Grant Street Group and Realauction LLC Headed to Trial

The pending litigation between Grant Street Group and finally appears to be headed for trial. A trial date for Grant Street Group v., LLC has been set for June 3, 2013, with jury selection commencing a few days prior on May 29, 2013. Grant Street Group is currently the world’s largest Internet auctioneer and according to its website was founded in 1997 in Pittsburg, Pennsylvania. Realauction while a bit smaller, was founded in 2004 in Ft. Lauderdale, Florida. This lawsuit has been pending since 2009.

The trial will take place in District Court for the Western District of Pennsylvania, and Grant Street Group is currently suing Realauction for patent infringement of U.S. Patent No. 7,523,063 (‘063 patent). The patent in question surrounds the process and apparatus for conducting auctions over electronic networks.

According to the abstract of the patent:

“[t]he auctioneer maintains a web site from which information about bonds to be auctioned can be obtained. A user participates in the auction by accessing the web site via a conventional Internet browser and is led through a sequence of screens that perform the functions of verifying the user’s identity, assisting the user in preparing a bid, verifying that the bid conforms to the rules of the auction, displaying to the user during the course of the auction selected bid information regarding bids received and informing the bidder how much time remains in the auction.”

Grant Street is directly targeting Realauction’s RealTaxLien and RealForeclosure products.

In the amended complaint filed in January 2010, Grant Street Group displayed the ‘063 patent number on its website as of April 2009. Moreover, prior to the issuance of the patent, and at least as early as 2000, the Grant Street Group had the words “patent pending” on its website when talking about its technologies. As a result, Grant Street Group alleges that Realauction has therefore been put on notice and been aware of the ‘063 patent at least as of 2009. Consequently, Grant Street Group is alleging willful infringement and seeking enhanced damages. They are seeking at least $25 million in damages in addition to hopes of obtaining an injunction of any infringing products.

Earlier this year, the District Court rejected Grant Street Group’s motion for summary judgment. Grant Street Group attempted to prevent the jury from learning about possible prior art that could possibly invalidate the ‘063 patent. Specifically, the existence of an eBay patent for an online auction website that was granted before the ‘063 patent could certainly be detrimental to Grant Street Group’s case. If the motion had been granted, and if Grant Street Group knew about the eBay prior art at or before filing the ‘063 patent application –possible inequitable conduct charges could exist. Nevertheless, as things stand today, both companies are firmly entrenched in their respective positions.

In an attempt to have the ‘063 patent invalidated, Realauction had the ‘063 reexamined three times by the United States Patent and Trademark Office. All attempts have been unsuccessful and the PTO affirmed the validity of the ‘063 patent. The latest attempt, which concluded in December 2012, was certainly a blow to Realauction’s invalidity case. One of the co-inventors and President of Grant Street Group stated: “there are few patents that have withstood the scrutiny that ours has…with this lawsuit, we merely seek to exercise the intellectual property rights lawfully to us by the United States Government.” Although Grant Street Group still has to prove infringement by the applicable standard; it will be interesting to see what new strategy, if any, Realauction will use during trial. Specifically, will Realauction try to prove that they in fact do not infringe the ‘063 patent, or rather will they concentrate their efforts to invalidate the patent.

A quick look on the website of Realauction shows that they currently are still offering the RealTaxLien and RealForeclosure products. However, it is difficult if not impossible to discern from the website if the products have changed at all from the time the lawsuit against them was filed. If Realauction is found guilty of infringement, it is very plausible that Grant Street Group will seek a reasonable royalty for every infringing use of the products.

Judge Donetta Ambrose will be presiding over the trial in June.


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