Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 1 of 16
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
`
`Civil Action
`No: 1:15-cv-00319-AT
`
`Civil Action
`No. 1:16-cv-02690-AT
`
`EMERSON ELECTRIC CO.,
`FISHER-ROSEMOUNT SYSTEMS,
`INC., and ROSEMOUNT INC.,
`
`Plaintiffs,
`
`v.
`
`SIPCO, LLC, and
`IP CO, LLC (d/b/a INTUS IQ),
`
`Defendants.
`
`SIPCO, LLC, and
`IP CO, LLC (d/b/a INTUS IQ),
`
`Plaintiffs,
`
`v.
`
`EMERSON ELECTRIC CO.,
`EMERSON PROCESS
`MANAGEMENT LLLP, FISHER-
`ROSEMOUNT SYSTEMS, INC.,
`ROSEMOUNT INC., BP p.l.c., BP
`AMERICA, INC., and BP AMERICA
`PRODUCTION COMPANY,
`
`Defendants.
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
`
`Civil Action
`No: 1:15-cv-00319-AT
`
`Civil Action
`No. 1:16-cv-02690-AT
`
`EMERSON ELECTRIC CO.,
`FISHER-ROSEMOUNT SYSTEMS,
`INC., and ROSEMOUNT INC.,
`
`Plaintiffs,
`
`v.
`
`SIPCO, LLC, and
`IP CO, LLC (d/b/a INTUS IQ),
`
`Defendants.
`
`SIPCO, LLC, and
`IP CO, LLC (d/b/a INTUS IQ),
`
`Plaintiffs,
`
`v.
`
`EMERSON ELECTRIC CO.,
`EMERSON PROCESS
`MANAGEMENT LLLP, FISHER-
`ROSEMOUNT SYSTEMS, INC.,
`ROSEMOUNT INC., BP p.l.c., BP
`AMERICA, INC., and BP AMERICA
`PRODUCTION COMPANY,
`
`Defendants.
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 2 of 16
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`SIPCO, LLC AND IP CO, LLC’S REPLY
`IN SUPPORT OF THEIR MOTION TO TRANSFER VENUE
`
`Defendants, SIPCO LLC and IP CO, LLC (together “SIPCO”) hereby
`
`submit this reply in support of their Motion to Transfer Venue, which was filed
`
`(provisionally sealed) on August 2, 2016 (Ga. Dkt. 111), 1 and refiled (unsealed) on
`
`August 12, 2016 (Ga. Dkt. 118). For the reasons set forth below, SIPCO
`
`respectfully requests the Court to grant this motion.
`
`I
`
`ARGUMENT
`
`A.
`
`Venue is “plainly proper” in the Eastern District of Texas.
`
`Emerson and BP admit on page 4 of their Opposition that the Eastern
`
`District of Texas is an appropriate venue for Emerson’s Declaratory Judgment
`
`Action. (Ga. Dtk. 115 at. 4.) Accordingly, there is no dispute that the first prong of
`
`the 28 U.S.C. §1404(a) transfer analysis has been satisfied.2 See Pro Sports Inc. v.
`
`1 “Ga. Dkt.” refers to the case originally filed in this Court by Emerson, bearing
`Docket No. 1:15-cv-00319-AT. “Tex. Dkt.” refers to the case originally filed in the
`Eastern District of Texas by SIPCO, which was transferred to this Court on July
`26, 2016 and now bears Docket No. 1:16-cv-02690-AT.
`2 This fact distinguishes this case from the IP CO. LLC v Tropos Networks, Inc.,
`Order that Emerson and BP mention on page 4 of their joint opposition. (Ga. Dkt.
`115 at 4; Toohey Decl., Ex. B.) In the Tropos case, the Court determined that the
`“might have been brought” first prong of §1404(a) transfer analysis had not been
`met. (See Ga. Dkt. 115; Toohey Decl., Ex. B at 5.)
`
`2
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 3 of 16
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`West, 639 F. Supp. 2d 475, 482 (D.N.J. 2009); Viam Corp. v. Iowa Export-Import
`
`Trading Co., 84 F.3d 424, 430 (Fed Cir. 1996); see also Avocent Huntsville Corp.
`
`v. Aten Int’l Co., 552 F.3d 1324, 1334 (Fed. Cir. 2008) (noting that “judicial or
`
`extra-judicial patent enforcement within the forum” will support jurisdiction there).
`
`B.
