Astornet Technologies Inc. v. Bae Systems, Inc. , 802 F.3d 1271 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
ASTORNET TECHNOLOGIES INC.,
Plaintiff-Appellant
v.
BAE SYSTEMS, INC.,
Defendant-Appellee
MORPHOTRUST USA, LLC,
Defendant-Appellee
NCR GOVERNMENT SYSTEMS, LLC,
Defendant-Appellee
______________________
2014-1854, 2015-1006, 2015-1007
______________________
Appeals from the United States District Court for the
District of Maryland in Nos. 8:14-cv-00245-RWT, 8:14-cv-
00543-RWT, 8:14-cv-00547-RWT, Senior Judge Roger W.
Titus.
______________________
Decided: September 17, 2015
______________________
GEOFFREY MASON, Moarbes LLP, Gaithersburg, MD,
argued for plaintiff-appellant.
SCOTT A. FELDER, Wiley Rein, LLP, Washington, DC,
argued for defendant-appellee BAE Systems, Inc. Also
2 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
represented by KEVIN PAUL ANDERSON; MATTHEW JAMES
DOWD, Andrews Kurth, LLP, Washington, DC.
PETER MICHAEL BOYLE, Kilpatrick Townsend & Stock-
ton LLP¸ Washington, DC, argued for defendant-appellee
NCR Government Systems, LLC. Also represented by
ADAM HOWARD CHARNES, Winston-Salem, NC.
RICHARD L. BROPHY, Armstrong Teasdale LLP, St.
Louis, MO, for defendant-appellee Morphotrust USA,
LLC. Also represented by JENNIFER E. HOEKEL.
MEGAN BARBERO, Appellate Staff, Civil Division,
United States Department of Justice, Washington, DC,
argued for amicus curiae United States. Also represented
by MARK R. FREEMAN, BENJAMIN C. MIZER.
______________________
Before PROST, Chief Judge, NEWMAN, and TARANTO,
Circuit Judges.
TARANTO, Circuit Judge.
Astornet Technologies, Inc. alleges that it is sole ex-
clusive licensee and owner of all rights in United States
Patent No. 7,639,844, issued in December 2009 to Michael
Haddad as the inventor and entitled “Airport vehicular
gate entry access system.” In what ended up as three
separate actions, Astornet asserted the patent against
three corporations—NCR Government Systems, LLC;
MorphoTrust USA, LLC; and BAE Systems, Inc. Astornet
alleged that (a) NCR, MorphoTrust, and a subsidiary of
BAE Systems, Inc. had contracts with the Transportation
Security Administration (TSA), an agency of the United
States government, to supply TSA certain boarding-pass
scanning systems, (b) TSA’s use of the equipment in-
fringed and would infringe the patent, and (c) NCR and
MorphoTrust were bidding for another contract to supply
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 3
modified equipment whose use by TSA would also in-
fringe.
The district court dismissed the actions, relying on
several grounds, among them that Astornet’s exclusive
remedy for the alleged infringement was a suit against
the United States in the Court of Federal Claims under
28 U.S.C. § 1498. While rejecting the district court’s
rationale for dismissal on other grounds, we agree that
§ 1498 bars these actions. We therefore affirm the dis-
missal.
BACKGROUND
A
Because these consolidated cases come to us on ap-
peals from dismissals under Fed. R. Civ. P. 12(b)(6), we
rely on the facts as alleged in the operative complaints
and attachments (there being no material supplemental
facts of public record subject to judicial notice). See E.I.
du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d
435, 448–49 (4th Cir. 2011); Philips v. Pitt County Memo-
rial Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
In June 2009, TSA sought bids for equipment it would
use for scanning airline passengers’ boarding passes at
airports in a Credential Authentication Technology-
Boarding Pass Scanning System (CAT/BPSS), requiring
that bidders set up demonstration kiosks for TSA’s re-
view. Astornet bid but was unsuccessful, at least partly
because it did not provide the required demonstration
kiosk. In September 2011, TSA entered into contracts
with NCR, a company for which MorphoTrust eventually
took over as the supplier under the contract, and a corpo-
ration called BAE Systems Information Solutions Inc.,
which is a subsidiary of a subsidiary of BAE Systems, Inc.
