Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 1 of 11 PageID #: 9392
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`CAUSE NO. 6:12-CV-799
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`ORDER
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`INVENSYS SYSTEMS, INC.,
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`Plaintiff,
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`v.
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`EMERSON ELECTRIC CO. and
`MICRO MOTION INC., USA,
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`Defendants.
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`On November 12, 2014, the Court held a hearing on various motions. This Order
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`memorializes the Court’s rulings at the hearing.
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` The Court DENIES Defendants Emerson Electric Co. (“Emerson”) and Micro Motion
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`Inc., USA’s (“Micro Motion”) Motion for Leave to Supplement Invalidity Contentions
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`(Docket No. 163) for the reasons set forth below.
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` The Court DENIES AS MOOT Plaintiff Invensys Systems, Inc.’s (“Invensys”) Motion
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`to Strike Amended Invalidity Contentions (Docket No. 230).
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` The Court GRANTS-IN-PART and DENIES-IN-PART Invensys’ Motion to Compel
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`and for Sanctions (Docket No. 167).1 Emerson SHALL suspend its document
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`destruction policy with regard to the Emerson Process Management Group and Emerson
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`Process Management LLLP. Emerson SHALL search electronic documents held by the
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`Emerson Process Management Group and Emerson Process Management LLLP using
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`Invensys’ requested search terms. Emerson SHALL produce the resulting documents or
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`1 Prior to the hearing, the parties met and conferred and agreed to reduce the scope of this Motion. Docket No. 241.
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 2 of 11 PageID #: 9393
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`file a sworn statement confirming that all documents have already been produced.
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`Additionally, Defendants SHALL make Mr. Connor available to Invensys for a brief
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`telephonic deposition prior to trial to serve as a sponsoring witness for emails if
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`Defendants object to the authenticity of any email of which Mr. Connor is custodian.
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`Finally, the Court DENIES WITHOUT PREJUDICE Invensys’ request to allow a
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`forensic
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`investigator
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`to examine Defendants’ computer systems and electronic
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`documents. Further, the Court instructs the parties that it will revisit these issues when
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`considering whether this qualifies as an exceptional case.
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` The Court DENIES Defendants’ Motion to Compel the Production of the Dickson
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`Presentation (Docket No. 172) for the reasons set forth below.
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` The Court DENIES Defendants’ Renewed Motion to Transfer Venue (Docket No. 213)
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`for the reasons set forth below.
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` The Court STRIKES Defendants’ Motion to Strike Paragraphs of the Expert Report of
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`Dr. Rodriguez (Docket No. 240). The Court instructs Defendants to raise any concern
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`regarding Dr. Rodriguez’s theories in compliance with the Court’s Standing Order
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`Regarding Letter Briefs, Motions in Limine, Exhibits, Deposition Designations, and
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`Witness Lists.2
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`BACKGROUND
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`On October 22, 2012, Invensys filed suit against Micro Motion and Emerson for
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`infringement of patents related to Coriolis flowmeters. Docket No. 25 at 1. Coriolis flowmeters
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`are used to measure the mass flow rate of liquids in a variety of applications, such as the oil and
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`gas, refinery, and food and beverage industries. Id. Invensys manufactures Coriolis flowmeters
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`2 See The Honorable Leonard Davis Chief District Judge, U.S. District Court: Eastern District of Texas,
`http://www.txed.uscourts.gov/page1.shtml?location=info:judge&judge=7.
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`2
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 3 of 11 PageID #: 9394
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`using the patented technology at issue. Docket No. 26 at 2. Micro Motion develops and markets
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`devices that measure the flow, mass, density, temperature, and viscosity of various materials.
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`Docket No. 14 at 2–3. Emerson is Micro Motion’s parent company. Id. at 2.
