Case 2:22-cv-00303-JRG Document 70 Filed 03/29/23 Page 1 of 9 PageID #: 252
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`IN RE: TAASERA LICENSING LLC,
`PATENT LITIGATION
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`THIS DOCUMENT RELATES TO CIVIL
`ACTION NO. 2:22-CV-00303-JRG
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`CIVIL ACTION NO. 2:22-MD-03042-JRG
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is Taasera Licensing LLC’s (“Taasera”) Motion to Dismiss Complaint
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`for Declaratory Judgment for Lack of Subject Matter Jurisdiction, or in the Alternative, to Transfer
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`or Stay Under the First-to-File Rule, and to Dismiss for Failure to State a Claim (the
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`“Motion”). (Case No. 2:22-cv-303, Dkt. No. 14). On February 21, 2023, the Court held a
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`hearing regarding the Motion.
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` (Dkt. No. 64).
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` Having considered the Motion, the
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`subsequent briefing, the oral arguments, and for the reasons set forth herein, the Court
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`finds that the Motion should be GRANTED as set forth herein.
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`I.
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`BACKGROUND
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`On November 30, 2021, Taasera filed suit against Trend Micro Incorporated (“Trend Micro
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`Japan”) in Case No. 2:22-CV-00441-JRG (“EDTX Action”) for patent infringement in the Eastern
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`District of Texas (“EDTX”). (EDTX Action, Dkt. No. 1). Thereafter, on August 19, 2022, Taasera
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`filed its Amended Complaint for Patent Infringement (“Amended Complaint”), asserting
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`infringement of U.S. Patent Nos. 6,842,796 (the “’796 Patent”); 7,673,137 (the “’137 Patent”);
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`8,327,441 (the “’441 Patent”); 8,850,517 (the “’517 Patent”); 8,955,038 (the “’038 Patent”);
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`8,990,948 (the “’948 Patent”); 9,092,616 (the “’616 Patent”); 9,608,997 (the “’997 Patent”); and
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`9,923,918 (the “’918 Patent) (collectively, the “Asserted Patents”). (EDTX Action, Dkt. No. 33
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`Case 2:22-cv-00303-JRG Document 70 Filed 03/29/23 Page 2 of 9 PageID #: 253
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`¶¶ 7–16). On March 1, 2022, Trend Micro Japan and its subsidiary, Trend Micro, Inc. (“Trend
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`Micro U.S.”), filed a declaratory judgment of non-infringement as to the Asserted Patents against
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`Taasera in the Northern District of Texas (“NDTX”), but that case was dismissed shortly thereafter
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`on March 4, 2022, via a Notice of Voluntary Dismiss Without Prejudice filed by the Trend Micro
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`entities. Trend Micro Inc. v. Taasera Licensing LLC, No. 3:22-cv-00477-E (N.D. Tex. Mar. 1,
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`2022), (Dkt. No. 1; Dkt. No. 5). That same day, Trend Micro U.S., without Trend Micro Japan,
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`filed a similar action for declaratory judgment as to non-infringement of the Asserted Patents in
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`the NDTX, which was later transferred to the EDTX and is presently stylized as Trend Micro, Inc.
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`v. Taasera Licensing, LLC, No. 2:22-CV-00303-JRG (“NDTX Action”). Beginning on August 3,
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`2022, and for tag-along cases filed thereafter, the United States Judicial Panel on Multidistrict
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`Litigation (the “Panel”) centralized the above-captioned litigation in the EDTX and transferred the
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`following cases to the same (categorized by their original jurisdictions) for consolidated pretrial
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`proceedings:
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`• Eastern District of Texas:
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`o Taasera Licensing LLC v. Trend Micro Incorporated, Case No. 2:22-CV-00441-
`JRG
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`o Taasera Licensing LLC v. Check Point Software Technologies Ltd., Case No. 2:22-
`CV-00063-JRG
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`o Taasera Licensing LLC v. Fortinet Inc., Case No. 2:22-CV-00415-JRG
`o Taasera Licensing LLC v. Musrubra US LLC d/b/a Trellix, Case No. 2:22-CV-
`00427-JRG
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`o Taasera Licensing LLC v. Palo Alto Networks, Inc., Case No. 2:23-CV-00113-JRG
`• Northern District of Texas:
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`o Trend Micro, Inc. v. Taasera Licensing LLC, Case No. 2:22-CV-00303-JRG
`• Western District of Texas:
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`2
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`Case 2:22-cv-00303-JRG Document 70 Filed 03/29/23 Page 3 of 9 PageID #: 254
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`o Taasera Licensing LLC v. CrowdStrike, Inc., CrowdStrike Holdings, Inc., Case No.
