Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01406/USCOURTS-ca13-15-01406-0/pdf.json

Parties Involved:
National Oilwell Varco, L.P.
Appellant
Omron Oilfield & Marine, Inc.
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

NATIONAL OILWELL VARCO, L.P.,

Plaintiff-Appellant

v.

OMRON OILFIELD & MARINE, INC.,

Defendant-Appellee

______________________ 

2015-1406

______________________ 

Appeal from the United States District Court for the 

Western District of Texas in No. 1:12-cv-00773-SS, Judge 

Sam Sparks.

______________________ 

Decided: January 25, 2017

______________________ 

JOHN WESLEY RALEY III, Raley & Bowick, LLP, Houston, TX, argued for plaintiff-appellant. Also represented 

by ROBERT MCGEE BOWICK, JR., BRADFORD TURNER 

LANEY. 

MATTHEW B. LOWRIE, Foley & Lardner LLP, Boston, 

MA, argued for defendant-appellee. Also represented by 

KIMBERLY KRISTIN DODD, Milwaukee, WI. 

______________________ 

Case: 15-1406 Document: 52-2 Page: 1 Filed: 01/25/2017
2 NOV v. OMRON OILFIELD & MARINE, INC. 

Before MOORE, CHEN, and HUGHES, Circuit Judges.

CHEN, Circuit Judge. 

Plaintiff National Oilwell Varco, L.P. (NOV) filed this 

patent case alleging that Defendant Omron Oilfield and 

Marine, Inc. (Omron) infringed claims 11 and 14 of U.S. 

Patent No. 5,474,142 (’142 Patent). Omron moved to 

dismiss the complaint and, in the alternative, for summary judgment of invalidity and noninfringement. The 

district court granted Omron’s motion to dismiss, with 

prejudice, finding that NOV lacked standing to assert the 

’142 Patent, and awarded attorney fees to Omron based 

on the exceptional nature of NOV’s litigation conduct. It

also granted Omron’s alternative motion for summary 

judgment of invalidity and noninfringement. 

We affirm, in part, and vacate, in part. The parties 

agree that this case turns on the proper reading of a 

particular asset transfer agreement between two subsidiaries, one of them being NOV. We agree with the district 

court that NOV lacks standing to assert the ’142 Patent

because the agreement in question did not transfer the 

rights to the ’142 Patent to NOV. We find no abuse of 

discretion in the district court’s dismissal of this case, 

with prejudice, and the award of attorney fees. We vacate 

the district court’s grant of Omron’s motion for summary 

judgment of invalidity and noninfringement because the 

district court had no jurisdiction to rule on the merits 

after dismissing this case for lack of standing. 

BACKGROUND

Bobbie Bowden is the named inventor on the ’142 Patent. According to the U.S. Patent & Trademark Office’s 

(USPTO) records, the ’142 Patent was assigned twice 

since its issuance on December 12, 1995. Bowden assigned the ’142 Patent to Wildcat Services, L.P., on OctoCase: 15-1406 Document: 52-2 Page: 2 Filed: 01/25/2017
NOV v. OMRON OILFIELD & MARINE, INC. 3

ber 9, 2001, and Wildcat Services, L.P. assigned the ’142

Patent to MD/Totco, a Division of Varco, L.P.,1 on June 

30, 2004. The USPTO’s records show no subsequent 

assignment to NOV.

After NOV filed suit against Omron asserting infringement of the ’142 Patent, Omron issued an interrogatory to NOV on NOV’s standing to assert the ’142 Patent. 

