Innovation Sciences, LLC v. Amazon.Com, Inc.,

Filing 314

MEMORANDUM OPINION AND ORDER. It is ORDERED that Vector Security, Inc's Motion to Dismiss for Lack of Standing (Dkt. # 163 ) and Resideo Technologies, Inc.'s Notice of Joinder in Vector Security, Inc.'s Motion to Dismiss for Lack of Standing (Dkt. # 174 ) are hereby DENIED. Signed by District Judge Amos L. Mazzant, III on 11/18/2019. (rpc, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

VIRGINIA INNOVATION SCIENCES,
INC.
Civil Action No. 4:18-cv-474
Judge Mazzant

v.
AMAZON.COM, INC., et al

INNOVATION SCIENCES, LLC
v.

Civil Action No. 4:18-cv-475
Judge Mazzant

RESIDEO TECHNOLOGIES, INC.

INNOVATION SCIENCES, INC.
v.

Civil Action No. 4:18-cv-476
Judge Mazzant

HTC CORPORATION

INNOVATION SCIENCES, INC.
Civil Action No. 4:18-cv-477
Judge Mazzant

v.
VECTOR SECURITY, INC.

MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant Vector Security, Inc’s (“Vector”) Motion to Dismiss
for Lack of Standing (Dkt. #163) and Resideo Technologies, Inc.’s (“Resideo”) Notice of Joinder
in Vector Security, Inc.’s Motion to Dismiss for Lack of Standing (Dkt. #174). Having reviewed
the motion, the notice, and the relevant pleadings, the Court finds that the motion should be denied.

BACKGROUND
The present lawsuit consists of four separate cases that have been consolidated for pretrial
purposes. In two of those cases, Plaintiff asserts U.S. Patent No. 9,912,983 (“the ‘983 Patent”)
against Defendants Vector and Resideo (collectively “Movants”). Tiejun (“Ronald”) Wang is one
of several listed inventors on U.S. patent application no. 11/501,747 (“the ‘747 application”),
which was filed on August 10, 2006. Ronald Wang is also listed as an inventor on the ‘983 Patent
along with his sister, Tiehong Wang (“Anne Wong”). On May 10, 2017, Ronald Wang and Anne
Wong executed a document purporting to assign their rights in the ‘983 Patent to Virginia
Innovation Sciences, Inc., Plaintiff’s predecessor (“VIS”).
However, Ronald Wang worked for RF Micro Devices, Inc. (“RFMD”) from October 2005
through September 2006, during the time the ‘747 application was filed. As a condition of his
employment, Ronald Wang entered into an “Inventions Confidentiality and Non-Solicitation
Agreement” with RFMD, which contained an invention assignment provision (“RFMD
Agreement”).
Plaintiff filed suit against Movants on July 5, 2018. On July 16, 2019, Vector filed the
present motion to dismiss for lack of standing (Dkt. #163) and on July 25, 2019, Resideo filed its
notice of joinder (Dkt. #174). Plaintiff filed its response on August 21, 2019 (Dkt. #203). On
September 5, 2019, Vector and Resideo filed their reply to the motion (Dkt. #221). Finally, on
September 13, 2019, Plainitff filed a sur-reply (Dkt. #239). The Court held a hearing on the motion
on November 4, 2019.
ANALYSIS

Movants contend that Plaintiff does not have standing to bring the present suit. According

to Movants, Ronald Wang’s interest in the ‘983 Patent was assigned to RFMD pursuant to the