(according to appellees’ undisputed representation to this
court citing BAE Systems, Inc.’s website).
4 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
TSA made some purchases under the initial phase of
the 2011 contracts, but it postponed further procurements
in June 2012. More than a year later, TSA solicited
proposals for revised CAT/BPSS equipment, setting
January 21, 2014 as the due date for bids. Astornet,
NCR, and MorphoTrust, but not any BAE Systems Inc.
entity, submitted proposals. The operative complaints
here were filed before any award in the new solicitation.
B
The litigation that forms the backdrop to the present
appeals began some months after the September 2011
award of contracts. On March 9, 2012, Mr. Haddad, in his
own name, filed two actions alleging infringement of the
’844 patent, in both of which he stated that he was “doing
business as wholly owned Astornet Technologies, Inc.”
J.A. V-1-1; J.A. VI-1-1. He filed one action in the Court of
Federal Claims under 28 U.S.C. § 1498, naming the
United States as the defendant. He filed the other action
in district court in the District of Maryland, naming
several defendants: NCR; MorphoTrust’s predecessor
(under the 2011 contract); two subsidiaries of BAE Sys-
tems, Inc. (including BAE Systems Information Solu-
tions); and TSA and the United States Army. Both
actions focused on the TSA contracts—the 2011 contracts
and those proposed in the resolicitation—and the equip-
ment purchased and to be used under those contracts.
The simultaneous filing of the two complaints involv-
ing essentially the same operative facts caused a problem,
under 28 U.S.C. § 1500, for Mr. Haddad’s ability to main-
tain his action in the Court of Federal Claims. See, e.g.,
United States v. Tohono O’Odham Nation, 563 U.S. 307
(2011) (Court of Federal Claims lacks jurisdiction if filed
when other case involving substantially the same opera-
tive facts is pending in another court); Harbuck v. United
States, 378 F.3d 1324, 1328 (Fed. Cir. 2004) (simultane-
ously filed cases subject to § 1500). On May 10, 2012, the
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 5
government moved to dismiss the Court of Federal Claims
action under § 1500. In that motion the government
explained that “the simplest solution is for plaintiff to
voluntarily dismiss both this action and the district court
action, and then refile his section 1498 action in the Court
of Federal Claims.” J.A. V-13-7 to -8. On June 5, 2012,
the Court of Federal Claims dismissed the case before it.
That dismissal is not challenged here.
The dismissal occurred even though, in the meantime,
Mr. Haddad, proceeding pro se, had dismissed his Mary-
land district court action before any substantive litigation
occurred—thus beginning a series of filings to correct the
initial dismissal to try to ensure that the dismissal would
be without prejudice to Mr. Haddad’s ability to pursue his
claims on their merits in the proper forum. On May 8,
2012, before any defendant even appeared in the case, Mr.
Haddad filed a notice withdrawing his case “with preju-
dice”; the district court approved the filing the next day,
and the endorsed filing was entered on the docket on May
11, 2012. See J.A. VI-20-1 (district court ruling, quoting
May 8 filing). “That same day, Haddad filed a ‘Motion to
Withdraw,’ attempting to ‘supersede’ and ‘replace’ his
May 8th notice of dismissal and ‘withdraw [his case]
without prejudice.’” Id. (alteration in original). On May
16, Mr. Haddad filed a letter “explaining that he made a
mistake when he dismissed the action on May 8th ‘with
prejudice.’ ” Id. Almost six months later, on November 7,
the district court “entered an Order providing that the
case remained closed and dismissed with prejudice pursu-
ant to Haddad’s May 8th filing.” Id. A week later, Mr.
Haddad filed a motion for relief, which the court denied as
moot on November 15. Id. On November 19, Mr. Haddad
filed further motions, which the court denied on Novem-
ber 28. J.A. VI-20-1 to -2.
On December 12, 2012, Mr. Haddad—represented by
counsel—moved to reconsider at least the most recent
denial of relief. The district court granted the motion on
6 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
August 8, 2013. J.A. VI-20-1 to -4. It found that Mr.