NOV responded that it purchased the ’142 Patent from 

Varco, L.P., pursuant to an Asset Contribution Agreement 

(ACA)2 dated January 1, 2006. NOV stated that documents sufficient to substantiate this transfer would be 

produced, including asset purchase agreements and 

assignment documents. NOV, however, refused to produce the ACA, and it instead produced only a document 

entitled, “Assistant Secretary’s Certificate.” Omron 

sought production of the ACA because the Assistant 

Secretary’s Certificate was not an actual assignment and 

assigned only “physical assets.” NOV refused to produce 

the ACA, stating:

The document is not relevant to any claim or defense in this lawsuit. The Secretary’s Certificate 

shows that all assets of Varco, L.P. were sold to 

National Oilwell including the ’142 Patent. The 

Asset Contribution Agreement would be cumulative and is not needed.

J.A. 4. Omron, in response, filed a motion to dismiss, 

arguing that (1) NOV refused to produce the ACA, (2) the 

 

1 NOV and Varco, L.P. are separate subsidiaries of 

one parent company, National Oilwell Varco, Inc. 

2 Although the ACA defines the purchaser as National Oilwell, L.P., NOV asserts that National Oilwell, 

L.P. changed its name to National Oilwell Varco, L.P. on 

December 22, 2005 or January 26, 2006. The record is 

unclear on which of these two dates is correct.

Case: 15-1406 Document: 52-2 Page: 3 Filed: 01/25/2017
4 NOV v. OMRON OILFIELD & MARINE, INC. 

Assistant Secretary’s Certificate could not establish 

NOV’s standing, and (3) NOV’s standing position was 

inconsistent with positions taken in other infringement 

litigations relating to the ’142 Patent that Varco, L.P.—

not NOV—owned the ’142 Patent. 

In response to Omron’s motion to dismiss, NOV produced the ACA. The district court denied the motion in a 

summary order, without prejudice to re-filing it at a later 

date. After reviewing the ACA, Omron refiled its motion 

to dismiss, arguing that (1) the ACA was not a present 

assignment of assets, (2) even if the ACA were a present 

assignment, the ACA includes only “physical assets,” 

which would exclude patents, and (3) even if the ACA

were a present assignment and patents could be physical 

assets, the ACA did not cover the ’142 Patent. 

The district court agreed with Omron, finding that 

NOV could not prove ownership of the ’142 Patent as of 

the filing date of this case, and dismissed the case, with 

prejudice, for lack of standing. It also granted Omron’s 

motion for summary judgment of invalidity and noninfringement. Finally, it granted in part Omron’s motion 

for attorney fees, finding that NOV’s refusal to produce 

the ACA and NOV’s litigation conduct was exceptionally 

unreasonable. 

DISCUSSION

I. Standard of Review

“Standing is a jurisdictional issue that implicates the 

case-or-controversy requirement of Article III.” Drone 

Techs., Inc. v. Parrot S.A., 838 F.3d 1283, 1292 (Fed. Cir. 

2016). “We review de novo a district court’s determination of standing.” Id. at 1291. “In determining whether a 

dismissal should have been with or without prejudice, this 

court applies the law of the pertinent regional circuit.” 

H.R. Techs., Inc. v. Astechnologies, Inc., 275 F.3d 1378, 

1384 (Fed. Cir. 2002). The Fifth Circuit “review[s] the 

Case: 15-1406 Document: 52-2 Page: 4 Filed: 01/25/2017
NOV v. OMRON OILFIELD & MARINE, INC. 5

district court’s decision to grant a motion to dismiss with 

or without prejudice only for abuse of discretion.” Club 

Retro, L.L.C. v. Hilton, 568 F.3d 181, 215 (5th Cir. 2009). 

We review a district court’s decision to award attorney 

fees for abuse of discretion. Highmark Inc. v. Allcare 

Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1749 (2014).

II. Standing

We begin with standing. “Standing to sue is a threshold requirement in every federal action.” Sicom Sys., Ltd. 

v. Agilent Techs., Inc., 427 F.3d 971, 975 (Fed. Cir. 2005). 

“Standing must be present at the time the suit is 

brought.” Id. at 975–76. “The party bringing the action 

bears the burden of establishing that it has standing.” Id.

at 976. 