`2:22-CV-00468-JRG
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`(NDTX Action, Dkt. No. 28 at 1, 3). On April 14, 2022, Taasera filed the instant Motion,
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`requesting that the Court (1) dismiss Trend Micro U.S.’s case for lack of subject matter
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`jurisdiction; (2) transfer this case to the EDTX under the first-to-file rule; and (3) dismiss this case
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`for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (EDTX Action,
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`Dkt. No. 14 at 1).
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`II.
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`LEGAL STANDARD
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`Application of the first-to-file rule is within a district court’s discretion. Futurewei
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`Technologies, Inc. v. Acacia Research Corp., 737 F.3d 704, 708 (Fed. Cir. 2013). “When
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`confronted with substantially similar declaratory judgment and patent infringement actions filed
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`in different jurisdictions, courts generally favor the forum of the first-filed action, whether or not
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`it is a declaratory action.” RPost Holdings, Inc. v. Sophos, Inc., No. 2:13-cv-959, 2014 WL
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`10209205, at *1 (E.D. Tex. Aug. 20, 2014) (citing Genentech, Inc. v. Eli Lilly & Co., 998 F.2d
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`931, 938 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277
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`(1995)). Courts typically enforce the first-to-file rule “absent sound reason for a change of forum.”
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`Genentech, 998 F.2d at 938; see also Elecs. For Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed.
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`Cir. 2005).
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`In determining whether to apply the first-to-file rule to an action, a court must resolve two
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`questions: (1) Are the two pending actions so duplicative or involve substantially similar issues
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`that one court should decide the subject matter of both actions; and (2) which of the two courts
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`should take the case? RPost Holdings, 2014 WL 10209205, at *1 (citing Texas Instruments, Inc.
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`v. Micron Semiconductor, Inc., 815 F. Supp. 994, 997 (E.D. Tex. 1993)). Once the “substantial
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`similarity” threshold is crossed, the first-to-file rule accords the first-filed court the responsibility
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`3
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`to determine which case should proceed. Id. “When two actions that sufficiently overlap are filed
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`in different federal district courts, one for infringement and the other for declaratory relief, the
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`declaratory judgment action, if filed later, generally is to be stayed, dismissed, or transferred to the
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`forum of the infringement action.” Futurewei Technologies, Inc. v. Acacia Research Corp., 737
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`F.3d 704, 708 (Fed. Cir. 2013) (citing Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir.
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`2012). However, under “considerations of judicial and litigant economy,” exceptions may be
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`justified, such as “the convenience and availability of witnesses, [the] absence of jurisdiction over
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`all necessary or desirable parties, . . . the possibility of consolidation with related litigation, or
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`considerations relating to the real party in interest.” Id. (citations omitted).
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`III. DISCUSSION
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`The Court initially takes up the parties’ dispute regarding the first-to-file rule. When the
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`Motion was originally filed, the NDTX Action had been transferred to the EDTX for pretrial
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`proceedings, and the parties’ briefing was directed to determining whether the first-to-file rule
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`applies and how the second-filed NDTX Action should proceed in regard to the first-filed EDTX
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`Action. (Dkt. No. 14 at 12; Dkt. No. 21 at 9). In a post-consolidation, supplemental brief, Taasera
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`argues that “if transfer [to the EDTX] is found to not be appropriate, dismissal is still within the
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`authority of the MDL court.” (Dkt. No. 53 at 3). This Court must still determine whether the first-
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`to-file rule applies, and if so, how the EDTX and NDTX Actions should each proceed.
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`Taasera asserts that the EDTX Action is the first-filed action, arguing that it filed the EDTX
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`Complaint on November 30, 2021, before Trend Micro U.S.’s NDTX Complaint on March 4,
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`2022. (Dkt. No. 14 at 12). In Taasera’s view, the first-to-file rule does not require “complete
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`identity of parties” between both cases so long as the issues substantially overlap. (Id.). Taasera
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`therefore argues that the first-to-file rule applies since both the EDTX and NDTX Actions “center
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`4
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`Case 2:22-cv-00303-JRG Document 70 Filed 03/29/23 Page 5 of 9 PageID #: 256
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`on infringement of the exact same Accused Products” and Asserted Patents and the claims for
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`infringement and claims for declaratory judgment of non-infringement between the EDTX Action
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`and the NDTX Action, respectively, mirror each other. (Id. at 13). Taasera notes that “compelling
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`circumstances” may justify departure from applying the first-to-file rule, however, such a
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`determination is for the first-filed court to decide. (Id. at 13–14). Even so, Taasera argues, this is
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`not a case where (1) Trend Micro U.S.’s later-filed declaratory judgment action was anticipatorily
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`filed for a more favorable forum; (2) the first-filed action is in a court of a foreign country; (3)
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`there is an applicable forum selection clause; or (4) the convenience factors provide compelling
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`circumstances that warrant departing from the first-to-file rule. (Id. at 14).
