United States District Court, E.D. Texas, Marshall Division
MEMORANDUM OPINION AND ORDER
GILSCRAP, UNITED STATES DISTRICT JUDGE.
the Court is Defendant BIScience Inc.'s
(“BIScience”) Motion to Dismiss, and in the
Alternative, Motion to Transfer Venue (the “First
Motion to Dismiss”). (Dkt. No. 15.) Additionally,
before the Court is BIScience's Second Motion to Dismiss,
and in the Alternative, Motion to Transfer Venue (the
“Second Motion to Dismiss”) (Dkt. No. 36), as
well as Plaintiff Luminati Networks Ltd.'s
(“Luminati”) Motion to Strike Portions of
Defendant's Second Motion to Dismiss (the “Motion
to Strike”) (Dkt. No. 40). Finally, before the Court is
Luminati's Motion for Early Venue Discovery. (Dkt. No.
considered these motions and for the reasons set forth
herein, the Court finds that Luminati's Motion to Strike
should be and hereby is DENIED. The Court
further finds that BIScience's First Motion to Dismiss
should be and hereby is DENIED AS MOOT.
BIScience's Second Motion to Dismiss should be and hereby
is GRANTED-IN-PART and
DENIED-IN-PART. BIScience's Second
Motion to Dismiss is GRANTED as to
Luminati's claim for tortious interference with
employment agreements, but is otherwise
DENIED. Also, Luminati's Motion for
Early Venue Discovery is DENIED AS MOOT.
filed its first Complaint (the “Original
Complaint”) against BIScience alleging direct and
indirect infringement of U.S. Patent Nos. 9, 241, 044 (the
“'044 Patent”) and 9, 742, 866 (the
“'866 Patent”) (collectively, the
“Asserted Patents”), as well as tortious
interference with Luminati's employment agreements and
misappropriation of trade secrets under the Defend Trade
Secrets Act (“DTSA”). (Dkt. No. 1.) BIScience
then filed its First Motion to Dismiss directed at the
Original Complaint arguing that this Court lacked personal
jurisdiction over BIScience; that, if the Court did have
jurisdiction, the case should nonetheless be transferred; and
that the Original Complaint failed to state claims for
violation of the DTSA or indirect infringement of the
Asserted Patents. (Dkt. No. 15.) Luminati opposed the First
Motion to Dismiss and moved for early venue discovery. (Dkt.
briefing on the First Motion to Dismiss was ongoing, Luminati
filed its First Amended Complaint. (Dkt. No. 28.) The First
Amended Complaint adds additional claims for false
advertising under the Lanham Act and tortious interference
with current and prospective business relationships.
(Id. ¶¶ 69-78.) The First Amended
Complaint also alleges new facts relevant to this Court's
personal jurisdiction over BIScience. (E.g. Id.
¶ 5.) These facts also bear on whether a transfer of
venue is appropriate. BIScience took the position that the
First Amended Complaint mooted the First Motion to Dismiss
and filed its Second Motion to Dismiss. (Dkt. No. 36.)
Luminati took the position that the First Motion to Dismiss
was not moot in its entirety and moved to strike the portions
of the Second Motion to Dismiss that Luminati argued were
duplicative of the First Motion to Dismiss. (Dkt. No. 40.)
The Second Motion to Dismiss asserts the same bases for
dismissal or transfer as the First Motion to Dismiss, except
BIScience drops its Rule 12(b)(6) defense as to
Luminati's claim for indirect infringement and adds a
Rule 12(b)(6) defense as to Luminati's Lanham Act claim.
(Compare Dkt. No. 15, with Dkt. No. 36.)
Motion to Strike
Court finds that the First Amended Complaint mooted the First
Motion to Dismiss directed at the Original Complaint.
