1 BERT H.

DEIXLER (SBN 070614)

(bdeixler@proskauer.com)
2 PROSKAUER ROSE LLP
2049 Century Park East, 32nd Floor
3 Los Angeles, CA 90067-3206
Telephone: (310) 557-2900
4 Facsimile: (310) 557-2193
5 LOUIS M. SOLOMON (pro hac vice admission pending)
(lsolomon@proskauer.com)
6 PROSKAUER ROSE LLP
1585 Broadway
7 New York, New York 10036-8299
Telephone: (212) 969-3000
8 Facsimile: (212) 969-2900
9 Counsel continued on signature page
10 Co-Counsel for Defendant and
Counterclaim-Plaintiff
11 Real Estate Alliance Ltd.
12 UNITED STATES DISTRICT COURT
13 CENTRAL DISTRICT OF CALIFORNIA
14 MOVE, INC., )
) Case No.: CV07-02185 GAF
15 Plaintiff, )
) Hon. Gary A. Feess
16 v. )
) DEFENDANT REAL ESTATE
17 REAL ESTATE ALLIANCE LTD. and ) ALLIANCE LTD.’S
EQUIAS TECHNOLOGY ) MEMORANDUM OF POINTS AND
18 DEVELOPMENT LLC, ) AUTHORITIES IN SUPPORT OF
) ITS MOTION FOR LEAVE TO
19 Defendants. ) FILE AMENDED
) COUNTERCLAIMS AND
20 ) ADDITIONAL CLAIMS – CLASS
REAL ESTATE ALLIANCE LTD., ) ACTION
21 )
Counterclaim-Plaintiff, ) Date: March 24, 2008
22 ) Time: 9:30 a.m.
v. ) Department: Courtroom 740
23 )
MOVE, INC., NATIONAL )
24 ASSOCIATION OF REALTORS; )
NATIONAL ASSOCIATION OF NEW )
25 HOME BUILDERS; ET AL, ) Action Filed: April 3, 2007
) Counterclaims Filed: August 8, 2007
26 Defendants. ) Trial Date: February 10, 2009
)
27 )
28
 1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 This is a motion to amend REAL’s counterclaims against plaintiff MOVE,
4 Inc. (“MOVE”) and to bring into this action additional parties who are liable for
5 infringement of REAL’s United States Patent Nos. 4,870,576 and 5,032,989
6 (collectively, the “Patents”) as a result of conduct that is caused by MOVE or is
7 inexorably intertwined with the business of MOVE. The Amended Counterclaims
8 and Additional Claims – Class Action (“Amended Counterclaims”) allege that
9 MOVE infringed the Patents by using the patented methods to display available real
10 estate properties on a number of websites that MOVE owns, maintains, and/or
11 controls (the “MOVE Websites”), including Realtor.com, the very website at the
12 heart of MOVE’s Complaint. REAL’s additional claims arise from the nationwide
13 infringement of the Patents by the proposed additional defendants and class
14 members, which are liable for infringement of the Patents based on their conduct
15 related to, supportive of, and intertwined with the business of MOVE, and for other
16 related conduct.
17 MOVE, through the National Association of Realtors (“NAR”), its business
18 partner on which its commercial success depends, had been funding and fully active
19 in patent infringement litigation in the Eastern District of Pennsylvania, Real Estate
20 Alliance Ltd. v. Sarkisian, et al., No. 05-CV-03573 (“Pennsylvania Action”), for
21 nearly two years when it filed this preemptive action on the same Patents, on the
22 same claims, and seeking the same relief as is being litigated in the Pennsylvania
23 Action—declarations of invalidity, unenforceability, and non-infringement of the
24 Patents.1 This Court denied REAL’s motion to dismiss or in the alternative to
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26 NAR has been intimately involved with the Pennsylvania Action from its outset—
counsel for NAR have been charged by the NAR board of directors with managing
27 the Pennsylvania Action, and NAR has contributed financial support to cover
defendant Diane Sarkisian’s legal expenses and provided deposition testimony,
28 supporting affidavits, and other documents in the Pennsylvania Action. (Declaration
of Lawrence Husick ¶ 4.).
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 1 transfer this action to the Eastern District of Pennsylvania, where the related case is
2 pending.
3 Rather than continue to pursue costly litigation on the same issues on both
4 coasts, REAL now seeks to conserve both judicial and its own resources by: (1)
5 seeking to stay or transfer the Pennsylvania action (which REAL is in the process of
6 doing); and (2) litigating, before this Court, in a single proceeding, the entire
7 controversy surrounding validity, enforceability, construction, and infringement
8 issues arising from MOVE’s activities relating to the Patents. The Amended
9 Counterclaims that REAL seeks to file here would accomplish this.
10 The Court should grant REAL’s request under Federal Rule of Civil
11 Procedure 15, which provides that “leave shall be freely given [to amend a pleading]
12 when justice so requires.” REAL’s proposed Amended Counterclaims would not
13 prejudice MOVE (or the additional defendants, who have no standing to complain at
14 this juncture in any event). Furthermore, the proposed amendments are not sought
15 in bad faith, are not futile, and are not conducive to undue delay. Provided the
16 defendants cooperate reasonably, REAL commits to completing discovery and being
17 trial ready on all claims and against all defendants on the current schedule already in
18 place in the Scheduling Order.
19 II. BACKGROUND
20 Procedural Background. Nearly two years prior to the filing of this action,
21 REAL filed the Pennsylvania Action against Diane Sarkisian, a real estate agent and
22 a user of, subscriber, and contributor to the MOVE Websites. (See Declaration of
23 Lawrence A. Husick (“Husick Decl.”) ¶ 2.) The Pennsylvania Action sought relief
24 for the infringement of the Patents. (Husick Decl. ¶ 2.) The Pennsylvania Action
25 was well underway—liability discovery had closed and cross-motions for summary
26 judgment on validity and infringement had been fully briefed—when MOVE filed
27 this action seeking to have the Patents declared invalid, unenforceable, and not
28 infringed. (Husick Decl. ¶ 3.) On May 14, 2007, REAL moved to dismiss this

