Case 6:12-cv-00799-JRG Document 108 Filed 02/10/14 Page 1 of 11 PageID #: 3290
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`C.A. No. 6:12-cv-799-LED
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`INVENSYS SYSTEMS, INC.,
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`v.
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`Plaintiff,
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`EMERSON ELECTRIC CO. and
`MICRO MOTION INC., USA,
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`and
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`Defendants.
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`MICRO MOTION INC., USA,
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`v.
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`Counterclaim-Plaintiff,
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`INVENSYS SYSTEMS, INC.,
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`Counterclaim-Defendant.
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`PLAINTIFF’S SURREPLY TO
`DEFENDANT EMERSON ELECTRIC CO.’S
`MOTION FOR SUMMARY JUDGMENT OF NON-INFRINGEMENT
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`Case 6:12-cv-00799-JRG Document 108 Filed 02/10/14 Page 2 of 11 PageID #: 3291
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`Defendant Emerson Electric Co.’s (“Emerson”) suggestion that it can escape liability for
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`infringement simply by having its agents do business under the name “Emerson Process
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`Management” (“EPM”), a concededly non-existent entity, is meritless. There is no legal
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`distinction between an unincorporated division and its parent company. See W. Beef, Inc. v.
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`Compton Inv. Co., 611 F.2d 587, 591 (5th Cir. 1980).
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`In addition, “EPM’s” sales
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`representatives, technicians, instructors, and others (including Jim Cahill) are Emerson’s agents,
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`and Emerson is liable for their infringement.1 Finally, Emerson’s numerous hearsay objections
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`are unfounded and irrelevant since Emerson itself has admitted the pertinent facts. Accordingly,
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`Emerson’s summary judgment should be denied. Alternatively, Invensys should be given
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`additional time for discovery.
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`I.
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`EPM’s Infringement Is Emerson’s Infringement.
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`A.
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`EPM Is Emerson.
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`Emerson has now unequivocally admitted that the EPM “business platform” “is not a
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`legal business entity of any type,” but merely a division of Emerson. Def.’s MSJ Reply at 3; see
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`also Def.’s MSJ Ex. 8 ¶ 3 (stating that “Emerson’s business is organized into five business
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`platforms,” including EPM). An unincorporated division of a corporation “is the corporation
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`itself.” W. Beef, 611 F.2d at 591. Since Emerson does not dispute that the sales, marketing,
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`instruction, and repair activities of EPM identified in Invensys’s opening brief constitute acts of
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`direct and indirect infringement, Emerson’s admission about EPM’s legal status should dispose
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`of Emerson’s summary judgment motion.2
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`1 Emerson alleges that Cahill is an employee of Emerson Process Management LLLP (“EPM
`LLLP”), a distinct legal entity.
`Invensys intends to seek leave to add EPM LLLP as a
`defendant in this case.
`2 Similarly, Invensys does not need to pierce the veil between EPM and Emerson because there
`is no corporate veil between EPM and Emerson. Notably, if Emerson had wanted to limit its
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`B.
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`EPM’s Representatives Are Emerson’s Agents.
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`The EPM sales representatives, technicians, and instructors who sell, repair, and provide
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`training on the accused Coriolis flowmeters are not acting on their own behalf.
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`Invensys has
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`presented sufficient evidence to at least raise a reasonable inference that those individuals are
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`agents of Emerson.3
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`Courts apply general principles of agency law in patent infringement cases.
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`See 5
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`DONALD S. CHISUM, CHISUM ON PATENTS § 16.06[1], 16-648 to 16-649. “Apparent authority . . .
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`is created by a person’s manifestation that another has authority to act with legal consequences
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`for the person who makes the manifestation, when a third party reasonably believes the actor to
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`be authorized and the belief is traceable to the manifestation.” RESTATEMENT (THIRD) OF
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`AGENCY § 3.03. The Restatement goes on to explain that the regular-looking appearance of
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`authority is the most significant aspect of agency for a business organization:
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`Apparent authority enables persons who interact with the organization to treat the
`agent’s act or statement as dispositive, without further inquiry directed elsewhere
`within the organization, in the absence of circumstances suggestive of self-dealing
`or other irregularity.