Haddad had made an “ ‘honest mistake’ ” and that correct-
ing the mistake would not unfairly prejudice the defend-
ants. J.A. VI-20-3. On that basis, the court ordered: “the
case is reopened solely for the purpose of dismissing it
WITHOUT PREJUDICE”; and “the Clerk of this Court
shall CLOSE this case.” J.A. VI-20-4.
C
Not long after the process of correcting Mr. Haddad’s
2012 dismissal was completed in August 2013, the TSA,
which in June 2012 had postponed further purchases
under the 2011 contracts, commenced its resolicitation.
On January 27, 2014, six days after bids were due, Astor-
net (not Mr. Haddad) filed a patent-infringement action in
the District of Maryland, naming NCR, MorphoTrust (not
its contractual predecessor), and BAE Systems, Inc. (not
BAE Systems Information Solutions Inc.). That action—
the “245 action” (its docket number is 14-cv-245)—is one
of the three cases now before us. The complaint alleges
direct infringement by the three named defendants for
making, using, selling, and offering to sell “products that
embody the patented invention”; it says nothing about
indirect infringement. J.A. II-1-13.
One month later, on February 24 and 25, 2014, Astor-
net separated the three defendants into three separate
cases. It did so by (a) filing an amended complaint (and
then a corrected amended complaint) in the 245 action,
which named only BAE Systems, Inc. as a defendant, and
(b) filing two new complaints, one each against NCR (the
“547 action”) and MorphoTrust (the “543 action”). Those
three complaints—which are the currently operative
complaints in the cases before us—differ substantively
from the original complaint in the 245 action in a signifi-
cant way: they allege only indirect (induced and contribu-
tory) infringement under 35 U.S.C. § 271(b) & (c).
Indeed, the three complaints recite that the “manufac-
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 7
ture, sale, and delivery of full and prototype CAT/BPSS
systems to the TSA alone . . . did not result in infringe-
ment,” because the sole independent claim of the patent
requires certain processing “steps to be performed,” and
those steps “are performed when the CAT/BPSS system is
being used for its intended purpose to maintain security
in sterile areas by, inter alia, checking boarding passes
against passenger photo identification and detecting
fraudulent identifications.” J.A. II-13-6; see J.A. III-1-6;
J.A. IV-1-6. “Accordingly, [each defendant] infringed the
’844 patent at least by inducing the TSA to use the [de-
fendant’s] CAT/BPSS system for these purposes by
providng the TSA both with CAT/BPSS prototypes and 10
full CAT/BPSS systems, and instructing the TSA regard-
ing the use of these systems in a manner which infring-
es . . . .” J.A. II-13-7; see J.A. III-1-6; J.A. IV-1-6 to -7.
NCR and BAE Systems filed motions to dismiss in
their cases. Both parties argued that 28 U.S.C. § 1498
barred the suits by limiting Astornet’s remedy to an
action against the United States in the Court of Federal
Claims. The district court agreed. J.A. 63–71.
BAE Systems, Inc. argued for dismissal of the action
against it on an additional ground. It contended that
“Astornet had sued the wrong defendant because non-
party BAE Systems Information Solutions Inc., not de-
fendant BAE Systems, Inc., was party to the TSA con-
tract.” Appellees’ Br. 14. The district court agreed. J.A.
60–61.
NCR, for its part, argued that the case against it must
be dismissed under Fed. R. Civ. P. 41(a)(1)(B), which in
certain circumstances deems a second voluntary dismissal
to be a judgment on the merits, with whatever preclusive
effect on future claims such a judgment has under claim-
preclusion law. See Manning v. S.C. Dep’t of Highway &
Pub. Transp., 914 F.2d 44, 47 (4th Cir. 1990). NCR
contended that Mr. Haddad’s dismissal of his earlier
8 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
Maryland suit constituted a first voluntary dismissal,
that Astornet’s filing of an amended complaint in the 245
action (which limited that action to BAE Systems, Inc. as
the sole defendant) constituted a second voluntary dis-
missal, and that the latter filing “operat[ed] . . . as an
adjudication on the merits” that precluded continuation of
the 547 action against NCR. The district court agreed.