`
`Emerson and BP infringe the asserted patents in the Eastern
`District of Texas.
`
`Emerson has facilities in the Eastern District of Texas and sells the accused
`
`Smart Wireless products within that judicial district. Emerson does not dispute
`
`these facts. BP does not dispute that it operates more than 800 well heads in the
`
`Eastern District of Texas. BP admits, through its answer and supplemental answer
`
`to Interrogatory No. 5, that it has five (5) facilities in East Texas that utilize the
`
`accused Smart Wireless products. (See Cronin Decl., Ex. A, Ans. to Int. No. 5; Ex.
`
`B, Supp. Ans. to Int. No. 5.) SIPCO’s joint infringement claims arise, in part, out
`
`of BP’s deployment and use of the accused Smart Wireless products at BP’s five
`
`(5) East Texas facilities. No known facts indicate that the same is true within the
`
`State of Georgia.3 Accordingly, the Eastern District of Texas clearly is a proper
`
`3 These facts distinguish this case from the SIPCO, LLC v Control4 Corp. Order
`that Emerson and BP cite on page 4 of their opposition. (Ga. Dkt. 115 at 4; Toohey
`Decl., Ex. C.) In the Control4 Order, the Texas court had already analyzed the
`
`3
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 4 of 16
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`venue for all claims in both cases.
`
`C.
`
`BP’s infringement in the Eastern District of Texas is substantial.
`
`BP’s Supplemental Answer to Interrogatory No. 5 admits that it has 24
`
`Smart Wireless devices in East Texas. (See Cronin Decl., Ex. B, Supp. Ans. to Int.
`
`No. 5.) That number of devices is on par with BP’s initial deployment of 15
`
`devices at the “Refinery of the Future” in Cherry Point, Washington. (See Cronin
`
`Decl., Ex. C, Smart Wireless Applications.) It is also on par with BP’s later
`
`deployment of a total of 35 devices at its Cherry Point refinery. (Id.)
`
`In an article discussing the benefits of deploying the Smart Wireless
`
`products on such a scale, Mark Howard, Commercial Technology Manager at BP,
`
`is quoted as saying:
`
`future
`refinery-of-the
`for
`enabler
`an important
`is
`“Wireless
`technologies.” (Cronin Decl., Ex. D, Wireless Now, at 3); and “It
`helps us deploy the sort of instrumentation, sensors and analytical
`devices that we need for condition monitoring to support predictive
`maintenance, tracking feedstock through the value chain and a host of
`other applications. Wireless is a very important vehicle for getting
`instrumentation into places where wired instrumentation would be too
`expensive or, frankly, not very practical.” (Id. at 3-4.)
`
`§ 1404(a) transfer factors and transferred the case to this judicial district. (Ga. Dkt.
`115; Toohey Decl., Ex. C at 2.) In this case, the Texas court determined which case
`is “first-filed.” (Tex. Dkt. 98 at 8-9). This Court is addressing the § 1404(a)
`transfer factors for the first time.
`
`4
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 5 of 16
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`Accordingly, any attempt by BP or Emerson to downplay BP’s deployment of
`
`Smart Wireless devices in East Texas, or to suggest that the number of Smart
`
`Wireless devices deployed in East Texas is de minimis, is belied by the similar
`
`number of devices deployed at BP’s “Refinery of the Future” in Cherry Point,
`
`Washington, where BP enjoys significant benefits from such deployment. (See
`
`Cronin Decl., Ex. C, Smart Wireless Applications.)4
`
`D.
`
`Emerson and BP’s collateral attack on SIPCO’s joint
`infringement allegations should be disregarded.
`
`Neither Emerson nor BP have moved to dismiss SIPCO’s joint infringement
`
`allegations pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
`
`Instead, Emerson and BP have answered the allegations, served non-infringement
`
`and invalidity contentions and participated in the Markman process.5 Accordingly,
`
`4 BP’s document production to date consists of a total of three contracts.
`Furthermore, BP will not allow SIPCO’s expert witness to inspect BP’s facilities in
`East Texas or elsewhere (See Cronin Decl. Ex. E, Obj. and Resp. to SIPCO’s
`Requests for Entry Upon Land) SIPCO expects further discovery to shed light on
`BP’s representations to this Court about the extent of its use of the Smart Wireless
`products and the fact that it is not a mere customer of Emerson.
