Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 1 of 21 PageID #: 2337
`
`IN THE UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`Case No. 12-CV-00799-LED
`
`))))))))))))))))))))))
`
`INVENSYS SYSTEMS, INC.,
`
`Plaintiff,
`
`vs.
`
`EMERSON ELECTRIC CO. and
`MICRO MOTION INC., USA,
`
`Defendants,
`
`and
`
`MICRO MOTION INC, USA,
`
`Counterclaim-Plaintiff,
`
`vs.
`
`INVENSYS SYSTEMS, INC.,
`
`Counterclaim-Defendant
`
`EMERSON ELECTRIC CO.’S MOTION FOR SUMMARY
`JUDGMENT OF NON-INFRINGEMENT
`
`4825-1656-9110.2
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 2 of 21 PageID #: 2338
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`III.
`
`ISSUE PRESENTED ..........................................................................................................1
`
`STATEMENT OF UNDISPUTED MATERIAL FACTS ..................................................1
`A.
`Emerson and Micro Motion Are Separate Corporations.........................................2
`B.
`Emerson Does Not Design, Manufacture, or Sell the Accused Products................3
`C.
`Emerson Does Not Control the Products of Micro Motion.....................................3
`D.
`Emerson Is Not the Same Entity as Scallon Controls, Emerson Process
`Management LLLP, Instrument & Valve Services Repair Center, or
`Instrument & Valve Services Company..................................................................5
`
`BRIEF IN SUPPORT OF EMERSON’S MOTION FOR SUMMARY
`JUDGMENT ON NON-INFRINGEMENT........................................................................7
`A.
`Emerson Cannot Be Liable as a Direct Infringer ....................................................7
`B.
`Emerson Cannot Be Liable for Indirect Infringement.............................................9
`C.
`Emerson as Parent Company Is Not Liable for Any Alleged Patent
`Infringement of its Subsidiary Absent Exceptional Circumstances Which
`Are Not Present Here.............................................................................................12
`No Further Discovery Is Necessary to Resolve this Motion .................................15
`
`D.
`
`IV.
`
`CONCLUSION .................................................................................................................15
`
`4825-1656-9110.2
`
`i
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 3 of 21 PageID #: 2339
`
`TABLE OF AUTHORITIES
`
`Federal Cases
`
`A. Stucki Co. v. Worthington Indus., Inc.,
`849 F.2d 593 (Fed. Cir. 1988) .................................................................................................14
`
`Am. Land Program, Inc. v. Bonaventura Uitgevers Maatschappij, N.V.,
`710 F.2d 1449 (10th Cir. 1983).................................................................................................7
`
`In re Bill of Lading Transmission & Processing Sys. Patent Litig.,
`681 F.3d 1323 (Fed. Cir. 2012) ...............................................................................................10
`
`Iridex Corp. v. Synergetics USA, Inc.,
`474 F. Supp. 2d 1105 (E.D. Mo. 2007) .....................................................................................9
`
`Mahurkar v. C.R. Bard, Inc.,
`No. 01 C 8452, 2003 U.S. Dist. LEXIS 2329 (N.D. Ill. 2003) ...............................................12
`
`Manville Sales Corp. v. Paramount Sys., Inc.,
`917 F.2d 544 (Fed. Cir. 1990) .................................................................................................12
`
`Nelson v. Int’l Paint Co.,
`734 F.2d 1084 (5th Cir. 1984).....................................................................................13, 14, 15
`
`Ronald A. Katz Tech. Licensing, L.P. v. Verizon Commc’n, Inc.,
`No. 01-5627, 2002 U.S. Dist. LEXIS 24117 (E.D. PA, 2002)..........................................11, 14
`
`Sapic v. Gov’t. of Turkm.,
`345 F.3d 347 (5th Cir. 2003)...................................................................................................13
`
`Secure Axcess LLC v. Bank of Am. Corp.,
`Case No. 6:10-CV-670, Mem. & Order (E.D. Tex. Mar. 30, 2012) (Davis, J.)......................14
`
`Tegal Corp. v. Tokyo Electron Co.,
`248 F.3d 1376 (Fed. Cir. 2001) ...............................................................................................13
`
`Tip Sys., LLC v. SBC Operations, Inc.,
`536 F. Supp. 2d 745 (S.D. Tex. 2008)...............................................................................12, 13
`
`United States v. Jon-T Chems., Inc.,
`768 F.2d 686 (5th Cir. 1985)...................................................................................................14
`
`Wechsler v. Macke Int’l Trade, Inc.,
`486 F.3d 1286 (Fed. Cir. 2007) ...............................................................................................13
`
`4825-1656-9110.2
`
`ii
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 4 of 21 PageID #: 2340
`
`Federal Statutes
`
`35 U.S.C.
