United States District Court, E.D. Texas, Sherman Division
WAPP TECH LIMITED PARTNERSHIP and WAPP TECH CORP.
HEWLETT-PACKARD ENTERPRISE COMPANY
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE
before the Court is Defendant Hewlett-Packard Enterprise
Company's Motion to Stay (Dkt. #13). Having considered
the motion and the relevant pleadings, the Court finds that
the motion should be granted.
July 2, 2018, and July 20, 2018, Plaintiffs Wapp Tech Limited
Partnership and Wapp Tech Corp. filed this case and three
other related cases in this Court. See Wapp Tech Ltd.
P'ship v. Micro Focus Int'l PLC,
4:18-CV-469-ALM; Wapp Tech Ltd. P'ship v. Wells Fargo
& Co., 4:18-CV-501-ALM; Wapp Tech Ltd.
P'ship v. Bank of Am. Corp., 4:18-CV-519-ALM. In
these cases, Plaintiffs allege that certain software products
once owned by Defendant and now owned by Micro Focus
International plc (“Micro Focus”) and its
subsidiaries infringe on United States Patent Numbers 9, 971,
678, 9, 298, 864, and 8, 924, 192 (collectively,
The Micro Focus Subsidiary Suit
Plaintiffs' case against Micro Focus, Micro Focus filed a
motion to dismiss for lack of personal jurisdiction.
Micro Focus Int'l PLC, 4:18-CV-469-ALM, Dkt.
#12. After conducting jurisdictional discovery, Plaintiffs
responded contending that the contacts of Micro Focus's
subsidiaries operating in Texas could be imputed to Micro
Focus because the subsidiaries were Micro Focus's alter
egos. Id. at Dkt. #30. Considering the motion and
relevant pleadings, the Court found that Plaintiffs could not
establish a prima facie case that Micro Focus's
subsidiaries were Micro Focus's alter egos. Id.
Therefore, the Court dismissed Micro Focus from the suit, but
allowed Plaintiffs to add five of Micro Focus's alleged
subsidiaries to the suit: Seattle SpinCo Inc.
(“SSI”), EntIT Software LLC
(“EntIT”), EntCo Interactive (Israel) Ltd., Entco
Government Software LLC, and Micro Focus (US) Inc.
(collectively, the “Subsidiary Suit” or
“Subsidiary Defendants”). Id.
The Delaware Litigation
of seeking to intervene in one of the cases filed in this
Court, on October 15, 2018, SSI and EntIT filed a declaratory
judgment action against Plaintiffs in the United States
District Court for the District of Delaware (“Delaware
Litigation”). Seattle SpinCo, Inc. v. Wapp Tech
Ltd. P'ship, 1:18-CV-01585-RGA (D. Del.). In the
Delaware Litigation, SSI and EntIT assert that they
manufacture and sell the Application Testing and Delivery
Management (“ADM”) software at issue and seek a
declaratory judgment of non-infringement, invalidity, and
ineligibility concerning the patents-in-suit. Id. at
Dkt. #1 ¶¶ 21-22, 32-96. On November 27, 2018,
Plaintiffs moved to dismiss, transfer, or stay the Delaware
Litigation. Id. at Dkt. #9; Dkt. #10. In their
opening brief, Plaintiffs argued the District of Delaware
lacked subject matter jurisdiction over the Delaware
Litigation and, alternatively, that the case should be
dismissed, stayed, or transferred pending the litigation in
this Court. Id. at Dkt. #10. On March 15, 2019, the
Honorable Richard G. Andrews stayed the Delaware Litigation
and dismissed, without prejudice to re-urging,
Plaintiffs' dismissal and transfer arguments.
Id. at Dkt. #39.
Wells Fargo & Company and Bank of America
Plaintiffs' cases against Wells Fargo & Company and
Bank of America Corporation in this Court, the defendants
moved to stay the case pursuant to the customer-suit
exception-among other theories. Wells Fargo &
Co., 4:18-CV-501-ALM, Dkt. #11; Bank of Am.
Corp., 4:18-CV-519-ALM, Dkt. #12. Specifically, the
defendants argue the Court should stay the case pending the
outcome of either the Subsidiary Suit or the Delaware
Litigation. Id. The motions to stay are pending.
Hewlett-Packard Enterprise Company
suit, Defendant filed its Motion to Stay on October 17, 2018
(Dkt. #13). Defendant alleges that prior to September 1,
2017, Defendant possessed ADM software at issue (Dkt. #13 at
pp. 7-8). In September 2017, Defendant entered into a
transaction termed the “Seattle Transaction” in
which Defendant transferred its ADM software business to its
subsidiary SSI and SSI's subsidiaries. SSI and its
subsidiaries then separated from Defendant. Defendant claims
that in the Seattle Transaction, SSI and its subsidiaries
assumed all responsibility for the ADM software and,
therefore, Defendant divested itself of any liability arising
from the ADM software. Plaintiffs filed a response in
opposition to the motion on November 1, 2018 (Dkt. #16).
Defendant filed a reply in support of the motion on November
8, 2018 (Dkt. #17).
district court possesses the inherent power to control its
docket, including the power to stay proceedings. Clinton
v. Jones, 520 U.S. 681, 706 (1997). In managing its
docket, a district court must exercise judgment, weigh
competing interests, and maintain an even balance. Landis
v. N. Am. Co., 299 U.S. 248, 254-55 (1936). “The
Supreme Court has repeatedly observed that under the doctrine
of comity, when cases involving substantially overlapping
issues are pending before two federal district courts, there