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holding that the complaint "plausibly alleges" fraudulent concealment
Summary of this case from Morgan v. ChapmanOpinion
Civil Action No. 4:20-CV-01415
2021-03-04
HUNTON ENERGY HOLDINGS, LLC, Plaintiff, v. HL SEAWATER HOLDINGS, LLC, et al., Defendants.
Taras Gracey, Pro Hac Vice, Polsinelli PC, Chicago, IL, Gregory V. Novak, Matthew Russell Frontz, Polsinelli PC, Houston, TX, Henry A. Petri, Jr., Polsinelli PC, Washington, DC, for Plaintiff. Carolyn E. Isaac, Michael Best & Friedrich LLP, Chicago, IL, Joshua Ryan Hamilton Gray, Pro Hac Vice, Michael Best & Friedrich LLP, Raleigh, NC, Arthur Gollwitzer, III, Jackson Walker LLP, Austin, TX, Austin Kennedy Yancy, Jackson Walker, LLP, Houston, TX, for Defendants.
Taras Gracey, Pro Hac Vice, Polsinelli PC, Chicago, IL, Gregory V. Novak, Matthew Russell Frontz, Polsinelli PC, Houston, TX, Henry A. Petri, Jr., Polsinelli PC, Washington, DC, for Plaintiff.
Carolyn E. Isaac, Michael Best & Friedrich LLP, Chicago, IL, Joshua Ryan Hamilton Gray, Pro Hac Vice, Michael Best & Friedrich LLP, Raleigh, NC, Arthur Gollwitzer, III, Jackson Walker LLP, Austin, TX, Austin Kennedy Yancy, Jackson Walker, LLP, Houston, TX, for Defendants.
ORDER
Alfred H. Bennett, United States District Judge
Before the Court are the Partial Motion to Dismiss ("Motion") filed by Defendants HL Seawater Holdings, LLC, Enviro Water Minerals Company, Inc., Hausman Interest, LTD., Tommy Lott, J. Hubble Hausman, and Paul Steven Wallace ("Defendants") (Doc. #13), Plaintiff Hunton Energy Holdings, LLC's Response (Doc. #18), and Defendants’ Reply (Doc. #21). Having reviewed the parties’ arguments and applicable legal authority, the Court denies the Motion.
I. Background
This is a breach of contract, trade secret misappropriation, and patent infringement case involving a water desalination and mineral recovery invention named "Zero Discharge Water Desalination Plant with Minerals Extraction Integrated with Natural Gas Combined Cycle Power Generation" ("Desalination Technology"). Doc. #1 ¶ 1. The Desalination Technology separates "dirty" minerals from saltwater or brackish water to produce drinkable water. Id. ¶ 2. Unlike other desalination processes, the Desalination Technology is "zero discharge" because it extracts commercial-grade minerals, including gypsum and magnesium hydroxide, from the "dirty" minerals that would otherwise be disposed of as waste. Id.
Plaintiff Hunton Energy Holdings was formed in 2007 to develop energy and water technology solutions. Id. ¶ 32. Plaintiff hired Defendant Paul Steven Wallace as its Chief Technology Officer ("CTO") in January 2008 to develop new technologies for the benefit of Plaintiff. Id. ¶ 34. Defendant Wallace signed an Employment Agreement that assigned all rights, interests, and title in all employment-related inventions to Plaintiff and required him to (1) disclose all technology he developed during his employment; (2) use Plaintiff's confidential information and trade secrets for the exclusive benefit of Plaintiff; and (3) keep such information in the strictest confidence during and after his employment. Id. ¶¶ 3, 35, 36. As the CTO, Defendant Wallace developed a review process for newly developed technologies under which he would draft a "Patent Disclosure Document" describing the newly developed technology. Id. ¶ 37. Once his supervisor approved the Patent Disclosure Document, Defendant Wallace would present the document to various Plaintiff employees, including the founder and president, to determine if a patent application should be filed with the U.S. Patent and Trademark Office ("PTO"). Id. ¶ 37.
