Texas Patent Litigation Monthly Wrap-Up: May 2024 

The Texas Patent Litigation Monthly Wrap-Up for May 2024 covers three decisions addressing amendments to infringement contentions, stays while similar actions proceed, and personal jurisdiction over holding companies.  

Daingean Technologies Ltd. v. T-Mobile USA, Inc., et al. 

No. 2:23-CV-00347-JRG-RSP (E.D. Tex. May 2, 2024) (Payne, R.) 

Plaintiff Daingean Technologies Ltd. (“Daingean”) sought leave to amend its infringement contentions, which it originally served on July 6, 2023, regarding U.S. Patent No. 8,576,803. Id. at *1. Defendant T-Mobile USA, Inc. and Intervenors Nokia of America Corporation and Ericsson, Inc. (collectively “Defendants”) filed a cross-motion challenging the sufficiency of the proposed amendments. Id. The court addressed the following claim elements, which were the only ones affected by Daingean’s proposed amendments: 

Id. Specifically, Daingean sought to amend the infringement contentions with regards to limitation 12[F]. Id. 

The defendants asserted that the contentions were deficient, as they did not explain how claim limitations 12[D], 12[E], and 12[F] come together to form the single beam disclosed in limitation 12[C]. Id. The court noted that the defendants did not specifically oppose the amendment as to adding the new theory with regard to 12[F]. Id. Rather, the defendants’ objections stemmed from wanting an explanation of how the new 12[F] theory interacted with 12[D] and 12[E]. Id. Daingean contended that the amendment simply added a new way for 12[F] to be satisfied and did not otherwise change its original contentions on how the limitations were met. Id. Daingean further argued that the defendants’ lack of objection to the contention’s explanation of how 12[D]-[F] combined until the defendants filed their motion on March 8, 2024, indicated that the explanation was reasonable. Id. 

The court held that the proffered amendments were sufficient pursuant to P.R. 3-1. Id. at 2. The court focused on the defendants’ delay in objecting to the contention’s explanation of how 12[C] is satisfied by 12[D]-[F], the narrowness of Daingean’s proposed amendment, and the fact that Daingean’s amendment was ultimately unopposed, in finding that the amendment was not in contravention of P.R. 3-1. Id. Particularly, as it relates to the delay on the defendants’ objections, the court determined that the contentions did not refer to essentiality in a way that would have prevented the defendants from raising the objections sooner. Id. Accordingly, Daingean’s motion to amend its infringement contentions was granted and the defendants’ objections were denied. 

System Stormseal PTY Ltd. and Stormseal USA, LLC v. SRS Distribution, Inc. 

No. 2:23-CV-00391-JRG (E.D. Tex. May 6, 2024) (Gilstrap, R.) 

Defendant SRS Distribution Inc. (“SRS”) requested the court to stay the instant case pending a resolution of a similar action filed 10 months prior by plaintiffs System Stormseal Pty Ltd. and Stormseal USA, LLC (collectively “Stormseal”) in the Southern District of Florida regarding the same patent, claims, and infringement theories. Id. at *1. SRS contended that it merely resold the accused product according to the installation instructions provided to it by Structural Wrap, a defendant in the Florida action. Id. at *2. SRS stated that it purchased the product one time from Structural Wrap, removed its access to the installation instructions, and agreed to be bound to the outcome of the Florida action. Id. Stormseal did not dispute that the products were the same and that SRS received the product from Structural Wrap in the Florida action. Id. Stormseal’s argument was that the cases did not involve the same product because SRS “trademarked and marketed its own product” under a different name, and Stormseal speculated that SRS could have provided alternative instructions to its customers. Id. 

Although the court has the authority to control its own docket, “the court in which an action is first filed is the appropriate court to determine whether subsequently filed cases involving substantially similar issues should proceed.” Id. (quoting Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997)). The District Court considered the following three factors to determine whether to grant the stay: “(1) whether the stay will unduly prejudice the nonmoving party, (2) whether the proceedings before the court have reached an advanced stage, including whether discovery is complete and a trial date has been set, and (3) whether the stay will likely result in simplifying the case before the court.” Id. at 3 (quoting NFC Techs. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015) (Bryson, J.)).  