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RFMD Agreement; thus, his purported transfer to VIS was ineffective. Because of the ineffective
assignment, Movants contend that Plaintiff is, at most, a co-owner of the ‘983 Patent. Movants
argue that all co-owners must jointly consent to bring a patent infringement suit. Because
Innovation Sciences, LLC is the only plaintiff in this case, Movants assert that Plainitff lacks
standing and this deficiency causes the Court to lack subject matter jurisdiction over the case
against Movants.
Plaintiff counters1 whether all co-owners are properly joined in the suit is not a
jurisdictional question or even a standing question. According to Plaintiff, the standing inquiry is
limited to Article III standing regarding whether there is a case and controversy. Plaintiff argues
that it has properly alleged constitutional standing at the pleadings stage and that the motion should
be denied on this basis.
However, Movants maintain that regardless of whether there is case or controversy
pursuant to Article III, Plaintiff still lacks standing. According to Movants, the failure to join all
co-owners in a patent case is a matter of prudential standing. Movants contend that the lack of
prudential standing serves as a proper basis for dismissal.
Standing is a threshold subject matter jurisdictional requirement. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 559–60 (1992).
Article III of the Constitution limits the federal juridical power to “Cases” or
“Controversies,” thereby entailing as an irreducible minimum that there be (1) an
injury in fact, (2) a causal relationship between the injury and the challenged
conduct, and (3) a likelihood that the injury will be redressed by a favorable
decision.
Biotechnology Indus. Org. v. District of Columbia, 496 F.3d 1362 (Fed. Cir. 2007) (quoting United
Food & Commercial Workers Union Local 751 v. Brown Grp., Inc., 517 U.S. 544, 550 (1996)

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Plaintiff presents other arguments, including arguments on the merits of the assignment; however, the remaining
arguments are unnecessary to address at this time.

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(internal quotations omitted)).

The Supreme Court of the United States has clarified that

constitutional standing is limited to this analysis of “Article III’s limitation of the judicial power
to resolv[e] ‘Cases’ and ‘Controversies.’” Lexmark Int’l, Inc. v. Static Control Components, Inc.,
572 U.S. 112, 125 (2014). Thus, the Court finds whether all owners are joined as plaintiffs in the
present lawsuit does not affect the constitutional standing analysis.
Here, Plaintiff argues that it has sufficiently alleged constitutional standing for purposes of
defeating a motion to dismiss based on its allegation that “it owns all right, title and interest in the
patent-in-suit, that Vector [and Resideo] ha[ve] infringed those rights and harmed Innovation, and
that Innovation is entitled to damages that can be awarded by the Court or a jury.” (Dkt. #203 at
p. 7). Movants did not respond to this argument,2 instead focusing on prudential standing as
opposed to constitutional standing. “The party invoking federal jurisdiction bears the burden of
establishing these elements.” Lujan, 504 U.S. at 561 (citations omitted). “At the pleadings stage,
general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a
motion to dismiss we ‘presum[e] the general allegations embrace those specific facts that are
necessary to support the claim.’” Id. (quoting Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 889
(1990)). Based on the facts, allegations, and arguments presented, the Court finds there to be
enough facts to support constitutional standing in this case.
However, the Federal Circuit, in the past, held that when there is more than one owner, all
co-owners must join in suit to establish standing, for a patent infringement suit based on the Patent
Act.3 See, e.g., Israel Bio-Eng’g Project v. Amgen, Inc, 475 F.3d 1256, 1264–65 (Fed. Cir. 2007).

2
LOCAL RULE CV-7(d) (“A party’s failure to oppose a motion in the manner prescribed herein creates a presumption
that the party does not controvert the facts set out by the movant and has no evidence to offer in opposition to the
motion.”).
3
 The Federal Circuit in Israel identified that 25 U.S.C. § 281 provides the general basis for standing in patent cases
and further explained in Ethicon and Schering that the basis for finding co-owners must joint in suit is 35 U.S.C. §
262. See Israel Bio-Eng’g Project v. Amgen, Inc, 475 F.3d 1256, 1264 (Fed. Cir. 2007); Ethicon, Inc. v. U.S. Surgical