“Before a court may exercise jurisdiction over a patent 

infringement action, it must be satisfied that, ‘in addition 

to Article III standing, the plaintiff also possesse[s] standing as defined by § 281 of the Patent Act.’” Drone Techs., 

838 F.3d at 1292 (quoting Alps S., LLC v. Ohio Willow 

Wood Co., 787 F.3d 1379, 1382 (Fed. Cir. 2015)). “Under 

§ 281, a patentee shall have remedy by civil action for 

infringement of his patent.” Id. (internal quotation marks 

omitted). “A patentee is not limited to the person to 

whom the patent issued, but also includes successors in 

title to the patentee.” Id. (internal quotation marks 

omitted). “A party may become the successor in title to 

the original patentee by assignment . . . and then may sue 

for infringement in its own name.” Id. “Applications for 

patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.” 35 U.S.C. § 261; 

see also Sky Techs. LLC v. SAP AG, 576 F.3d 1374, 1379 

(Fed. Cir. 2009) (“The Federal Patent Act requires that all 

assignments of patent interest be in writing.”).

The district court properly focused its attention on the 

ACA. The ACA describes Varco L.P.’s “desire[]” and 

“agreement” to contribute assets to a “Partnership” deCase: 15-1406 Document: 52-2 Page: 5 Filed: 01/25/2017
6 NOV v. OMRON OILFIELD & MARINE, INC. 

fined as National Oilwell, L.P.3 The ACA provides, in 

relevant part:

WHEREAS, Contributor desires to contribute all 

of its physical assets, including but not limited to 

those assets generally described in Exhibit A (the 

“Property”), excluding any capital or common 

stock of subsidiaries or owned companies. 

. . . . 

1.1 Agreement to Contribute Property and Issue 

Partnership Interest. For and in consideration of 

the mutual benefits enjoyed by one another under 

this Agreement, Contributor agrees to transfer 

and convey or assign all of Contributor’s right, title, and interest in and to the Property to Partnership, and Partnership agrees to accept the 

contribution and conveyance of the Property and, 

in exchange therefore, to issue a limited partnership interest in Partnership to the Contributor, 

pursuant to the terms and conditions set forth in 

this Agreement.

1.2 Conveyance of the Property. Concurrently 

with the execution of this Agreement, Contributor 

shall convey, assign, and transfer the Property to 

Partnership, subject only to the liens, encumbrances, security interests, restrictions, and 

claims of public record or referenced on Exhibit A. 

Contributor shall execute and deliver any and all 

documents or instruments as may be required, or 

which may be reasonably requested, by Partnership in order to effect and memorialize such conveyance, assignment, and transfer.

 

3 As noted, National Oilwell, L.P. was purportedly 

renamed to NOV in either December 2005 or January 

2006.

Case: 15-1406 Document: 52-2 Page: 6 Filed: 01/25/2017
NOV v. OMRON OILFIELD & MARINE, INC. 7

J.A. 3906. The ACA contains no reference to patents 

except within Exhibit A. Exhibit A is a lengthy spreadsheet with columns corresponding to various divisions of 

Varco, L.P and rows corresponding to various assets, 

liabilities, equities, and revenues. The only entry related 

to patents is a row titled “Patents – Patents.” J.A. 9. 

Every column in this row has an entry of “0” except for a 

division of Varco, L.P. known as Varco LP Brandt, which 

has an entry of “129,647.” J.A. 9, 15. 

The district court held that the ACA represented

merely a promise by Varco, L.P. to assign rights in the 

future. It also held that even if the ACA were a present 

assignment, the ACA covered only “physical assets,” 

which did not include the ’142 Patent because patents are 

not physical assets. It finally held that even if the ACA 

were a present transfer of assets that included patents, 

the ACA did not cover the ’142 Patent because the Exhibit 

A spreadsheet to the ACA discloses a “0” for the entry 

where the row for patents intersects with the column for 

MD/Totco, the division of Varco, L.P. that purportedly 

assigned the ’142 Patent to NOV.