`5 SIPCO alleges joint infringement in Counts III, VI and IX of the Second
`Amended Complaint filed in the Texas case. (Tex. Dkt. 105.) Further details about
`SIPCO’s joint infringement allegations are set forth in SIPCO’s infringement claim
`charts served in the Texas case. See claim chart for U.S. Patent No. 7,697,492 at
`
`5
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 6 of 16
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`their collateral attack on the sufficiency of SIPCO’s joint infringement allegations
`
`should be disregarded by the Court.
`
`E.
`
`SIPCO has a right to prove joint infringement and recover
`damages commensurate with such infringement.
`
`Counts III, VI and IX of the Second Amended Complaint set forth SIPCO’s
`
`joint infringement allegations with respect to Emerson and BP. (Tex. Dkt. 105.)
`
`SIPCO has a right to prove that Emerson and BP’s concerted efforts constitute an
`
`act of joint infringement. E.I. du Pont de Nemours & Co. v. MacDermid Printing
`
`Solutions, LLC, 525 F.3d 1353, 1362 (Fed. Cir. 2008) (holding that “each act of
`
`patent
`
`infringement gives rise to a separate cause of action”); Independent
`
`Pneumatic Tool Co. v. Chicago Pneumatic Tool Co., 96 F. Supp. 70, 74 (N.D. Ill.
`
`1951) (holding that “claims are independent inventions”). SIPCO also has a right
`
`to recover damages commensurate with such infringement—damages that are
`
`separate from damages that result from Emerson’s sales of the accused Smart
`
`Wireless products. To do otherwise would deprive SIPCO of the opportunity to
`
`seek redress for infringement of legitimate and actionable joint
`
`infringement
`
`pp. 6-8 for claims 8 and 9; claim chart for U.S. Patent No. 6,437,692 at pp. 8-14
`for claims 24-30 and pp. 30-41 for claims 55-64; and claim chart for U.S. Patent
`No. 6,914,893 at pp. 9-11 for claim 37, provided in camera for the Court’s review.
`
`6
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 7 of 16
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`claims.6 See E.I. du Pont de Nemours & Co., 525 F.3d at 1362; Independent
`
`Pneumatic Tool Co., 96 F. Supp. at 74.
`
`F.
`
`Joint infringement does not require joint development.
`
`Joint infringement of a patent claim does not require joint development of an
`
`accused device or system, as Emerson and BP seem to suggest. Akamai Techs.,
`
`Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (explaining
`
`that joint infringement exists where one entity controls another’s performance of
`
`method steps or where multiple parties form a joint enterprise). Accordingly, any
`
`notion that SIPCO must prove that Emerson and BP jointly developed the accused
`
`Smart Wireless products in order to prove joint infringement is incorrect as a
`
`matter of law. Nevertheless, BP’s involvement with Emerson in connection with
`
`the development of the accused Smart Wireless products may provide support for
`
`SIPCO’s joint infringement claims. It also clearly demonstrates that BP is not a
`
`mere customer, and that this case is not a mere “customer suit,” as outlined by the
`
`6 SIPCO should be afforded the right to prove that such activity results in joint
`infringement regardless of the identity of accused infringers involved. That a
`separate party other than BP might also engage in acts of joint infringement does
`not diminish or render unimportant the serious claims SIPCO has against Emerson
`and BP. SIPCO has a right to prove that such activity results in joint infringement
`regardless of the parties involved.
`
`7
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 8 of 16
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`Nintendo case.7 In re Nintendo of Am., Inc., 756 F.3d 1363 (Fed. Cir. 2014). To the
`
`contrary, the facts show that BP collaborated and/or partnered with Emerson in
`
`connection with the accused Smart Wireless products. Cellular Commc’ns Equip.
`
`LLC v. HTC Corp., No. 6:13-cv-507, at 17 (E.D. Tex. Mar. 27, 2015), ECF No.
`
`373 (noting that the downstream retailers were “likely to possess discoverable
`
`information relevant to the development” of the accused products in rejecting the
`
`customer-suit exception); cf. VirtualAgility, Inc. v. Salesforce.com, Inc., No. 2:13-
`
`cv-00011-JRG, 2014 WL 459719, at *2 (E.D. Tex. Jan. 31, 2014) (claims not
`
`peripheral where, based on collaboration with manufacturer, downstream
`
`7 Proof that BP is not a mere customer is set forth in SIPCO’s opposition to
`Emerson and BP’s Joint Motion to Sever and Stay the claims against the BP
`defendants (Tex. Dkt. 76 at 2-4, 6-10) and the exhibits submitted in connection
`therewith (See Tex. Dkt. 76-79, Declaration of Timothy J. Reppucci, Esq., ¶¶ 4-25,
`Exs. 1-22). Additional proof is set forth in SIPCO’s sur-reply (Tex. Dkt. 84 at 2-5.)
