Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 1 of 9
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`SIPCO LLC, and
`IP CO., LLC (d/b/a INTUS IQ)
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`Plaintiffs,
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`v.
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`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
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`
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
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`Civil Action No. 6:15-CV-907
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`Defendants.
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`BP P.L.C’S MOTION TO DISMISS FOR
`FAILURE TO STATE A CLAIM AND FOR MISJOINDER
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`Plaintiffs have filed this action alleging infringement of multiple patents by so-called
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`Emerson “Smart Wireless Solution” products. Defendant BP p.l.c. moves to dismiss the claims
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`asserted against it pursuant to Federal Rules of Civil Procedure Nos. 12(b)(6) and 21. Plaintiffs
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`have not and cannot plead that BP p.l.c. itself has purchased or used the “Smart Wireless
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`Solution” products at issue. (Dkt. 19). BP p.l.c. is a holding company that indirectly owns as
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`subsidiaries two of the other defendants: BP America Production Company and BP America,
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`Inc. BP p.l.c. apparently is included in the Complaint only because it has that indirect parent
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`relationship. (See Dkt. 19 at ¶9). The Complaint contains no allegation that BP p.l.c. engages in
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`independent business operations outside of the allegations made against BP America Production
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`Company and BP America, Inc. (See, e.g., Dkt 19 at ¶12). The latter two entities have answered
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`the allegations in the Complaint. (Dkt 49 and 52). No factually-supported allegations have been
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 2 of 9
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`made that BP p.l.c. has liability for the actions of either BP America Production Company or BP
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`America, Inc. Thus, the Plaintiffs have insufficiently pled a specific allegation of infringement
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`by BP p.l.c.
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`In addition, because BP p.l.c. is not itself alleged to have purchased or used the “Smart
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`Wireless Solutions” products, it shares no common question of law or fact arising from this
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`action with the other Defendants, and is therefore misjoined in this action. Fed. R. Civ. P. 20;
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`see also 35 U.S.C. § 299 (strictly limiting joinder in patent cases).
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`BP p.l.c. appears in this case specially and only for the limited purpose of filing this
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`motion.
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`FACTS
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`On October 16, 2015, Plaintiffs SIPCO LLC and IP CO., LLC filed the present action
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`against Defendants Emerson Electric Co., Fisher-Rosemount Systems, Inc., and Rosemount Inc.
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`alleging patent infringement based on the making, using, selling, offering for sale, and importing
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`of the accused “Smart Wireless Solutions” products that Plaintiffs allege “provide monitoring
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`and control of remote wireless devices in industrial environments.” (Dkt. 1 at ¶¶ 56, 72, 87, 102,
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`117, 131, 147, 161, 175, 189, 203).
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`After Defendants Emerson Electric Co., Fisher-Rosemount Systems, Inc. and Rosemount
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`Inc. (“Emerson Defendants”) moved to dismiss or transfer to a different, first-filed jurisdiction
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`on December 10, 2015 (Dkt. 10), Plaintiffs filed their First Amended Complaint to attempt to
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`beef up their Texas contacts by adding an Emerson customer identified as BP p.l.c., BP America,
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`Inc., and BP America Production Company (“BP Defendants”). (Dkt. 19).
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`The Amended Complaint alleges that BP p.l.c. is a public limited company with
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`headquarters in London, England. (Dkt. 19 at ¶9). BP America, Inc. is allegedly a Delaware
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 3 of 9
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`corporation and a subsidiary of defendant BP p.l.c. (Id. at ¶¶ 9 and 12). BP America Production
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`Company is allegedly a Delaware corporation and also a subsidiary of BP p.l.c. (Id.). Both BP
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`America, Inc. and BP America Production Company have answered the allegations in the
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`Complaint. (Dkt. 49 and 52).
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`In the Amended Complaint, Plaintiffs first define “BP” as the conglomerate of the three
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`separate, but related, BP Defendants. (Dkt. 19 at Preamble). Thereafter, all of the Counts that
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`apply to any of the three “BP” entities are grouped so as to apply to all of the BP entities. (E.g.,
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`Dkt. 19 at ¶¶ 101, 125, 149, 173, 191, 209, 227, 244, 262, 280, and 298). None of the allegations
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`in the Counts apply specifically to only the BP p.l.c. entity. (Dkt. 19).
