A U.S. District Court jury has found that LendingTree should pay $5.8 million in damages for infringing on a patent held by IMX Inc., a mortgage technology company.
The Jan. 20 jury verdict followed a two-week trial. IMX had sought about $6 million in damages in the lawsuit, which was filed in November 2003.
LendingTree officials said today they will ask the judge to set aside the verdict and are considering an appeal.
The Delaware District Court jury found that LendingTree “has literally infringed” on 23 claims of a patent held by IMX, and that LendingTree willfully infringed on the IMX patent. “Literal infringement” means that every element of a patent’s claim can be literally found in the device or process that allegedly infringed on that patent.
IMX Exchange for Brokers, which launched in 1997, is a platform that allows brokers to get fully adjusted pricing on posted loans from participating lenders, and to conduct loan-purchase transactions online.
LendingTree, which launched in 1998, connects consumers to local, regional and national lending institutions. LendingTree also offers to connect its consumers with a real estate agent. The company, acquired by Barry Diller’s IAC/InterActiveCorp in 2003, owns online real estate portal RealEstate.com, which has plans to enter the real estate brokerage business in select markets this year.
“This case will have no meaningful effect on how our lenders and customers interact with LendingTree,” said Tom Reddin, CEO of IAC Financial Services and Real Estate, in a statement. “LendingTree will continue to provide the same level of quality service to both consumers and lenders. The fundamentals of our consumer proposition will remain the same — consumers will continue to use the LendingTree marketplace to find lenders that will compete for their business.”
He also stated, “We’re disappointed with the jury’s verdict and do not believe that it was consistent with the evidence presented at trial. We intend to ask the district judge to set aside the verdict and, if necessary, to appeal.”
IMX “anticipates that the court will issue and injunction to stop LendingTree’s infringement,” according to a company announcement.
“We are very pleased with the verdict,” said Michele Buschman, acting CEO of IMX, in a statement. “We’ve maintained all along that LendingTree infringes this patent. While we would have preferred to settle the issue out of court, we are extremely satisfied that the validity of this key technological innovation has been upheld.”
IMX filed on Sept. 12, 1997, for a patent on an “Interactive Mortgage and Loan Information and Real-Time Trading System,” and received a patent on Nov. 30, 1999, according to court documents, and LendingTree founder Doug Lebda reportedly received a copy of IMX’s press release relating to the issuance of the IMX patent in January 2000.
IMX claimed in the lawsuit that the LendingTree Exchange and a related “Lend-X” technology that LendingTree provided to third-party companies infringed on the IMX patent. “LendingTree has recklessly disregarded IMX’s rights in the … patent by continuing to infringe the … patent,” IMX asserts in court documents.
Bill Goldman, a partner with the DLA Piper Rudnick Gray Cary US LLP law firm that represented IMX in the lawsuit, said, “What we’re seeking now is … a permanent injunction” to prevent further patent infringement.
He said that such injunctions are common in cases of patent infringement. Also, Goldman said the judge has the option to triple the damages awarded by the jury because the jury found that LendingTree had willfully infringed on the patent.
IMX had initially named E-Loan and Priceline in the lawsuit. IMX reached an out-of-court agreement with Priceline, Goldman said, and E-Loan was dismissed from the case without prejudice.
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