J.A. 62–63.
The district court then sua sponte dismissed the case
against MorphoTrust. The court stated simply that the
MorphoTrust case was one “in which the same defense
has been asserted based on the same contract docu-
ments.” J.A. 71.
Astornet filed appeals in all three cases. We consoli-
dated the appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1).
DISCUSSION
Astornet challenges each of the district court’s ration-
ales for dismissal. A dismissal under Fed. R. Civ. P.
12(b)(6) is reviewed de novo. Cioca v. Rumsfeld, 720 F.3d
505, 508 (4th Cir. 2013). We affirm the dismissal here
based on 28 U.S.C. § 1498(a). We also address the two
other rationales for dismissal that the district court set
forth, because NCR, MorphoTrust, and BAE Systems, Inc.
have defended the judgment on those grounds and it is
unclear if the alternative rationales would have a continu-
ing effect if left undisturbed. We reject those two alterna-
tive rationales.
A
Section 1498(a) of Title 28, U.S. Code, provides:
Whenever an invention described in and covered
by a patent of the United States is used or manu-
factured by or for the United States without li-
cense of the owner thereof or lawful right to use or
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 9
manufacture the same, the owner’s remedy shall
be by action against the United States in the
United States Court of Federal Claims for the re-
covery of his reasonable and entire compensation
for such use and manufacture. . . .
For the purposes of this section, the use or man-
ufacture of an invention described in and covered
by a patent of the United States by a contractor, a
subcontractor, or any person, firm, or corporation
for the Government and with the authorization or
consent of the Government, shall be construed as
use or manufacture for the United States.
The provision provides a cause of action against the
United States (waiving sovereign immunity) for a patent
owner to recover damages for the unauthorized use or
manufacture of a patented invention “by or for the United
States.” See Fla. Prepaid Postsecondary Educ. Expense
Bd. v. Coll. Sav. Bank, 527 U.S. 627, 663 n.15, 664 (1999)
(Stevens, J., dissenting); Richmond Screw Anchor Co. v.
United States, 275 U.S. 331, 344 (1928); Zoltek Corp. v.
United States, 672 F.3d 1309, 1312 (Fed. Cir. 2012) (en
banc); Advanced Software Design Corp. v. Fed. Reserve
Bank of St. Louis, 583 F.3d 1371, 1377–78 (Fed. Cir.
2009). At the same time, the statute protects government
contractors against infringement liability and remedies
where it applies. As indicated by the statute’s use of the
definite article in providing “the owner’s remedy” and its
statement that the remedy is for payment of the owner’s
“entire compensation,” the statute, within its ambit,
makes the remedy against the United States exclusive.
See Richmond Screw Anchor, 275 U.S. at 343; Zoltek, 672
F.3d at 1316. The Supreme Court long ago said of the
1918 enactment that introduced the key language of
§ 1498(a) that the “purpose of Congress” was “to stimulate
contractors to furnish what was needed” by the govern-
ment, “without fear of becoming liable themselves for
infringements to inventors or the owners or assignees of
10 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
patents.” Richmond Screw Anchor, 275 U.S. at 345; see
TVI Energy Corp. v. Blane, 806 F.2d 1057, 1059–60 (Fed.
Cir. 1986) (“the policy behind the 1918 amendment was to
relieve private Government contractors from expensive
litigation with patentees, possible injunctions, payment of
royalties, and punitive damages”).
The provision squarely applies to Astornet’s allega-
tions in the three operative complaints at issue. The
complaints allege only indirect infringement. Specifically,
the complaints allege that NCR, MorphoTrust, and BAE
Systems, Inc. induced (and contributed to) direct in-
fringement by TSA by virtue of TSA’s use of equipment
supplied by the three defendants. The direct infringe-
ment alleged as a prerequisite for the alleged indirect
infringement, see Limelight Networks, Inc. v. Akamai
Techs., Inc., 134 S. Ct. 2111, 2117 & n.3 (2014), is a use of
the patented invention “by . . . the United States.”