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`In only one paragraph does the Amended Complaint even mention anything with respect
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`to the Movant per se. It does so in its introduction to BP p.l.c. in ¶9:
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`“9. BP p.l.c. is a British public limited company with its corporate
`headquarters in London, England, SW1Y 4PD. BP p.l.c.is the
`global parent company of the world-wide business operating under
`the “BP” logo. Defendants BP America, Inc. and BP America
`Production Company are wholly-owned subsidiaries of BP p.l.c.
`and are sufficiently controlled by BP p.l.c. so as to be BP p.l.c.’s
`agents in Texas. BP p.l.c. does substantial business in Texas,
`including within this judicial district, and may be served with
`process by serving its registered agent, C.T. Corporation System,
`at 350 N. St. Paul St., Suite 2900, Dallas, Texas 75201-4234.
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`(Dkt. 19 at ¶9). In other words, taking the allegations of the Amended Complaint as true for
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`purposes of this Motion, there is nothing alleged about BP p.l.c. that isn’t alleged against BP
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`America, Inc. and/or BP America Production Company, except that the latter two are
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`“controlled” by the former and are its “agents in Texas.” (Id.). That is, the conclusory
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`infringement allegations against BP p.l.c. are identical to the conclusory allegations against its
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`subsidiaries. (Dkt. 19 at ¶¶ 101, 125, 149, 173, 191, 209, 227, 244, 262, 280, and 298). The
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`Amended Complaint makes no attempt whatsoever to plead any facts specific to BP p.l.c. (Id.).
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 4 of 9
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`1. STANDARD OF REVIEW
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`When considering a motion under Rule 12(b)(6), the Court is obligated to presume that
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`all well-pleaded allegations are true, resolve all doubts and inferences in the plaintiffs’ favor, and
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`view the pleadings in the light most favorable to the plaintiffs. See Fitzgerald v. Barnstable Sch.
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`Comm., 555 U.S. 246, 249 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
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`However, the Court cannot accept as true bald assertions, conclusions, inferences, or legal
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`conclusions couched as facts. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009); Twombly, 550
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`U.S. at 555. The allegations contained within the complaint must be “plausible” and they must
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`be supported by sufficient facts that permit “the reasonable inference that the defendant is liable
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`for the misconduct alleged.” Id. 550 U.S. at 570; Iqbal, 556 U.S. at 678.
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`2. THE COMPLAINT FAILS TO STATE A CLAIM AGAINST BP P.L.C.
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`A cause of action for infringement arises under 35 U.S.C. § 271(a), which provides that
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`“whoever without authority makes, uses, offers to sell, or sells any patented invention ... during
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`the term of the patent therefor, infringes the patent.” The counts of Plaintiffs’ complaint are
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`deficient as they do not allege any meaningful identification of specific acts that constitute such
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`infringement within the United States by BP p.l.c. specifically. In the opening paragraph of the
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`Amended Complaint, Plaintiffs define three separate legal entities (BP, p.l.c, BP America, Inc.,
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`and BP America Production Company) collectively as “BP” (Dkt. 19 at Preamble), and then
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`proceed to allege that the collective defendant group “BP,” as defined, improperly uses or
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`imports the accused products. (Dkt. 19 at Preamble and ¶¶ 101, 125, 149, 173, 191, 209, 227,
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`244, 262, 280, and 298). Plaintiffs allege infringement by the collective BP entities through their
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`alleged use and/or importation of “infringing products sold by Emerson Electric, Emerson
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`Process Management, Fisher Rosemount Systems, and/or Rosemount.” (Dkt. 19 at ¶12).
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 5 of 9
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`Plaintiffs rely only upon that conclusion and do not allege any facts showing that BP p.l.c. has
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`used or imported the accused products.
