Emerson Process Management LLLP v. Wetro Lan, LLC

Filing 27

ORDER DENYING 13 Motion to Dismiss. Signed by Judge Sam Sparks. (dm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

2015

SEp2

4K 10:

CLE

WESIE.'

EMERSON PROCESS MANAGEMENT LLLP,
Plaintiff,
Case No. A-15-CA-416-SS

-vs-

WETRO LAN, LLC,
Defendant.

ORDER
BE IT REMEMBERED on this day the Court held a hearing in the above-styled cause, and
the parties appeared by and through counsel. Before the Court is Defendant Wetro Lan, LLC's

Motion to Dismiss or, in the Alternative, Stay the Case [#13], Plaintiff Emerson Process
Management LLLP's Response [#16] thereto, Defendant's Reply [#20] thereto, and Plaintiff's SurReply [#25] thereto. Having reviewed the documents, the governing law, and the file as a whole,
the Court now enters the following confirming its oral pronouncements.
This is a declaratory judgment action brought by Plaintiff Emerson Process Management
LLLP (EPM) against Defendant Wetro Lan, LLC (Wetro). EPM seeks a declaration its product, the

DeltaV Controller Firewall, does not infringe Wetro' s U.S. Patent No. 6,795,918 (the '918 Patent).
In its motion to dismiss, Wetro argues this case should be dismissed because it is duplicative of an

infringement suit presently pending in the Marshall Division of the Eastern District of Texas, or
alternatively, should be stayed under the first-to-file rule.
Wetro, which according to EPM was formed in December 2014, purchased the '918 Patent
at the beginning of this year. As Wetro admitted at hearing, the '918 Patent expired in 2012 after

I

its inventors failed to pay the maintenance fees required by the Patent Office, was expired at the time

Wetro bought it, and remains expired today. After purchasing the '91 8 Patent, Wetro filed 55 suits
for infringement in the Eastern District,' including one suit against Emerson Electric Co., the

corporate parent of EPM. EPM represented at hearing that Emerson Electric Co. is a holding
company at the very top of the Emerson corporate pyramid which has nothing to do with the
production or marketing of the DeltaV Controller Firewall. According to EPM, it, not Emerson

Process Co., makes and markets the allegedly infringing product.
District courts in this Circuit conduct a three-pronged inquiry in determining whether to
dismiss a declaratory judgment action, asking whether: (1) the action is justiciable; (2) the court has
authority to grant declaratory relief; and (3) the court should exercise its discretion to dismiss the
action. Lateena Girls, L.L. C.

v.

Latina Media Ventures, L.L. C., No. SA-06-CA-2 1 7-RF, 2006 WL

2547884, at *4 (W.D. Tex. Aug. 9, 2006) (citing Orix CreditAlliance

v.

Wolfe, 212 F.3d 891, 895

(5th Cir. 2000)). Here, the first and second factors are satisfied, and the Court declines to exercise
its discretion to dismiss this case. Considering the non-exhaustive factors for guiding the Court's

discretion set forth in St. Paul Insurance Co.

v.

Trejo, 39 F.3d 585 (5th Cir. 1994),2 the Court first

finds the convenience ofthe parties strongly favors retaining this case. Specifically, EPM' s principal

place of businessRound Rock, Texasis located in this District, and the EPM witnesses with
PACER query of the Eastern District's electronic filing system for "Wetro Lan" returns 55 lawsuits against
55 different defendants, all filed on four different dates from January through March 2015.
2

The seven nonexclusive factors are: "(1) whether there is a pending state action in which all of the matters in
controversy may be fully litigated; (2) whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant;
(3) whether the plaintiff engaged in forum shopping in bringing suit; (4) whether possible inequities in allowing the
declaratory plaintiff to gain precedence in time or to change forums exist; (5) whether the federal court is a convenient
forum for the parties and witnesses; (6) whether retaining the lawsuit would serve the purposes ofjudicial economy; and
(7) whether the federal court is being called on to construe a state judicial decree involving the same parties and entered
by the court before whom the parallel state suit between the same parties is pending." Trejo, 39 F.3d at 5909 1. Because
there are no state actions pending, the only factors relevant here are (2)(6).

-2-

knowledge of the DeltaV Controller Firewall reside in this District. Wetro does not dispute that all

of the pertinent EPM witnesses with knowledge of the accused device are located here. In contrast,
Wetro has identified only one potential witness, Anthony Wang, who resides in the Eastern District;
Mr. Wang is an officer of Wetro whose connection to the material issues in the case,

if any, is not

clear.

Further, there is no indication EPM filed this action for improper or abusive reasons. The

circumstances of the Eastern District litigation, however, are peculiar. Despite Wetro's decision to
sue 55 companies for patent infringement in the Eastern District within the first three months afier

purchasing the '918 Patent (a number ofwhich have already settled with Wetro), Wetro chose to sue

EPM's parent, a large holding company, rather than EPM. While Wetro Lan argues EPM and
Emerson Electric Co. should be treated as the same entity, it provides no evidence in support of that

claim other than attorney argument. Under the circumstances, the Court declines Wetro's invitation
to dismiss this litigation. Similarly, the Court declines to exercise its discretion to stay this case

pursuant to the first-to-file rule. This action will be placed on the Court's typical patents docket and
proceed to claims construction.

Accordingly:
IT IS ORDERED that Defendant Wetro Lan, LLC's Motion to Dismiss or, in the

Alternative, Stay the Case [#13] is DENIED.
SIGNED this the

/'dayof september2015.

SAM SPARKS
UNITED STATES DISTRICT JUDGE
416 deny mtd ord ba.fnn