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`ANALYSIS
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`1. Defendants’ Motion for Leave to Supplement Invalidity Contentions (Docket No. 163)
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`The relevant facts surrounding Defendants’ Motion are not in dispute. Defendants began
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`to investigate prior art in 2012. Docket No. 163 at 3. Defendants identified the prior art and
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`subsequently served their invalidity contentions. Id. at 1. Invensys narrowed the number of
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`asserted claims from 106 to 55. Docket No. 169 at 5. Defendants responded by electing asserted
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`prior art. Id. Defendants now seek leave to amend their invalidity contentions to include prior
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`art evidence they discovered in April 2014.
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`On April 22, 2014, Defendants’ counsel met with Mr. Maginnis, a Micro Motion
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`employee, to prepare him for a deposition. Docket No. 163 at 4. During the meeting, Mr.
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`Maginnis mentioned a “fishbowl” prototype that may have used digital signal processing similar
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`to the technology in this case. Id. at 4–5. Mr. Maginnis then investigated the fishbowl prototype
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`further and located a schematic in a file cabinet in his office. Docket No. 169 at 2. Earlier in this
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`litigation, Mr. Maginnis had performed a cursory search of the documents in the cabinet. Docket
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`No. 169-2, Ex. B at 10:25–12:23 (“Q. And did you look in that folder when you got the original
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`hold notice? A. I don’t recall. Q. Did you look in the rest of your file cabinet when you got the
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`original hold notice? A. Not very well, no.”). The fishbowl schematic led Defendants to
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`additional evidence of a prior art system (the “Digital Prototype”) not included in Defendants’
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`invalidity contentions. Docket No. 163 at 1.
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`3
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 4 of 11 PageID #: 9395
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`Local Rule P.R. 3-3 requires the parties to serve invalidity contentions, which must state
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`“[w]hether each item of prior art anticipates each asserted claim or renders it obvious.” P.R. 3-
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`3(b). A party’s invalidity contentions are “deemed to be that party’s final contentions.” P.R. 3-
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`6(a); Motorola, Inc. v. Analog Devices, Inc., No. 1:03-CV-131, 2004 WL 5633735, at *1 (E.D.
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`Tex. Apr. 8, 2004). After the deadline for serving invalidity contentions has passed, a party may
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`amend its contentions as a matter of course if it believes in good faith that the claim construction
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`order requires it or if the opposing party amends its infringement contentions. P.R. 3-6(a). Other
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`amendments “may be made only by order of the Court, which shall be entered only upon a
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`showing of good cause.” P.R. 3-6(b).
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`The primary dispute between Invensys and Defendants is whether Defendants acted
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`diligently in conducting their prior art investigation.3 Defendants contend that their failure to
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`discover the Digital Prototype evidence is excusable because the schematic predated Mr.
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`Maginnis’ employment with Micro Motion. Docket No. 163 at 5. When Defendants’ counsel
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`first interviewed Mr. Maginnis early in the case, he said he had no knowledge of earlier systems
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`developed by Micro Motion. Id. at 3. Defendants argue that Mr. Maginnis cannot be expected
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`to have knowledge of events predating his employment. Id. at 4–5. Defendants also emphasize
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`that “after uncovering this additional information about the Digital Prototype, Defendants’
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`counsel acted diligently to learn additional facts and to bring these facts to the attention of
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`opposing counsel.” Id. at 5.
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`In response, Invensys argues that Micro Motion did not perform a diligent search of
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`likely relevant files in its possession. Docket No. 169 at 7. Invensys contends that the late
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`3 There is little dispute that once Defendants’ counsel learned of the schematic, Defendants acted promptly to notify
`Invensys of the evidence. See Docket No. 163 at 1–2 (describing Defendants’ contact with Invensys in May 2014);
`Docket No. 202 at 1 (describing depositions taken by Invensys relating to the Digital Prototype).
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`4
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 5 of 11 PageID #: 9396
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`production is a result of Micro Motion’s failure to appreciate the importance of its own early
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`development work. Id. at 7–8.