BIScience properly directed its Second Motion to Dismiss at
the First Amended Complaint. Accordingly, BIScience's
First Motion to Dismiss is DENIED AS MOOT
and Luminati's Motion to Strike is
an amended pleading supersedes the original for all
purposes.” Nolen v. Lufkin Indus., Inc., 466
Fed.Appx. 895, 898 (Fed. Cir. 2012); see also King v.
Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (“An
amended complaint supersedes the original complaint and
renders it of no legal effect . . . .”). “A
motion to dismiss that attacks the superseded complaint may
be denied as moot.” New World Int'l, Inc. v.
Ford Global Techs., LLC, No. 3:16-CV-1112-M, 2017 WL
1078525, at *5 (N.D. Tex. Mar. 22, 2017); see also
WorldVentures Holdings, LLC v. Mavie, No. 4:18-CV-393,
2018 WL 6523306, at *16 (E.D. Tex. Dec. 12, 2018). However,
where a motion to dismiss attacks the original complaint for
deficiencies that persist in the amended complaint, the court
has discretion to apply the original motion to dismiss to the
amended complaint rather than deny the motion as moot.
New World, 2017 WL 1078525, at *5; see also
6 Charles A. Wright & Arthur R. Miller, Federal
Practice and Procedure § 1476 (3d ed. 2019)
(“[D]efendants should not be required to file a new
motion to dismiss simply because an amended pleading was
introduced while their motion was pending. If some of the
defects raised in the original motion remain in the new
pleading, the court simply may consider the motion as being
addressed to the amended pleading.”).
Court finds that the proper course is to deny the First
Motion to Dismiss as mooted by the First Amended Complaint.
argues that its First Amended Complaint did not necessarily
moot the First Motion to Dismiss and, as a result, the Second
Motion to Dismiss is a duplicative motion that represents an
abusive litigation tactic. (Dkt. No. 40, at 5-6.) While
Luminati is correct that other courts have found motions to
dismiss and motions to transfer not mooted by amended
complaints, these courts recognized that it was an act of
their “discretion” to consider such motions to
the extent “such a motion remains applicable.”
WowWee Grp. Ltd. v. Wallace, CV-12-2298-MWF(VBKx),
2012 WL 13013022, at *2 (C.D. Cal. June 27, 2012). Indeed, it
is within the Court's discretion to consider a motion
directed to a superseded pleading where the motion remains
applicable to the amended pleading-that is, where the amended
pleading has not addressed the defects raised in the motion.
However, it is equally within the discretion of the Court to
deny such motion where it is not applicable. The Court finds
that the latter situation is present here. This decision is
largely facilitated by BIScience's filing of its Second
Motion to Dismiss.
purpose of interpreting a motion directed at a superseded
complaint as one directed at the amended complaint is to save
time and resources in situations where the motion is fairly
applicable to amended complaint, not to unfairly tie the
hands of the movant in situations where it is not. The
plaintiff should not be allowed to amend its complaint in
response to a motion and then require the movant to rest on
its outdated briefing.
argues that Rule 12(b)(2) motions are distinguishable from
Rule 12(b)(6) motions or other motions on the pleadings and
thus cases finding such motions moot are inapposite. (Dkt.
No. 57, at 2-3.) Luminati provides no basis for this supposed
distinction. See, e.g., New World, 2017 WL
1078525, at *5 (denying as moot a motion to dismiss for lack
of personal jurisdiction and improper venue directed towards
a superseded complaint). Though discovery is available in
determining a Rule 12(b)(2) motion, the Court also relies on
the facts pled in the complaint, just as it does in a Rule
12(b)(6) motion. See Bullion v. Gillespie, 895 F.2d
213, 217 (5th Cir. 1990) (“[O]n a motion to dismiss for
lack of jurisdiction, uncontroverted allegations in the
plaintiff's complaint must be taken as true . . .
.”). The First Amended Complaint, in addition to adding
new causes of action, alleges new facts, including new facts
alleged in support of this Court's jurisdiction.