Defendant Wallace drafted a Patent Disclosure Document for the Desalination Technology that is dated February 15, 2009, but Defendant Wallace did not submit the document or otherwise mention the invention to any Plaintiff employees. Id. ¶¶ 38, 39. Defendant Wallace subsequently resigned as Plaintiff's CTO on July 16, 2009. Id. ¶ 40. Plaintiff's counsel sent Defendant Wallace a letter on July 23, 2009 reminding him of his ongoing confidentiality and disclosure obligations under the Employment Agreement. Id. ¶ 40, Ex. 4. Defendant Wallace responded on July 28, 2009 that he would abide by his confidentiality obligations and had returned all IP records. Id. ¶ 41, Ex. 5 at 7. In November 2009, Defendant Wallace was hired to serve as the CTO for Katana Energy ("Katana"), a company formed by Plaintiff's former president Verley Sembritzky. Id. ¶¶ 40, 15; Doc. #13 at 1. In the same month, Defendant Lott and Defendant Hausman Interests (a company owned by Defendant Hausman) extended credit to Katana in exchange for a security interest in Katana's existing and after-acquired intellectual property. Doc. #1 ¶¶ 12, 46, 51.
On February 17, 2010, Defendant Wallace filed Provisional Patent Application No. 61/305,193 ("’193 Provisional Application") with the PTO, which eventually matured into U.S. Patent No. 9,047,351 ("the ’351 Patent"). Id. ¶ 8. The ’193 Provisional Application had the same title as the Patent Disclosure Document for the Desalination Technology, an "essentially identical description," and an appendix designating "Hunton Energy Confidential Information." Id. ¶ 42. In June 2010, Defendant Wallace filed two related patent applications with the PTO and assigned the Desalination Technology, along with the three related patent applications, to Katana. Id. ¶ 8. In April 2012, "based on an alleged default by Katana," Defendant Lott and Defendant Hausman Interests foreclosed on Katana's intellectual property, including the three patent applications related to the Desalination Technology, and "contributed" them to Defendant HL Seawater, a company owned by Defendant Lott and Defendant Hausman Interests. Id. ¶¶ 13, 14. In September 2012, Defendants Lott, Hausman Interests, and HL Seawater recorded a Nunc Pro Tunc Assignment with the PTO assigning the Desalination Technology and three related patent applications to Defendant HL Seawater. Id. ¶ 16.
Defendant HL Seawater proceeded to create Defendant Enviro Water, a separate company, "to develop and exploit desalination processes utilizing the Desalination Technology, including the ’351 Patent." Id. ¶ 16. Defendant Lott serves as a Director of Defendant Enviro Water, Defendant Wallace serves as its CTO, and Defendant Hausman Interests is its President, Secretary, and a Director. Id. ¶ 50. Defendant HL Seawater and Defendant Enviro Water then entered into a public-private partnership with the El Paso Water Utilities to build a Full Recovery Desalination Plant ("El Paso Plant") using the Desalination Technology and ’351 Patent. Id. ¶¶ 68–70; Ex. 8 at 4, 6; Ex. 9 at 19. As of April 2019, the El Paso Plant was "finishing commissioning and expected to commence full commercial operations soon." Id. , Ex. 8 at 6.
Two separate but related lawsuits have also arisen regarding the Desalination Technology. The first was a suit filed in 2012 by Sembritzky, Plaintiff's former president, against Katana, Defendant Hausman Interests, Defendant Hausman, Defendant Lott, and two parties not involved in this case. Id. ¶ 59. That case settled in 2013. Id. In a second suit that is currently pending, Defendants HL Seawater, Hausman, and Lott are suing Sembritzky for trade secret misappropriation related to the Desalination Technology. Id. ¶¶ 15, 61. Plaintiff alleges that after the second suit was filed and "just less than a year" before this case was filed, Sembritzky told Plaintiff about his discovery of the Patent Disclosure Document for the Desalination Technology that Defendant Wallace drafted while serving as Plaintiff's CTO. Id. ¶ 61. In light of this discovery, Plaintiff filed corrective papers with the PTO on February 13, 2020 declaring itself the true owner of the ’351 Patent. ¶ 65.
Plaintiff filed this suit on April 21, 2020 asserting claims against all Defendants for patent infringement, misappropriation of trade secrets under the Texas Uniform Trade Secrets Act ("TUTSA"), and misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA), and seeking declaratory judgments that: (1) declare Plaintiff the owner by assignment of the Desalination Technology, ’351 Patent, and related patent applications, (2) confirm Plaintiff's corrective recordation with the PTO, and (3) declare all assignments of the ’351 Patent and related patent applications void ab initio. Doc. #1 ¶¶ 133, 72, 92, 122–124. Plaintiff also asserts a claim for breach of contract against Defendant Wallace individually. Id. ¶¶ 128–130. Defendants now move to dismissal all claims against them apart from the claim for declaratory judgment against Defendant HL Seawater. Doc. #13.