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`. . . .
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`. . . Most people proceed on many matters on the assumption that
`ordinary-looking instances of delegation are effective. For example, it is not
`necessary to see an exemplified resolution of the board of directors of a car-rental
`company reasonably to conclude that a counter agent has authority to bind the
`company to the rental agreement.
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`Id. at cmt. c.4
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`liability for the actions of the non-existent EPM “business platform,” it could easily have done
`so by creating a separately incorporated subsidiary, a technique it is obviously familiar with.
`3 Contrary to Emerson’s assertion, Invensys is not required to prove its claims to defeat
`summary judgment.
`4 Invensys also believes that further discovery will demonstrate that the various EPM agents
`also have actual authority to act on Emerson’s behalf, but the information necessary to prove
`actual authority is within Emerson’s control.
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`The facts show that third parties dealing with “EPM” representatives would view those
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`representatives as agents of Emerson, not Defendant Micro Motion, Inc. (“Micro Motion”) (or
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`any of Emerson’s other subsidiaries):
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` Emerson admits that many of its subsidiaries in addition to Micro Motion use
`the EPM name to market and sell their products. See Def.’s MSJ Reply Ex. 1
`¶¶ 4-5.
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` Emerson admits that EPM is a “business platform” with no legal existence
`that serves as an organizational unit within Emerson. See id. at 3; see also
`Def.’s MSJ Ex. 8 ¶ 3.
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` EPM sales representatives sell suites of products from a variety of Emerson
`subsidiaries. See Decl. of Robert Arias ¶ 5 (Ex. A to Pl.’s MSJ Resp.); see
`also Def.’s MSJ Reply at 4.
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` Customers purchasing products across a variety of EPM brands would receive
`a single purchase order from EPM, not separate purchase orders from the
`individual Emerson subsidiaries. See Arias Decl. ¶ 8 (Ex. A to Pl.’s MSJ
`Resp.).
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` Emerson owns the trademarked Emerson logo that is part of the EPM logo.
`See Pl.’s MSJ. Resp. Ex. P at 3. Micro Motion’s logo does not appear
`anywhere in the EPM logo.
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`Therefore, in their dealings with third parties EPM sales representatives would give every
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`impression that they are agents of Emerson, not one of Emerson’s many individual subsidiaries.
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`Simply put, this case is indistinguishable from the example of the car rental agent provided in the
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`Restatement: A potential customer negotiating with an “EPM” representative for the purchase of
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`Coriolis flowmeters as part of a suite of other Emerson products would naturally assume he was
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`dealing with an agent of Emerson. Nor would potential customers have any reason to believe
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`that EPM sales representatives are agents of any company other than Emerson. Thus, from the
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`perspective of the public and potential customers (as well as Invensys) EPM and Emerson as
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`interchangeable.
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`Moreover, Emerson’s own evidence proves that it has deliberately fostered the public
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`impression that EPM and Emerson are the same. Emerson has directed its subsidiaries to use the
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`EPM name for their marketing and sales activities. See Def.’s MSJ. Ex. 8 ¶ 6; Def.’s MSJ Reply
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`Ex. 1 ¶ 4. Emerson has never suggested that the use of the EPM name by its sales and service
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`representatives and instructors is unauthorized.
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`It also appears that Emerson benefits from the
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`use of the EPM name through increased brand recognition and sales. See Def.’s MSJ. Ex. 8 ¶ 6.
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`Emerson’s actions manifest its intent that third parties equate EPM with Emerson and believe
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`that “EPM” representatives are Emerson’s agents. Therefore, Emerson is liable for the
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`infringing acts of its “EPM” representatives.
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`II.
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`Cahill’s Marketing Activities Also Raise a Fact Issue on Indirect Infringement.