`§ 271(a)............................................................................................................................7, 9, 12
`§ 271(b) .....................................................................................................................................9
`
`4825-1656-9110.2
`
`iii
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 5 of 21 PageID #: 2341
`
`Emerson Electric Co. (“Emerson”) respectfully moves for summary judgment1
`
`that it does not infringe the Invensys patents-in-suit.2 This Motion should be granted because it
`
`is undisputed that Emerson does not make, use, offer to sell, sell, import, or repair any product
`
`capable of infringing the Invensys patents-in-suit. Emerson appears to have been made a
`
`defendant in this lawsuit solely because the other co-defendant, Micro Motion, Inc. (“Micro
`
`Motion”), an indirect wholly-owned subsidiary of Emerson, manufactures and sells the accused
`
`Coriolis flowmeters. This is not a sufficient basis to drag Emerson into this litigation.
`
`The facts are without dispute. Micro Motion is a separate corporation that is not
`
`controlled by Emerson. Emerson cannot be liable for any alleged infringement of a subsidiary.
`
`And Emerson does not make or sell any of the products accused of infringement in this lawsuit.
`
`As explained below, the claims against Emerson should be dismissed.
`
`I.
`
`ISSUE PRESENTED
`
`Whether there is any legal basis to support Invensys’s seven claims of patent
`
`infringement against Emerson.
`
`II.
`
`STATEMENT OF UNDISPUTED MATERIAL FACTS3
`
`Emerson is entitled to summary judgment of non-infringement of the Invensys
`
`patents-in-suit because the following facts are undisputed:
`
`
`1 Consistent with the Court’s standing order, Emerson sought leave to file the present
`Motion, which the Court granted. (See Dkt No. 67.)
`
`2 U.S. Patent Nos. 7,124,646, 7,136,761, 6,311,136, 7,505,854, 6,754,594, 7,571,062, and
`8,000,906 are hereinafter referred to as the “Invensys patents-in-suit.”
`
`3 The Statement of Undisputed Material Facts are hereinafter referred to as “SUMF.”
`
`4825-1656-9110.2
`
`1
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 6 of 21 PageID #: 2342
`
`A.
`
`1
`
`Emerson and Micro Motion Are Separate Corporations
`
`Emerson is a Missouri corporation with its principal place of business in St.
`
`Louis, Missouri. (Declaration of Dr. Randall D. Ledford (“Ledford Decl.”) ¶ 2.)
`
`2
`
`Emerson is a diversified global manufacturing and technology company offering a
`
`wide range of products and services in the industrial, commercial, and consumer markets through
`
`its five business platforms: (i) Emerson Process Management (“EPM”), (ii) Emerson Industrial
`
`Automation, (iii) Emerson Network Power, (iv) Emerson Climate Technologies, and (v)
`
`Emerson Commercial and Residential Solutions. (Id. at ¶¶ 2-3.)
`
`3
`
`Micro Motion, an Emerson subsidiary, is part of the EPM business platform. (Id.
`
`at ¶¶ 4, 6.)
`
`4
`
`Micro Motion is a Colorado corporation. (Declaration of Andrew Dudiak
`
`(“Dudiak Decl.”) ¶ 2.)
`
`5
`
`Micro Motion has been in the business of designing, manufacturing, and selling
`
`Coriolis flow and density measurement devices for more than 30 years. (Id. at ¶ 4.)
`
`6
`
`Micro Motion has been an indirect wholly-owned subsidiary of Emerson since
`
`1984, when Emerson acquired 100% of Micro Motion’s stock. (Id at ¶ 2; Ledford Decl. ¶ 4.)
`
`7
`
`Micro Motion and Emerson are different corporations with different employees
`
`and separate payrolls. (Dudiak Decl. ¶ 2; Ledford Decl. ¶ 8.)
