M-I LLC v. FPUSA, LLC

Filing 110

ORDER TO ADIMINISTRATIVELY STAY CASE re 109 Suggestion of Bankruptcy filed by FPUSA, LLC. The Clerks office is DIRECTED to administratively close this case pending further order of the Court. The claims construction hearing scheduled for May 5, 2016, is hereby CANCELLED. Though administratively closed, this case will remain on the docket of this Court and may be reopened upon request of any party or on the Courts own motion. Signed by Judge David A. Ezra. (wg)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
M-I LLC,
Plaintiff,
vs.
FPUSA, LLC,
Defendant.

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No. 5:15–CV–406
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ORDER STAYING CASE DUE TO
SUGGESTION OF BANKRUPTCY

On May 15, 2015, Plaintiff M-I LLC (“M-I”), brought suit against
Defendant FPUSA (“FPUSA”), alleging that three of FPUSA’s drilling fluid
recovery systems (collectively, the “Vac-Screen Systems”) infringe upon
technology protected by M-I’s Patent No. 9,004,288 (the “‘288 Patent”), issued by
the United States Patent and Trademark Office (“USPTO”) on April 14, 2015. M-I
filed a motion for a preliminary injunction on May 21, 2015; this Court issued a
preliminary injunction on June 24, 2015, enjoining FPUSA from infringing upon
Claim 16 of the ‘288 Patent. (Dkts. ## 8, 31.) FPUSA appealed. (Dkt. # 49.)
On August 12, 2015, M-I filed an Amended Complaint adding an
additional allegation that FPUSA’s Vac-Screen Systems infringe upon one or more
claims of United States Patent No. 9,074,440 (the “‘440 Patent”), which was issued
to M-I by the USPTO on July 7, 2015. (Dkt. # 63.) On September 24, 2015, the
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Federal Circuit affirmed this Court’s decision that Claim 16 of the ‘288 Patent is
likely infringed, vacated the preliminary injunction, if any, as to Claim 1, and
remanded the case to this Court to reform the injunction in accordance with
Federal Rule of Civil Procedure 65(d). See M-I, LLC v. FPUSA, LLC, No. 20151870, 2015 WL 5603901 (Fed. Cir. Sept. 24, 2015). On November 4, 2015, after
receiving the Federal Circuit’s mandate, this Court reformed its preliminary
injunction and specifically enjoined infringement of Claim 16 of the ‘288 Patent,
contingent upon M-I posting a bond in the amount of ten million dollars. (Dkt.
# 89.) M-I posted a bond in the specified amount the following day. (Dkt. # 90.)
On April 21, 2016, FPUSA filed a Suggestion of Bankruptcy
notifying this Court of its Voluntary Petition for Relief under Chapter 11 of the
United States Bankruptcy Code, in Bankruptcy Case No. 16-40742 in the Sherman
Division of the Eastern District of Texas. (Dkt. # 109.) Section 362 of the United
States Bankruptcy Code requires that “a petition filed under section 301, 302, or
303 of this title . . . operates as a stay, applicable to all entities, of . . . any act to
collect, assess, or recover a claim against the debtor that arose before the
commencement of the case under this title.” 11 U.S.C. § 362(a)(6). The objective
of M-I’s Amended Complaint is to find that FPUSA is liable for direct and indirect
infringement of the ‘288 and ‘440 Patents, enjoin future infringement, and to
obtain compensation for damages, reasonable costs, and attorney’s fees. Because
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the Vac-Screen technology at issue is held by a debtor involved in a bankruptcy
proceeding, this Court finds that the action must be STAYED pursuant to Section
362(a)(6) of the United States Bankruptcy Code.
Where a suit is stayed pursuant to a bankruptcy proceeding, an
administrative closure is appropriate. See Mire v. Full Spectrum Lending Inc., 389
F.3d 163, 167 (5th Cir. 2004). An administrative closure is “a postponement of
proceedings,” rather than “a termination.” S. La. Cement, Inc. v. Van Aalst Bulk
Handling, B.V., 383 F.3d 297, 302 (5th Cir. 2004). A case that is administratively
closed “may be reopened upon request of the parties or on the court’s own
motion.” Mire, 389 F.3d at 167.
The Clerk’s office is DIRECTED to administratively close this case
pending further order of the Court. The claims construction hearing scheduled for
May 5, 2016, is hereby CANCELLED. Though administratively closed, this case
will remain on the docket of this Court and may be reopened upon request of any
party or on the Court’s own motion.
IT IS SO ORDERED.
DATED: April 26, 2016. San Antonio, Texas.

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David Alan Ezra
Senior United States Distict Judge

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