The court found that the prejudice factor weighed slightly in favor of granting a stay since SRS’s unrebutted evidence showed that it entered an agreement only with Structural Wrap to provide the product and received the system only from Structural Wrap. Id. at *4. The court also determined that Stormseal would not be unduly prejudiced from the stay, as SRS had taken significant steps toward removing the product from the marketplace and was no longer directly competing with Stormseal’s product. Id. Concerning the second factor, Stormseal’s case against SRS was in its early stages and, thus, weighed in favor of granting a stay. Id. at *5. Lastly, the court determined that the simplification factor also weighted in favor of granting a stay because SRS had agreed to be bound by infringement and validity determinations in the Florida action, which would simplify the same infringement and validity claims against SRS. Id. at *6. SRS’s undisputed evidence showed that Structural Wrap was the sole supplier of the product, SRS followed the installation instructions provided to it that are the same instructions as Structural Wrap’s, and SRS agreed to be bound by an infringement determination in the Florida action. Id. Although the Florida action would not resolve Stormseal’s allegations that SRS infringed the product by installing it, the court determined that the Florida action would simplify the issue. Id. Accordingly, the court stayed the case pending resolution of the Florida action. Id. 

Swissdigital USA Co., Ltd. v. Samsonite International S.A. 

No. 6:23-CV-00196-ADA-DTG (W.D. Tex. May 14, 2024) (Gilliland, D.) 

Defendant Samsonite International S.A.’s (“Samsonite”) motion to dismiss for lack of personal jurisdiction under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6) was granted, and the magistrate judge recommended that the case be dismissed without prejudice. Id. at *1. Swissdigital USA Co., Ltd. (“Swissdigital”) alleged infringement against Samsonite on four U.S. patents in a line of luggage products that contain a sheath for a USB charge. Id. Samsonite is a holding company with corporate headquarters in Luxembourg and Massachusetts and a principal place of business in Hong Kong. Id. at *1-2. Samsonite claimed it had never supplied any products mentioned in Swissdigital’s pleadings in Texas, had no affiliate or subsidiaries in Texas, and had no directors in Texas. Id. at *2.  

Swissdigital argued that the Texas federal District Court has personal jurisdiction over Samsonite under Federal Rule of Civil Procedure 4(k)(2), which establishes personal jurisdiction for a federal claim over a defendant if “(A) the defendant is not subject to jurisdiction in any state’s court of general jurisdiction; and (B) exercising jurisdiction is consistent with the United States Constitution and laws.” Id. at * 3 (quoting Fed. R. Civ. P. 4(k)(2)). The court disagreed with Swissdigital’s argument and concluded that 4(k)(2) did not apply because Samsonite has a corporate headquarters in Massachusetts, making it subject to jurisdiction in Massachusetts’s court of general jurisdiction. Id. at *4 Thus, the first part of Rule 4(k)(2) was not met. 

The court then moved to analyze whether it had personal jurisdiction over Samsonite under the Fourteenth Amendment Due Process Clause and International Shoe by considering three factors: “(1) whether the defendant ‘purposefully directed’ its activities at residents of the forum; (2) whether the claim ‘arises out of or relates to’ those activities; and (3) whether the assertion of personal jurisdiction is ‘reasonable and fair.’” Id. at *3-4.  

Ultimately, the court found that Swissdigital had not met its burden to demonstrate that Samsonite had “minimum contacts” with the State of Texas to satisfy the first prong of International Shoe. Id. at *5. Although Swissdigital pointed to the Quadrion product line, Samsonite’s online store, its subsidiaries, and Amazon.com, Swissdigital failed to show that any of these activities were directed to Texas residents. Id. The court noted that while Amazon has a presence in Texas, Swissdigital had failed to present any evidence that tied Amazon’s Texas presence to the accused products or any activity relevant to the lawsuit. Id. The court found that Swissdigital’s allegation of contact amounted to nothing more than a “bare formulaic accusation” that is insufficient to support personal jurisdiction. Id. (quoting AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358 (Fed. Cir. 2012)). Furthermore, the mere existence of an alleged infringer’s website, by itself, is insufficient to show minimum contacts with the forum. Id. (citing NexLearn, LLC v. Allen Interactions, Inc., 859 F.3d 1371, 1378 (Fed. Cir. 2017)). Thus, the alleged contacts at most proved contact with the U.S. but did not show specific contacts with Texas. Id. 

The court also found that Swissdigital has not shown direction or control by Samsonite over its subsidiaries or third parties such that their contacts with Texas could be attributable to Samsonite. Id. at *6. Swissdigital had failed to proffer evidence that showed Samsonite’s control over its subsidiaries exceeded “normal parent-subsidiary control.” Id. (citing Dalton v. R&W Marine, Inc. 897 F.3d 1350, 1363 (“[T]he mere existence of a parent-subsidiary relationship will not support the assertion of jurisdiction over a foreign parent[.]”)). Finally, the court noted that Swissdigital made only a brief reference to the traditional notions of fair play and substantial justice prong. Id. Accordingly, the magistrate judge recommended that the case be dismissed without prejudice and that jurisdictional discovery was moot and should be denied. Id.