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`In essence, Plaintiffs have alleged that the collective action of the three distinct BP
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`Defendants amounts to infringement without identifying what specific action BP p.l.c. has taken
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`beyond a conclusory allegation that it “controls” its subsidiary “agents,” the other two BP
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`Defendants. See Dkt. 19 at ¶9; Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir.
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`1983) (“Generally, our cases demand proof of control by the parent over the internal business
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`operations and affairs of the subsidiary in order to fuse the two for jurisdictional purposes…The
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`degree of control exercised by the parent must be greater than that normally associated with
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`common ownership and directorship.”) The conclusory allegations of parent “control” of a
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`subsidiary here do not adequately substitute for the need to plead infringement facts specific to
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`BP p.l.c. since the alleged “control” over the conduct by the subsidiaries is itself only conclusory
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`and unsupported by facts. See Tegal Corp. v. Tokyo Electron Co., 248 F.3d 1376, 1380 (Fed.
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`Cir. 2001) (a company has no affirmative obligation to stop its corporate affiliates from selling or
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`servicing infringing products in the absence of proof that it controlled the operations of those
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`affiliates); Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544, 552 (Fed. Cir.1990)
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`(“general rule that the corporate entity should be recognized and upheld, unless specific, unusual
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`circumstances call for an exception”); A. Stucki Co. v. Worthington Industries, Inc., 849 F.2d
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`593, 596–97 (Fed. Cir.1988) (in the absence of evidence showing that the parent company either
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`was an alter ego of the subsidiary or controlled the conduct of the subsidiary, a parent company
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`is not liable for direct infringement for mere inaction in the face of infringement by a subsidiary);
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`Jaffer v. Standard Chartered Bank, 301 F.R.D. 256, 263 (N.D. Tex. 2014) (“Plaintiffs must
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`allege sufficient facts to show the requisite degree of dominion and control needed to pierce the
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 6 of 9
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`corporate veil between parent and subsidiary”). Absent an allegation of the specific intent to
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`escape liability for a specific tort, the cause of justice does not justify disregarding the corporate
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`entity. See Manville, 917 F.2d at 552.
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`Because Plaintiffs have not asserted underlying facts supporting their conclusory
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`allegation of “control,” the court is not obligated to accept as true the proposition that BP p.l.c.
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`legally controls the activities of its subsidiary defendants or the activities of any business
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`ventures owned by the subsidiaries for purposes of this Motion. Given the context of this
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`litigation, where the subsidiaries BP America, Inc. and BP America Production Co. are alleged to
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`have a United States presence and have substantively answered the Plaintiffs’ allegations, there
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`is no hint of allegation that the U.K. parent BP p.l.c. is necessary to prevent an escape of liability.
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`Because the Amended Complaint does not sufficiently tie BP p.l.c. to the alleged acts of
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`infringement by the other two BP Defendants, Plaintiffs have not fulfilled their minimal
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`requirements for pleading BP p.l.c.’s infringement. See Twombly, 550 U.S. at 555.
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`For the same reason, Plaintiffs have also not sufficiently pled a theory of joint
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`infringement by BP p.l.c. either within the context of the BP subsidiaries or the Emerson
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`Defendants. Joint infringement exists if one party exercises “control or direction” over the entire
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`process such that every step is attributable to the controlling party, if one party’s actions are
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`attributed to the alleged infringer such that the alleged infringer becomes the single actor, or if
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`there is a joint enterprise comprising a joint enterprise agreement, common purpose, community
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`or pecuniary interest, and equal right to a voice in the direction of the enterprise. Akamai
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`Technologies, Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015); Muniauction,
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`Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2008) (citing BMC Res. Inc. v.
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`Paymentech, L.P., 498 F.3d 1373, 1380-81 (Fed. Cir. 2007)). None of the facts supporting those
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 7 of 9
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`joint infringement theories are pled here against BP p.l.c. As outlined above, Plaintiffs have not
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`pled the underlying facts supporting its conclusion that BP p.l.c. controls either of its subsidiaries
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`so as to create a parent-subsidiary joint infringement pool, as the Amended Complaint tries and
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`fails to do by only a simplistic, collective definition of “BP.” (See Dkt. 19 at Premble). Further,
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`BP p.l.c. and its subsidiaries are not presumed to be a “single actor” because “[i]t is a general
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`principle of corporate law deeply ingrained in our economic and legal systems that a parent
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`corporation ... is not liable for the acts of its subsidiaries.” United States v. Bestfoods, 524 U.S.