`Also, as set forth on page 4 of Exhibit D to the Cronin Declaration, John Berra,
`Chairman of Emerson Process Management, is quoted as saying “We value highly
`the collaboration with BP Refining Technology team” and “Smart Wireless was
`conceived through years of research and development
`that
`led to Emerson’s
`pioneering introduction to the market in 2006. Key in this effort was the parallel
`pioneering effort by BP in its trial mesh installation of Smart Wireless at Cherry
`Point in that same year. Our combined efforts have, I believe, moved the age of
`wireless forward at an accelerated pace.” (See Cronin Decl., Ex. D, Wireless Now
`at 4.)
`
`8
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 9 of 16
`
`defendant possessed sales information and “technical know-how” of the accused
`
`product).
`
`G. Witness convenience and location of the infringing activities favor
`transfer to the Eastern District of Texas.
`
`Because the center of the infringing activities is located in the Eastern
`
`District of Texas, the majority of the infringement-related party and non-party
`
`witnesses are located within or in close proximity to the Eastern District of Texas.
`
`Indeed, for the Texas-based party and non-party witnesses, driving to Court in the
`
`Eastern District of Texas is less expensive and more convenient than flying to
`
`Atlanta to attend Court.8 For the non-party witnesses located in California, the
`
`flight time to Dallas is shorter than the flight time to Atlanta.
`
`SIPCO is a small company and its employees will travel to Court in the
`
`Eastern District of Texas if requested by Emerson and BP. With respect to the non-
`
`party patent prosecution attorneys Emerson identified in its opposition, they are
`
`less important to the transfer analysis than the infringement witnesses.9 Ramsey v.
`
`8 Compulsory process is also available for many of such witnesses. The same is not
`true in Georgia.
`9 Indeed, Emerson did not allege inequitable conduct as a counterclaim until July
`14, 2016 (Tex. Dkt. 106), and SIPCO moved to dismiss the inequitable conduct
`
`9
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 10 of 16
`
`Fox News Network, LLC, 323 F. Supp. 2d 1352, 1356 (N.D. Ga. 2004) (noting that
`
`key witnesses are those which have information regarding liability, and thus,
`
`liability witnesses are accorded more weight in the transfer calculus).
`
`H.
`
`The interests of justice favor transfer to the Eastern District of
`Texas
`
`SIPCO respectfully submits that this case should proceed to trial as quickly
`
`as possible. To do otherwise will unfairly prejudice SIPCO. Indeed, not only is
`
`Emerson proposing to completely reset the Markman claim construction schedule
`
`and start the Markman process over from the beginning, Emerson is serially filing
`
`petitions for Inter Partes Review (“IPR”) in the United States Patent and
`
`Trademark Office (“PTO”) with respect to various SIPCO and IP CO patents. (See
`
`Cronin Decl., ¶ 10.) More particularly, 10 petitions have been filed since the filing
`
`of this action. Id. Managing multiple IPR proceedings concurrent with ongoing
`
`patent litigation is extremely expensive and time consuming for SIPCO. And
`
`appointing a special master to work on this case is equally expensive and time
`
`counterclaims for failure to state a claim upon which relief can be granted (Tex.
`Dkt. 116).
`
`10
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 11 of 16
`
`consuming.10 Coupling this with the sluggish pace at which Emerson has been
`
`producing responsive documents, SIPCO respectfully submits that if the Eastern
`
`District of Texas has the ability to resolve this matter swiftly and economically
`
`then it should be transferred to that venue, where jurisdiction exists over all
`
`parties.11 Medien Patent Verwaltung AG v. Warner Bros. Entm’t., Inc., No.1:10-
`
`CV-04119-CM-GWG, 2014 WL 1169575, at *2 (S.D.N.Y. Mar. 21, 2014)
`
`(indicating that “in addition to the axiom that ‘justice delayed is justice denied,’ it
`
`is a practical reality that the longer litigation lasts, the more expensive it will be”).
`
`I.