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Additionally, in patent cases, the Patent Act specified that “[a] patentee shall have remedy by civil
action for infringement of his patent.” 35 U.S.C. § 281. “The word ‘patentee’ includes not only
the patentee to whom the patent was issued but also the successors in title to the patentee.” 35
U.S.C. § 100(d). Moreover, “[i]n the absence of any agreement to the contrary, each of the joint
owners of a patent may make, use, offer to sell, or sell the patented invention within the United
States, or import the patented invention into the United States, without the consent of and without
accounting to the other owners.” 35 U.S.C. § 262.
Subsequent to the Federal Circuit’s decision in Israel Bio-Engineering Project, in 2014,
the Supreme Court of the United States issued its decision in Lexmark. The Supreme Court
explained that while the Article III “Cases” and “Controversies” analysis established the absolute
minimum for constitutional standing, “[i]n recent decades, however, [the Supreme Court has]
adverted to a ‘prudential’ branch of standing.” 572 U.S. at 125. The Supreme Court noted that
the prudential standing doctrine was not well defined. Id. As such, in Lexmark, the Supreme Court
set out to “clarify[] the nature of” “prudential standing.” Id. In so doing, the Supreme Court held
that determining “as a matter of statutory interpretation, the ‘scope of [a] private remedy created
by” Congress . . . and the ‘class of persons who [could] maintain a private damages action under’
that legislatively conferred cause of action” is not a prudential standing consideration, but is
instead a statutory consideration. Id. at 126. The Federal Circuit observed that the Supreme Court
further explained this principle in a footnote:
We have on occasion referred to [whether a plaintiff may bring suit under a certain
statute] as “statutory standing” and treated it as effectively jurisdictional . . . That
label is an improvement over the language of “prudential standing,” since it
correctly places the focus on the statute. But it, too, is misleading, since “the
absence of a valid (as opposed to arguable) cause of action does not implicate

Corp., 135 F.3d 1456, 1468 (Fed. Cir. 1998); Schering Corp. v. Roussel-UCLAF SA, 104 F.3d 341, 344 (Fed. Cir.
1997).  

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subject-matter jurisdiction, i.e., the court’s statutory or constitutional power to
adjudicate the case.”
LoneStar Silicon Innovations LLC v. Nanya Tech. Corp., 925 F.3d 1225, 1235 (Fed. Cir. 2019)
(emphasis in original) (quoting Lexmark, 572 U.S. at 128 n.4).4
Based on the Supreme Court’s holding in Lexmark, the Federal Circuit clarified its view
on standing in patent cases:
Lexmark is irreconcilable with our earlier authority[5] treating § 281 as a
jurisdictional requirement . . . . Where intervening Supreme Court precedent makes
clear that our earlier decisions mischaracterized the effects of §281, we are bound
to follow that precedent rather than our own prior panel decisions. We therefore
firmly bring ourselves into accord with Lexmark and our sister circuits by
concluding that whether a party possesses all substantial rights in a patent does not
implicate standing or subject matter jurisdiction.
Id. (citations omitted).6

The Federal Circuit additionally explained that its prior decisions

“confuse[d] the requirements of Article III—which establish when a plaintiff may invoke the
judicial power—and the requirements of § 281—which establish when a party may obtain relief
under the patent laws.” Id. at 1235–36.
Thus, regardless of whether the Court analyzes Movant’s request under constitutional
standing, prudential standing, or statutory standing, it is not a jurisdictional inquiry. Movants

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After Lexmark, “the doctrine of third-party standing or jus tertii, still remains in the prudential category.” 33
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 8343, at 1 (2d ed. 2004). This
doctrine is based on the broad principle that there should be a “general prohibition on a litigant’s raising another
person’s legal rights.” Lexmark, 572 U.S. at 126. Movants do not argue that this is the basis of prudential standing
in this situation and the Court finds that it would not serve as the basis for prudential standing in this situation.
Essentially, the argument in this case is that, under the statute, one patent owner is a plaintiff but not all owners are
present, which fits squarely in line with what the Supreme Court in Lexmark decided is not prudential standing—the
scope of a statutory remedy and who can assert a claim for that remedy. Thus, the owner-plaintiff is asserting its own
legal rights and does not implicate the doctrine of third-party standing.
5
Movants argue that the Federal Circuit decided cases after Lexmark still holding that joining all co-owners are
required to be joined in order to have standing. See, e.g., Advanced Video Techs. LLC v. HTC Corp., 879 F.3d 1314,
1319 (Fed. Cir. 2018); STC.UNM v. INTEL CORP., 754 F.3d 940, 946 (Fed. Cir. 2014). However, the Court finds
these cases to be included in the Federal Circuit’s broad statement of its “earlier authority.”
6
The Court notes that the facts of LoneStar are not the same facts we have here. In Lonestar, the Federal Circuit was
presented with the scope of a licensing agreement. However, the Federal Circuit more broadly explained that “whether
a party possesses all substantial rights in a patent does not implicate standing or subject matter jurisdiction.” Lonestar,
925 F.3d at 1235. Thus, the Court finds that this case applies to the current set of facts.