II. Legal Standard
To state a claim for relief, " Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations omitted). To survive a 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). This plausibility standard is met when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. When conducting its inquiry, a court "accepts all well-pleaded facts as true and views those facts in the light most favorable to the plaintiff." Bustos v. Martini Club Inc. , 599 F.3d 458, 461 (5th Cir. 2010). In considering a motion to dismiss, a court may consider the complaint and its proper attachments. Dorsey v. Portfolio Equities, Inc. , 540 F.3d 333, 338 (5th Cir. 2008).
III. Analysis
a. Breach of Contract
Defendants argue that Plaintiff's breach of contract claim against Defendant Wallace is barred by the statute of limitations. Doc. # 13 at 4. Plaintiffs respond that Defendant Wallace's fraudulent concealment tolls the statute of limitations. Doc. #18 at 3. Texas imposes a four-year statute of limitations for breach of contract claims. TEX. CIV. PRAC. & REM. CODE § 16.004. "A claim for breach of contract accrues when the contract is breached." Cosgrove v. Cade , 468 S.W.3d 32, 39 (Tex. 2015). But "invocation of fraudulent concealment estops a defendant from relying on the statute of limitations as an affirmative defense to [a] plaintiff's claim." Borderlon v. Peck , 661 S.W.2d 907, 908 (Tex. 1983). The party asserting fraudulent concealment must allege that the defendant (1) actually knew a wrong occurred; (2) had a fixed purpose to conceal the wrong; and (3) did conceal the wrong. Shell Oil Co. v. Ross , 356 S.W.3d 924, 927 (Tex. 2011). "However, fraudulent concealment only tolls the statute of limitations until the fraud is discovered or could have been discovered with reasonable diligence." Id. (internal quotations omitted).
Here, Plaintiff asserts a claim for breach of contract against Defendant Wallace based on his failure to disclose the Patent Disclosure Document for the Desalination Technology and his use of Plaintiff's trade secrets and confidential information for the benefit of others. Doc. #1 ¶¶ 128–130. Defendants argue that the cause of action could not have accrued any later than 2010 when Defendant Wallace filed the ’193 Provisional Application. Doc. #13 at 4. But the Complaint specifically alleges that Defendant Wallace breached the Employment Agreement when he used Plaintiff's trade secrets during his employment with Enviro Water, which began in February 2012. Doc. # 1 ¶¶ 130, 56. Accordingly, the Court finds that Plaintiff has sufficiently alleged that the breach of contract claim did not accrue until February 2012. However, Plaintiff's assertion of fraudulent concealment prevents the Court from ending its inquiry here. See Doc. #18 at 3.
The Complaint alleges that under the Employment Agreement, Defendant Wallace "was obligated to disclose all technology that he developed" and established intellectual property protocols "for making mandatory disclosure of developed technologies." Doc. #1 ¶¶ 3, 39. The Complaint further alleges that Defendant Wallace "actively conceal[ed] the fact that he developed the Desalination Technology while employed" by Plaintiff and "did not follow the intellectual property protocols that he, himself, established ... when it came to his invention of the Desalination Technology." Id. ¶¶ 36, 39. After resigning as Plaintiff's CTO, Defendant Wallace wrote a letter acknowledging his obligations under the Employment Agreement but still proceeded to file a patent application based on Plaintiff's confidential information. Id. ¶¶ 41, 42. Plaintiff exited the water desalination industry after Defendant Wallace resigned and did not monitor Defendant Wallace's post-employment activities because it "reasonably relied upon the representations of [Defendant] Wallace" in his July 28 letter "that he would maintain his contractual confidentiality obligations to [Plaintiff]." Id. ¶¶ 35, 36, 80. The Complaint further alleges that Plaintiff did not learn of the Patent Disclosure Document until 2019. Id. ¶ 36.