(See Dkt. No. 28 ¶ 5.) The plaintiff cannot
shift the playing field during the course of briefing on a
motion and reasonably expect that the defendant will not be
given an opportunity to respond with a new and properly
also argues that the Second Motion to Dismiss is barred by
Rule 12(g). (Dkt. No. 40, at 7-8.) It is true that Rule 12(g)
would prevent BIScience from raising an argument in its
Second Motion to Dismiss that was available to it but not
asserted in its First Motion to Dismiss. Fed.R.Civ.P.
12(g)(2). However, Luminati identifies no such arguments. On
the contrary, Luminati affirmatively states that
“BIScience's Second Motion to Dismiss is based on
the same grounds as the First Motion to Dismiss.” (Dkt.
No. 40, at 9; see also Id. at 1-2.)
Luminati's argument that the Second Motion to Dismiss
effectively circumvents this Court's local rules
regarding briefing schedules and page limits is unfounded.
(Id. at 8-9.) BIScience timely responded to
Luminati's First Amended Complaint with a new motion
directed at the First Amended Complaint. Fed.R.Civ.P.
12(a)-(b), 15(a). BIScience briefed this motion within the
prescribed page limits and without seeking to incorporate by
reference arguments made in its First Motion to Dismiss.
First Amended Complaint superseded the Original Complaint and
added allegations to address defects asserted by the First
Motion to Dismiss. Accordingly, the Court denies the First
Motion to Dismiss as moot and considers instead the Second
Motion to Dismiss. Luminati's Motion to Strike is denied.
Second Motion to Dismiss
to the Second Motion to Dismiss, the Court finds that it has
specific personal jurisdiction or supplemental personal
jurisdiction over all of Luminati's claims. However, the
Court declines to exercise supplemental jurisdiction over the
claim for tortious interference with employment agreements.
Accordingly, the tortious interference with employment
agreements claim is DISMISSED WITHOUT
PREJUDICE. The Court further finds that transfer of
venue is not warranted and that Luminati has stated claims
for violations of the DTSA and the Lanham Act. Therefore, the
remainder of BIScience's Second Motion to Dismiss is
Motion to Dismiss for Lack of Jurisdiction
Court finds that it has specific personal jurisdiction over
Luminati's claims for patent infringement and false
advertising. Additionally, the Court has supplemental
jurisdiction over the remainder of Luminati's claims.
However, the Court declines to exercise supplemental
jurisdiction over Luminati's claim for tortious
interference with employment agreements, as determination of
that claim is best left to the judicial authority of the
State of Israel.
Circuit law governs personal jurisdiction where “a
patent question exists.” See Celgard, LLC v. SK
Innovation Co., 792 F.3d 1373, 1377 (Fed. Cir. 2015).
“[W]hether a defendant is subject to specific personal
jurisdiction in the forum state involves two inquiries:
first, whether the forum state's long-arm statute permits
service of process and, second, whether the assertion of
jurisdiction is consistent with due process.”
Id. “Because the Texas long-arm statute
extends to the limits of federal due process, the two-step
inquiry collapses into one federal due process
analysis.” Johnston v. Multidata Sys. Int'l
Corp., 523 F.3d 602, 609 (5th Cir. 2008); accord
Grober v. Mako Prod., Inc., 686 F.3d 1335, 1345 (Fed.
Cir. 2012) (“California and federal due process
limitations are coextensive, and thus the inquiry collapses
into whether jurisdiction comports with due process.”)
(internal quotation marks omitted).
process to be satisfied, the defendant must have
“certain minimum contacts with [the forum] such that
the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.”
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (internal quotations omitted). “A court must
inquire whether the defendant has ‘purposefully
directed his activities' at the forum state and, if so,
whether ‘the litigation results from alleged injuries
that arise out of or relate to those activities.'”
