Texas Round-Up: February 2025

This post summarizes some of the significant developments from the Texas District Courts for the month of February 2025.

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Multimedia Technologies Pte. Ltd. v. LG Electronics Inc. and LG Electronics USA, Inc., No. 2:22-cv-00494-JRG-RSP (E.D. Tex. Feb. 3, 2025) — motion for summary judgment granted re: two asserted patents

Defendants LG Electronics Inc. and LG Electronics USA Inc. filed a motion for summary judgment of ineligibility pursuant to 35 U.S.C. § 101 relating to all 10 asserted patents. In their motion, the defendants argued that all asserted claims embody an abstract idea: “receiving, analyzing, and presenting data or information.” On January 6, 2025, Magistrate Judge Payne issued a report and recommendation granting the defendants’ motion as to the asserted claims in U.S. Patent Nos. 9,237,291 and 9,185,325, but otherwise denying the defendants’ motion for summary judgment as to the other eight asserted patents.

The claims in the '291 patent generally relate to a search tool within a smart TV interface that remembers past user searches and provides search results from multiple sources, including internet sites. The plaintiff first argued that independent Claim 9 was not directed to a search tool per se, but rather to an improvement to a user interface, which is improved by the presence of a search tool that helps users locate desired programing quickly and efficiently. In rejecting this argument, Judge Payne found that “the claim language does not recite any specific structure or limitation to the search tool with respect to the user interface” and that “merely taking an abstract idea and presenting it through an interface does not make it non-abstract.” The plaintiff also argued that Claim 9 was not abstract because the search history that the search tool provided included prior searches from a variety of sources, including external content sources, such as the internet. Judge Payne found that the idea of content coming from different sources was analogous to a librarian making suggestions based on the prior searches or check outs of books, movies, or boardgames. Further, the court noted that the potential “external content sources” contain minimal differences from a librarian stating that the individual previously inquired about items on loan at the library (items external to a library’s catalogue but that the librarian still recalls an individual asking about previously). Accordingly, Judge Payne found that Claim 9 is directed to an abstract idea, and therefore, fails Alice step 1. Because the plaintiff’s step 2 arguments were unsupported and conclusory, Judge Payne found that Claim 9 did not recite any inventive concept or technical improvement. For similar reasons, dependent Claim 10 was also found to be directed to ineligible subject matter.

The claims of the ’325 patent generally relate to sorting video-on-demand content based on whether the user has watched, partially watched, or not watched content. Judge Payne found this sorting process to be “analogous to an individual sorting books into one of three piles based on whether the book has a bookmark at the very front, middle, or at the end.” Consequently, Judge Payne found that asserted Claim 1 amounted to nothing more than a longstanding human practice now done in computerized form. Judge Payne also found Claim 1 to be directed to displaying information like those in Electric Power Group and to organizing information based on classifications like those in TLI. Ultimately, he found that the combination of two abstract ideas does not render an abstract idea less abstract. Once again, because the plaintiff’s step 2 arguments were unsupported and conclusory, Judge Payne found that Claim 1 did not recite any inventive concept or technical improvement.

Following objections by both Multimedia and LG, Judge Gilstrap agreed with the reasoning provided in Judge Payne's report and recommendation and concluded that the objections by the parties failed to show that Judge Payne's report and recommendation was erroneous. Consequently, Judge Gilstrap adopted the report and recommendation and granted the defendants’ motion for summary judgment of ineligibility under § 101 as to the asserted claims in the '291 and '325 patent, but otherwise denied the defendants’ motion on all other grounds.

Force MOS Technology Co, Ltd. v. ASUSTek Computer, Inc., No. 2-22-cv-00460-JRG (E.D. Tex. Feb. 4, 2025) — motion for summary judgment granted finding that plaintiff did not lack standing

On January 22, 2025, Judge Gilstrap denied defendant ASUSTek Computer Inc.’s motion for summary judgement for lack of standing in a patent infringement case filed by plaintiff Force MOS Technology Co. Ltd.