Based on these allegations, the Court finds that the Complaint plausibly alleges that Defendant Wallace knew a wrong occurred, had a fixed purpose to conceal the wrong, and did conceal the wrong, thus triggering the tolling of the statute of limitations under the doctrine of fraudulent concealment. See Shell Oil Co. , 356 S.W.3d at 927. The Court further finds that the Complaint contains sufficient facts to plausibly conclude that the tolling did not end until Plaintiff reasonably discovered the Patent Disclosure Document in 2019. See id. Because the statute of limitations was tolled until 2019 and Plaintiff filed suit in 2020, the Court denies the Motion as to Plaintiff's breach of contract claim.
b. Texas Uniform Trade Secret Act
Defendants argue that Plaintiff's trade secret misappropriation claim under TUTSA must be dismissed because the Act does not apply to claims that arose before September 1, 2013 and Plaintiff's claim arose when Defendant Wallace resigned as Plaintiff's CTO in July 2009. Doc. #13 at 8–9. Plaintiff argues that the Complaint contains allegations of misappropriation that occurred after 2013, including the development of the El Paso Plant using the Desalination Technology. Doc. #18 at 8–9; cf. Capstone Associated Servs., Ltd. v. Organizational Strategies, Inc. , No. CV H-15-3233, 2019 WL 3819085, at *3 (S.D. Tex. Aug. 14, 2019). TUTSA "only applies to the misappropriation of a trade secret made on or after September 1, 2013." In re Mandel , 578 F. App'x 376, 384 n.8 (5th Cir. 2014) (citing Uniform Trade Secrets Act, 83rd Leg., R.S., ch. 10, § 3, 2013 Tex. Gen. Laws 12, 14). However, a "cause of action for trade-secret misappropriation accrues when the trade secret is actually used" by the offending party to seek profit. Sw. Energy Prod. Co. v. Berry-Helfand , 491 S.W.3d 699, 721–22 (Tex. 2016) (internal citations omitted). "[A]ny exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant is a ‘use.’ " Gen. Universal Sys., Inc. v. HAL, Inc. , 500 F.3d 444, 450–51 (5th Cir. 2007).
Here, Plaintiff alleges that the "Desalination Technology misappropriated by [Defendant] Wallace[ ] was used by his employer [Defendant] Enviro Water to develop [the El Paso Plant,] a commercial water production and mineral manufacturing facility." Doc. #1 ¶ 97. Attached to the Complaint is a presentation by Defendant Enviro Water dated April 2019, which states that the El Paso Plant "is finishing commissioning and expected to commence full commercial operations soon." Id. , Ex. 8 at 6. Accepting these allegations as true and viewing them in the light most favorable to Plaintiff, the Court finds that the Complaint sufficiently alleges that Defendants have used Plaintiff's trade secrets to seek profit on or after September 1, 2013. See Bustos , 599 F.3d at 461. Accordingly, the Motion is denied as to Plaintiff's TUTSA claim.
c. Defend Trade Secrets Act
Defendants next argue that Plaintiff's DTSA claim must fail in its entirety because it fails to identify trade secrets beyond the information contained in the public patent filings and that at a minimum it must fail as to Defendant HL Seawater and Defendant Enviro Water, who did not exist when Defendant Wallace resigned as Plaintiff's CTO in 2009. Doc. #13 at 10–12. Plaintiff argues that Defendants cannot avoid trade secret liability by filing a patent application that destroys trade secret status and that the Complaint sufficiently alleges use of misappropriated trade secrets by Defendant HL Seawater and Defendant Enviro Water. Doc. #18 at 11, 13. The DTSA defines misappropriation as the "disclosure or use of a trade secret of another without express or implied consent." 18 U.S.C. § 1839. While it is true that "a published patent application destroys the secrecy of its contents for trade secret purposes," a plaintiff is not deprived of his cause of action where "unpatented technology [ ] was misappropriated before the trade secrets at issue were disclosed by a subsequent patent." Tewari De-Ox Sys., Inc. v. Mountain States/Rosen, L.L.C. , 637 F.3d 604, 612 (5th Cir. 2011).
Here, Plaintiff alleges that rather than disclosing the Patent Disclosure Document for the Desalination Technology to Plaintiff, Defendant Wallace concealed Plaintiff's trade secrets until he filed the ’193 Provisional Application. Doc. #1 ¶¶ 5, 8. The Complaint further alleges that after Defendant Wallace assigned the ’193 Provisional Application to Katana Energy, Defendant Lott and Defendant Hausman Interests foreclosed on Katana's intellectual property and contributed the ’193 Provisional Application to Defendant HL Seawater. Id. ¶¶ 9, 13, 14. Defendant HL Seawater then allegedly created Defendant Enviro Water "to develop and exploit the desalination processes utilizing the Desalination Technology" and related patent and patent applications. Id. ¶ 16. Finally, the Complaint alleges that Defendant HL Seawater and Defendant Enviro Water have used the Desalination Technology to "develop a commercial water production and mineral manufacturing facility," namely the El Paso Plant. Id. ¶ 97. Based on these allegations, the Court finds that the Complaint sufficiently alleges that "unpatented technology [ ] was misappropriated before the trade secrets at issue were disclosed" and that Defendant HL Seawater and Defendant Enviro Water have used Plaintiff's trade secrets without Plaintiff's consent. See Tewari , 637 F.3d at 612 ; 18 U.S.C. § 1839. Accordingly, the Motion is denied as to the DTSA claim.