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`Trend Micro U.S. responds that the first-to-file rule should not apply in light of
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`circumstances surrounding Taasera’s EDTX Action, which indicate intentional forum shopping.
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`(Dkt. No. 21 at 11). Relying on Emerson Process Management LLLP v. Wetro Lan, LLC, Trend
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`Micro U.S. argues that Taasera engaged in forum shopping by suing Trend Micro Japan in the
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`EDTX rather than suing Trend Micro U.S., the alleged direct infringer that is responsible for
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`implementing and selling the accused technology. (Id. at 12 (citing No. A-15-CA-416-SS, 2015
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`WL 11438109 (W.D. Tex. Sept. 2, 2015)). Trend Micro U.S. also argues that the first-to-file rule
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`should not apply given that it is a desirable or necessary party for which venue in the EDTX would
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`be improper. (Id. at 13). Trend Micro U.S. contends that Trend Micro Japan does not conduct
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`operations in the United States and Trend Micro U.S. controls all United States sales of the Trend
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`Micro products. (Id. (citing Nexon Am. Inc. v. Uniloc 2017 LLC, No. 19-1096-CFC, 2020 WL
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`3035647 (D. Del. June 5, 2020)). Trend Micro U.S. further contends that venue in the EDTX
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`under 28 U.S.C. § 1400(b) is improper and therefore the desirable party exception to the first-to-
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`file doctrine applies. (Id. at 14).
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`5
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`Taasera replies that, in the EDTX Action, it identified Trend Micro Japan as the direct
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`infringer responsible for making the Accused Products and providing them to Trend Micro U.S.
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`for sales in the United States. (Dkt. No. 25 at 9). Taasera disputes the application of Emerson,
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`arguing that it did not discuss forum shopping; it did not evaluate the first-to-file doctrine or any
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`exceptions thereto; and the facts are not analogous. (Id. at 10–11). Taasera argues that Trend
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`Micro U.S. is neither a necessary nor desirable party and Nexon “made clear that the deciding
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`factor for whether a party is desirable or necessary is based on development and manufacturing,
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`and that sales are not considered in the analysis.” (Id. at 11).
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`The Court finds that the EDTX and NDTX Actions are substantially similar and the first-
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`to-file rule applies. As this Court has noted, “A subsequent action that does not have complete
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`identity of the parties can still substantially overlap on the substantive issues of the first-filed
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`action, warranting dismissal or transfer.” AmberWave Sys. Corp. v. Intel Corp., No. 2:05-CV-321,
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`2005 WL 2861476, at *1 (E.D. Tex. Nov. 1, 2005) (citations omitted). The EDTX Action is the
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`first-filed action since it was filed in time prior to the NDTX Action. The EDTX and NDTX
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`Actions are largely the same because they involve the same Accused Products and Asserted
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`Patents. In fact, Trend Micro U.S. concedes that the claims for infringement against Trend Micro
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`Japan and the declaratory judgment claims of non-infringement substantially overlap. (Dkt. No.
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`21 at 8 (“In view of [Taasera’s] allegations in the Eastern District Action, [Trend Micro U.S.] filed
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`this action on March 4, 2022, seeking declaratory judgment of non-infringement as to the nine
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`patents asserted in the Eastern District Action.”)).
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`The Court concludes that Trend Micro U.S. fails to establish any basis that would warrant
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`departure from the first-to-file rule. Forum shopping typically applies where the first-filed suit
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`was anticipatory, and forum shopping is not dispositive of but is merely one factor in the entire
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`first-to-file analysis. Elecs. For Imaging, 394 F.3d at 1347 (noting that a district court may
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`consider a party’s intent to preempt another’s infringement suit, which is “merely one factor in the
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`analysis”); (Dkt. No. 21 at 11 (“[T]he forum shopping exception is often applied where the first-
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`filed suit is ‘anticipatory’ in nature . . . .”)). However, neither party argues that the other engaged
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`in forum shopping for purposes of an anticipatory filing. Relying on Emerson, Trend Micro U.S.
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`contends that forum shopping should be considered in a non-anticipatory context (Dkt. No. 21 at
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`11); however, Emerson is inapposite as it did not discuss forum shopping. 2015 WL 111438109,
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`at *1–2.