Breckenridge Pharm., Inc. v. Metabolite Labs., Inc.,
444 F.3d 1356, 1361-62 (Fed. Cir. 2006) (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). Upon
a showing of purposeful minimum contacts, the defendant bears
the burden to prove unreasonableness. Elecs. for Imaging,
Inc. v. Coyle, 340 F.3d 1344, 1350 (Fed. Cir. 2003). In
rare circumstances, a defendant may defeat the exercise of
personal jurisdiction by “present[ing] a compelling
case that the presence of some other considerations would
render jurisdiction unreasonable.” Burger
King, 471 U.S. at 477.
court has personal jurisdiction over the patent claims
asserted, the court also has supplemental personal
jurisdiction over “non-patent claims to the extent they
form part of the ‘same case or controversy' as the
patent claims.” Avocent Huntsville Corp. v. Aten
Int'l Co., 552 F.3d 1324, 1339 (Fed. Cir. 2008). 28
U.S.C. § 1367 “confers supplemental jurisdiction
with respect to both subject matter and personal jurisdiction
where the ‘same case or controversy' requirement is
satisfied.” Silent Drive, Inc. v. Strong Indus.,
Inc., 326 F.3d 1194, 1206 (Fed. Cir. 2003).
Court finds that it has personal jurisdiction over BIScience
as to Luminati's claims of patent infringement. BIScience
has sold its allegedly infringing GeoSurf service to at least
52 customers in Texas. (Dkt. No. 36-1 ¶ 11.)
Additionally, BIScience's service allows customers all
over the world to utilize residential proxy devices in ten
Texas cities-Arlington, Austin, Crowley, Dallas, El Paso,
Fort Worth, Houston, Katy, San Antonio, and Spring-and
BIScience advertises as such. (Dkt. No. 28-5, at 2-3.) Those
proxy service activities are “purposefully
directed” at Texas, and Luminati's claims for
patent infringement allege “injuries that arise out of
or relate to those activities.” Burger King
Corp., 471 U.S. at 472. Accordingly, specific personal
jurisdiction is proper over these claims.
Spike, LLC v. Texas Instruments, Inc., upon which
BIScience relies (Dkt. No. 53, at 3-4), is distinguishable.
No. 6:12-cv-499, 2014 WL 11829323 (E.D. Tex. Mar. 31, 2014).
In Blue Spike, the plaintiff attempted to establish
jurisdiction by arguing that “[defendant's]
partners-and therefore [defendant] itself operates
pervasively throughout Texas.” Id. at *3. The
plaintiff also argued that the defendant's website
included a “partner locator” that directed
customers to partners in Texas. Id. at *2. The court
found these arguments unpersuasive, noting that “[t]he
Court's focus is on [defendant's] actions, not
third-party customers.” The court held that the
plaintiff had not established that the defendant's
partner's contacts with Texas related to the claims in
that case. Id. at *3.
contrast, in the instant case, BIScience itself, not a
third-party, has purposefully directed activities toward
Texas. These contacts relate directly to the claims at issue.
BIScience is accused, inter alia, of directly and
indirectly infringing method claims in the Asserted Patents.
(Dkt. No. 28 ¶¶ 39-40, 53-54.) BIScience allegedly
does this by allowing its customers to request content via
selected residential proxy devices, including many located in
Texas. (See Id. ¶ 49.) BIScience is also
accused of implementing these residential proxies.
(Id. ¶ 24, 39, 53.) The ability to direct
internet traffic through proxies situated in various
locations, including Texas, is a key advertised feature of
A proxy will also give you access to a set of proxy servers
located worldwide, which will help you solve the location
obstacle easily: Just select your preferred location, whether
it's the United States or Madagascar, and surf in total
anonymity and freedom.
(Dkt. No. 28-4, at 5; see also Dkt. No. 28-3, at 2
(“Location is key. One of the reasons to use a proxy,
is to appear as if you were surfing from a different
place.”).) Far from being unrelated, BIScience's
encouragement of customers to use proxies, including those
located in Texas, is foundational to Luminati's claims of