The Court finds Defendants’ three remaining arguments regarding dismissal of the DTSA claim unpersuasive. First, Defendants argue that statute of limitations bars the DTSA claim. Doc. #13 at 9. As explained regarding the breach of contract claim, Plaintiffs have sufficiently alleged that Defendant Wallace's fraudulent concealment tolled the statute of limitations until 2019. See Ross , 356 S.W.3d at 927. Second, Defendants argue that the DTSA claim must fail because Mr. Sembritzky took no steps to protect Plaintiff's trade secrets when he hired Defendant Wallace to work at Katana. Doc. #13 at 11. But Plaintiff alleges that Mr. Sembritzky is a former president of Plaintiff's and a subsequent founder of Katana. Doc. #1 ¶ 15; Doc. #18 at 12. There is no basis in the Complaint to infer that Sembritzky was still serving as Plaintiff's president when he hired Defendant Wallace to serve as Katana's CTO. Plaintiff's allegations regarding the confidentiality terms of the Employment Agreement and the July 23 letter are sufficient to plausibly infer that Plaintiff took reasonable steps to protect its trade secrets. Doc. #1 ¶¶ 35, 41. Finally, Defendants’ argument that the Complaint fails to allege that the trade secrets have economic value is unpersuasive because it is premised exclusively on trade secrets beyond those disclosed in the public patent filings. As described above, allegedly misappropriated technology that was subsequently publicized in a patent application is not beyond the reach of Plaintiff's DTSA claim. See Tewari , 637 F.3d at 612.
d. Declaratory Judgment
Defendants next argue that Plaintiff's declaratory judgment claims must be dismissed as to all Defendants other than Defendant HL Seawater because the claim "is limited to seeking a declaration of ownership" of the ’351 Patent. Doc. #13 at 14. While declaratory judgment regarding ownership is the first type of relief the Complaint seeks, the subsequent two paragraphs seek declaratory judgments "confirming Hunton Energy's February 13, 2020 corrective recordation" and "declaring Wallace's assignment of any of the foregoing patents and patent applications to Katana Energy, and any subsequent security interests, foreclosure sales, and assignments to Lott, Hausman Interests, and/or HL Seawater as void ab initio." Doc. #1 ¶¶ 122–24. Because the declaratory judgments sought are not limited to patent ownership or interactions with Defendant HL Seawater, the Motion is denied as to the declaratory judgment claims.
e. Patent Infringement
Finally, Defendants argue that Plaintiff's patent infringement claim must fail for two reasons: first, it does not sufficiently identify the allegedly infringing system or how that system is infringing on the ’351 Patent, and second, it does not allege any actions taken by Defendants Hausman Interests, Wallace, Hausman, or Lott that would constitute indirect infringement. Doc. #13 at 15. Plaintiff argues that the Complaint includes sufficient facts to avoid dismissal on either ground. Doc. #18 at 15. To state a claim for patent infringement under 35 U.S.C. § 271, a plaintiff need only give the defendant "fair notice" of the infringement claim and "the grounds upon which it rests." Disc Disease Sols. Inc. v. VGH Sols., Inc. , 888 F.3d 1256, 1260 (Fed. Cir. 2018). A defendant has fair notice of a direct infringement claim if the complaint specifically identifies the allegedly infringing product and the patent the product infringes. Id. "[T]here is no requirement that the facts alleged mimic the precise language used in a claim; what is necessary is that facts, when considered in their entirety and in context, lead to the common sense conclusion that a patented method is being practiced." In re Bill of Lading Transmission & Processing Sys. Patent Litig. , 681 F.3d 1323, 1343 (Fed. Cir. 2012).