In its motion, ASUSTek claimed that the original inventor, Dr. Fwu-Iuan Hshieh, assigned the ’409 patent’s rights to Force-MOS Technology Corp. (KY), a non-existing entity, and thus, that the assignment was void. ASUSTek also argued that the 2009 patent assignment agreement transferring rights to the plaintiff was invalid because it lacked signatures from all required supervisors under Taiwanese law.

The court found that, despite an error in naming the assignee as to Force-MOS Technology Corp. (KY), an entity that did not exist, the extrinsic evidence supported that the intended assignee was Force-MOS Technology Corp. (Cayman Islands). The court also found the 2009 patent assignment agreement to be effective because the plaintiff’s key supervisor signed the agreement and the plaintiff’s only other “supervisor,” Dr. Ming-Tao Chung, stated in a declaration that he was aware of and agreed to the signing of the patent assignment agreement. Since the plaintiff had at least one exclusionary right to the ’409 patent at the time of filing, the court denied ASUSTek’s motion for summary judgment for lack of standing and found that the plaintiff had constitutional standing at the time it filed suit. That said, it gave ASUSTek two days to file a response on why it should not grant summary judgment in favor of Force MOS on the standing issue.

On February 4, 2025, Judge Gilstrap addressed ASUSTek’s response to the court’s January 22, 2025, order concerning the plaintiff’s standing to assert the’409 patent. In its response, ASUSTek argued that there was a genuine dispute of material fact regarding whether Force MOS had standing to assert the ’409 patent. Specifically, ASUSTek argued that a factual dispute existed regarding the declaration of Dr. Ming-Tao Chung.

After considering ASUSTek’s response, the court found that a genuine dispute of material fact existed as to whether Dr. Fwu-Iuan Hshieh in 2006 assigned his rights in U.S. patent application No. 11/633,366, which issued as the ’409 patent, to Force MOS Technology Co., Ltd. (Cayman Islands). However, because ASUSTek abandoned its arguments in the response that Force MOS
Technology Co., Ltd. (Cayman Islands) did not assign the ’366 application to the plaintiff in the 2009 patent assignment agreement, the court found that there was no genuine dispute of material fact that the 2009 patent assignment agreement transferred the ’366 application to the plaintiff for the reasons set forth in the court’s January 22, 2025, order. Accordingly, the court granted summary judgment in the plaintiff’s favor as to the 2009 patent assignment agreement alone, leaving an open question of material fact as to whether Dr. Hshieh assigned the ’366 application to Force MOS Technology Co., Ltd. (Cayman Islands) in 2006.

Huwais IP Holdings et al. v. Dr. Cesar Guerrero Facial and Oral Surgery PLLC, No 4:24-cv-04433 (S.D. Tex. Feb. 20, 2025) — granting plaintiff’s motion for default judgment and permanent injunction

On January 11, 2025, the court entered a default against the defendant, and on January 22, 2025, plaintiff Huwais IP Holdings LLC filed a motion for default judgment and permanent injunction against the defendant. In their motion, the plaintiffs sought a default judgment following the defendant’s failure to respond to both a demand letter and the complaint alleging infringement of multiple claims of Versah’s patents. Specifically, Versah’s complaint focused on Guerrero’s use of a device called a “Bone Clock,” which presented different sized burs or drills used by dental professionals to drill holes into a patient’s jawbone. Although the complaint did not contain a claim chart, one was included with the plaintiff’s motion.

To support their request, the plaintiffs argued that:

• A default judgment was warranted because no material facts were at issue because Guerrero PLLC failed to respond to the complaint and so admitted all allegations other than the amount of damages
• Guerrero PLLC will not be substantially prejudiced because it was given sufficient time and notice to appear and contest the allegations but chose not to
• There was no evidence of mistake or excusable neglect that resulted in the default
• The judgment was not harsh because the plaintiff was only seeking equitable relief in the form of an injunction and not monetary damages
• The defendant had not filed a motion to set aside the default

To establish the four factors required for an injunction, the plaintiffs alleged that:

1. They sustained irreparable injury from a competitor who was infringing on their patent rights to a specific dental technology
2. Monetary relief would not be sufficient because the damage to Versah’s market and reputation could not be fully compensated with money
3. The defendant would not suffer significant harm if enjoined because it already stopped marketing the infringing technology on some social media platforms
4. There was a public interest in enforcing patent rights