`
`8
`
`Micro Motion is the only Emerson subsidiary that designs, manufactures, or sells
`
`Coriolis meters. (Dudiak Decl. ¶ 5; Ledford Decl. ¶ 7.)
`
`4825-1656-9110.2
`
`2
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 7 of 21 PageID #: 2343
`
`B.
`
`9
`
`Emerson Does Not Design, Manufacture, or Sell the Accused Products
`
`The First Amended Complaint alleges that Emerson and Micro Motion infringe
`
`seven patents purportedly owned by Invensys. (Dkt. No. 25 ¶¶ 12-63.)
`
`10
`
`The Invensys patents-in-suit relate to the operation of a Coriolis flowmeter. (See
`
`id. at ¶¶ 13, 19, 25, 37, 43, 49, 57.)
`
`11
`
`The First Amended Complaint identifies the accused products as Micro Motion®
`
`Elite® Coriolis Meters containing a Micro Motion transmitter with a Micro Motion enhanced
`
`core processor and substantially similar components. (Id. at ¶¶ 14, 20, 26, 38, 44, 50, 58.)
`
`12
`
`The First Amended Complaint makes identical allegations against both Emerson
`
`and Micro Motion. (Id. at ¶¶ 14-17, 20-23, 26-35, 38-41, 44-47, 50-55, 58-63.)
`
`13
`
`Of the two defendants, only Micro Motion designs, manufactures, and sells
`
`Coriolis flowmeters; Emerson does not. (Compare Dudiak Decl. ¶¶ 4-5 with Ledford Decl. ¶¶ 6-
`
`7.)
`
`C.
`
`14
`
`Emerson Does Not Control the Products of Micro Motion
`
`Micro Motion controls all aspects of its Coriolis meter products, including their
`
`design and development, manufacture, and sale. (Dudiak Decl. ¶ 8.)
`
`15
`
`In particular, Micro Motion employs the people who conduct research and design
`
`associated with its Coriolis meters. (Id.)
`
`16
`
`Micro Motion makes all the decisions regarding the features and functions that are
`
`incorporated into its products. (Id.; Ledford Decl. ¶ 9.)
`
`17
`
`Although Micro Motion reports to the managers of the EPM business platform,
`
`Emerson has not and does not determine the design and development of Micro Motion’s
`
`products. (Dudiak Decl. ¶ 9.)
`
`4825-1656-9110.2
`
`3
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 8 of 21 PageID #: 2344
`
`18
`
`In particular, Emerson has not and does not determine how Micro Motion’s
`
`products operate or what features and functions they have. (Id.)
`
`19
`
`Emerson’s involvement with Micro Motion’s products is at a high level and is
`
`focused on business issues, including strategic planning, product profitability and market
`
`position. (Id.; Ledford Decl. ¶ 9.)
`
`20
`
`Dr. Randall D. Ledford is Emerson’s Senior Vice President and Chief Technology
`
`Officer. (Ledford Decl. ¶ 9.)
`
`21
`
`In that role, he has general knowledge of the various types of products sold by
`
`Emerson’s subsidiaries. (Id. at ¶¶ 7, 9.)
`
`22
`
`If there was involvement by Emerson in the design and development of Micro
`
`Motion’s products, he would have been aware of that involvement; however, he is unaware of
`
`any such activities. (Id. at ¶ 9.)
`
`23
`
`While Emerson conducts various reviews of Micro Motion’s strategic and
`
`financial plans, Emerson does not direct the design or development of Micro Motion’s products.
`
`(Id.; Dudiak Decl. ¶ 9.)
`
`24
`
`The intent of these reviews is to discuss the priorities and issues Micro Motion
`
`faces and the programs it intends to pursue to achieve profitable sales growth and to improve its
`
`market position. (Ledford Decl. ¶ 9; Dudiak Decl. ¶ 9.)
`
`25
`
`To the extent new products may be discussed, such discussions are generally at a
`
`high level. (Ledford Decl. ¶ 9.)
`
`26
`
`Emerson does not dictate details about Micro Motion’s product functions and
`
`features. (Id.)
`
`4825-1656-9110.2
`
`4
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 9 of 21 PageID #: 2345
`
`27
`
`Emerson does not and never has instructed or required Micro Motion to include
`
`any specific feature or functionality in its Coriolis flowmeters or otherwise directed Micro
`
`Motion as to how its Coriolis flowmeters should be designed. (Id.)
