Su v. MRMBS II, LLC
Filing
70
OPINION on Patents. None of Su's rights were infringed or diminished by the sale of the vessel. Su will take nothing from MRMBS II, First Commercial Bank Co., SC Lowy Primary Investments, A Whale Corporation, and the Participating Lenders whom he nonsensically names "John Doe(s)." MRMBS II will recover from Su $13,695,066.65 plus interest accrued under the loan agreement. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
United States District Court
Southern District of Texas
ENTERED
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Hsin Chi Su,
Plaintiff,
versus
MRMBS
II, llC,
et
al.
Defendants.
December 07, 2018
David J. Bradley, Clerk
Opinion on Patents
1.
Introduction.
Hsin Chi Su guaranteed a loan that was used to buy a ship. The shipowner
defaulted on its loan, and Su did not pay the debt for which the shipowner was liable.
The lender, on the order of a bankruptcy court, sold the ship at an auction. Su sued the
lender for infringement of patents that he holds on technology in the ship. He seeks a
declaratory judgment on the preservation of his patent rights, validity of his
infringement claims, unjust enrichment, money had and received, and indirect
infringement. The lender counterclaimed for payment of the debt. Su will take nothing.
The lender will take $13,695,066.65.
2..
Background.
In 2.010, A Whale Corporation borrowed $90 million from First Commercial
Bank Co., Ltd., to purchase a vessel. The lender required Hsin Chi Su to guarantee the
loan. The rights under the guarantee were assigned from First Commercial to SC Lowy
Primary Investment, Ltd., and then to MRMBS II, lle. A Whale defaulted on the loan
and filed for bankruptcy. MRMBS demanded payment, and Su did not pay.
OnJuly 9,2.014, A Whale asked the bankruptcy court for approval to sell the
vessel. Su objected, arguing that the sale violated his patent. OnJuly 18, 2.014, the
bankruptcy court approved the sale but reserved Su's right to pursue patent claims. Su
then requested a stay. It was denied by the bankruptcy court onJuly 2.8,2.014, and later
affirmed by this court and the court of appeals.
Before the sale, Su owed $82,205,492.65. MRMBSpurchased the vessel by credit
bid for $66,500,000. MRMBS received a payment of $2,010,426, bringing the balance
still due to $I 3,695,066.65.
Su says that the bankruptcy court's approval of the sale extinguished his right
to sue future patent infringers. He seeks a declaration from this court that (a) the
bankruptcy court's judgment has no effect on his patents, (b) his claims against MRMBS
and the estate of A Whale are valid, and (c) A Whale transferred property rights that
did not belong to it. In light of these claims, Su argues that his liability to MRMBS should
be reduced. MRMBS seeks payment from Su under the guarantee.
3.
Patent Claims.
Su says that because MRMBS infringed his patents, he may offset his debt
through compensation owed for the infringements. Each of Su's claims hinges on
whether MRMBS infringed his patents. It did not, and each claim collapses accordingly.
Su's request for declaratory judgment is essentially a request for an advisory
opinion, which no court can grant. I A declaration that Su may sue nameless infringers
for future acts is, by definition, an advisory opinion because it fails to resolve any
present, genuine controversy. Su wants assurance that he could, ifhe feels like it, have
a controversy in the future, but he has none.
MRMBS acted in accordance with the bankruptcy court's order to sell the vessel.
It submitted a winning credit bid, and the bankruptcy court approved the sale. No
patent rights were sold; only the vessel. A ship is like any other product containing
patented technology. A car, for example, embodies numerous patents. If a consumer
buys a car with a loan from a bank and defaults on the loan, when the bank forecloses
on the car, the patent owner cannot sue the bank for infringement when it uses or
resells the car.
Su's residual patent rights are distinct from the embodied technology in the
vessel. Neither the loan nor Su's guarantee mentions patents. As the bankruptcy court
concluded, the patents were not the property of A Whale except as embodied in the
ship.
u.s. Const. art. III, § 2, d.
I; Adams v. Mcllhany, 764 F.2d 294,299 (5th Gr. 1985); Villas
at Parks ide Partners v. Farmers Branch, 577 F. Supp. 2d 880,883-84 (N.D. Tex. 2008).
Also, Su has no claim for money had and received or unjust enrichment. MRMBS
did not profit from the sale of Su's patent rights because no sale has occurred.
Finally, Su cannot claim indirect infringement. To hold MRMBS liable, Su would
have to prove that someone else - perhaps A Whale - directly infringed Su's patents
and that MRMBS is indirectly responsible for that infringement. Those facts are precisely
what Su cannot show. He has no evidence of direct infringement by anyone; therefore,
MRMBS cannot be liable for indirect infringement.
4.
Guarantee.
Su admits that he owes MRMBS on the guarantee, but he argues that he should
not be forced to pay until the court resolves his patent claims. Su cannot rely on a
hypothetical offset to block a summary judgment concerning his obligation under the
written guarantee. 2 When he guaranteed the loan, Su agreed that his rights related to
the vessel would be inferior to the lender's right to recover the money owed. MRMBS
demanded repayment, and Su must pay regardless of any imagined patent claims.
Su says MRMBS bought the vessel at an unreasonably low price, and is liable for
bad faith and unfair conduct. He offers nothing but conclusory statements that the sale
price was unfair and unreasonably low. Su relies solely on Kevin lin's declaration that
the price was below market value. lin, a Taiwanese lawyer, was supposed to testify
about Taiwanese law as it relates to MRMBS's motion for summary judgment. Because
he has no knowledge of the value of the vessel, his speculations may be ignored. 3
Absent lin's declaration, Su has no evidence about the vessel's market value, bad faith,
and unfair conduct.
Su owes MRMBS under the guarantee.
5.
Conclusion.
None ofSu's rights was infringed or diminished by the sale of the vessel. Su will
take nothing from MRMBS II, liC; First Commercial Bank Co., Ltd.;
sc Lowy Primary
Investments, Ltd.; A Whale Corporation; and the Participating Lenders whom he
nonsensically names 'John Doe(s)."
2
Levy v. F.D.I.C., 7 F.3d 1054,1057 (1St Gr. 1993); Chih Shen Chen v. Inteplast Group, Ltd.,
I I F. Supp. 3d 82.4 (S.D. Tex. 2.014).
Fed. R. Evid. 702.; Bradlry v. Phillips Chemical Co., 484 F. Supp. 2.d 604, 612. n.2.2. (S.D. Tex. 2.007).
MRMBSII, llC, will recover from Su $13,695,066.65, plus interest accrued under
the loan agreement.
Signed on December ( ' 2018, at Houston, Texas.
-:@
~~-H~gheS
Lynn N.
United States DistrictJudge
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