Source Search Tech LLC v. LendingTree LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Source Search Technologies, LLC (New Jersey)
  • Defendant: Lendingtree, Inc. (North Carolina) and IAC InterActiveCorp (New York)
  • Plaintiff’s Counsel: Kaplan & Gilman, L.L.P.
• Case Identification: 2:04-cv-04420, D.N.J., 09/13/2004
• Venue Allegations: Venue is alleged to be proper based on Defendants transacting business, advertising, selling products, and deriving substantial revenue within the District of New Jersey.
• Core Dispute: Plaintiff alleges that Defendants’ online marketplace, which matches buyers and sellers of services, infringes a patent related to a computerized system for processing and routing requests for quotation.
• Technical Context: The technology relates to early internet-based electronic marketplaces designed to connect buyers with multiple, pre-qualified vendors without relying on a large, centralized product database.
• Key Procedural History: The patent-in-suit, U.S. Patent No. 5,758,328, was the subject of an ex parte reexamination requested in 2011, years after the complaint was filed. The resulting Reexamination Certificate, issued in 2013, cancelled claims 17-19, confirmed the patentability of claims 5-11 and 13-16, and amended independent claims 4 and 12. This post-filing change to the asserted patent’s claims may introduce significant complexity regarding the scope of the asserted claims for the purposes of this litigation.

Case Timeline

Date	Event
1996-02-22	'328 Patent Priority Date
1998-05-26	'328 Patent Issue Date
2004-09-13	Complaint Filing Date
2011-08-11	Reexamination Request Filing Date
2013-03-21	Reexamination Certificate Issue Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 5,758,328 - Computerized Quotation System and Method

The Invention Explained

• Problem Addressed: The patent’s background section describes the inefficiency and high cost for buyers needing to locate appropriate vendors for goods and services, a problem compounded when seeking vendors in foreign countries. It notes that prior computerized systems were limited because they relied on a massive, centralized database of products and prices that was difficult to create, maintain, and scale ('328 Patent, col. 1:26-58).
• The Patented Solution: The invention proposes a decentralized system that acts as a routing service rather than a product catalog. A buyer submits a request for quotation (RFQ) to a central computer, which uses "filter conditions" to identify and "broadcast" the RFQ to a select group of appropriate vendors ('328 Patent, Abstract). These vendors can then respond with quotes. The patent characterizes this as a "cross between telephone and broadcasting technologies," creating a flexible linkage between buyers and vendors without a rigid central database ('328 Patent, col. 2:26-30). The overall network structure is depicted in Figure 1 ('328 Patent, Fig. 1).
• Technical Importance: This approach offered a more scalable model for e-commerce by shifting the burden of maintaining product and price information from a central operator to the individual vendors, addressing a key bottleneck of early online commerce platforms ('328 Patent, col. 2:15-21).

Key Claims at a Glance

• The complaint does not identify specific claims, alleging infringement of the patent generally (Compl. ¶10). Independent claim 1 is a representative system claim.
• Independent Claim 1:
  • A computerized system for forming a computer based communications network of network members inclusive of network buyers and or network vendors for processing requests for quotation for goods and services through at least one central processing unit.
  • The system includes operating system software for controlling the central processing unit.
  • It includes a storage means containing identification of the network members.
  • It includes a means for network buyers to generate a request for quotation.
  • It includes a means for transmitting the request to the central processing unit.
  • It includes a filter means for filtering the network members to receive the request based upon filter conditions.
  • It includes a means for broadcasting the request to the selected network members.
  • It includes a means for responding to the generator of the request.
• The complaint does not explicitly reserve the right to assert dependent claims, but its general allegation of infringement of the '328 patent could be interpreted as encompassing all claims.

III. The Accused Instrumentality

Product Identification

The website "www.lendingtree.com" and the underlying methods and systems it employs (Compl. ¶10).

Functionality and Market Context

• The complaint alleges the Lendingtree website is a system that "matches buyers and sellers of products and services via, for example, the Internet" (Compl. ¶8). It further alleges the website "operates in direct accord with the language of the claims of the '328 patent" (Compl. ¶10). The complaint does not provide specific technical details about how the Lendingtree platform operates, beyond these conclusory allegations.
• The complaint alleges the website is commercially significant, generating "over a hundred million dollars in revenue per year" (Compl. ¶10).

