EMA Electromechanics, Inc. v. Siemens Corp.
| Decision Date | 04 February 2022 |
| Docket Number | 6:21-cv-1001-ADA |
| Parties | EMA ELECTROMECHANICS, INC., Plaintiff, v. SIEMENS CORPORATION and SIEMENS INDUSTRY, INC., Defendants. |
| Court | U.S. District Court — Western District of Texas |
Came on for consideration this date is Defendants' Motion to Dismiss Duplicative Lawsuit or, in the alternative, For Failure to State a Claim and For Improper Venue. ECF No. 11 (the “Motion”). The Parties agreed to bifurcate EMA's response to the Motion. ECF No. 12. Plaintiff EMA Electromechanics, Inc. filed its opposition to the Duplicative Lawsuit portion of the Motion on November 15 2021. ECF No. 13. Defendants Siemens Corporation (“SC”) and Siemens Industry, Inc. (“SII”) (collectively, “Siemens”) replied on November 24, 2021. ECF No. 14. That same day, EMA filed its opposition to the remainder of the Motion, ECF No 15, to which Siemens replied on December 8, 2021, ECF No. 19.
After careful consideration of the Motion, the Parties' briefs and the applicable law, the Court GRANTS-IN-PART and DENIES-IN-PART Siemens's Motion to Dismiss.
On March 4, 2021, EMA filed an action against Siemens in this Court for infringing U.S. Patent No. 7, 724, 489 (the “'489 patent”). See EMA Electromechanics, Inc. v. Siemens Corp., No. 6:21-cv-206-ADA (the “First Action”), ECF No. 1 (W.D. Tex. Mar. 4, 2021). EMA accused Siemens's “type SDV-RTM non-arc resistant and type SDV-A-ARTM arc-resistant medium-voltage outdoor distribution circuit breaker products specifically for renewable energy applications” (the “Accused Products”) of infringing. Id. ¶ 13.
EMA is a Texas corporation with its principal place of business in Sweetwater, Texas. See id. ¶ 1. EMA alleges that it was originally founded in Argentina and became “one of the most important manufacturers of electromechanical equipment in Latin America.” Id. ¶ 9. EMA's president is one of the inventors of the '489 patent and EMA uses that patented technology to make and sells its own products. See id. ¶¶ 8-9.
According to EMA, SC is a Delaware corporation headquartered in Washington, D.C. See id. ¶ 2. It is a purportedly a U.S. subsidiary of Siemens AG, an international technology company. See id. ¶ 12. EMA also alleges that SII is a Delaware corporation with its principal place of business in New Jersey. Id. ¶ 3. It is cast as a subsidiary of SC. See id. ¶¶ 3, 12.
On May 10, 2021, Siemens filed a motion to dismiss EMA's complaint for lack of subject matter jurisdiction, failure to state a claim, and improper venue. See Second Action, ECF No. 14. A portion of that motion directed to subject matter jurisdiction became ripe for judgment on June 14, 2021. See Second Action, ECF No. 19. The Parties disputed whether there was a defect in EMA's chain of title to the '489 patent such that EMA lacked standing when it filed suit. See Id. The Court held a hearing on that issue on September 28, 2021. See Second Action, ECF No. 38. At the conclusion of that hearing, EMA filed a separate, second suit-this “Second Action”- almost identical to first. See ECF No. 1 (the “Complaint”). This Second Action's Complaint differs from that in the First Action in alleging that EMA executed a nunc pro tunc agreement meant to cure the alleged defect in EMA's chain of title. See id. ¶ 9.
Two days later, this Court held in abeyance a judgment on the issue of subject matter jurisdiction in the First Action pending discovery on the issue followed by supplemental briefing and an evidentiary hearing. See First Action, ECF No. 39. At the conclusion of supplemental briefing, the Parties waived the evidentiary hearing. See First Action, ECF No. 57. And, on December 13, 2021, the Court dismissed without prejudice the First Action for lack of subject matter jurisdiction. See First Action, ECF No. 66. The Court did not reach any of the other grounds upon which Siemens sought dismissal. See id.