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`The Court further finds that Trend Micro U.S. is not a necessary or desirable party to the
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`EDTX Action. Nexon, the only case that Trend Micro U.S. relies upon, is inapplicable. 2020 WL
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`3035647 at *4. In Nexon, the court held that in a first-filed patent infringement case where the
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`only defendants were foreign parent companies, the American subsidiary was a “desirable if not
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`necessary party” because it “alone developed and manufactures the accused Launcher
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`technology.” Id. However, in this case, each claim for infringement in Taasera’s Amended
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`Complaint identifies Trend Micro Japan as the direct infringer of the Asserted Patents by “making
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`using, offering to sell, selling, and/or importing” the accused products. (EDTX Action, Dkt. No.
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`33 ¶¶ 34, 45, 56, 67, 82, 95, 111, 126, 140). In fact, in its Complaint, Trend Micro U.S. pleads
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`that “Taasera alleged that Trend Micro Japan infringed and continues to infringe one or more
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`claims of the [Asserted Patents] by making, selling, offering for sales, importing and distributing
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`and by actively inducing others to make, use, sell, offer to sell, and/or import products that
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`implement Taasera’s network security inventions.” (NDTX Action, Dkt. No. 1 ¶ 5 (emphasis
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`added)). Although Trend Micro U.S. contends that it is a necessary party to the EDTX Action
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`because it controls all U.S. sales of the Trend Micro products (Dkt. No. 21 at 13; see also Dkt. No.
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`7
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`Case 2:22-cv-00303-JRG Document 70 Filed 03/29/23 Page 8 of 9 PageID #: 259
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`1 ¶ 6), mere sales by themselves does not make Trend Micro U.S. a necessary party. See Nexon,
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`2020 WL 3035647, at *4 (considering only the development and manufacture of the accused
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`products in the necessary-or-desirable-party analysis). Trend Micro U.S. is neither desirable nor
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`necessary when its upstream parent company, Trend Micro Japan, that makes the accused products
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`is already a named party in the EDTX Action.1 (Dkt. No. 1 ¶ 6). The Court need not determine
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`whether venue under 28 U.S.C. § 1400(b) would be improper in the EDTX because Trend Micro
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`U.S. is not a necessary or desirable party to the EDTX Action.2
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`The first-to-file rule applies to the NDTX Action, and no equitable exception exists. In
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`light of the foregoing, the Court determines that efficient administration of the NDTX and EDTX
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`Actions are best effectuated by staying the later-filed NDTX Action. Futurewei, 737 F.3d at 708
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`(“When two actions that sufficiently overlap are filed in different federal district courts, one for
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`infringement and the other for declaratory relief, the declaratory judgment action, if filed later,
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`generally is to be stayed, dismissed, or transferred to the forum of the infringement action.”). The
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`second-filed NDTX Action is largely similar to the first-filed EDTX Action, and resolution of the
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`EDTX Action will therefore resolve the issues asserted in the NDTX Action. Accordingly, a stay
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`“will best conserve judicial resources and promote efficiency.” RPost Holdings, 2014 WL
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`1 “Trend Micro U.S. is a wholly owned subsidiary of Trend Micro America, Inc., and Trend Micro
`America, Inc. is a wholly owned subsidiary of Trend Micro Japan.” (Dkt. No. 1 ¶ 6).
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`2 In the Motion, then-pending in the NDTX, Taasera requests that, in the alternative, the NDTX
`Action be transferred to the EDTX under the first-to-file rule. (Dkt. No. 14 at 5). Trend Micro
`U.S. argues that “courts may also consider the traditional 28 U.S.C. § 1404(a) venue transfer
`factors when determining whether an exception to the first-filed case doctrine applies,” which in
`this case, the transfer factors weigh against transfer. (Dkt. No. 21 at 14, 15). The Court does not
`reach the application of the private and public factors under § 1404(a) given that the NDTX Action
`is now pending before this Court for consolidated pretrial proceedings. Further, the Supreme Court
`has held that 28 U.S.C. § 1407 “precludes a transferee court from granting any § 1404(a) motion.”
`Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 41 n.4 (1998).
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`8
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`Case 2:22-cv-00303-JRG Document 70 Filed 03/29/23 Page 9 of 9 PageID #: 260
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`10209205, at *3. In light of this Court’s stay of the NDTX Action, it does not reach those practices
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`of the Motion related to lack of subject matter jurisdiction or failure to state under Federal Rule of
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`Civil Procedure 12(b)(6).
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`IV. CONCLUSION
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`The Court finds that the Motion (Case No. 2:22-cv-303, Dkt. No. 14) should be and hereby
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`is GRANTED. Accordingly, Case No. 2:22-CV-00303-JRG is STAYED pending disposition of
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`Case No. 2:22-CV-00441-JRG on the merits or until subsequent order of this Court lifting
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`or modifying such STAY, whichever occurs first.
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`9
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`.
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`____________________________________
`RODNEY GILSTRAP
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 29th day of March, 2023.
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