Intellectual Tech LLC v. Zebra Technologies Corporation

CourtDistrict Court, W.D. Texas
DecidedMay 20, 2022
Docket6:19-cv-00628
StatusUnknown

This text of Intellectual Tech LLC v. Zebra Technologies Corporation (Intellectual Tech LLC v. Zebra Technologies Corporation) is published on Counsel Stack Legal Research, covering District Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Intellectual Tech LLC v. Zebra Technologies Corporation, (W.D. Tex. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION

INTELLECTUAL TECH LLC, Plaintiff,

v. 6:19-cv-00628-ADA

ZEBRA TECHNOLOGIES CORPORATION, Defendant.

MEMORANDUM OPINION & ORDER GRANTING-IN-PART-AS-MODIFIED AND DENYING-IN-PART DEFENDANT ZEBRA’S MOTION FOR SUMMARY JUDGMENT FOR LACK OF STANDING [ECF No. 116] Came on for consideration this date is Defendant Zebra Technologies Corporation’s Motion for Summary Judgment for Lack of Standing Pursuant to Federal Rules of Civil Procedure 56. ECF No. 116 (the “Motion”). Plaintiff Intellectual Tech LLC (“IT”) filed an opposition on March 3, 2022, ECF No. 123, to which Zebra replied on March 17, 2022, ECF No. 124. The Court heard oral arguments on the Motion on May 2, 2022. See ECF No. 141. That same day, the Court ordered this Action stayed pending resolution of the Motion. ECF No. 142. After careful consideration of the Motion, the Parties’ briefs, and the applicable law, the Court GRANTS-IN- PART-AS-MODIFIED AND DENIES-AS-MOOT-IN-PART Zebra’s Motion for Summary Judgment for Lack of Standing Pursuant to Federal Rules of Civil Procedure 56. ECF No. 116. I. BACKGROUND Whether IT suffered a constitutional injury depends on a series of interrelated agreements that IT entered into with its parent, OnAsset Intelligence, Inc. (“OnAsset”), and OnAsset’s creditor, Main Street Capital Corporation (“Main Street”). OnAsset gave Main Street a security interest in U.S. Patent No. 7,233,247 (the “’247 patent”) in exchange for a loan. And when OnAsset defaulted on that loan, Main Street gained certain rights in the ’247 patent by dint of its security interest. OnAsset and Main Street later entered a forbearance agreement to deal with on OnAsset’s default. IT sprung from that forbearance and was given, along with title to the ’247 patent, a mandate to monetize the ’247 patent. In furtherance of that mandate, IT sued Zebra in this Court on October 22, 2019, alleging infringement of the ’247 patent. See ECF No. 1. But the rights Main

Street maintained in the ’247 patent—through security interests followed by defaults—cast a cloud over IT’s constitutional. II. LEGAL STANDARD “The law of Article III standing, which is built on separation-of-powers principles, serves to prevent the judicial process from being used to usurp the powers of the political branches.” Town of Chester v. Laroe Estates, Inc., 137 S. Ct. 1645, 1650, 198 L. Ed. 2d 64 (2017). To have standing, IT “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547, 194 L. Ed. 2d 635 (2016). “Th[at] triad of injury in fact, causation, and redressability constitutes the core of Article III’s case-or-controversy requirement,” and IT, as “the party invoking federal jurisdiction[,] bears the burden of establishing

its existence.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103–04, 118 S. Ct. 1003, 140 L. Ed. 2d 210 (1998) (footnote omitted). Regional circuit law governs standards for the “dismissal of a complaint for lack of standing unless the issue is unique to patent law and therefore exclusively assigned to the Federal Circuit.” Univ. of S. Fla. Rsch. Found., Inc. v. Fujifilm Med. Sys. U.S.A., 19 F.4th 1315, 1323 (U.S. Fed. Cir. 2021). Federal Circuit law governs an entity’s constitutional standing in a patent infringement action. WiAV Sols. LLC v. Motorola, Inc., 631 F.3d 1257, 1263 (Fed. Cir. 2010). “[E]ach element of Article III standing must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, with the same evidentiary requirements of that stage of litigation.” Legacy Cmty. Health Servs., Inc. v. Smith, 881 F.3d 358, 366 (5th Cir.), as revised (Feb. 1, 2018), cert. denied, 139 S. Ct. 211, 202 L. Ed. 2d 126 (2018) (quotation marks omitted). Thus, at summary judgment, IT cannot rely on “mere allegations”; it “must set forth by affidavit or other evidence specific facts” supporting standing. Lujan v. Defs. of Wildlife, 504 U.S.

555, 561, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992) (quotation marks omitted). III. ANALYSIS A. Summary Judgment, Reconsideration, and Subject Matter Jurisdiction IT asserts that this Court should deny Zebra’s Motion on procedural grounds because this Court already disposed of this issue at the dismissal stage. ECF No. 123 at 1. On January 19, 2021, Zebra filed a motion to dismiss for lack of constitutional and statutory standing. ECF No. 68. That motion became ripe on January 29, 2021, ECF No. 74 (the “Dismissal Motion”), and the Court entered a brief order holding that “Intellectual Tech LLC is the rightful owner of the ’247 patent, retains the right to enforce that patent, and thus has constitutional and statutory standing to bring a patent infringement suit against Zebra Technologies Corporation,” ECF No. 75. IT contends that, “under Federal Rule of Civil Procedure 12(d), Zebra’s Motion to Dismiss must be treated as a

motion for summary judgment under Rule 56,” supposedly because Zebra’s motion to dismiss “presented matters outside the pleadings, including certain loan, security, and forbearance agreements.” ECF No. 123. This Court need not treat Zebra’s Dismissal Motion as a motion for summary judgment because courts in the Fifth Circuit are permitted to resolve factual disputes underlying subject matter jurisdiction without converting a motion under Rule 12(b)(1) to one for summary judgment. See, e.g., Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (“In examining a Rule 12(b)(1) motion, the district court is empowered to consider matters of fact which may be in dispute.”). And in any event, the Court has authority under Rule 54(b) to “to revise[] at any time any order or other decision . . . [that] does not end the action.” Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017) (quoting Fed. R. Civ. P. 54(b)) (internal quotation omitted, alterations in original). Federal Rule of Civil Procedure 54(b) “reflect[s] the inherent power of the rendering district court to afford such relief from interlocutory judgments as justice requires.” Id.

(internal quotation omitted). In accordance with this Rule, courts may reconsider and reverse prior decisions “even in the absence of new evidence or an intervening change in or clarification of the substantive law.” Id. Accordingly, the Court exercises its discretion to reconsider any prior judgment as to IT’s rights in the ’247 patent as it bears on constitutional standing. Moreover, as to the instant Motion, the Fifth Circuit has “expressed doubt as to the propriety of summary judgment as a tool for disposing of a case on jurisdictional grounds when the district court does not actually purport to address the merits of the parties’ dispute.” Gaspard v.

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Intellectual Tech LLC v. Zebra Technologies Corporation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/intellectual-tech-llc-v-zebra-technologies-corporation-txwd-2022.