Because we agree with the district court that the ACA 

did not transfer the ’142 Patent from the MD/Totco division of Varco, L.P. to NOV, we conclude that the district 

court properly dismissed this case for lack of standing.

As an initial issue, we first note that “state law governs the interpretation of contracts generally.” DDB 

Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 

1284, 1290 (Fed. Cir. 2008). The ACA provides that “the 

substantive internal laws of the State of Delaware” control. J.A. 13. Under Delaware law, we “review[] the trial 

court’s interpretation of contract terms de novo.” BLGH 

Holdings LLC v. enXco LFG Holding, LLC, 41 A.3d 410, 

414 (Del. 2012). When “the plain language of a contract is 

unambiguous i.e., fairly or reasonably susceptible to only 

one interpretation, we construe the contract in accordance 

Case: 15-1406 Document: 52-2 Page: 7 Filed: 01/25/2017
8 NOV v. OMRON OILFIELD & MARINE, INC. 

with that plain meaning and will not resort to extrinsic 

evidence to determine the parties’ intentions.” Id.

The district court correctly interpreted the ACA to 

find that its plain meaning did not include transferring

the ’142 Patent from Varco, L.P. to NOV because the 

Exhibit A spreadsheet shows a “0” where the patents row 

intersects with the MD/Totco column. J.A. 14–15. NOV 

does not dispute that MD/Totco owned the ’142 Patent 

before the execution of the ACA. NOV only argues that 

Exhibit A was not an exhaustive list of assets, but simply

an example of the types of assets owned by Varco, L.P. 

and transferred to NOV.

We agree with the district court that, even if Exhibit 

A discloses merely an example of the types of transferred 

assets, NOV does not account for the “0” entry for 

MD/Totco’s patents, showing that no patents were transferred from MD/Totco to NOV through the ACA. We also 

agree that the district court correctly rejected NOV’s 

argument that the numerical values in Exhibit A represent revenue from assets, rather than the asset values, 

because other non-revenue-generating entries in Exhibit

A contain non-zero entries—including, e.g., $8.7 million

for “Goodwill” and $44.5 million for “Furniture and Fixtures”—and a separate section of Exhibit A is set aside for

revenues. J.A. 16. 

We affirm the district court’s conclusion that NOV 

lacks standing to assert the ’142 Patent because a plain 

reading of the ACA reveals that it did not transfer the 

’142 Patent from MD/Totco to NOV. Because we affirm on 

this basis, we do not reach the district court’s alternate

findings that the ACA was not a present assignment or 

that patents are not physical assets.

III. Dismissal with Prejudice

“Ordinarily, dismissal for lack of standing is without 

prejudice.” Fieldturf, Inc. v. Sw. Recreational Indus., Inc., 

Case: 15-1406 Document: 52-2 Page: 8 Filed: 01/25/2017
NOV v. OMRON OILFIELD & MARINE, INC. 9

357 F.3d 1266, 1269 (Fed. Cir. 2004). “On occasion, 

however, a dismissal with prejudice is appropriate, especially where ‘it [is] plainly unlikely that the plaintiff [will 

be] able to cure the standing problem.’” Id. “[I]t is for the 

district court to complete these inquiries, and then determine, in its discretion, whether to dismiss the case with or 

without prejudice.” Id. at 1270.

The district court dismissed this case with prejudice 

because NOV did not present a consistent picture of 

ownership of the ’142 Patent throughout (1) the USPTO 

records, (2) this case, and (3) three separate previous 

litigations including a case against Pason Systems USA 

Corp. (the Pason case), a case in Canada (the Canadian 

case), and a case against Auto-Dril (the Auto-Dril case). 