`
`28
`
`In the fall of 2000, in an effort to harmonize marketing materials of its various
`
`businesses, Emerson instructed its U.S. subsidiaries to include on their marketing materials the
`
`name of the Emerson business platform under which they operate. (Id. at ¶ 6.)
`
`29
`
`At that point, Micro Motion began to include the EPM logo on Micro Motion’s
`
`marketing materials. (Dudiak Decl. ¶ 10.)
`
`30
`
`Despite this, Emerson itself has not and does not control or direct the
`
`development, design, features, functions, manufacturing, or sales of Micro Motion’s products,
`
`including the accused Coriolis flowmeters. (Id.)
`
`D.
`
`Emerson Is Not the Same Entity as Scallon Controls, Emerson Process
`Management LLLP, Instrument & Valve Services Repair Center, or
`Instrument & Valve Services Company
`
`31
`
`Scallon Controls, Inc. is a Texas corporation located in Beaumont, Texas, that
`
`was incorporated in 1977. (Declaration of Kadie M. Jelenchick (“Jelenchick Decl.”), Ex. A.)
`
`32
`
`For more than 35 years, Scallon Controls has offered process plants, mills, oil and
`
`gas production, and engineering firms throughout the Southeast Texas area a complete range of
`
`products and services, including control systems and PLC’s (programmable logic controllers),
`
`control valves, instrumentation, asset optimization, remote automation solutions, regulators,
`
`valve automation, compressor controls, and wireless solutions, to meet any business need.
`
`(Jelenchick Decl., Exs. B-C.)
`
`33
`
`While Scallon Controls’ website indicates that it is “your local Emerson Process
`
`Management business partner,” Scallon Controls is a separate legal entity. (Id. at Exs. A-B.)
`
`4825-1656-9110.2
`
`5
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 10 of 21 PageID #: 2346
`
`34
`
`Scallon Controls is an independent company and is not directly or indirectly
`
`owned or controlled by Emerson or any Emerson subsidiary. (Declaration of James Davis
`
`(“Davis Decl.”) ¶ 7.)
`
`35
`
`Scallon Controls, through agreements with Emerson Process Management LLLP,
`
`has been appointed as a sales, engineering, and service representative for certain Micro Motion
`
`products under certain conditions and in certain geographic territories. (Id. at ¶ 6.)
`
`36
`
`Emerson Process Management LLLP is a Delaware limited liability limited
`
`partnership. (Id. at ¶ 1.)
`
`37
`
`Emerson Process Management LLLP is a separate legal entity from Emerson
`
`Electric Co. (Id. at ¶ 2.)
`
`38
`
`Scallon Controls’ website includes an announcement about the opening of the
`
`“Instrument & Valve Services Repair Center.” (Id. at ¶ 8; Jelenchick Decl., Ex. D.)
`
`39
`
`Nothing in Scallon Controls announcement relating to the “Instrument & Valve
`
`Services Repair Center” says either Scallon Controls or the “Repair Center” repairs Coriolis
`
`flowmeters or is authorized to repair Coriolis flowmeters. (Jelenchick Decl., Ex. D.) This
`
`announcement states in relevant part: “[f]or over sixty years, Golden Triangle industrial plants
`
`have relied on Emerson products such as Fisher® control valves, Rosemount® transmitters,
`
`DeltaV™ digital automation systems, and Micro Motion® Coriolis flowmeters.” (Id.)
`
`40
`
`The correct corporate name for the “Instrument & Valve Services Repair Center”
`
`is the Instrument & Valve Services Company, which is part of the EPM business platform.
`
`(Davis Decl. ¶ 9.)
`
`41
`
`The Instrument & Valve Services Company is a company based in Marshalltown,
`
`Iowa. (Id. at ¶ 10.)
`
`4825-1656-9110.2
`
`6
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 11 of 21 PageID #: 2347
`
`42
`
`The Instrument & Valve Services Company is a separate legal entity from both
`
`Emerson Process Management LLLP and Emerson. (Id. at ¶ 11.)
`
`III.
`
`BRIEF IN SUPPORT OF EMERSON’S MOTION FOR SUMMARY JUDGMENT
`ON NON-INFRINGEMENT
`
`A.