On October 27, 2021, Siemens filed its Motion in this Second Action. See ECF No. 11. Siemens first argued that the Second Action should be dismissed because it was duplicative of the First Action. See id. at 2-6. It also argued that EMA failed to state a claim for willful and indirect infringement, and that venue was improper over SC. See id. at 6-14. While Siemens's first argument became ripe for judgment on November 24, 2021, see ECF No. 14, the Court has not been able to pass judgment until now, well after it dismissed the First Action. The other grounds in Siemens's Motion did not become ripe for judgment until December 8, 2021, see ECF No. 19.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted is “a purely procedural question not pertaining to patent law, ” and so the law of the Fifth Circuit controls. McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356 (Fed. Cir. 2007). When considering such motions, this Court “accepts all well-pleaded facts as true, views them in the light most favorable to the plaintiff, and draws all reasonable inferences in the plaintiff's favor.” Johnson v. BOKF Nat'l Ass'n, 15 F.4th 356, 361 (5th Cir. 2021).
Rule 12(b)(6) requires that a complaint contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To meet this factual plausibility standard, the plaintiff must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, ” based on “more than a sheer possibility that a defendant has acted unlawfully.” Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. In resolving a motion to dismiss for failure to state a claim, the question is “not whether [the plaintiff] will ultimately prevail, . . . but whether [the] complaint was sufficient to cross the federal court's threshold.” Skinner v. Switzer, 562 U.S. 521, 530 (2011). “The court's task is to determine whether the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010) (citing Iqbal, 556 U.S. at 678).
Section 284 of the Patent Act provides that a court may increase damages for patent infringement “up to three times the amount found or assessed.” 35 U.S.C. § 284. A party seeking such “enhanced damages” must show that an infringer's conduct has been “willful, ” or “wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or-indeed-characteristic of a pirate.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 103-04 (2016). Enhanced damages should “generally be reserved for egregious cases typified by willful misconduct.” Id. at 106.
To state a claim for relief for willful patent infringement, a plaintiff must allege facts plausibly showing that the accused infringer: “(1) knew of the patent-in-suit; (2) after acquiring that knowledge, it infringed the patent; and (3) in doing so, it knew, or should have known, that its conduct amounted to infringement of the patent.” Parity Networks, LLC v. Cisco Sys., Inc., No. 6:19-CV-00207-ADA, 2019 WL 3940952, at *3 (W.D. Tex. July 26, 2019) (quoting Valinge Innovation AB v. Halstead New England Corp., No. 16-1082-LPS-CJB, 2018 WL 2411218, at *13 (D. Del. May 29, 2018)).
Section 271(b) of the Patent Act provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b). To succeed on such a claim, the patentee must show that the accused infringer (1) knowingly induced direct infringement and (2) possessed “specific intent” to induce that infringement. See MEMC Electr. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1378 (Fed. Cir. 2005). Willful blindness can satisfy the knowledge requirement, Warsaw Orthopedic, Inc. v. NuVasive, Inc., 824 F.3d 1344, 1347 (Fed. Cir. 2016), and circumstantial evidence may suffice to prove specific intent, MEMC, 420 F.3d at 1378.
To state a claim for relief for induced patent infringement, “a complaint must plead facts plausibly showing that the accused infringer ‘specifically intended [another party] to infringe [the patent] and knew that the [other party]'s acts constituted infringement.'” Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372, 1376-77 (Fed. Cir. 2017) (quoting In re Bill of Lading Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323, 1336 (Fed. Cir. 2012)). “[T]here can be no inducement or contributory infringement without an underlying act of direct infringement.” Joao Control & Monitoring Sys., LLC v. Protect Am., Inc., No. 1:14-cv-00134-LY, 2015 U.S. Dist. LEXIS 74262, 2015 WL 3513151, at *3 (W.D. Tex. Mar. 24, 2015). “To state a claim for indirect infringement . . . a plaintiff need not identify a specific direct infringer if it pleads facts sufficient to allow an inference that at least one direct infringer exists.” In re Bill of Lading, 681 F.3d at 1336.
Section 271(c) of the Patent Act provides that:
Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same...
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