The claim of use of the patented invention by the
United States is squarely within the statutory terms. The
language is not limited to claims that are filed against the
United States or its government agencies. And it would
cut a substantial hole in the provision, and its intended
function, to read it to be limited in that way. Doing so
would expose a significant range of government contrac-
tors to direct liability (and possible injunctive remedies),
namely, those accused of indirect infringement of claims
directly infringed by the government. There is no justifi-
cation for departing from the clear meaning of the text to
produce a result that runs counter to the evident, estab-
lished statutory policy.
The foregoing analysis does not depend on any inquiry
into government authorization or consent. We therefore
undertake no such inquiry. And the straightforward “use
by the United States” analysis requires dismissal based
on the sole claims of infringement—i.e., indirect infringe-
ment—actually in the operative complaints.
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 11
Astornet makes some passing references in this court
to an additional theory of direct infringement for certain
testing activities by the defendants. But those references
do not change our conclusion. A theory of direct in-
fringement is not asserted in the operative complaints,
and the complaints’ factual allegations cannot be deemed
adequate for a direct-infringement theory without draw-
ing inferences that are too strained given the distinctness
of that theory from the only theories actually pleaded.
Such a theory, moreover, would raise questions under
§ 1498 about whether, even if the core of the case (indirect
infringement based on government use after delivery of
the equipment) had to be dismissed, a small part of the
case (involving testing) could nevertheless remain—which
might also raise new problems under 28 U.S.C. § 1500 if
Astornet sued the United States in the Court of Federal
Claims under § 1498. Astornet nowhere argues to us that
only part, rather than the whole, of its case should be
reinstated; it presents only an all-or-nothing argument.
In these circumstances, we disregard the new references
to direct infringement.
B
The district court relied on one ground of dismissal
that is unique to BAE Systems, Inc., not applicable to the
other defendants. BAE Systems, Inc. contended that the
amended complaint—which, as relevant to the present
issue, specifically alleged inducement by BAE Systems,
Inc. under 35 U.S.C. § 271(b)—did not sufficiently state a
claim against it. The core contention was and is that it
was not BAE Systems, Inc., but a corporate subsidiary
(two levels down), that entered into the contract with TSA
to supply the equipment whose use by TSA constitutes
the alleged direct infringement required for the claimed
indirect infringement. According to the appellees’ brief
here, “BAE Systems, Inc. argued that . . . Astornet had
sued the wrong defendant because non-party BAE Sys-
tems Information Solutions Inc., not defendant BAE
12 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
Systems, Inc., was party to the TSA contract” attached to
the amended complaint. Appellees’ Br. 14.
In dismissing the case against BAE Systems, Inc., the
district court stressed that the (indirect) corporate subsid-
iary, not BAE Systems, Inc., was the contracting party.
J.A. 60–61. The court then stated, in seemingly broad
terms, that “[t]here is absolutely nothing in the complaint
to state a basis for suing BAE Systems, Inc., arising out of
the performance by another company of a contract with
the TSA.” J.A. 61. But the court immediately adopted a
narrower focus in explaining what it found missing from
the amended complaint (id.):
It is routine in corporate America for multiple en-
tities to be created for the very specific purpose of
isolating the liability of one company from anoth-
er. There’s nothing wrong with that. That is as
American as apple pie. It only becomes un-
American when a properly pleaded complaint can
allege that that in effect creates a fraudulent situ-
ation or it’s necessary to overcome a paramount
equity or that there is an alter ego or something
that would indicate a basis for piercing through it.
But in this case, there’s nothing in the com-
plaint that alleges that. I have no information be-
fore me because of that. And for that reason, I
conclude that BAE Systems, Inc. is not a proper
defendant before the court and I will grant its mo-
tion to dismiss for that reason among others.
The district court seems to have concluded that the
amended complaint was insufficient as to BAE Systems,
Inc. solely because there were no allegations of the sort of
facts that would justify piercing the corporate veil (of the
indirect subsidiary that was the party to the TSA con-
tract). The court did not discuss what BAE Systems, Inc.
itself notes is the amended complaint’s allegation that
BAE Systems, Inc. “induced the United States to infringe
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 13
the ’844 patent by ‘instructing the TSA regarding the use
of [the CAT/BPSS] systems in a manner which infringes
the ’844 patent.’ ” Appellees’ Br. 13–14 (alteration in
original) (quoting amended complaint). In its narrow
focus only on potential veil-piercing facts, the district
court erred.
