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New Trial Date Set for DealerTrack Patent Infringement Suit

October 06, 2008

SANTA ANA, Calif. — After more than five years in the discovery phase, DealerTrack Holdings Inc.’s patent infringement case against RouteOne LLC and Finance Express LLC is scheduled to go before a jury on Feb. 24 of next year. Judge Andrew Guilford of the U.S. District Court for the Central District of California set the new date after ruling on several key pre-trial motions Tuesday.

Judge Guilford’s decisions effectively dismissed two of the three patents in question as well as DealerTrack’s charge of willful infringement in the third. The jury will be asked to determine whether RouteOne and Finance Express violated DealerTrack’s ownership of U.S. Patent No. 7,181,427, which was awarded in March of last year and pertains specifically to DealerTrack’s online credit application processing system.

Finance Express’ founder and president, David Huber, was encouraged by Tuesday’s rulings.

“While we never expected the dismissal of all DealerTrack’s claims, only three out of all their original patent claims remain in the case,” Huber said Wednesday. “The fact that two out of their three patents were found to be either non-infringing or invalid is an incredible victory not only for our company, but the industry in general.”

DealerTrack first leveled the suit against RouteOne in Jan. 2004, alleging that RouteOne had infringed on three patents relating to DealerTrack’s dealer management system (DMS). DealerTrack later filed a joint suit against both RouteOne and Finance Express in Oct. 2006. Counterclaims from both companies against DealerTrack followed, alleging inequitable conduct, among other charges.

RouteOne, which alleged that DealerTrack intentionally withheld pertinent information in the course of the investigation of the remaining patent, also claimed victory Wednesday. RouteOne hopes their claim of inequitable conduct will be proved in the jury trial, which could open the door for both companies to go after DealerTrack to recoup the cost of their legal fees.

“We are gratified by the court’s decision,” said Mike Jurecki, RouteOne’s CEO. “It greatly simplifies this litigation … We are very comfortable with our defenses to the remaining patent claims and, if necessary, will deal with this remnant of the case at trial.”

In a prepared statement, DealerTrack reminded those following the case that only one of the remaining claims must be proven true for their side to prevail, and that the key for the plaintiff in patent litigation is to make it to the trial phase.

“We are firmly committed to protecting our intellectual property rights, including enjoining RouteOne’s and Finance Express’ infringing activities,” said Mark O’Neil, DealerTrack’s chairman/CEO. “We are confident in the merits of our case and look forward to the jury trial in February.”

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