Here, Plaintiff specifically identifies the infringing facility as the El Paso Plant, includes photos and diagrams of the facility in the Complaint, and alleges that the El Paso Plant infringes on all claims of the ’351 Patent. Doc. #1 ¶¶ 68–70, Ex. 8. Because Plaintiff does not have access to the accused facility, this is not a typical patent infringement case where the accused product can be purchased and reverse engineered. Nevertheless, based on a presentation by Defendant Enviro Water that is included as an exhibit, the Complaint alleges that the El Paso Plant produces high purity gypsum and magnesium hydroxide, the allegedly novel aspect of the Desalination Technology. Id. ¶¶ 69, 2, Ex. 8 at 7. The Complaint further alleges that Defendant HL Seawater created Defendant Enviro Water to utilize the Desalination Technology, including the ’351 Patent, and hired Defendant Wallace to serve as the CTO. Id. ¶¶ 16, 5. In light of Plaintiff's limited access to the El Paso Plant and looking at the Complaint in its entirety, the Court finds these allegations sufficient to give Defendants "fair notice" of the direct infringement claim against them and the grounds upon which it rests. See Disc Disease Sols. Inc. , 888 F.3d at 1260.
Defendants next argue that the Complaint lacks sufficient allegations against Defendants Hausmann Interests, Wallace, Hausman, or Lott to state a claim for indirect infringement. Doc. #13 at 17. To state a claim for induced infringement, one of the two types of indirect infringement, "a complaint must plead facts plausibly showing that the accused infringer specifically intended another party to infringe the patent and knew that the other party's acts constituted infringement." Lifetime Indus., Inc. v. Trim-Lok, Inc. , 869 F.3d 1372, 1379 (Fed. Cir. 2017) (cleaned up).
Here, Plaintiff alleges that based on Defendant Wallace's designation of "Hunton Energy Confidential Information" in the ’193 Provisional Application, Defendants knew of Plaintiff's existing ownership rights in the patent and patent applications for the Desalination Technology and that any use of the information without Plaintiff's consent would be an infringement. Doc. #1 ¶¶ 8, 55. The Complaint further alleges the following chain of events: First, Defendant Wallace executed an assignment of the Desalination Technology to Katana after the ’193 Provisional Application was filed and available for Defendants to review. Id. ¶¶ 8, 9. Defendant Lott and Defendant Hausman, acting through Defendant Hausman Interests, then foreclosed on the Desalination Technology and related patent applications and contributed them to Defendant HL Seawater, a company owned by Defendant Lott and Defendant Hausman Interests. Id. ¶¶ 14, 12. Defendants Lott, Hausman Interests, and HL Seawater next filed a Nunc Pro Tunc Assignment with the PTO announcing Defendant HL Seawater as the owner of the Desalination Technology patent applications. Id. ¶ 16. Finally, Defendant HL Seawater created Defendant Enviro Water "to develop and exploit desalination processes using the Desalination Technology, including the ’351 Patent." Id. Defendant Lott serves as a Director of Defendant Enviro Water, Defendant Wallace serves as its CTO, and Defendant Hausman Interests is its President, Secretary, and a Director. Id. ¶ 50. Based on these allegations, the Court finds that the Complaint plausibly alleges that Defendants Hausman, Hausman Interests, Lott, and Wallace knew that using the ’351 Patent without Plaintiff's consent would constitute patent infringement and intended for Defendant HL Seawater and Defendant Enviro Water to do so. See Lifetime Indus., Inc. , 869 F.3d at 1379.
Accordingly, the Motion is denied as to the patent infringement claim.
IV. Conclusion
In conclusion, the Court finds that the Complaint sufficiently alleges a breach of contract claim against Defendant Wallace, whose fraudulent concealment tolled the statute of limitations until 2019. Plaintiff has alleged misappropriation of trade secrets that took place after TUTSA's enactment and has sufficiently alleged a claim for misappropriation of trade secrets under the DTSA. Additionally, Plaintiff's declaratory judgment claims are not limited to interactions with Defendant HL Seawater nor ownership of the ’351 Patent. Finally, Plaintiff has sufficiently alleged a claim for patent infringement against all Defendants. For the foregoing reasons, the Motion is DENIED.
Additionally, because Plaintiff's Motion to Stay Discovery is premised on resolution of the Motion to Dismiss, the Motion to Stay is DENIED as moot. See Doc. #19 at 3. The Court agrees with Plaintiff that it in good faith lacks sufficient information regarding the privately owned El Paso Plant and that Plaintiff has followed the procedures set forth in the Southern District of Texas Local Patent Rules. See Doc. #16 at 1–2, 6. Accordingly, Plaintiff's Motion for Discovery Pursuant to Patent Rule 2-1(b) is GRANTED. To the extent the parties are unable to agree on a confidentiality order before the March 8 Markman Hearing, the parties should be prepared to explain their disagreements and any other obstacles to discovery to the Court.
It is so ORDERED.