`
`Emerson’s choice of venue should be given little to no weight
`
`Emerson is the parent company of Emerson’s White Rodgers Division. (See
`
`Tex. Dkt. 105 at ¶ 82.) The White Rodgers Division took a license to one or more
`
`of the asserted SIPCO and IP CO patents in 2011. (Id. at ¶¶ 82-83.) In 2013,
`
`SIPCO was negotiating with Emerson—the parent of its licensee—at the time the
`
`Declaratory Judgment complaint was filed. (See Cronin Decl., Ex. F, Email from
`
`10 SIPCO is still considering the Court’s suggestion of utilizing a special master. It
`has grave concerns over
`the expense and potential delay associated with
`appointment of same. SIPCO welcomes the opportunity to discuss this with the
`Court.
`11 Furthermore, setting this case on a path to swift resolution may expedite an out-
`of-court settlement of this dispute.
`
`11
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 12 of 16
`
`John Groves to Candida Petite.) During the negotiations, John Groves of Emerson
`
`admitted that the Eastern District of Texas was an appropriate venue and SIPCO’s
`
`venue of choice, as shown below in an email he sent to Candida Petite of SIPCO:
`
`(See id.; see also Tex. Dkt. 76, Reppucci Decl., Ex. A.)
`
`Clearly, Emerson’s Declaratory Judgment Action was anticipatory in nature
`
`and usurped SIPCO’s venue of choice. Accordingly, Emerson’s choice of venue
`
`should be given little to no weight in the transfer analysis. Merial Ltd. v. Cipla
`
`12
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 13 of 16
`
`Ltd., 681 F.3d 1283, 1299 (Fed Cir. 2012) (holding that a court may decline to
`
`apply the first-filed rule and may consider many equitable factors in making this
`
`determination); Manuel v. Convergys Corp., 430 F.3d 1132, 1135-1136 (11th Cir.
`
`2005) (anticipatory nature of suit is “one equitable factor among many” to be
`
`considered).
`
`II.
`
`CONCLUSION
`
`Overall, the nine factors considered for venue transfer under Section 1404(a)
`
`clearly show that the most convenient and efficient choice is to send both cases to
`
`the Eastern District of Texas. Both actions “might have been brought” in that
`
`forum, that forum is clearly more convenient than this forum, and SIPCO now asks
`
`this Court to transfer both actions for the reasons stated above.
`
`13
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 14 of 16
`
`Dated: August 16, 2016
`
`Respectfully Submitted,
`
`/s/ J. Christopher Fox, II
`J. Christopher Fox, II
`Georgia Bar No. 272527
`Michael Coleman
`Georgia Bar No. 177635
`Thompson Hine LLP
`Two Alliance Center, Suite 1600
`3560 Lenox Road
`Atlanta, Georgia 30326
`Telephone: 404-541-2900
`Facsimile: 404-541-2905
`Chris.Fox@ThompsonHine.com
`Michael.Coleman@ThompsonHine.com
`
`Paul J. Cronin, Pro hac vice
`James C. Hall, Pro hac vice
`Timothy J. Reppucci, Pro hac vice
`Nutter, McClennen & Fish LLP
`155 Seaport Boulevard
`Boston, Massachusetts 02210-2604
`Telephone: 617-439-2000
`Facsimile: 617-310-9000
`pcronin@nutter.com
`jhall@nutter.com
`treppucci@nutter.com
`
`Counsel for SIPCO, LLC and IP CO, LLC
`
`14
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 15 of 16
`
`CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1
`
`The undersigned hereby certifies that this filing was prepared using one of
`
`the font and point selections approved by this Court
`
`in Local Rule 5.1C.
`
`Specifically, Times New Roman font was used in 14 point.
`
`/s/ J. Christopher Fox, II
`J. Christopher Fox, II
`Georgia Bar No. 272527
`
`15
`
`
`
`Case 1:16-cv-02690-AT Document 139 Filed 08/16/16 Page 16 of 16
`
`CERTIFICATE OF SERVICE
`
`This is to certify that I have this day served all counsel of record with a copy
`
`of the within and foregoing SIPCO, LLC and IP CO, LLC’s Reply Brief in Support
`
`of Their Motion to Transfer Venue using the Court’s ECF filing system which will
`
`automatically send a copy to all counsel of record registered to receive service
`
`thereby.
`
`Respectfully submitted this 16th day of August, 2016.
`
`J. Christopher Fox, II
`/s/
`J. Christopher Fox, II
`
`16
`
`
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