The district court’s focus was appropriate for consider-
ing indirect (sometimes called derivative) liability for the
wrongful acts (here, infringement of any variety) commit-
ted by another legal entity, specifically a subsidiary. But
veil-piercing standards do not govern the separate issue of
direct liability for one’s own wrongful acts, as the govern-
ing law defines those wrongs. See United States v.
Bestfoods, 524 U.S. 51, 64–65 (1998). Thus, without
regard to veil piercing, BAE Systems, Inc. could be direct-
ly liable for its own wrongful acts of inducement, just as a
corporation that is not an owner of the contracting subsid-
iary here could be. In either event, the issue is whether
the defendant’s own conduct meets the standards for
inducement, including the requirements for inducing acts
with the requisite intent. See A. Stucki Co. v. Worthing-
ton Indus., Inc., 849 F.2d 593, 596–97 (Fed. Cir. 1988)
(separately addressing indirect liability for subsidiary’s
infringement, based on veil-piercing standards, and direct
liability for inducement by parent); cf. Wordtech Systems,
Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308,
1313–16 (Fed. Cir. 2010) (discussing earlier cases con-
cerning corporate officers and owners).
“To prove inducement of infringement, the patentee
must ‘show that the accused inducer took an affirmative
act to encourage infringement with the knowledge that
the induced acts constitute patent infringement.’ ” Info-
Hold, Inc. v. Muzak LLC, 783 F.3d 1365, 1372 (Fed. Cir.
2015). Here, the district court’s analysis did not include
an examination of whether, veil piercing aside, BAE
Systems, Inc., acting in its own capacity while respecting
corporate forms and having the intent required for indi-
14 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
rect infringement, affirmatively encouraged the govern-
ment to enter into a contract with the parent’s wholly
owned subsidiary to engage in infringement. Such acts
are not facially irrational for a parent company that
would indirectly benefit from sales made by its subsidi-
ary. But the opinion of the district court includes no
discussion of inducement standards and whether the 245
amended complaint’s allegations about BAE Systems,
Inc.’s own actions suffice to proceed beyond the complaint
stage under those standards.
Accordingly, the district court’s analysis of the ground
for dismissal uniquely advanced by BAE Systems, Inc.
was too narrow to support the dismissal. We see no
reason to undertake our own independent analysis of
whether the factual allegations of the amended complaint
as a whole are “sufficient to show that [the] claim has
substantive plausibility.” Johnson v. City of Shelby,
Miss., 135 S. Ct. 346, 347 (2014). Even if we were to deem
the allegations insufficient, the remedy for insufficient
specificity, in the ordinary course, would be a dismissal
with leave to amend. Id. Given that we are affirming the
dismissal on the basis of § 1498(a) in any event, we see no
reason to pursue further whether Astornet’s pleading here
was legally sufficient.
C
NCR and MorphoTrust contend that the “two-
dismissal rule” of Rule 41(a)(1)(B), which treats certain
dismissals as adjudications on the merits, independently
supports the dismissal of the cases against them—a
ground not advanced by BAE Systems, Inc. We note first
that it is hardly clear that the district court relied on Rule
41 in dismissing the case against MorphoTrust. In its sua
sponte dismissal of MorphoTrust, the district court re-
ferred only to MorphoTrust’s defense based on “the same
contract documents,” J.A. 71, which seems unconnected to
Rule 41. Moreover, the asserted first suit, i.e., Mr. Had-
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 15
dad’s Maryland action, was not actually brought against
MorphoTrust, but against the company that was its
predecessor under the 2011 TSA contract at issue. We
need not further examine the significance of those facts,
however, because we reject the district court’s Rule 41
conclusion for a reason independent of any differences
between NCR and Morpho-Trust. 1
Rule 41(a) provides:
(a) Voluntary Dismissal.