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`51, 61 (1998). Nor have Plaintiffs pled facts supporting the multiple elements (agreement,
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`purpose, common interest, and equal voice) required for any joint enterprise theory between BP
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`p.l.c. and its subsidiaries. Even further afield, Plaintiffs have not pled any facts (or for that
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`matter even any conclusions) of BP p.l.c. control/attribution/enterprise in relation to any of the
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`Emerson Defendants. “Conclusory allegations or legal conclusions masquerading as factual
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`conclusions will not suffice to prevent a motion to dismiss.” McZeal v. Sprint Nextel Corp., 501
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`F.3d 1354, 1356 (Fed. Cir. 2007) (citing Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th
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`Cir. 2002)). Plaintiffs have not sufficiently pled the control required for an allegation of joint
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`infringement by BP p.l.c.
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`Defendant BP p.l.c. should be dismissed because the Amended Complaint fails to state a
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`claim against it.
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`3. PLAINTIFFS MISJOINED BP P.L.C.
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`Fed. R. Civ. P. 20 and 35 U.S.C. ¶ 299 govern misjoinder of defendants. Rule 20(a)(2)
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`permits defendants to be joined only if the relief requested arises out “the same transaction,
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`occurrence, or series of transactions or occurrences,” and “any question of law or fact common
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`to all defendants will arise in the action.” 35 U.S.C. §299 adds that in a patent case, the same
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 8 of 9
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`transaction or occurrence requires that the defendants may be joined “only if” the defendants are
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`making, using, importing into the United States, offering for sale, or selling “the same accused
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`product or process.” Fed. R. Civ. P. 21 provides the remedy for misjoinder in that “the court
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`may at any time, on just terms, add or drop a party.”
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`BP p.l.c. requests that it be dismissed from this action because the Amended Complaint
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`contains no facts supporting the conclusory allegation that BP p.l.c. makes, uses, sells, offers for
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`sale or imports the accused products in the United States, separate from the allegations directed
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`to its subsidiaries. Additionally, Plaintiffs did not sufficiently plead agency control by BP p.l.c.
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`over its subsidiaries’ actions, as described above. Thus, the Amended Complaint fails to
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`adequately plead BP p.l.c.’s liability for its subsidiaries’ manufacture, use, importation, offers for
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`sale or sale in the United States of the accused products.
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`There is also no question that the dismissal of BP p.l.c. will be “on just terms” as Rule 21
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`indicates. Both of the BP subsidiaries are Defendants in this action and have answered the
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`accusations of the Amended Complaint. Tailoring this action to the proper defendant is per se
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`“just” and, indeed, failing to do so is the opposite of the justice required by Rule 21. Fed. R. Civ.
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`P. 21.
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`CONCLUSION
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`For the foregoing reasons, BP p.l.c respectfully requests that the Court dismiss this case
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`against it.
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`Case 1:16-cv-02690-AT Document 87 Filed 05/25/16 Page 9 of 9
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`Dated: May 25, 2016
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`Respectfully submitted,
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`__/s/_Donald L. Jackson
`Donald L. Jackson
`James D. Berquist
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON &
`GOWDEY, LLP
`8300 Greensboro Dr., Suite 500
`McLean, VA 22102
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`Melissa R. Smith
`GILLAM & SMITH LLP
`303 South Washington Ave.
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`Email: melissa@gillamsmithlaw.com
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`Attorneys for Defendant BP America, Inc..
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on this 25th day of May, 2016, a true and correct
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`copy of the foregoing document has been served via the Court’s ECF system to all counsel of
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`record.
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`/s/ Melissa R. Smith______________
`Melissa R. Smith
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