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`Defendants fail to show good cause for leave to amend their invalidity contentions.4
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`Notably, Defendants seek to untimely amend their contentions based on information that was in
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`their possession from the time Invensys filed its lawsuit. The Digital Prototype evidence is not
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`“new” as Defendants suggest, Docket No. 163 at 1, merely because it is new to Defendants’
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`counsel. Here, it is undisputed that Defendants had possession of the information at all relevant
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`times. See L.C. Eldridge Sales Co. v. Azen Mfg. Pte., Ltd., No. 6:11-CV-599, 2013 WL
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`7937026, at *3 (E.D. Tex. Oct. 11, 2013) (denying a motion for leave to amend where the
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`defendants sought to add prior art that was in their possession when they served their invalidity
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`contentions).
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`Likewise, Defendants’ argument that they produced documents quickly after the initial
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`discovery is misplaced. As other courts have recognized, “the critical issue is not what the party
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`did after they discovered the prior art; rather, the critical issue is whether or not [the party
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`seeking to amend] exercised diligence in discovering the prior art.” Symantec Corp. v. Acronis
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`Corp., 2013 WL 5368053, at *5 (N.D. Cal. Sept. 25, 2013) (quotation marks omitted). Here, Mr.
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`Maginnis admits that his initial search for relevant documents in his file cabinet was not
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`thorough. See Docket No. 169-2, Ex. B at 10:25–12:23. When later prompted by Defendants’
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`counsel during deposition preparation, however, Mr. Maginnis returned to the file cabinet and
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`located the Digital Prototype schematic within one day. Docket No. 163-2, Ex. B at 2.
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`4 The Court held a Markman hearing on May 1, 2014 and issued a claim construction order on August 6, 2014.
`Docket Nos. 158, 203. Defendants filed this Motion on June 10, 2014. Docket No. 163. Because Defendants do
`not argue that their supplementation is based on P.R. 3-6(a), Defendants must show good cause to satisfy P.R. 3-
`6(b).
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`5
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 6 of 11 PageID #: 9397
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`Defendants’ explanation for their failure to identify the Digital Prototype earlier falls short of the
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`good cause standard.
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`The Court notes that there is no evidence of gamesmanship on the part of Defendants in
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`this case. However, to allow amendment under these circumstances would set a troubling
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`precedent and introduce a potential for abuse among future litigants. Accordingly, Defendants
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`fail to show good cause and their Motion for Leave to Supplement Invalidity Contentions is
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`DENIED.
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`2. Defendants’ Motion to Compel Production of the Dickson Presentation (Docket No. 172)
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`Defendants ask the Court to compel Invensys to produce documents relating to Invensys’
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`license-revenue projections. In a separate state court lawsuit against Invensys’ former counsel,5
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`that counsel disclosed a license-revenue projection made by an Invensys employee, Brian
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`Dickson. Docket No. 172 at 2. The projection originates from Mr. Dickson’s statements during
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`a presentation to Invensys’ general counsel and executive team (the “Dickson Presentation”). Id.
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`Defendants argue that any privilege protecting the presentation is waived because
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`Invensys did not request that the state court filings be sealed. Id. 4–5. Additionally, Defendants
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`argue that privilege is waived for all of Invensys’ license-revenue projections in light of the
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`earlier disclosure. Id. at 4. In response, Invensys argues that there was no waiver of privilege in
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`the state court proceeding because Invensys did not authorize its former counsel to make its
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`statements. Docket No. 186 at 4–5. Invensys also argues that if the Court does find a waiver, it
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`should be limited to the specific statement revealed by Invensys’ former counsel. Id. at 5.
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`The parties appear to agree that the Dickson Presentation contains privileged information.
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`See, e.g., Docket No. 172 at 4; Docket No. 186 at 3–4. The parties’ central dispute is whether
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`5 Invensys claims that the disclosure was made by “prospective counsel,” rather than former counsel. Docket No.
`186 at 1. This distinction is irrelevant to the Court’s reasoning in this Order.
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`6
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 7 of 11 PageID #: 9398
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`Invensys waived any applicable privilege by “fail[ing] to object or take corrective action” after
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`the disclosure. Docket No. 172 at 5. Since this Motion was filed, Invensys has agreed not to
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`object to Defendants’ use of the specific statement in the state court pleadings on the basis of
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`privilege. Docket No. 241 at 5. Therefore, the only remaining issue is whether Invensys must
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`produce the Dickson Presentation or other license-revenue projections to Defendants.