In the Pason case and the Canadian case, Varco, L.P. 

alleged that it owned the ’142 Patent or the Canadian 

counterpart to the ’142 patent, even after the execution of 

the ACA, and in the Auto-Dril case, NOV settled when 

Auto-Dril presented the same lack of standing argument 

that Omron raises here. We affirm because we find no 

abuse of discretion in the district court’s analysis. 

The district court provided several examples of NOV’s 

behavior evidencing a pattern of highly questionable 

conduct. We agree with the district court that even if 

NOV had been confused about the ownership of the ’142 

Patent, NOV was put on notice about its potential lack of 

standing in October 2011, when Auto-Dril filed a motion 

to dismiss in the Auto-Dril case for lack of standing. In 

the Auto-Dril case, NOV also initially relied on the Assistant Secretary’s Certificate, and NOV settled with AutoDril after Auto-Dril responded with the same lack of 

standing argument advanced by Omron here. Yet nine 

months after settling with Auto-Dril, NOV filed this case

against Omron, without fixing the problem of a lack of 

written assignment of the ’142 Patent from Varco, L.P. to 

NOV. NOV made numerous conflicting representations in 

this case, including stating that the ACA was not relevant 

Case: 15-1406 Document: 52-2 Page: 9 Filed: 01/25/2017
10 NOV v. OMRON OILFIELD & MARINE, INC. 

to any claim or defense in this case, or that it was cumulative and not needed, yet NOV now relies on the ACA as 

the purported assignment document. Even NOV’s Rule 

30(b)(6) designee did not know whether Exhibit A to the 

ACA covered the ’142 Patent. We agree that NOV was 

aware of the “web of confusion it was weaving” as early as 

October 2011, more than nine months before it filed this 

case, yet it failed to “fill[] the void that has now consumed 

this matter: the absence of a written assignment, as 

required by law, of the ’142 Patent from Varco, L.P. to 

NOV.” J.A. 3, 22–23. Had NOV been able to fix the

standing problem, “it would have done so a long time ago 

and certainly before August 2012,” and it “at no point ... 

even made an attempt to explain the blatant inconsistencies” in its previous positions on standing. J.A. 23. We

agree and find no abuse of discretion because the district 

court’s decision to dismiss this case with prejudice was 

not clearly unreasonable, arbitrary, or fanciful, or based 

on an erroneous conclusion of law or fact. 

IV. Motion for Attorney Fees 

After the district court dismissed the case, Omron 

filed a motion for attorney fees and costs, which the 

district court granted, in part. Although the district court 

did not find NOV’s initial filing of the lawsuit or NOV’s 

infringement positions exceptional, it did find exceptionally unreasonable “NOV’s refusal to produce the ACA when 

Omron specifically requested the document,” and “NOV’s 

maintaining of this lawsuit once it was clear NOV lacked 

standing.” J.A. 55, 57. 

We find no abuse of discretion in the district court’s 

award of attorney fees. “[A]n ‘exceptional’ case is simply 

one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or 

the unreasonable manner in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 

Case: 15-1406 Document: 52-2 Page: 10 Filed: 01/25/2017
NOV v. OMRON OILFIELD & MARINE, INC. 11

134 S. Ct. 1749, 1756 (2014). “District courts may determine whether a case is ‘exceptional’ in the case-by-case 

exercise of their discretion, considering the totality of the 

circumstances.” Id. Bad faith is not necessary because “a 

case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from 

mine-run cases to warrant a fee award.” Id. at 1757.

The district court acted well within its discretion in 

finding this case exceptionally meritless compared with 

mine-run cases to warrant an award of attorney fees. It

found that NOV’s offer of the Assistant Secretary’s Certificate, a one-page document tangential to the underlying 

transaction, was disingenuous. It found that NOV’s “legal 

arguments” were “remarkably weak,” and “NOV offered 

no credible arguments to rebut Omron’s grounds for 

dismissal.” J.A. 59. It also explained that this case stood 

out from the many other patent cases that the district 

court had handled because NOV was on notice of the 

standing issue, yet was not forthcoming on addressing or 

acknowledging it, even when Omron specifically requested the ACA, and NOV intentionally withheld the ACA, 

unreasonably claiming it was not relevant to any claim or 

defense in this case.