IV. Analysis of Infringement Allegations

The complaint does not contain a claim chart or provide a detailed, element-by-element breakdown of its infringement theory. The central allegation is a conclusory statement that the Lendingtree website "operates in direct accord with the language of the claims of the '328 patent" (Compl. ¶10). The narrative theory suggests that Lendingtree’s online platform, which connects consumers seeking loans (buyers) with financial institutions (vendors), embodies the patented system by receiving consumer requests and routing them to appropriate lenders. No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Scope Questions: A primary question may be whether the patent's claims, which describe a system for obtaining quotes for "goods and/or services" and provide examples such as "computer products," "appliances," and "electronic parts" ('328 Patent, Fig. 2A), can be construed to cover the financial instruments (e.g., mortgages, loans) offered on the Lendingtree platform. The defense may argue for a narrower construction limited to the types of tangible goods and general services disclosed in the specification.
  • Technical Questions: The complaint lacks factual allegations detailing how the accused website performs the claimed functions. A key question for discovery will be whether the Lendingtree system uses a "filter means" and a "means for broadcasting" as those terms are defined by the structures disclosed in the patent. For example, does the accused system distribute a single request to multiple, competing vendors simultaneously, or does it use a different matching and routing logic?

V. Key Claim Terms for Construction

• The Term: "filter means for filtering the network members...based upon filter conditions" (Claim 1)

• Context and Importance: This means-plus-function limitation appears central to the patent's novelty, distinguishing it from a simple directory. Its construction will define the scope of the core matching and routing technology. Practitioners may focus on this term because its scope is limited to the corresponding structures disclosed in the specification and their equivalents, which will be a focal point of the non-infringement analysis.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent states that "filter conditions" can be set by the buyer, the vendor, or the network operator, and may include criteria such as "geographical location, quantity, language spoken, currency, special conditions of sale, and the like" ('328 Patent, Abstract). The phrase "and the like" may support an interpretation that covers a wide range of filtering criteria beyond the explicit examples.
  • Evidence for a Narrower Interpretation: The specification discloses specific logic for implementing the filter, as illustrated in the flowchart of Figure 5, which checks for buyer type, currency, sub-category, and region ('328 Patent, Fig. 5). An argument could be made that the "structure" corresponding to the "filter means" is this specific software logic, thus narrowing the claim's scope to that implementation and its structural equivalents.

• The Term: "means for broadcasting said request for quotation" (Claim 1)

• Context and Importance: The term "broadcasting" is critical for defining how requests are distributed to vendors. Whether the accused system "broadcasts" will be a key factual dispute.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification suggests multiple methods for communicating the request, including making it available via FTP or sending it via email, which could support a functional interpretation of "broadcasting" as merely "distributing" or "making available" to selected vendors ('328 Patent, col. 5:36-50).
  • Evidence for a Narrower Interpretation: The patent explicitly analogizes the invention to "broadcasting technologies" ('328 Patent, col. 2:27-28), which could imply a one-to-many, simultaneous transmission. Furthermore, the specification discloses an embodiment that uses "time sequence routing of the buyer's request based on the vendor's distance from the buyer's location" ('328 Patent, col. 7:23-26), which suggests a sequential, rather than simultaneous, distribution that may not align with the ordinary meaning of "broadcast."

VI. Other Allegations

• Indirect Infringement: The complaint alleges contributory and induced infringement, stating that Defendant IAC InterActiveCorp "aids and abets the infringement of defendant Lendingtree, with the specific intent to cause such infringement" (Compl. ¶9). The factual basis provided is that IAC "runs and controls the daily operation of the Lendingtree website" (Compl. ¶10).
• Willful Infringement: The complaint alleges willfulness based on the belief that Defendants have "full knowledge of [Plaintiff's] patent rights, and the intent to continue infringing" (Compl. ¶11). The complaint does not specify whether this alleged knowledge is pre-suit or post-suit.

VII. Analyst’s Conclusion: Key Questions for the Case

• A core issue will be one of domain applicability: can the claims of the '328 patent, disclosed in the context of sourcing tangible goods like electronic components, be construed to cover the accused online marketplace for complex financial instruments like mortgages?
• A key evidentiary question will be one of technical operation: given the complaint's conclusory allegations, does the Lendingtree platform, in fact, implement the specific "filter means" and "broadcasting means" structures described in the patent's specification, or is there a fundamental mismatch in how the accused system matches and routes user requests?
• A central procedural question will be the impact of reexamination: how does the 2013 Reexamination Certificate, which amended certain independent claims years after the suit was filed, affect the Plaintiff’s case, which was premised on the original, now-altered patent claims?