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`Emerson appears to take the position that the Emerson Process Experts blog operated by
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`Cahill is some sort of personal “fan” blog. See id. at 8. Given the professional quality of the
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`blog and its single-minded focus on promoting Emerson’s products, it seems doubtful that the
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`Emerson Process Experts blog is merely a personal blog Cahill maintains on his own time
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`without any compensation or involvement from Emerson. In any event, a jury could reasonably
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`infer from the nature of the Emerson Process Experts blog that Cahill operates it at Emerson’s
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`behest. This is all that is necessary to defeat Emerson’s summary judgment on Invensys’s claim
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`for inducement, and at a minimum, this evidence warrants further discovery.
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`Cahill’s disclaimer does not alter this analysis. As an initial matter, Cahill’s disclaimer
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`refers to EPM, not Emerson, and Emerson’s reliance on it is another tacit admission that
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`Emerson and EPM are the same. In addition, the fact that Emerson does not review or approve
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`Cahill’s articles before they are posted does not mean that Emerson has no control over the
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`Emerson Process Experts blog.
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`It seems unlikely that a post in which Cahill expressed a
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`negative “personal opinion” about an Emerson product would be allowed to remain on the
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`Emerson Process Experts blog.
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`III.
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`Emerson’s Objections to Invensys’s Summary Judgment Evidence Are Baseless.
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`A.
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`Arias’s Declaration Is Not Hearsay.
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`As an initial matter, Invensys acknowledges that ¶ 11 of Arias’s declaration was not
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`based on personal knowledge. This was an error, and Invensys withdraws ¶ 11 of Arias’s
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`declaration and its argument that the specific sale discussed in ¶ 11 is evidence of Emerson’s
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`infringement. See Pl.’s MSJ Resp. at 3-4, 11.
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`In the balance of his declaration, Arias states that he has purchased accused Coriolis
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`flowmeters from EPM representatives and that those EPM representatives (not Micro Motion
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`personnel) handled all stages of the transaction. See Arias Decl. ¶¶ 5-8 (Ex. A to Pl.’s MSJ
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`Resp.). Similarly, repair services were handled by EPM representatives. See id. at ¶ 9. Emerson
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`complains that these statements are hearsay. Emerson is wrong.
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`Most of Emerson’s complaints about Arias’s declaration actually relate to the legal
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`conclusions to be drawn from the facts he recites, not the evidence itself. See Def.’s MSJ Reply
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`at 4-5. As discussed in detail above, there is no distinction between Emerson and EPM, and
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`Emerson is liable for EPM’s infringement. See supra Part I. Thus, it is correct to refer to the
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`infringing acts of Emerson and EPM interchangeably.
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`Emerson also complains that Arias does not provide the names of
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`the EPM
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`representatives from which he purchased the accused Coriolis flowmeters or other details about
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`those transactions. Emerson has not challenged specific sales.
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`It has merely made a blanket
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`assertion that it does not sell the accused Coriolis flowmeters. Arias’s declaration negates this
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`blanket claim, which is all that is required to defeat Emerson’s summary judgment motion.
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`In
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`addition, Emerson’s objection is irrelevant since it has admitted that EPM sales representatives
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`sell both the accused flowmeters and products from other Emerson subsidiaries. See Def.’s MSJ
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`Reply at 4.
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`Moreover, as a result of his negotiations with EPM sales representatives Arias
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`successfully purchased accused Coriolis flowmeters for which he was invoiced by EPM.
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`Therefore, the EPM sales representatives with whom he dealt could not have been imposters
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`acting without Emerson’s knowledge and consent. Emerson necessarily accepted and acted on
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`the sales they solicited. Thus, their statements are admissions by a party opponent. See FED. R.
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`CIV. P. 801(d)(2).
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`Emerson’s objection to Arias’s statement that EPM certified technicians calibrate and
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`repair the accused Coriolis flowmeters is similarly baseless and irrelevant. Emerson’s own
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`website states that Emerson Certified Technicians provide service and support for Micro Motion
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`Coriolis flowmeters. See Pl.’s MSJ Resp. Exs. O & P.
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`B.