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 1 action or, in the alternative, to have it transferred to the Eastern District of
2 Pennsylvania. [DE-5] This Court denied REAL’s motion [DE-18] and, on August
3 8, 2007, REAL filed its Answer and Counterclaims [DE-30].
4 On November 26, 2007, this Court entered its Scheduling Order pursuant to
5 Rule 16 of the Federal Rules of Civil Procedure. [DE-35] The Scheduling Order
6 provides that the parties have until February 29, 2008 to amend their pleadings and
7 to add additional parties. (Order [DE-35], at 15.) In the interest of efficiency and
8 judicial economy, REAL now seeks leave to amend its counterclaims and to add
9 claims against additional parties so that its disputes relating to common issues
10 arising out of the operation of the MOVE Websites by MOVE and related activities
11 can be adjudicated in a single action. REAL does so rather than filing separate
12 actions against all of these entities and then moving to consolidate them pursuant to
13 Federal Rule of Civil Procedure 42.
14 The additional parties include the trade organization NAR, certain real estate
15 agents, brokers, multiple listing services, new home builders, rental property owners
16 and managers, and the National Association of Homebuilders (“NAHB”), as well as
17 technology providers to some of these entities (collectively, the “Additional
18 Defendants”). The Additional Defendants are related to each other through, among
19 other things, their connection to MOVE and are all integral parts of the operation of
20 the MOVE Websites as well as beneficiaries of the MOVE enterprise. This
21 relationship and participation in common conduct justifies joining them in this
22 single action and demonstrates the significant benefits and efficiencies of doing so.
23 Indeed, Federal Rule of Civil Procedure 42 recognizes the benefits of combining
24 cases involving common questions of law or fact by expressly permitting
25 consolidation of such actions. Further, as part of its effort to maximize efficiencies,
26 REAL seeks to bring claims against proposed classes of real estate agents, brokers,
27 multiple listing services, new home builders, and rental property owners and
28 managers under Federal Rule of Civil Procedure 23.

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 1 Substantive Background. As detailed more fully in the Patents themselves,
2 the Patents describe methods for locating available real estate properties for sale,
3 lease, or rental using a database of available properties and displaying the
4 approximate locations of properties contained in the database on zoom-enabled
5 maps. MOVE infringes the Patents by using the claimed methods to display on
6 zoom-enabled maps on the MOVE Websites the location of millions of properties
7 presently available around the country.
8 There is no question that the patented methods are of critical importance to
9 the operation of the MOVE Websites. Over three-quarters of homebuyers search for
10 a home online and one in four find the home they ultimately purchase on the
11 Internet. Websites owned or controlled by NAR members therefore account for the
12 majority of real estate-related Internet traffic and leads. As alleged in the
13 Counterclaims, one of the most significant benefits that NAR acknowledges its
14 members have is, “timely access to uniform real property information, including, but
15 not limited to, mapping data.” “Technologies such as sophisticated mapping
16 capabilities . . . allow consumers to gather more information about properties and
17 neighborhoods even before contacting” a NAR-member broker or agent.
18 As explained in the Amended Counterclaims, MOVE’s infringement
19 activities are orchestrated through a coordinated network involving the Additional
20 Defendants. For the benefit of its one million-plus members, the majority of which
21 are real estate brokers and agents, NAR has contracted with MOVE to operate the
22 infringing MOVE Websites, including Move.com and REALTOR.com, which is
23 NAR’s official website. By contract, NAR allows MOVE to place NAR members’
24 property listings on the MOVE Websites, subject to NAR’s control. MOVE
25 benefits from this relationship with NAR by obtaining content for its Websites and
26 NAR benefits by the MOVE Websites promoting the listings of NAR’s members.
27 MOVE claims that the MOVE Websites attract almost 10 million unique users each
28 month.