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requested the Court to dismiss the suit because the defect in standing resulted in the Court lacking
jurisdiction.7 Thus, there is no basis to grant the requested relief.
Nevertheless, Movants contend that their reply changes their request from a dismissal
based on a lack of jurisdiction, and the Court notes that the reply does not mention jurisdiction.
However, the Court does not accept new arguments, or a change of theory raised for the first time
in a reply. See generally Branch v. CEMEX, Inc., No. H-11-1953, 2012 WL 2357280, at *9 (S.D.
Tex. June 20, 2012) (citing Conway v. United States, 647 F.3d 228, 237 n.8 (5th Cir. 2011)).
Moreover, the Court is unsure what vehicle Movants seek to use for their motion to dismiss, if
they are not using Federal Rule of Civil Procedure 12(b)(1).8
At the hearing, Movants additionally orally requested the Court to convert the motion to
dismiss to whatever motion the Court finds appropriate. However, it is the Movants responsibility
to file the appropriate motion and the Court will not convert the current motion to another motion,
whatever that may be, find a new legal standard, and convert the arguments presented for a motion
to dismiss into the framework of that standard. Moreover, the Local Rules state that each
“motion . . . must be filed as a separate document.” LOCAL RULE CV-7(a). Thus, whatever change
Movants made in their reply or at oral argument is inconsequential to the Court’s analysis. Because

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Movants specified that they were moving for dismissal based on a jurisdictional defect in their opening brief on
several occasions: (1) “In such circumstances, the plaintiff’s standing defect deprives the Court of subject matter
jurisdiction.” (Dkt. #163 at p. 8) (citations omitted); (2) “A challenge to standing may be raised at any time. See, e.g.,
[FED. R. CIV. P.] 12(h)(3) (‘If the court determines at any time that it lacks subject-matter jurisdiction, the court must
dismiss the action.’).” (Dkt. #163 at p. 8); (3) “The party invoking federal jurisdiction bears the burden of establishing
[standing].” (Dkt. #163 at p. 8) (citations omitted); (4) “Because Qorvo has not voluntarily joined, Plaintiff lacks
standing, the Court lacks jurisdiction over this action, and the case must be dismissed.” (Dkt. #163 at p. 15); and (5)
“The Court thus lacks subject matter jurisdiction, and Defendant respectfully requests that this case be dismissed.”
(Dkt. #163 at p. 16).
8
Movants, in their opening brief, argued that the current motion was timely because subject matter jurisdiction can be
raised at any time; however, any other motion to dismiss based on Rule 12(b) “must be made before pleading if a
responsive pleading is allowed.” FED. R. CIV. P. 12(b); see also 5C CHARLES ALAN WRIGHT & ARTHUR R.
MILLER, FEDERAL PRACTICE AND PROCEDURE § 1361, at 92 (3d ed. 2004) (“If the defendant decides to assert a Rule
12(b) defense by motion, then he must do so before filing the answer.”). Vector filed its answer on September 13,
2018 and Resideo filed its first responsive pleading on October 2, 2018.

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the clearly articulated relief that can be properly considered—a motion to dismiss based on a lack
of jurisdiction—is not proper, the Court finds the motion should be denied.
CONCLUSION

.

It is therefore ORDERED that Vector Security, Inc’s (“Vector”) Motion to Dismiss for
Lack of Standing (Dkt. #163) and Resideo Technologies, Inc.’s (“Resideo”) Notice of Joinder in
Vector Security, Inc.’s Motion to Dismiss for Lack of Standing (Dkt. #174) are hereby DENIED.9
SIGNED this 18th day of November, 2019.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

9

The Court does not hold that this argument cannot be raised in another motion or that all appropriate parties are
currently joined in the lawsuit; the Court merely holds that it has proper subject matter jurisdiction as there is no defect
in constitutional standing, which is the only relevant inquiry for subject matter jurisdiction in this case.

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