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`The Webpages Offered by Invensys Are Admissible.
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`Courts routinely hold that materials posted on a party’s own website constitute
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`admissions by a party opponent under Rule 801(d)(2).5 Emerson does not deny that it owns
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`“www2.emersonprocess.com,” which is plastered with the trademarked Emerson logo.
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`Accordingly, Invensys’s Exhibits O and P are admissions by a party opponent under Rule
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`802(d)(2).
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`5 See, e.g., Metcalf v. Blue Cross Blue Shield of Mich., No. 3:11-cv-1305-ST, 2013 WL
`4012726, at *10 (D. Or. Aug. 5, 2011); Rengo v. Cobane, No. C12-298 TSZ, 2013 WL
`3294300, at *1 n.1 (W.D. Wash. June 28, 2011); Adonai Commc’ns, Ltd. v. Awstin
`Investments, LLC, No. 3:10-CV-2642-L, 2011 WL 4712246, at *6 (N.D. Tex. Oct. 7, 2011);
`Ross v. Stranger, No. C 11-94-CW, 2011 WL 1431517, at *4 n.1 (N.D. Cal. Apr. 4, 2011);
`Greater New Orleans Fair Hous. Ctr. v. St. Bernard Parish, 648 F. Supp. 2d 805, 806 n.2
`(E.D. La. 2009); Masterson Mktg., Inc. v. Lotus Int’l, Inc., No. 04cv2133-LAB (BLM), 2008
`WL 667412, at *5 (S.D. Cal. Mar. 7, 2008); Van Westrienen v. Americontinental Collection
`Corp., 94 F. Supp. 2d 1087, 1109 (D. Or. 2000).
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`Cahill’s articles from the Emerson Process Experts blog are verbal acts that are not being
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`offered for the truth of the matter asserted. The significance of these documents is that they
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`show that Emerson promotes the sale of the accused Coriolis flowmeters. Whether the
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`substantive content of the articles is true or not is irrelevant. As discussed above, the contents of
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`the Emerson Process Experts blog itself supports a reasonable inference that
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`the blog is
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`maintained for Emerson’s benefit and at its request. See supra Part II. Therefore, Invensys’s
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`Exhibits H-L are admissible.
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`As to the remaining documents, most of the cases on which Emerson relies rejected
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`internet materials because of concerns about their authenticity, the source of the information, or
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`its reliability.6 None of those concerns are present in this case, however. Emerson does not deny
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`the authenticity of any of the web pages Invensys has cited or claim that the information
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`contained on those pages was posted by someone other than the authors listed. Finally, Emerson
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`does not appear to argue that these materials are untrue or inaccurate. Thus, most of the cases
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`Emerson cites are readily distinguishable.
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`In any event, any doubts about the admissibility of the remaining documents can be
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`easily resolved through discovery, which only highlights the importance of Invensys’s alternative
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`request under Rule 56(d).
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`In addition, even if these documents are excluded, Emerson’s
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`summary judgment motion should still be denied because the same information is contained in or
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`inferable from other materials Invensys has submitted (or Emerson’s admissions).
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`6 See Li v. Holder, No. 09-60551, 2010 WL 4368469, at *2 (5th Cir. Nov. 2, 2010) (Wikipedia);
`United States v. Jackson, 208 F.3d 633, 637-38 (7th Cir. 2000) (third-party website);
`VBConversions LLC v. Now Solutions, Inc., No. CV 13-853 RSWL (ANx), 2013 WL
`2370723, at *3 (C.D. Cal. May 30, 2013) (information alleged to be inaccurate); Tank v.
`Deutsche Telekom, AG, No. 11 C 4619, 2013 WL 1707954, at *2 (N.D. Ill. Apr. 19, 2013)
`(LinkedIn); Lewis v. Omni Indem. Co., No. 4:11-cv-715-MGL-TER, 2013 WL 4018598, at *1
`(D.S.C. Aug. 5, 2013) (factually inaccurate third-party website).
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`IV.
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`Alternatively, the Court Should Allow Additional Time for Discovery.