On February 20, 2025, Judge Ellison granted Versah’s motion for default judgment; ruled that the defendant infringed the 10 patents asserted by Versah; and issued a permanent injunction prohibiting the defendant from manufacturing, selling, distributing, marketing, or using any osseodensification bur (such as the “Bone Clock”) that is the same as or substantially similar to Versah’s patented technology and from circumventing the injunction through minor modifications to the infringing product. The court also ordered that the injunction applied equally to the defendant’s officers, agents, employees, attorneys, and any affiliated persons who were aware of the court order.

Monterey Research LLC v. Renesas Electronic Corporation, Denso Corporation, and Denso International America Inc., No. 2:24-cv-00238-JRG (E.D. Tex. Feb. 24, 2025) — defendant’s motion to sever and say denied

Monterey filed a patent infringement suit against the defendants, alleging that defendant Denso’s incorporation of Renesas chips into its products infringes four patents. Denso and Renesas filed a motion to sever and stay Monterey’s claims against Denso pending resolution of the case against Renesas. Specifically, the defendants argued that the case should be stayed under the customer-suit exception, which allows courts to defer litigation against a customer when the claims are based on the manufacturer’s product. The defendants also argued that staying the case against Denso would promote judicial efficiency.

In denying the defendants’ request, the court found that the customer-suit exception generally applies when a manufacturer and customer are seeking to sever to allow lawsuits to continue in different forums. Here, since, Denso and Renesas were co-defendants in the same case and were not seeking to transfer a portion of the case to a different forum, the court found that a severance and stay was not justified under the customer-suit exception. Furthermore, the court found that the traditional factors considered in determining whether to stay a lawsuit did not weight in favor of a stay here. Specifically, the court found factor one to weight in favor of the plaintiff because staying the case would prejudice the plaintiff by delaying Monterey’s claims against Denso and might require separate trial, which would increase litigations costs. Next, it found factor two to be neutral because staying the case may narrow trial issues but would not resolve all claims. Finally, it found that factor three, while slightly favoring a stay because the case was still in its early stages, did not outweigh the other considerations. Ultimately, the court denied the defendants’ motion to stay and sever.

Auth Wallet LLC v. Amarillo National Bank, No. 24-CV-00064-DC (W.D. Tex. Feb. 28, 2025) — defendant’s motion to strike plaintiff’s second amended complaint and dismiss its first amended complaint granted

Defendant Amarillo National Bank filed a motion to strike plaintiff Auth Wallet’s second amended complaint, as well as a motion to dismiss the plaintiff’s first amended complaint for failure to state a claim upon with relief can be granted. The court granted the defendant’s motions.

First, the court struck the plaintiff’s second amended complaint pursuant to Federal Rule of Civil Procedure 15(a) because the plaintiff failed to seek leave from the court before filing its second amended complaint and the defendant did not consent to its filing.

Next, the court dismissed the plaintiff’s first amended complaint because it did not plausibly allege direct, indirect, or willful infringement of the asserted patent — U.S. No. 8,099,368. The court noted that the plaintiff failed to plead a plausible claim for direct infringement because it omitted key claim elements from its allegations. Specifically, the plaintiff did not allege that the defendant performed all the steps of the patented method, including “generating a transaction indication message,” in Claim 1, and also did not allege that the elements of “retrieving” and “multiple payment instruments” in Claim 21 were met. The court also dismissed the plaintiff’s indirect infringement claims for lack of factual support. Specially, the court found that the plaintiff merely recited the legal elements of inducement and contributory infringement and made conclusory allegations that the defendant infringes without providing factual allegations as to who and how the defendant allegedly induced others to infringe or contributed to others’ infringement. Finally, because the court found the plaintiff’s claims for direct and indirect infringement to be insufficient, it also concluded that the plaintiff’s claim for willful infringement, without a plausible claim for infringement to begin with, was also insufficient.

Ultimately, the court dismissed the plaintiff’s claim without prejudice to replead and gave the plaintiff 14 days to refile its complaint.