In the United States Court of Federal Claims

No. 15-501C 

(Filed: April 5, 2016) 

3RD EYE SURVEILLANCE, LLC and 

DISCOVERY PATENTS, LLC,

 

 Plaintiffs, 

 v. 

UNITED STATES,

 Defendant. 

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Patent case; government’s motions to 

notify eight entities alleged to have an 

interest in the subject matter of the action; 

RCFC 14(b); standard for an “alleged 

interest” under the notice provision of 

RCFC 14(b) 

Stephen A. Kennedy, Kennedy Law, L.L.P., Dallas, Texas, for plaintiffs. 

 David M. Ruddy, Trial Attorney, Commercial Litigation Branch, Civil Division, United 

States Department of Justice, Washington, D.C., for defendant. With Mr. Ruddy on the briefs 

were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, and John 

Fargo, Director, Commercial Litigation Branch, Civil Division, United States Department of 

Justice, Washington, D.C. With him at the hearing were Joss Nichols, Civil Division, United 

States Department of Justice and Nathan Grebasch, United States Department of Homeland 

Security. 

 

OPINION AND ORDER

LETTOW, Judge. 

 Pending before the court in this patent infringement case brought pursuant to 28 U.S.C. 

§1498(a) are motions by the defendant (“United States” or the “government”) to notify eight 

entities, each of which “is alleged to have an interest in the subject matter of the suit.” Rule 

14(b) of the Rules of the United States Court of Federal Claims (“RCFC”).1

 The patents at issue 

relate to alarm surveillance technology: U.S. Patent No. 6,778,085 entitled “Security System and 

Method with Realtime Imagery,” U.S. Patent No. 6,798,344 entitled “Security Alarm System and 

Method with Realtime Streaming Video,” and U.S. Patent No. 7,323,980, also entitled “Security 

System and Method with Realtime Imagery.” In the motions, the government asserts that the 

entities to be given notice have contracts with the government involving security or alarm 

1

The eight entities are IndigoVision, LTD; Datawatch Systems, Incorporated; Tyco 

Integrated Security LLC; Diebold, Incorporated; Vidsys, Inc.; EFW Inc.; Tactical Micro, Inc.; 

and ICx Technologies, Inc. 

 
systems, or components of such systems, that, based on plaintiffs’ allegations, may constitute 

infringement of plaintiffs’ asserted patents. The government further asserts that each of the 

contracts held by the eight entities contains a standard indemnity clause pursuant to 48 C.F.R. 

(Federal Acquisition Regulation or “FAR”) § 52.212-4(h) or § 52.227-3, requiring the contractor 

to indemnify the government against liability for patent infringement arising from performance 

of the contract. The plaintiffs oppose all three motions on the basis that the government has not 

sufficiently alleged an interest on the part of the named entities in the subject action to warrant 

notice under RCFC 14(b). The motions have been fully briefed and were addressed at a hearing 

on March 24, 2016. For the reasons stated, the court has concluded that the government’s 

motions should be granted and all eight entities should be given notice of the proceedings 

pursuant to RCFC 14(b). 

BACKGROUND2

A. Original Patent Infringement Complaint 

Plaintiffs filed a complaint on May 15, 2015 alleging that the government was and is 

infringing their patents for alarm surveillance systems. See 3rd Eye Surveillance, LLC v. United 

States, 124 Fed. Cl. 438, 439-40 (2015). All three patents relate to a “security alarm system that 

provides secure, realtime video and/or other realtime imagery of a secured location to one or 

more emergency response agencies over a high-speed communications link.” Id. at 440 (quoting 

’085 patent at Abstract). Plaintiff 3rd Eye Surveillance, LLC (“3rd Eye”) alleges that it is the 

exclusive licensee of the three patents, and plaintiff Discovery Patents, LLC (“Discovery 

Patents”) is the alleged assignee of all interests in the patents. Id. In their original complaint, 

plaintiffs claimed that the government was developing and deploying infringing surveillance 

systems either through the direct actions of government agencies or through third-party 

consultants and contractors. Id. Plaintiffs claim damages for this infringement that “approach or 

exceed $1 [b]illion.” Id.

On September 16, 2015, the government filed a motion to dismiss plaintiffs’ complaint 

for lack of subject matter jurisdiction under RCFC 12(b)(1), as well as a motion for a more 

definite statement under RCFC 12(e). 3rd Eye, 124 Fed. Cl. at 439. In the latter motion, the 

government asserted it could not reasonably respond to plaintiffs’ complaint because it did not 

provide any information about the identity or location of the accused systems, nor did it provide 

details of the allegedly infringing activity beyond a representative list of eight government 

entities “responsible for military, security, and law enforcement functions,” as well as six thirdparty “consultants and contractors” to the government. Id. at 440. The court denied the 

government’s motion to dismiss but directed plaintiffs “to file an amended complaint that 

(1) explains, with as much specificity as possible, why they believe certain government agencies 

and third-party contractors to the government have developed and used surveillance systems that 

infringe their patents, and (2) provides the publicly available information that was used to reach 

2

To provide a background and context for the case, the court has drawn upon the 

submissions of the parties attendant to the pending motions. 