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 1 MOVE obtains property listings through a series of steps involving the active
2 and intentional participation of the Additional Defendants. Typically, a broker or
3 real estate agent belongs to a regional multiple listing service (“MLS”), which is
4 usually itself a member of NAR, and which collects property listings of brokers and
5 agents within a specific geographic region, such as a county. Contracts between
6 MLS’s and their members generally provide that members are obligated to transmit
7 their new property listings promptly to the MLS. The MLS facilitates the sharing of
8 property listings between its various member brokers and agents, which increases
9 the range of properties they may offer to their customers. The MLS also transmits
10 these same listings to MOVE for use on the MOVE Websites.
11 MOVE receives additional listings of available real estate from builders of
12 new homes and rental property owners or managers seeking tenants. MOVE also
13 operates the “Official New Homes” website for NAHB.
14 Many of the agents, brokers, MLS’s, new home builders and rental property
15 owners and managers own, maintain and/or operate their own websites and infringe
16 the Patents by using the claimed methods to display available real estate properties
17 on zoom-enabled maps. Some of these websites are designed and/or maintained by
18 the technology providers named in the Amended Counterclaims.
19 III. ARGUMENT
20 Pursuant to Federal Rule of Civil Procedure 15(a)(2), “[t]he court should
21 freely give leave [to amend a pleading] when justice so requires.” The policy in
22 favor of amendment is to be applied with “extreme liberality.” Eminence Capital,
23 LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). A request for amendment
24 should be granted in the absence of “undue delay, bad faith or dilatory motive on the
25 part of the movant, . . . undue prejudice to the opposing party by virtue of allowance
26 of the amendment, [and] futility of the amendment.” Osher v. JNI Corp., 183 Fed.
27 Appx. 604, 605 (9th Cir. 2006) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962);
28 see also Paramount Pictures Corp. v. RePlayTV, 298 F. Supp. 2d 921, 927 (C.D.

5
 1 Cal. 2004). Once the party seeking to amend has stated the grounds for amendment,
2 “the burden usually shifts to the opposing party to show the court that justice
3 requires denial.” In re Circuit Breaker Litigation, 175 F.R.D. 547, 550 (C.D. Cal.
4 1997).
5 A. There Has Been No Unjustified Delay, Bad Faith, or Dilatory
6 Motive, and No Party Will Suffer Prejudice.
7 REAL has engaged in no “undue delay” in seeking this Court’s leave to
8 amend its counterclaims and add additional claims. This motion is filed within the
9 time allowed by the governing Scheduling Order to amend pleadings and to add
10 parties. Further, this case is in its early stages, and REAL has now had an
11 opportunity to conduct a more thorough investigation of the facts, the scope of the
12 interrelationships between MOVE and the proposed Additional Defendants, and the
13 concerted action to violate REAL’s patent rights. This motion is made after only
14 minimal discovery has begun. Indeed, the parties have each propounded only one
15 set of written discovery requests and, due to their continuing negotiations over an
16 applicable protective order governing the disclosure of confidential materials in this
17 case, REAL has received no substantive discovery from MOVE, other than merely
18 perfunctory document production. (REAL’s subpoena for documents on NAR has
19 met with a blanket objection, and NAR has not produced a single document.) No
20 depositions have been taken.
21 In setting forth its proposed amended counterclaims and additional claims,
22 REAL has conducted a good faith investigation based upon the information
23 currently available to it. Moreover, REAL has recently engaged new co-counsel,
24 Proskauer Rose LLP, and has been conducting appropriate due diligence prior to
25 seeking to amend its counterclaims and to add claims. Further, there will be no
26 additional delay caused by this amendment: Assuming reasonable cooperation by
27 MOVE and the new defendants, REAL and its counsel will commit to keep the
28

