Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01854/USCOURTS-ca13-14-01854-0/pdf.json

Parties Involved:
Astornet Technologies Inc.
Appellant
BAE Systems, Inc.
Appellee
MorphoTrust USA, LLC
Appellee
NCR Government Systems, LLC
Appellee

Document Text:

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-cv00543-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 

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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 & Stockton 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 exclusive 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 infringed and would infringe the patent, and (c) NCR and 

MorphoTrust were bidding for another contract to supply 

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ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 3

modified equipment whose use by TSA would also infringe. 

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 dismissal. 

BACKGROUND

A 

Because these consolidated cases come to us on appeals 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 Memorial 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 TechnologyBoarding Pass Scanning System (CAT/BPSS), requiring 

that bidders set up demonstration kiosks for TSA’s review. 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 corporation 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). 

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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 Systems, Inc. (including BAE Systems Information Solutions); 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 equipment purchased and to be used under those contracts. 

The simultaneous filing of the two complaints involving essentially the same operative facts caused a problem, 

under 28 U.S.C. § 1500, for Mr. Haddad’s ability to maintain 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 operative facts is pending in another court); Harbuck v. United 

States, 378 F.3d 1324, 1328 (Fed. Cir. 2004) (simultaneously filed cases subject to § 1500). On May 10, 2012, the 

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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 Maryland 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 prejudice”; 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 pursuant 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 November 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 

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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 correcting the mistake would not unfairly prejudice the defendants. 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, Astornet (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, Astornet 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 significant way: they allege only indirect (induced and contributory) infringement under 35 U.S.C. § 271(b) & (c). 

Indeed, the three complaints recite that the “manufacCase: 14-1854 Document: 86-2 Page: 6 Filed: 09/17/2015
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 infringement,” 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 [defendant’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 regarding the use of these systems in a manner which infringes . . . .” 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 nonparty BAE Systems Information Solutions Inc., not defendant BAE Systems, Inc., was party to the TSA contract.” 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 claimpreclusion 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 

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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 dismissal, 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 documents.” J.A. 71.

Astornet filed appeals in all three cases. We consolidated the appeals. We have jurisdiction under 28 U.S.C. 

§ 1295(a)(1). 

DISCUSSION

Astornet challenges each of the district court’s rationales 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 continuing effect if left undisturbed. We reject those two alternative 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 manufactured by or for the United States without license of the owner thereof or lawful right to use or 

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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 recovery of his reasonable and entire compensation 

for such use and manufacture. . . .

 For the purposes of this section, the use or manufacture 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 government, “without fear of becoming liable themselves for

infringements to inventors or the owners or assignees of 

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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 allegations 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 infringement by TSA by virtue of TSA’s use of equipment 

supplied by the three defendants. The direct infringement 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 contractors to direct liability (and possible injunctive remedies), 

namely, those accused of indirect infringement of claims 

directly infringed by the government. There is no justification for departing from the clear meaning of the text to 

produce a result that runs counter to the evident, established 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 infringement—actually in the operative complaints.

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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 infringement is not asserted in the operative complaints, 

and the complaints’ factual allegations cannot be deemed 

adequate for a direct-infringement theory without drawing 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 Systems Information Solutions Inc., not defendant BAE 

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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 subsidiary, 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 entities to be created for the very specific purpose of 

isolating the liability of one company from another. There’s nothing wrong with that. That is as 

American as apple pie. It only becomes unAmerican when a properly pleaded complaint can 

allege that that in effect creates a fraudulent situation 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 complaint that alleges that. I have no information before 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 motion 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 contract). 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 

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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 considering indirect (sometimes called derivative) liability for the 

wrongful acts (here, infringement of any variety) committed 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 governing 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 directly liable for its own wrongful acts of inducement, just as a 

corporation that is not an owner of the contracting subsidiary 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. Worthington 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 concerning 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.’” InfoHold, 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 indiCase: 14-1854 Document: 86-2 Page: 13 Filed: 09/17/2015
14 ASTORNET TECHNOLOGIES INC. v. BAE SYSTEMS, INC. 

rect infringement, affirmatively encouraged the government 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 subsidiary. 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 “twodismissal 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 referred 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. HadCase: 14-1854 Document: 86-2 Page: 14 Filed: 09/17/2015
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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 federal 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.” Cunningham 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 government also declined to waive any defenses that it might 

raise in a new § 1498 action. Id. at 24:27–24:40.

 

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 (B) Effect. Unless the notice or stipulation 

states otherwise, the dismissal is without prejudice. 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 voluntary 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 dismissal would become an adjudication on the merits) previously 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 involves distinct persons (and is invoked in various settings 

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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 parties . . .”). 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). Moreover, perhaps not surprisingly in light of the separatecorporations defense presented by BAE Systems, Inc., 

NCR and MorphoTrust have not argued that the corporate veil of Astornet should be pierced or that the consequence 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 conclusion 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 MorphoTrust have not argued, or cited any authority establishing, 

that the demanding standards for veil piercing are automatically 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).

 

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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 district 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 voluntary dismissal, NCR’s counsel explained at oral argument 

that MorphoTrust’s counsel had played a role in persuading 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 application 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 

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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 arguments 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 nonprecedential decision, we have rejected § 1631’s applicability 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 affirmed. 

AFFIRMED

 

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