`
`Emerson Cannot Be Liable as a Direct Infringer
`
`1. Emerson does not make, use, offer to sell, sell, or import the accused
`products
`
`The First Amended Complaint alleges that Emerson infringes the Invensys
`
`patents-in-suit by making, using, offering to sell, selling, and/or importing certain Micro Motion
`
`Coriolis flowmeters. (SUMF ¶¶ 9-12.) However, the undisputed facts are clear that Emerson
`
`does not make, use, offer to sell, sell, or import any Coriolis flowmeters, let alone the accused
`
`Coriolis flowmeters. (SUMF ¶ 13.) As such, Emerson cannot be a direct infringer of the
`
`patents-in-suit. See 35 U.S.C. § 271(a); Am. Land Program, Inc. v. Bonaventura Uitgevers
`
`Maatschappij, N.V., 710 F.2d 1449, 1454 (10th Cir. 1983) (citing Wyatt v. Kaplan, 686 F.2d 276,
`
`280-82 (5th Cir. 1982)) (finding that defendants’ uncontroverted affidavits overrode conclusory
`
`allegations in the complaint).
`
`2. Emerson does not repair the accused products
`
`In an effort to salvage its case against Emerson and to try to create a fact issue,
`
`Invensys will likely argue that Emerson has service centers that repair the accused Micro Motion
`
`Coriolis flowmeters.4 As support for its theory, Invensys points to an announcement from the
`
`website of Scallon Controls.
`
`
`4 Invensys did not allege this allegation in its First Amended Complaint, but raised it for
`the first time in response to Emerson’s request for motion for leave to file the present Motion.
`(See Dkt. No. 61-1 3; see also Jelenchick Decl., Ex. D.)
`
`4825-1656-9110.2
`
`7
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 12 of 21 PageID #: 2348
`
`It is without dispute, however, that Emerson does no such repairs. First, nothing
`
`in the announcement relied on by Invensys indicates that Scallon Controls either repairs Coriolis
`
`flowmeters or is authorized to repair Coriolis flowmeters. (SUMF ¶¶ 38-39.) Second, nothing in
`
`the announcement indicates that Scallon Controls has ever repaired one of the accused Micro
`
`Motion Coriolis flowmeters. (SUMF ¶¶ 38-39.) Third, and most significant, even if Scallon
`
`Controls had repaired an accused Micro Motion Coriolis flowmeter, Scallon Controls is a
`
`separate corporation, unrelated to Emerson. (SUMF ¶¶ 31-34.) Scallon Controls is a third-party
`
`sales, engineering, and service representative for certain Micro Motion products under certain
`
`conditions and in certain geographic territories by way of agreements with Emerson Process
`
`Management LLLP. (SUMF ¶ 35.) Emerson Process Management LLLP is not Emerson, but a
`
`separate entity. (SUMF ¶¶ 36-37.) And Scallon Controls is not owned or controlled by Emerson
`
`or Emerson Process Management LLLP. (SUMF ¶ 34.)
`
`Similarly, Invensys could not successfully argue that Emerson is sanctioning
`
`repairs of the accused Micro Motion Coriolis flowmeters out of the “Instrument & Valve
`
`Services Repair Center,” based on a website announcement from Scallon Controls. The
`
`Instrument & Valve Services Repair Center, properly named the “Instrument & Valve Services
`
`Company,” is a separate corporate entity that is unrelated to Emerson. (SUMF ¶¶ 40-42.)
`
`Moreover, there is no indication in the Scallon Controls’ web announcement that the “Repair
`
`Center” repairs Coriolis flowmeters, let alone the accused Micro Motion Coriolis flowmeters.
`
`(SUMF ¶ 39.)
`
`A single mention in a webpage from Scallon Controls, which is a separate
`
`corporation from Emerson, that yet another separate entity, the Instrument & Valve Services
`
`Company, opened next door to Scallon Controls, is the sole basis for Invensys’s contention that
`
`4825-1656-9110.2
`
`8
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 13 of 21 PageID #: 2349
`
`Emerson has service centers. From there, Invensys leaps to the conclusion that Emerson must
`
`therefore repair Micro Motion Coriolis flowmeters at these service centers. There is no support
`
`for this theory. Scallon Controls’ webpage merely states: “[f]or over sixty years, Golden
`
`Triangle industrial plants have relied on Emerson products such as Fisher® control valves,
`
`Rosemount® transmitters, DeltaV™ digital automation systems, and Micro Motion® Coriolis
`
`flowmeters.” (SUMF ¶ 39.) Nothing in this announcement supports a claim that Emerson
`
`repairs Coriolis flowmeters.