(1) By the Plaintiff.
(A) Without a Court Order. Subject to Rules
23(e), 23.1(c), 23.2, and 66 and any applicable fed-
eral statute, the plaintiff may dismiss an action
without a court order by filing:
(i) a notice of dismissal before the opposing
party serves either an answer or a motion for
summary judgment; or
(ii) a stipulation of dismissal signed by all
parties who have appeared.
1 We address this question even though, in a new
Astornet suit against the United States, preclusion might
not result from the district court’s Rule 41 ruling. “The
Restatement and other authorities recognize that res
judicata should not bar a claim when a court’s remedial
authority in the first action prevented the plaintiff from
seeking the relief sought in the second action.” Cunning-
ham v. United States, 748 F.3d 1172, 1179 (Fed. Cir.
2014); see 18 C. Wright, A. Miller & E. Cooper, Federal
Practice and Procedure § 4412, at 276 (2d ed. 2002). At
oral argument, the government observed that it could not
have been sued for patent infringement in the Maryland
district court. Oral Arg. at 25:10–25:16. But the govern-
ment also declined to waive any defenses that it might
raise in a new § 1498 action. Id. at 24:27–24:40.
16 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
(B) Effect. Unless the notice or stipulation
states otherwise, the dismissal is without preju-
dice. But if the plaintiff previously dismissed any
federal- or state-court action based on or including
the same claim, a notice of dismissal operates as
an adjudication on the merits.
NCR and MorphoTrust invoke the last sentence. They
argue that, when Astornet amended the complaint in the
245 action to leave only BAE Systems, Inc. (omitting NCR
and MorphoTrust), the amendment constituted a volun-
tary dismissal under Rule 41(a) and was, moreover, the
second such voluntary dismissal (of an action based on or
including the same claim), the first one having been Mr.
Haddad’s dismissal of his earlier Maryland action.
The argument by NCR and MorphoTrust runs into a
clear textual obstacle. Rule 41(a)(1)(B) by its terms
applies only if “the plaintiff” (in the action whose dismis-
sal would become an adjudication on the merits) previous-
ly dismissed an action (based on or including the same
claim). The plaintiff in the second action must be the
same person as the plaintiff in the first action at the time
of the voluntary dismissal (NCR and MorphoTrust accept
that the provision applies only to voluntary dismissals).
Here, however, the asserted first action was brought and
dismissed by Mr. Haddad, and the asserted second action
(the 245 action) was brought by Astornet. Astornet, “the
plaintiff” in the 245 action, did not previously dismiss Mr.
Haddad’s Maryland action—to which Astornet was not
even a party.
NCR and MorphoTrust do not contend, or support a
contention, that Mr. Haddad and Astornet actually are
the same “plaintiff.” They are not: one is a natural person
that allegedly owns the other, a corporation. That fact is
not altered by any invocation of “privity” between Mr.
Haddad and Astornet, a concept that by definition in-
volves distinct persons (and is invoked in various settings
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 17
to justify imposing certain legal consequences on one
because of the relationship with the other). See Bryan
Garner, Black’s Law Dictionary 1394 (10th ed. 2009)
(“[t]he connection or relationship between two par-
ties . . .”). In the district court, NCR, in asserting privity,
cited only one decision, and that decision did not involve
Rule 41(a)(1)(B) and its “the plaintiff” language. Doe v.
Urohealth Sys., Inc., 216 F.3d 157 (1st Cir. 2000). Moreo-
ver, perhaps not surprisingly in light of the separate-
corporations defense presented by BAE Systems, Inc.,
NCR and MorphoTrust have not argued that the corpo-
rate veil of Astornet should be pierced or that the conse-
quence of doing so would be to equate Mr. Haddad and
Astornet so as to make them the same plaintiff. 2
At least for that reason, the facially rigid Rule
41(a)(1)(B) is inapplicable by its plain terms. That con-
clusion is so straightforward that we rely on it even if,
which we need not say, Astornet did not clearly articulate,
among its somewhat imprecise arguments on a somewhat
confusing topic, this particular ground for finding Rule
41(a)(1)(B) inapplicable. As a result, we need not explore
the additional questions raised about whether Rule
41(a)(1)(B) applies here, including whether the dismissal
2 Mr. Haddad said in his two complaints that he
was “doing business as” Astornet, but NCR and MorphoT-
rust have not argued, or cited any authority establishing,
that the demanding standards for veil piercing are auto-
matically satisfied for that reason. See EEOC v. Recession
Proof USA LLC, 2013 WL 6328000, at *8–9 & n.12 (D.