NOV also objects to the period over which the district 

court awarded attorney fees. NOV seeks to reduce the 

attorney fees award to correspond to the total “delay” 

between March 17, 2014, when NOV objected to producing the ACA, and May 9, 2014, when NOV actually produced the ACA. Omron responds that the district court 

properly exercised its discretion to award all attorney fees 

starting from the date that NOV refused to produce the 

ACA. We agree with Omron.

The district court did not award fees for the entire litigation, but only starting from March 2014, the date of 

NOV’s decision to withhold the ACA. NOV’s subsequent 

production of the ACA did not cure the problem because 

Case: 15-1406 Document: 52-2 Page: 11 Filed: 01/25/2017
12 NOV v. OMRON OILFIELD & MARINE, INC. 

the ACA itself “totally undermined” NOV’s position. J.A. 

59. The district court aptly explained that “NOV attempted to distract the Court with extrinsic evidence but 

to no avail,” and NOV presented “no credible arguments” 

“in what was not a close call.” J.A. 59. We find no abuse 

of discretion in how the district court chose to calibrate 

the period of the litigation for which Omron was entitled 

to be awarded its attorney fees.

V. Invalidity and Noninfringement

Because the district court properly dismissed this case 

based on NOV’s lack of standing to assert the ’142 Patent, 

the district court had no jurisdiction to rule on Omron’s 

motion for summary judgment. J.A. 46. In Steel Co. v. 

Citizens for a Better Environment, the Supreme Court 

rejected “the position embraced by several Courts of 

Appeals, which f[ou]nd it proper to proceed immediately 

to the merits question, despite jurisdictional objections, at 

least where (1) the merits question is more readily resolved, and (2) the prevailing party on the merits would 

be the same as the prevailing party were jurisdiction 

denied.” 523 U.S. 83, 94 (1998). The Supreme Court 

explained that “[w]ithout jurisdiction the court cannot 

proceed at all in any cause.” Id. “Jurisdiction is power to 

declare the law, and when it ceases to exist, the only 

function remaining to the court is that of announcing the 

fact and dismissing the cause.” Id. As explained above, 

NOV lacked standing to assert the ’142 Patent. The 

district court thus lacked jurisdiction to hear the case and 

it was without power to reach any merits decisions. See 

Bd. of Trs. of Leland Stanford Junior Univ. v. Roche 

Molecular Sys., Inc., 583 F.3d 832, 848–49 (Fed. Cir. 

2009) (vacating a district court’s grant of summary judgment of invalidity and remanding with instructions to 

dismiss Stanford’s claim for lack of standing because “the 

district court lacked jurisdiction over Stanford’s infringement claim and should not have addressed the validity of 

the patents”). Therefore, we vacate the district court’s 

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NOV v. OMRON OILFIELD & MARINE, INC. 13

grant of Omron’s motion for summary judgment of invalidity and noninfringement of the ’142 Patent. J.A. 46.

CONCLUSION

We affirm the district court’s judgment that NOV 

lacks standing to assert the ’142 Patent because the ACA 

did not transfer the ’142 Patent from MD/Totco to NOV 

based on the “0” listed in Exhibit A to the ACA. Because 

we affirm on this basis, we need not reach the district 

court’s additional grounds for why the ACA may not have 

transferred the ’142 Patent to NOV. We find no abuse of 

discretion in the district court’s dismissal of this case with 

prejudice or grant of attorney fees, and we affirm those 

decisions. 

We vacate the district court’s grant of Omron’s motion 

for summary judgment of invalidity and noninfringement.

AFFIRMED-IN-PART AND VACATED-IN-PART

Case: 15-1406 Document: 52-2 Page: 13 Filed: 01/25/2017