`
`There can be no dispute – Emerson does not make, use, offer to sell, sell, import,
`
`or repair the accused Micro Motion Coriolis flowmeters. Invensys has no evidence to the
`
`contrary because there is none. Accordingly, the Court should grant summary judgment that
`
`Emerson is not liable for direct infringement under § 271(a).
`
`B.
`
`Emerson Cannot Be Liable for Indirect Infringement
`
`Emerson also cannot be liable for indirect infringement because it has not actively
`
`induced Micro Motion’s alleged conduct. See 35 U.S.C. § 271(b). The Invensys patents-in-suit
`
`claim particular functionality and operation of Coriolis flowmeters. Given that Emerson has no
`
`role in or control over the design, development, or sale of the accused Micro Motion Coriolis
`
`flowmeters, Emerson cannot be liable for inducing infringement of these patents by its separate,
`
`wholly-owned subsidiary, Micro Motion. See Iridex Corp. v. Synergetics USA, Inc., 474 F.
`
`Supp. 2d 1105, 1109 (E.D. Mo. 2007) (finding that where the parent corporation did not cause
`
`the subsidiary to infringe the patent, the parent corporation was entitled to summary judgment
`
`dismissing the claims against it).
`
`To survive a motion to dismiss on this issue, a complaint “must contain facts
`
`plausibly showing that [the defendants’] specifically intended their customers to infringe the []
`
`patent[s] and knew that the customer’s acts constituted infringement.” In re Bill of Lading
`9
`
`4825-1656-9110.2
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 14 of 21 PageID #: 2350
`
`Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012). Here, no
`
`such allegations were made. However, even if Invensys attempted to amend its complaint for the
`
`second time to assert such allegations, the undisputed facts would not support them.
`
`Micro Motion is a separate corporation from Emerson. (SUMF ¶¶ 1-7.) Micro
`
`Motion controls all aspects of its Coriolis meter products, including their design and
`
`development, manufacture, and sale. (SUMF ¶ 14.) With respect to design and development,
`
`Micro Motion employs the people who conduct the research and design associated with its
`
`Coriolis meters and makes all the decisions regarding the features and functions that are
`
`incorporated into its products. (SUMF ¶¶ 15-16.) Micro Motion was manufacturing and selling
`
`Coriolis flowmeters and density measurement devices prior to its acquisition by Emerson.
`
`(SUMF ¶¶ 5-6.) Once acquired, Micro Motion continued to direct the development (and sale) of
`
`its products, including Coriolis flowmeters, without any contribution by Emerson as to the
`
`design or features and functions. (SUMF ¶¶ 14-18, 23, 26-27, 30.) Micro Motion has its own
`
`separate engineers and is the only Emerson-related entity involved with any research and
`
`development, engineering, and manufacturing of Coriolis flowmeters. (SUMF ¶¶ 7-8, 15-16.)
`
`Emerson does not dictate how Micro Motion should design and develop its
`
`products and has never done so. (SUMF ¶¶ 17-18, 26-27.) Indeed, Dr. Randall Ledford,
`
`Emerson’s Chief Technology Officer, makes clear: “if there was involvement by Emerson in the
`
`design and development of Micro Motion, Inc.’s products, I would likely be aware of that
`
`involvement; however, I am unaware of any such activities.” (SUMF ¶¶ 20-22.) Emerson’s
`
`lack of control over and connection to Micro Motion’s Coriolis flowmeters is reiterated by Mr.
`
`Andrew Dudiak, Vice President and General Manager for Micro Motion. Specifically, Mr.
`
`Dudiak states: “Emerson has not and does not determine the design and development of Micro
`
`4825-1656-9110.2
`
`10
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 15 of 21 PageID #: 2351
`
`Motion, Inc.’s products. In particular, Emerson has not and does not determine how Micro
`
`Motion, Inc.’s products operate or what features and functions they have.” (SUMF ¶¶ 17-18.)