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`“When a party waives privilege as to a particular communication, the waiver applies to
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`all other communications relating to the same subject matter.” Mass Engineered Design, Inc. v.
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`Ergotron, Inc., No. 2:06-CV-272, 2008 WL 744705, at *1 (E.D. Tex. Mar. 19, 2008) (citing
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`GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1273 (Fed. Cir. 2001) (applying Fifth Circuit law)).
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`“The scope of [any] waiver is narrowly construed in patent cases.” Id. While there is no bright
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`line rule for identifying the subject matter of a waiver, “courts weigh the circumstances of the
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`disclosure, the nature of the legal advice sought and the prejudice to the parties of permitting or
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`prohibiting further disclosures.” Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349–50
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`(Fed. Cir. 2005).
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`Having reviewed the Dickson Presentation,6 the Court finds that Defendants are not
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`entitled to it. The document itself addresses the disclosed license-revenue figure in only a very
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`limited way; therefore, any waiver would provide Defendants with only the same statement that
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`Invensys has agreed not to challenge. Any alleged waiver would not apply to unrelated
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`statements in the Dickson Presentation because the mere mention of a document does not
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`automatically waive privilege as to the entire contents of the document. As for Defendants’
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`request that Invensys be compelled to produce “all other documents relating to Invensys license
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`revenue projections,” Docket No. 172 at 5, such a request clearly exceeds the scope of any
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`6 Invensys submitted a copy of the Dickson Presentation to the Court for in camera review.
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`7
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 8 of 11 PageID #: 9399
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`waiver made by Invensys’ former counsel in its single sentence in the state court lawsuit.
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`Accordingly, Defendants’ Motion to Compel to Compel Production of Documents is DENIED.
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`3. Defendants’ Renewed Motion to Transfer Venue (Docket No. 213)
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`Defendants ask the Court to transfer this case to the District of Colorado. This is not
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`Defendants’ first request for transfer. Defendants filed their initial transfer motion on January
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`10, 2013 (the “Initial Motion”). Docket No. 14. The Court denied the Initial Motion on
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`September 30, 2013. Id. The Court found that all factors in the transfer analysis were neutral
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`except for the availability of compulsory process, which weighed slightly against transfer. Id. at
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`11. The Federal Circuit denied Defendants’ petition for mandamus relief and the Supreme Court
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`denied Defendants’ subsequent petition for certiorari. In re Emerson Elec. Co., 559 F. App’x
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`1007 (Fed. Cir. Mar. 13, 2014) cert. denied sub nom. Emerson Elec. Co. v. U.S. Dist. Court for
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`E. Dist. of Texas, 135 S. Ct. 339 (2014).
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`Defendants filed this Renewed Motion to Transfer Venue on August 15, 2014, after the
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`close of fact discovery. Docket No. 213. Defendants argue that “the facts claimed by Invensys
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`in support of its opposition [to the Initial Motion] were simply not true.” Id. at 8. Defendants
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`argue that Invensys misrepresented that (1) there are non-party witnesses located within the
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`Eastern District of Texas; (2) Invensys employees with relevant knowledge are located within
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`the Eastern District of Texas; and (3) “many of Invensys’s witnesses related to its financial
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`information, marketing, and sales are located in or near the Eastern District.” Id. at 1–6.
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`Additionally, Defendants reiterate that the majority of Micro Motion’s witnesses are located in
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`the District of Colorado. Id. at 6. Defendants identify 17 party witnesses and 1 non-party
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`witness located within the District of Colorado. Id.