Ariz. 2013), adopted in relevant part, 2013 WL 6327994
(D. Ariz. 2013) (“doing business as” allegation not enough
for veil piercing); Matter of Adventure Bound Sports, Inc.,
837 F. Supp. 1244, 1256 (S.D. Ga. 1993) (relying on full
veil-piercing analysis, not just the “doing business as”
label).
18 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC.
of Mr. Haddad’s Maryland action and the amendment of
the complaint in the 245 action were voluntary dismissals
within the meaning of the Rule.
The argument made by NCR and MorphoTrust for
dismissal based on Rule 41 accordingly must depend on a
departure from the Rule’s language to expand its reach.
But if such an expansion is ever permissible, we do not
see a persuasive justification for bringing this case within
the Rule’s coverage. There was no abusive, harassing
litigation to the prejudice of the defendants here. There
were only non-prejudicial changes made to avoid potential
pleading problems. And one crucial step in the process
took place with the urging of one of the defendants.
No litigation on the merits had occurred before the
eventual arrival at the three Astornet actions now at
issue. As to Mr. Haddad’s Maryland filing that was the
subject of the alleged first voluntary dismissal, the dis-
trict court described that case as “a comical pro se case
where the person filed a notice of dismissal with prejudice
and [the court] rescued him from the consequences of
having done so.” J.A. 62. As for the alleged second volun-
tary dismissal, NCR’s counsel explained at oral argument
that MorphoTrust’s counsel had played a role in persuad-
ing Astornet to take the step that NCR and MorphoTrust
now treat as the second dismissal, namely, the separation
of the 245 action into three separate actions against the
three distinct defendants, apparently because of the
newly effective restrictions on joinder of defendants in
patent cases, 35 U.S.C. § 299. Oral Arg. at 20:34–20:46.
In these circumstances, barring Astornet’s actions
against NCR and MorphoTrust by relying on an applica-
tion of Rule 41(a)(1)(B) that goes beyond its terms would
not comport with the overarching directive that the Civil
Rules “be construed and administered to secure the just,
speedy, and inexpensive determination of every action
and proceeding.” Fed. R. Civ. P. 1. We therefore reject
ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 19
the district court’s reliance on Rule 41(a)(1)(B) as a basis
for dismissal.
D
The brief for appellees makes several additional ar-
guments to support the dismissal. Like the district court,
we do not rule on those arguments.
E
Astornet has not argued for a transfer of this case to
the Court of Federal Claims under 28 U.S.C. § 1631 if, as
we and the district court have both concluded, § 1498 bars
Astornet’s present actions against the defendants. Such
an argument, if made, would face a serious problem.
§ 1631 applies only if “there is a want of jurisdiction” in
the transferor court. See, e.g., Fisherman’s Harvest, Inc.
v. PBS & J, 490 F.3d 1371, 1374–78 (Fed. Cir. 2007)
(§ 1631 inapplicable where no jurisdictional bar to case in
transferor court). But we have held that § 1498’s bar does
not deprive the district court of jurisdiction. Toxgon Corp.
v. BNFL, Inc., 312 F.3d 1379 (Fed. Cir. 2002). In a non-
precedential decision, we have rejected § 1631’s applica-
bility in similar circumstances. Connell v. KLN Steel
Prods. Co., 255 F. App’x 519, 522 (Fed. Cir. 2007). With
no argument for transfer from Astornet, however, we do
not consider transfer as an alternative to dismissal and so
do not definitively address § 1631’s applicability.
CONCLUSION
The dismissal of Astornet’s case based on § 1498 is af-
firmed.
AFFIRMED