`
`Emerson similarly does not control or direct sales of Micro Motion’s accused
`
`Coriolis flowmeters. (SUMF ¶¶ 17-18, 30.) While Micro Motion does provide high-level
`
`reporting to managers of the relevant Emerson business platform – EPM – this does not
`
`transform or otherwise give Emerson the ability to control the accused Micro Motion products.
`
`(SUMF ¶¶ 17-19, 26-27.) Emerson is squarely focused on strategic planning, product
`
`profitability, and market position. (SUMF ¶ 19.) Invensys has provided no authority, likely
`
`because there is none, to implicate Emerson for liability under these circumstances.
`
`Based on its past briefing, Invensys will likely attempt to create a fact issue by
`
`pointing to the EPM trademark and logo on Micro Motion marketing materials. But this was
`
`done in an effort to harmonize marketing materials of the various EPM, entities, (SUMF ¶¶ 28-
`
`29), and does not mean that Emerson thereby controls Micro Motion’s activities. EPM is a
`
`business platform of Emerson, and Micro Motion is one of the Emerson subsidiaries that
`
`operates under the EPM platform. (SUMF ¶¶ 2-3.) EPM is not Emerson, and Emerson is not
`
`EPM; they are separate entities. (SUMF ¶ 2.)
`
`The mere use of the EPM name and logo by Micro Motion does not make
`
`Emerson liable for any alleged infringement by Micro Motion. See Ronald A. Katz Tech.
`
`Licensing, L.P. v. Verizon Commc’n, Inc., No. 01-5627, 2002 U.S. Dist. LEXIS 24117, at *3-4,
`
`7-10 (E.D. PA, 2002). As the court pointed out in Verizon, summary judgment dismissing patent
`
`infringement claims as against the parent corporation was proper even when the advertising and
`
`other public statements did not delineate between the subsidiaries and the parent company. Id. at
`
`*3-4. Additionally, in Mahurkar v. C.R. Bard, Inc., after noting that the subsidiary used the
`
`4825-1656-9110.2
`
`11
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 16 of 21 PageID #: 2352
`
`trademark and logo of the parent, and the parent required the subsidiary to clarify for customers
`
`that the subsidiary was part of the parent, the court determined that to prove infringement, the
`
`plaintiff was required to show that the parent itself infringed the patent. Mahurkar v. C.R. Bard,
`
`Inc., No. 01 C 8452, 2003 U.S. Dist. LEXIS 2329, at *22-23 (N.D. Ill. 2003). The court
`
`concluded further that the parent could not be found liable for the infringement of the subsidiary
`
`unless the corporate veil could be pierced. Id. at *14. Here, Emerson cannot be liable. As
`
`discussed below, there is no basis to pierce the corporate veil.
`
`C.
`
`Emerson as Parent Company Is Not Liable for Any Alleged Patent
`Infringement of its Subsidiary Absent Exceptional Circumstances Which Are
`Not Present Here
`
`Emerson’s position as Micro Motion’s parent cannot make it liable for
`
`infringement. Invensys is unable to offer any evidence to support a piercing the veil theory, and
`
`there is none.
`
`In general, and absent limited specific circumstances not present here, a parent
`
`corporation is not liable for any patent infringement of its subsidiary corporation. “‘[T]he
`
`corporate entity should be recognized and upheld, unless specific, unusual circumstances call for
`
`an exception.’” Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 552 (Fed. Cir.
`
`1990) (quoting citation omitted). “[A] parent corporation may be liable as a direct infringer
`
`under 35 U.S.C. § 271(a) for infringement by subsidiary corporations only if ‘the evidence
`
`reveals circumstances justifying disregard of the status of [the subsidiaries and the parent] as
`
`distinct, separate corporations.’” Tip Sys., LLC v. SBC Operations, Inc., 536 F. Supp. 2d 745,
`
`753 (S.D. Tex. 2008) (quoting citation omitted) (emphasis added).
`
`The Federal Circuit has only imposed liability on a parent company for the patent
`
`infringement of its subsidiary in extremely limited circumstances, namely, when it is appropriate
`
`to pierce the corporate veil and ignore the corporate structure between the parent and subsidiary.
