Variant Holdings LLC et al v. Hilton Hotels Holdings

Filing 132

MEMORANDUM OPINION AND ORDER. Signed by Judge Rodney Gilstrap on 9/11/2012. (ch, )

IN THE UNITED STATES DISCTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
VARIANT HOLDINGS LLC
AND VARIANT, INC.
Plaintiff,
v.
HILTON HOTELS HOLDINGS LLC, ET AL.
Defendant

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Civil Action No. 2:11-CV-00427-JRG

MEMORANDUM OPINION AND ORDER
I.

Introduction
Pending before the Court is Defendants Hyatt Corporation; Hyatt Hotels Corporation;

Hyatt Hotels Management Corporation; and Hyatt Place Franchising, LLC’s (collectively,
“Hyatt”) Motion to Dismiss (Dkt. No. 60) and Benchmark Hospitality International’s
(“Benchmark”) Motion to Dismiss (Dkt. No. 65).

For the reasons discussed below, both

Defendant Hyatt’s Motion to Dismiss (Dkt. No. 60) and Defendant Benchmark’s Motion to
Dismiss (Dkt. No. 65) are DENIED.
II.

Factual and Procedural Background
Plaintiff Variant Holdings (“Variant”) filed its Original Complaint on September 15,

2011 – the eve of effective date of the America Invents Act (“AIA”). Plaintiff seemingly admits
that the Original Complaint was deficiently pleaded. On November 29, 2011, Defendant Hyatt
filed a Motion to Dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to
state a claim (Dkt. No. 60), arguing that Plaintiff’s Original Complaint should be dismissed as

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deficient. Specifically, Hyatt argues that the Original Complaint fails to allege a sufficient
jurisdictional basis and fails to provide adequate notice of the claims against it.
On December 16, 2011, Plaintiff filed an Amended Complaint. (Dkt. No. 67). In
Plaintiff’s Amended Complaint, Plaintiff included a more detailed description of its jurisdictional
basis, including a description of each Defendant’s principal place of business and their activities
within the state of Texas. Id. Additionally, Plaintiff expanded upon its claims against the
Defendants, including a list of the allegedly infringing websites that belong to each Defendant.
Id.
To promote judicial economy, Defendant Benchmark joined Hyatt’s Motion to Dismiss
and bound itself to the Court’s ruling on this motion.

(Dkt. No. 65).

Plaintiff noted

Benchmark’s addition (Dkt. No. 73) and addressed its sur-reply to both Hyatt and Benchmark.
(Dkt. No. 73).
In its reply, Hyatt argues that, regardless of the Amended Complaint, the case should be
dismissed. Defendants claim Plaintiff’s Original Complaint was merely a placeholder to ensure
this case was filed before the enactment of the AIA and lacked sufficient details to place all
defendants on notice of Plaintiff’s claims against them. (Dkt. No. 69, at 3). As a result,
Defendants argue the commencement date of this law suit should be determined from the date
Plaintiff filed the Amended Complaint, placing this case under the AIA requirements.
III.

Applicable Law
To meet the pleading requirements under Federal Rule of Civil Procedure 8, “a claim for

relief must contain a short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2). In the Fifth Circuit, motions to dismiss under Rule 12(b)(6) are

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viewed with disfavor and rarely granted. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th
Cir. 2009); Lowrey v. Texas A&M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997).
A civil action is considered “commenced” by filing a complaint. Fed. R. Civ. P. 3. “An
amendment to a pleading relates back to the date of the original pleading when the amendment
asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or
attempted to be set out—in the original pleading.” Fed. R. Civ. P. 15(c); McCellon v. Lone Star
Gas Co., 66 F.3d 98 (5th Cir. 1995).
IV.

Analysis
First, the Court considers Defendants’ claim that Plaintiff’s Original Complaint was

merely a placeholder to ensure this case was filed before the effective date of the AIA and that it
lacked sufficient detail to place all defendants on notice of Plaintiff’s claims. (Dkt. No. 69). As
a result, Defendants assert that the commencement date of this action should be the date Plaintiff
filed the Amended Complaint. The Court disagrees.
The Fifth Circuit has specifically rejected the argument that a party cannot amend a
complaint to cure Rule 8 pleading deficiencies and still maintain the commencement date as the
date the original complaint was filed. See McClellon, 66 F.3d at 103 (holding the amended
complaint must be given the date of the original complaint even though it was deficient).
Defendants’ argument relating the applicability of the AIA to this case is wholly irrelevant. The
Original Complaint was filed before the effective date the AIA, and as such, the act simply does
not apply or control in this case.
As to the Original Complaint, Defendants argue Plaintiff failed to allege a sufficient
jurisdictional basis. (Dkt. No. 60, at 5-6). In its Amended Complaint, Plaintiff includes a
discussion of the Texas Long Arm Statute and explains why Defendants are subject to the

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Court’s jurisdiction. (Dkt. No. 67, ¶27). This Court finds that any deficiencies in the Original
Complaint regarding Plaintiff’s jurisdictional basis are cured by the Amended Complaint.
Defendants also argue that Plaintiff failed to provide them with adequate notice of the
claims against them. (Dkt. No. 60, at 6-8). Defendants argue that in order to comply with the
pleading requirements, Plaintiff must “at a minimum … notify [Defendants] as to which website
(or feature of the website) allegedly infringes the patent-in-suit and provide sufficient factual
information such that [Defendants] can identify the accused products/system.” (Dkt. No. 60, at
7). Plaintiff likewise has cured this defect by way of its Amended Complaint, which provides
Defendants with a list of the websites which Plaintiff claims infringe the patent-in-suit. (Dkt.
No. 67, ¶53). This objection falls short in the Court’s view.
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V.
Conclusion
The Court finds Plaintiff has sufficiently met the broad and liberal pleading standard
through its Amended Complaint. The Court also finds the Plaintiff’s Amended Complaint
properly asserts a claim that arose out of the occurrence Plaintiff attempted to set out in its
original pleading. Accordingly, and as set forth above, Hyatt and Benchmark’s Motions to
Dismiss (Dkt. Nos. 60 and 65, respectively) are DENIED.
SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 11th day of September, 2012.

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RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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