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 1 schedule set forth in the Court’s Scheduling Order and will be prepared to try this
2 matter in February 2009.
3 Because REAL has moved with all deliberate speed to seek this Court’s leave
4 to amend, MOVE (and the Additional Defendants sought to be added) will suffer no
5 prejudice. The opposing party “bears the burden of showing prejudice [stemming
6 from the proposed amendment].” DCD Programs, Ltd. v. Leighton, 833 F.2d 183,
7 187 (9th Cir. 1987). Findings of prejudice generally are based on unjustified delay
8 in moving to amend that creates an unfair disadvantage for the opposing party, not
9 simply the passage of time. See, e.g., United States ex rel. Bernard v. Casino Magic
10 Corp., 293 F.3d 419, 426 (8th Cir. 2002) (no abuse of discretion to deny leave to
11 amend “two and a half years into the litigation”). Prejudice does not arise simply
12 because a party has to defend against new claims. See, e.g., Popp Telcom, Inc. v.
13 American Sharecom, Inc., 210 F.3d 928, 943 (8th Cir. 2000) (“The inclusion of a
14 claim based on facts already known or available to both sides does not prejudice the
15 non-moving party.”).
16 REAL’s Amended Counterclaims should not involve significant new issues of
17 law or new subject matter. They relate to the validity, enforceability, claim
18 construction, and infringement of the same Patents that MOVE itself placed in issue
19 from its outset. In addition, the parties sought to be added—who are all integrally
20 related to the business of MOVE—cannot possibly suffer any prejudice, even
21 assuming they had standing at this juncture to raise the issue. REAL intends
22 vigorously to pursue infringement remedies against these parties, who will be
23 defendants in this action or in separate actions. Combining these defendants all in a
24 single action due to their overall common purpose and concerted action would
25 promote judicial economy and efficiency, avoid inconsistent results, and is arguably
26 required under the Federal Rules.
27 B. REAL’s Proposed Amendments Are Not Futile.
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 1 An amendment is considered futile when “a plaintiff can prove no set of facts
2 that would constitute a valid claim.” Miller v. Rykoff-Sexton Inc., 845 F.2d 209, 214
3 (9th Cir. 1988). Here, REAL’s Amended Counterclaims state valid claims for relief.
4 In particular, REAL seeks a declaration that its Patents are valid and enforceable and
5 that the named defendants have infringed those patents. REAL further seeks an
6 award of damages arising from the infringement of its Patents. As MOVE has
7 conceded, through the filing of its own complaint in this action, there is a legitimate
8 dispute between the parties that requires resolution by the Court.
9 With respect to REAL’s class action allegations and claims, at the appropriate
10 time REAL intends to show that class certification is appropriate in this case.
11 REAL’s proposed Amended Counterclaims has fully complied with the
12 requirements of both Federal Rule of Civil Procedure 23 and Local Rules 23-1
13 through 23-3. We note that the Court in the in the Pennsylvania Action denied a
14 class certification motion made after discovery closed in that case. We will show at
15 the appropriate time that the reasons underlying that denial are not present here,
16 where the motion will be brought at the outset of discovery, and where REAL has
17 taken particular care to name class representatives that have defenses typical of each
18 class, adequate resources to defend this action, and no goals that are adverse to those
19 of the class.
20 IV. CONCLUSION
21 MOVE chose this forum for the resolution of its disputes with REAL. It is
22 neither in the interest of judicial economy nor REAL’s efficient use of resources to
23 litigate the same questions at issue in this litigation in multiple forums. For the
24 reasons set forth above, this Court should permit REAL to amend its counterclaims
25 and add additional claims against related third parties as set forth in its Amended
26 Counterclaims. REAL respectfully requests that that Court issue an order permitting
27 filing of its [Proposed] Amended Counterclaims and Additional Claims.
28 Respectfully submitted,

8
1
DATED: February 28, 2008 PROSKAUER ROSE LLP
2
3 /s/ – Bert H. Deixler
BERT H. DEIXLER (SBN 070614)
4 LARY ALAN RAPPAPORT (SBN 087614)
2049 Century Park East, 32nd Floor
5 Los Angeles, CA 90067-3206
6 Telephone: (310) 557-2900
Facsimile: (310) 557-2193
7
LOUIS M. SOLOMON (Pro hac vice admission pending)
8 HARRY FRISCHER (Pro hac vice admission pending)
9 THEODORE K. CHENG (Pro hac vice admission
pending)
10 ALEXANDER KAPLAN (Pro hac vice admission
pending)
11 1585 Broadway
New York, NY 10036-8299
12 Telephone: (212) 969-3000
13 Facsimile: (212) 969-2900

14 JOSEPH A. CAPRARO, JR. (Pro hac vice admission

pending)
15 CHARLES SLADE (Pro hac vice admission pending)
16 KEVIN SU (Pro hac vice admission pending)
One International Place
17 Boston, MA 02110-2600
Telephone: (617) 526-9600
18 Facsimile: (617) 526-9899
19 LAWRENCE A. HUSICK (admitted pro hac vice)
20 DEBORAH A. LOGAN (SBN 146214)
LAURENCE A. WEINBERGER (Pro hac vice
21 application to be filed)
LIPTON, WEINBERGER & HUSICK
22 P.O. Box 587
23 Southeastern, PA 19399-0587
Telephone: (610) 296-8259
24 Facsimile: (610) 296-5816
25 Attorneys for Defendant and Counterclaim-
26 Plaintiff Real Estate Alliance Ltd.

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