`12
`
`4825-1656-9110.2
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 17 of 21 PageID #: 2353
`
`See Tegal Corp. v. Tokyo Electron Co., 248 F.3d 1376, 1379 (Fed. Cir. 2001) (citing A. Stucki
`
`Co. v. Worthington Indus., Inc., 849 F.2d 593, 596-97 (Fed. Cir. 1988) (referring to previous
`
`holding of no parent liability “absen[t] evidence showing that the parent company either was an
`
`alter ego of the subsidiary or controlled the conduct of the subsidiary”)); see also Tip Sys., 536 F.
`
`Supp. 2d at 753 (“Courts determining whether a defendant parent corporation may be held liable
`
`for the infringement by a subsidiary corporation . . . examine whether the plaintiff has shown that
`
`the corporate veil between the parent and subsidiary may be pierced.”). For this reason, a parent
`
`company’s motion for summary judgment is properly granted when there is insufficient evidence
`
`to pierce the corporate veil between the parent and the subsidiary. Id. at 756-57 (granting
`
`summary judgment in favor of a corporate parent in a patent infringement suit after finding no
`
`alter ego); see Nelson v. Int’l Paint Co., 734 F.2d 1084, 1092 (5th Cir. 1984) (“Our past
`
`decisions make clear that, in the lack of sufficient evidence to place the alter ego issue in dispute,
`
`a corporate defendant may be entitled to summary judgment.”).
`
`The Fifth Circuit5 uses a totality of the circumstances test in determining whether
`
`to pierce the corporate veil. Sapic v. Gov’t. of Turkm., 345 F.3d 347, 359 (5th Cir. 2003). For
`
`example, the Court may consider whether the parent and subsidiary have common officers,
`
`departments, financial statements, tax returns, directors or stock ownership, whether the parent
`
`causes the incorporation of the subsidiary, finances the subsidiary, pays the salaries and other
`
`expenses of the subsidiary and the subsidiary operates with grossly inadequate capital, whether
`
`the subsidiary obtains all of its business from the parent, the parent uses the subsidiary’s property
`
`as its own, the daily operations of the two corporations are not kept separate, and the subsidiary
`
`5 The issue of whether to pierce the corporate veil is not unique to patent law, and it is
`therefore governed by the law of the regional circuit – the Fifth Circuit. Wechsler v. Macke Int’l
`Trade, Inc., 486 F.3d 1286, 1295 (Fed. Cir. 2007).
`
`4825-1656-9110.2
`
`13
`
`

`
`Case 6:12-cv-00799-JRG Document 83 Filed 11/05/13 Page 18 of 21 PageID #: 2354
`
`does not observe the basic corporate formalities of keeping its own books and records and
`
`holding shareholder and board meetings. United States v. Jon-T Chems., Inc., 768 F.2d 686,
`
`691-92 (5th Cir. 1985); see also Secure Axcess LLC v. Bank of Am. Corp., Case No. 6:10-CV-
`
`670, Mem. & Order 6-9 (E.D. Tex. Mar. 30, 2012) (Davis, J.). Another basis of piercing the
`
`corporate veil is “where the parent has so dominated the subsidiary that the subsidiary is found to
`
`be a mere agent or conduit through which the parent conducts its business.” Nelson, 734 F.2d at
`
`1092. Here, it is not appropriate to pierce the corporate veil under any test.
`
`Micro Motion is a distinct subsidiary of Emerson, and its status as a separate
`
`corporate entity should be upheld. (SUMF ¶¶ 3-7.) Micro Motion independently hires and
`
`manages its own employees on its own payrolls, brings in its own business with its own direct
`
`sales force, maintains its own distinct facilities, and has exclusive discretion as to substantially
`
`all aspects of the continuing development and marketing of its Coriolis flowmeters. (SUMF ¶¶
`
`7-8, 14-18, 26-27.)
`
`Micro Motion’s use of the Emerson Process Management logo on its marketing
`
`materials does not subject Emerson to liability. See Verizon, 2002 U.S. Dist. LEXIS 24117 at
`
`*3-4, 7-10. Importantly, Emerson’s ownership of one-hundred percent of Micro Motion’s stock
`
`will not do it either. See Stucki, 849 F.2d at 596 (holding that parent company’s mere ownership
`
`of the subsidiary’s stock is insufficient to disregard the corporate structure); Jon-T Chems., 768
`
`F.2d at 691-92 (“N