Stamps.com 2002 Annual Report Download - page 21

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damages. We answered the complaint on August 6, 1999, denying the allegations of patent infringement and asserting a number of affirmative
defenses. Pitney Bowes filed a similar complaint in early June 1999 against E-Stamp Corporation, alleging infringement of seven Pitney Bowes
patents. On April 13, 2000, Pitney Bowes asked the court for permission to amend its complaint to drop allegations of patent infringement with
respect to one patent and to add allegations of patent infringement with respect to three other patents. On July 28, 2000 the court entered Pitney
Bowes’ amended complaint. On June 18, 2001, E-Stamp and Pitney Bowes agreed to settle their litigation.
On September 18, 2000, Pitney Bowes filed another patent infringement lawsuit against us in the UnitedStates District Court for the Eastern
District of Texas, alleging that we are infringing four patents owned by Pitney Bowes related to multi-carrier shipping (“Pitney II”). The suit
sought unspecified damages and a permanent injunction from further alleged infringement. We answered the complaint on December 1, 2000,
denying the allegations of patent infringement and asserting a number of affirmative defenses. The United Parcel Service acquired our iShip
multi-carrier shipping service assets on May 18, 2001. On September 4, 2001, the court granted our motion to transfer the lawsuit to the United
States District Court for the District of Delaware. On April 18, 2002, the claim that we are infringing one of the patents was dismissed with
prejudice. On June 20, 2002, all remaining claims in the Pitney II lawsuit were dismissed without prejudice.
On June 14, 2001, we filed a patent infringement lawsuit against Pitney Bowes in the United States District Court for the Central District of
California (“Pitney III”), alleging that Pitney Bowes infringes four patents we own. The suit seeks treble damages, an injunction against further
alleged infringement, attorneys’ fees and other unspecified damages. On January 7, 2002, the court granted Pitney Bowes’ motion to transfer
the lawsuit to the United States District Court for the District of Delaware. We presently allege that Pitney Bowes’ ClickStamp Online service
and at least five of Pitney Bowes’ DM Series Mailing Systems infringe the patents at issue in this suit.
On September 30, 2002 the court stayed all activity in the Pitney I and Pitney III cases pending the appointment of a Special Master. On
October 15, 2002 the court appointed a Special Master and lifted the stay imposed on September 30, 2002. On December 13, 2002 the Special
Master submitted a Scheduling Order to the court containing proposed dates for various remaining pretrial events in both the Pitney I and
Pitney III cases, and permitting the court to set new trial dates in both actions. The Scheduling Order proposed a hearing on dispositive motions
and claim construction to be conducted on June 3-5, 2003. The court has not yet executed that Scheduling Order or set new trial dates.
On December 4, 2002, Pitney Bowes filed a further patent infringement lawsuit against us in the UnitedStates District Court for the District of
Delaware, alleging that our NetStamps postage product infringes four patents owned by Pitney Bowes. The suit seeks treble damages, an
injunction against further alleged infringement, attorneys’ fees and other damages and relief. On January 23, 2003, we answered Pitney’ s
complaint, denying the allegations of patent infringement and asserting a number of affirmative defenses as well as a counterclaim alleging that
Pitney Bowes’ DM Series Mailing Systems infringe three additional Stamps.com patents. In connection with our counterclaim, we also seek
treble damages, an injunction against further alleged infringement, attorneys’ fees and other damages and relief. A trial date has not yet been set
in this matter.
The outcome of all our litigation against Pitney Bowes is uncertain. Therefore, we can give no assurance that Pitney Bowes will not prevail in
its suits against us. Success by Pitney Bowes in its suits against us alleging patent infringement could prevent us from offering our Internet
Postage services and severely harm our business or cause it to fail.
On December 13, 2000, Cybershop (a British Columbia, Canada partnership) and its general partners filed suit against us in the U.S. District
Court for the Southern District of Texas, alleging that in 1998 a third party fraudulently transferred ownership of the Internet domain name
“stamps.com” away from Cybershop and subsequently transferred it to us. The complaint sought legal resolution and recognition of
Cybershop’ s
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2003. EDGAR Online, Inc.