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`Even if the Court does not deny Emerson’s summary judgment motion outright, Invensys
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`should be allowed time for additional discovery. Emerson’s only real objection to Invensys’s
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`Rule 56(d) request
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`is that Invensys has not conducted discovery relating to Emerson’s
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`infringement with the dispatch Emerson would like. The discovery cut off in this case is still
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`months away, however, and this case involves many issues other than Emerson’s infringement.
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`In addition, Emerson’s own reply brief both eliminates a number of issues on which
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`Invensys had intended to take discovery while raising new issues it will need to investigate. For
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`example, Emerson’s admission that EPM is not a legal entity means that Invensys will no longer
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`need to take discovery on that subject. See Def.’s MSJ Reply Ex. 1 ¶ 6. Emerson’s brief also
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`provides previously unknown information about EPM LLLP’s involvement in marketing the
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`accused Coriolis flowmeters. For example, Cahill is apparently an employee of EPM LLLP. See
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`id. ¶ 7. In addition, it appears that EPM LLLP is actively involved in distributing and providing
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`training on the accused Coriolis flowmeters. See id. ¶ 15.
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`In light of this new information,
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`Invensys intends to seek leave to add EPM LLLP as a party to this suit and to take discovery
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`regarding its infringement.
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`Finally, Emerson’s reliance on Cormier v. Pennzoil Exploration & Production Co., 969
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`F.2d 1559 (5th Cir. 1992), is misplaced. In Cormier, the plaintiff had no meaningful discovery
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`plan and did not even bother to attend the scheduled hearing on the summary judgment motion.
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`See id. at 1561. Invensys has expressly set forth the discovery it needs. See Pl.’s MSJ Resp. at
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`17. Emerson does not suggest
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`that this information is unnecessary or irrelevant or that
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`Invensys’s discovery plan is too vague. Accordingly, Cormier is inapposite.
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`Case 6:12-cv-00799-JRG Document 108 Filed 02/10/14 Page 10 of 11 PageID #: 3299
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`CONCLUSION
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`For the foregoing reasons, and the reasons set forth in Invensys’s Response to Emerson’s
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`Motion for Summary Judgment of Non-Infringement, Emerson’s summary judgment motion
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`should be denied. Alternatively, the Court should give Invensys the opportunity to take
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`additional discovery from Emerson.
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`Dated: February 10, 2014
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`Respectfully submitted,
`
`/s/ Claudia Wilson Frost
`Claudia Wilson Frost
`State Bar No. 21671300
`Jeffrey L. Johnson
`State Bar No. 24029638
`Dawn M. Jenkins
`State Bar No. 24074484
`DLA PIPER LLP
`1000 Louisiana, Suite 2800
`Houston, TX 77002
`Telephone: 713.425.8400
`Facsimile: 713.425.8401
`Claudia.Frost@dlapiper.com
`Jeffrey.Johnson@dlapiper.com
`Dawn.Jenkins@dlapiper.com
`
`Nicholas G. Papastavros
`Daniel Rosenfeld
`DLA PIPER LLP
`33 Arch Street, 26th Floor
`Boston, MA 02110
`Telephone: 617.406.6000
`Facsimile: 617.406.6100
`Nick.Papastavros@dlapiper.com
`Daniel.Rosenfeld@dlapiper.com
`
`Todd S. Patterson
`DLA PIPER LLP
`401 Congress Ave., Suite 2500
`Austin, TX 78701-3799
`Telephone: 512.457.7017
`Facsimile: 512.721.2217
`todd.patterson@dlapiper.com
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`ATTORNEYS FOR PLAINTIFF
`INVENSYS SYSTEMS, INC.
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on February 10, 2014, all counsel of record who are
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`deemed to have consented to electronic service are being served with a copy of this document via
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`the Court’s CM/ECF system per Local Rule CV-5(a)(3). Any other counsel of record will be
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`served by facsimile transmission and/or first class mail.
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`/s/ Claudia Wilson Frost
`Claudia Wilson Frost
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