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`8
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 9 of 11 PageID #: 9400
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`As an initial matter, the Court construes Defendants’ Renewed Motion as a motion to
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`reconsider the September 30, 2013 Order denying the Initial Motion. See Triton Tech of Texas,
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`LLC. v. Nintendo of Am. Inc., No. 2:10-CV-328, 2012 WL 2036411, at *1 (E.D. Tex. June 6,
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`2012). The standard for reconsideration is a narrow one. A motion for reconsideration should
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`not be used to raise arguments “that could, and should, have been made before entry of judgment
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`or to re-urge matters that have already been advanced by a party.” eTool Dev., Inc. v. Nat’l
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`Semiconductor Corp., 881 F. Supp. 2d 745, 749 (E.D. Tex. 2012). Instead, motions for
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`reconsideration “serve the narrow purpose of allowing a party to correct manifest errors of law or
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`fact or to present newly discovered evidence.” Id. Consistent with this standard, the parties are
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`expected to advance their strongest case when the matter is first considered. Id. To prevail on a
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`motion for reconsideration, the moving party must show “(1) an intervening change in
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`controlling law; (2) the availability of new evidence not previously available; or (3) the need to
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`correct a clear error of law or prevent manifest injustice.” In re Benjamin Moore & Co., 318
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`F.3d 626, 629 (5th Cir. 2002).
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`Defendants’ Renewed Motion does not raise “new evidence” warranting reconsideration
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`of the Court’s September 30, 2013 Order. A critical shortcoming in Defendants’ Initial Motion
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`was that Defendants failed to “identify [] engineers or any witnesses residing in Colorado with
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`particularity.” Docket No. 75 at 8; see also In re Emerson Elec. Co., 559 F. App’x 1007, at
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`*1008 (Fed. Cir.) (noting that Defendants’ Initial Motion identified with particularity only two
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`individuals in Colorado as potential witnesses). Here, Defendants attempt to bolster their
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`Renewed Motion by identifying 18 witnesses located in Colorado. However, Defendants do
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`nothing to explain why they could not have identified these witnesses (17 of whom are Micro
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`Motion employees) in the Initial Motion. Such evidence is not “new” in the context of a motion
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`for reconsideration.
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`Defendants’ remaining arguments likewise do not justify reconsideration of the Court’s
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`Order. Defendants do not contest that a number of Invensys employees live within and around
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`the Eastern District of Texas and that Defendants deposed these individuals on relevant topics.
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`Additionally, Invensys previously and currently claims that four potential non-party witnesses
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`are located within the subpoena power of this Court. Docket No. 217 at 5. That Invensys has
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`not yet relied on these potential witnesses does not justify a transfer of venue at this stage in the
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`case.
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`To allow transfer motions to become an ongoing battle throughout litigation would
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`circumvent the goal of preserving judicial economy. See In re Vistaprint Ltd., 628 F.3d 1342,
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`1345 (Fed. Cir. 2010) (recognizing the importance of judicial economy to the transfer analysis).
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`Defendants acknowledged as much during their oral argument on this Motion. Although
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`Defendants raise a valid concern that representations made early on in a case may turn out to be
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`incorrect, this concern applies equally to plaintiffs and defendants.7 A defendant could just as
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`easily misrepresent its connections with a transferee forum in order to change venue. If those
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`representations were later determined to be unfounded, the plaintiff might request transfer back
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`to the original venue. Such ongoing venue disputes would certainly not preserve the parties’
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`interest in efficient resolution of the case or the courts’ interest in judicial economy.
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`Because Defendants fail to raise sufficient “new” evidence that could not have been
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`timely presented in the Initial Motion, the Court DENIES Defendants’ Renewed Motion to
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`Transfer Venue.
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`7 The Court emphasizes that there is no indication of gamesmanship on the part of either party in this case.
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`10
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`Case 6:12-cv-00799-JRG Document 248 Filed 12/03/14 Page 11 of 11 PageID #: 9402
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`CONCLUSION
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`For the reasons set forth above, the Court DENIES Defendants’ Motion for Leave to
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`Supplement Invalidity Contentions (Docket No. 163), DENIES Defendants’ Motion to Compel
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`the Production of the Dickson Presentation (Docket No. 172), and DENIES Defendants’
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`Renewed Motion to Transfer Venue (Docket No. 213).
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`11
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`__________________________________
`LEONARD DAVIS
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 3rd day of December, 2014.