefore denies those allegations. 27. Plaintiff demands trial by jury of all issues relating to this claim. Answer: No response is required.

AFFIRMATIVE DEFENSES The Times asserts the following affirmative defenses: 1. With respect to the `702 patent, the Plaintiff cannot seek damages relating to the

activities of the Times prior to June 20, 2007, since Plaintiff neither provided the Times with actual notice of its claim of infringement nor engaged in adequate marking. 2. With respect to the `366 patent, Plaintiff cannot seek damages relating to the

activities of the Times prior to June 27, 2007, since Plaintiff neither provided the Times with actual notice of its claim of infringement nor engaged in adequate marking. 3. States Code. The Patents in suit are invalid under one or more provisions of Title 35 United

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4. 5. 6. of Laches. 7.

The Complaint fails to state a claim for which relief can be granted. The Times does not infringe and has not infringed the Patents. Plaintiff's claims for relief are barred in whole or in part by the equitable doctrine

The Times reserves the right to add any additional defenses or counterclaims that

discovery may reveal. 8. Plaintiff's claims of willful infringement against the Times fail to state a claim

and further violate Fed. R. Civ. P. 11. COUNTERCLAIMS FOR DECLARATORY JUDGMENT COMES NOW The New York Times Company (the "Times") in the capacity of Counterclaim-Plaintiff and files these its Counterclaims against Beneficial Innovations, Inc. ("Beneficial") and in so doing alleges as follows:

JURISDICTION AND VENUE 1. This Court has jurisdiction over these Counterclaims for declaratory relief under

Title 35 of the United States Code, 28 U.S.C. §§ 1331, 1338, 2201 and 2202. 2. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1391(b), (c) and 1400(b).

Additionally, venue is proper because Beneficial has consented to venue in the Eastern District of Texas by filing its claim for patent infringement in this Court. 3. Upon information and belief, and by virtue of the filing of the instant action, this

Court has personal jurisdiction over Beneficial.

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PARTIES 4. The Times is a corporation organized and existing under the laws of the State of

New York and has its principal place of business at 620 Eighth Ave, New York, New York 10018. 5. Upon information and belief, Beneficial is a corporation organized under the laws

of State of Nevada.

FACTS 6. Beneficial has alleged that it is the owner of the patents whose numbers, titles and

issue dates are set forth below (the "Patents"). Patent Number 6,712,702 6,183,366 Entitled Method and System for Playing Games on a Network Network Gaming System Date of Issuance Mar. 30, 2004 Feb. 6, 2001

7.

Beneficial has sued the Times for infringement of the Patents, alleging that the

Times has "infringed, contributed to the infringement, or induced others to infringe the `702 Patent ... [and] infringed, contributed to the infringement, or induced others to infringe the `366 Patent" 8. As a result, there exists an actual and continuing controversy between the Times

and Beneficial.

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COUNT I DECLARATORY JUDGMENT OF NON-INFRINGEMENT UNDER 35 U.S.C. § 271 (a)-(c) 9. forth herein. 10. 11. The Times does not infringe any valid claim of the Patents. The Times does not induce others to infringe or contribute to the infringement of The Times repeats and realleges the allegations of paragraphs 1-8 as if fully set

any valid claims of the Patents. COUNT II DECLARATORY JUDGMENT OF PATENT INVALIDITY 12. forth herein. 13. 112. WHEREFORE, The Times respectfully requests that this Court enter the following relief: a. b. a declaratory judgment that the Patents are invalid; a declaratory judgment that The Times is not liable for infringement of any of the The claims of the Patents are invalid under 35 U.S.C. §§ 101, 102, 103 and/or The Times repeats and realleges the allegations of paragraphs 1-11 as if fully set

asserted claims of the Patents under 35 U.S.C. § 271 (a)-(c); c. d. action; and e. a judgment in favor of the Times for such further relief as this Court may deem a declaration that this case is exceptional under 35 U.S.C. § 285; a judgment in favor of the Times for its attorneys fees, costs, and expenses in this

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Dated: September 2812, 2007

Respectfully submitted,

By:/s/ Sam Baxter______________________________ Samuel Franklin Baxter, Esq. McKool Smith 104 East Houston Street Suite 300 Marshall, TX 75670 Telephone: [phone] Facsimile: 903-923-9099 Steven Lieberman Brian Rosenbloom Rothwell, Figg, Ernst & Manbeck 1425 K Street, NW, Suite 800 Washington, DC 20005 [phone] Telecopier - [phone] Attorneys for Defendant The New York Times Company

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CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing has been served upon counsel of record via CM/ECF on September 28, 2007. __/s/ Sam Baxter___________

1429017

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