2 

 
this conclusion.” Id. at 444. 

B. Amended Complaint and Details on Government Contractors 

The plaintiffs responded to the court’s order by filing an amended complaint on January 

26, 2016, ECF No. 22. The amended complaint provided examples of locations where the 

allegedly infringing surveillance systems are in use, including airports, government office 

buildings and courthouses, and national border areas. Am. Compl. ¶¶ 9, 84. The complaint also 

stated that “[t]he [g]overnment enters into contracts with third parties for hardware components 

(such as cameras, audio sensors and computers/servers), software applications, and IT 

technology consulting necessary to implement and operate the infringing [g]overnment security 

systems.” Am. Compl. ¶ 11. Plaintiffs asserted that “[d]etailed specifications for the various 

[g]overnment security systems are confidential.” Am. Compl. ¶ 10. 

Plaintiffs provided information about “video cameras” in use at airports, such as Dallas 

Fort Worth International Airport. Am. Compl. ¶ 17. Plaintiffs also submitted a news article 

from January 2016 relating to Hitachi Data Systems Federal (“Hitachi Federal”), a government 

contractor, describing an “airport security monitoring system” that uses “video intelligence” and 

an “automated monitoring system.” Am. Compl. ¶¶ 18-20. Plaintiffs stated that they “do not 

allege that Hitachi Federal is directly or indirectly infringing the [asserted] patents at this time,” 

but the government’s airport monitoring system, as described in the article and evidenced by the 

video cameras in use, infringes one or more of the claims in the three patents at issue. Am. 

Compl. ¶¶ 43-48. 

Plaintiffs also provided information about security systems in use at government 

buildings, including systems that use “Converged Security Information Management software” 

provided by a contractor, Vidsys, Inc. (“Vidsys”). Am. Compl. ¶¶ 50, 52-53. Plaintiffs allege 

that the government is infringing one or more of the claims in the ’344 patent and the ’980 patent 

by using the Vidsys software “in connection with other components,” including video cameras 

and other “sensors,” alarms, and access control systems such as “identity management, card 

access, and biometrics.” Am. Compl. ¶¶ 57-66, 81-83. Plaintiffs do not allege that Vidsys is 

infringing their patents or “that the Vidsys . . . software, by itself, directly or indirectly, infringes 

the claims of [p]laintiffs’ patents.” Am. Compl. ¶¶ 79-80. 

Plaintiffs additionally provided information on the government’s use of a “remote video 

surveillance system” to “monitor[] portions of its border.” Am. Compl. ¶ 86. Plaintiffs point to 

a contract recently awarded to General Dynamics to upgrade a border surveillance system. Am. 

Compl. ¶ 87.3

 The system reportedly “includes a wide-area electro-optical and infrared multisensor camera system that provides [government] agents with persistent ground surveillance and 

real-time video analytics to effectively detect, track, identify, classify, and respond to missions 

along the nation’s borders.” Am. Compl. ¶ 90. Plaintiffs assert that this system infringes one or 

3

At the hearing, the government indicated it was not seeking to notify General Dynamics 

under RCFC 14(b) because, among other things, the contract with General Dynamics apparently 

does not contain a patent indemnity clause. Hr’g Tr. 7:6-14 (Mar. 24, 2016), ECF No. 40. 

3 

 
more of the claims in the ’344 patent and the ’980 patent. Am. Compl. ¶¶ 100-03. 

Plaintiffs also included in their complaint a summary of government contracts under 

General Services Administration (“GSA”) Schedules 70 and 84, which are used to obtain 

“hardware components, software and other components needed to provide security systems for 

secured locations.” Am. Compl. ¶¶ 104-06. In this summary, plaintiffs identified contracts with 

two entities, IndigoVision, LTD (“IndigoVision”) and Datawatch Systems, Incorporated 

(“Datawatch”), for “security system[s] that include[] . . . video cameras, sensors, a control center 

to receive input from computers connected to such sensors, and the capabilities of providing realtime video of alarm events to response agencies.” Am. Compl. ¶ 105. Plaintiffs also stated that 

the government purchases goods and services from Vidsys through GSA Schedule 70. Am. 

Compl. ¶ 106. 

C. The Government’s Motions to Notify Interested Third Parties 

1. The government’s first motion: IndigoVision and Datawatch. 

On February 5, 2016, the government filed a motion to notify IndigoVision and 

Datawatch as interested third parties under RCFC 14(b). Def.’s Opposed Mot. to Notice Third 

Parties (“Def.’s First Mot.”), ECF No. 23. The government based its motion on the fact that both 

IndigoVision and Datawatch are named in Paragraph 105 of plaintiffs’ amended complaint as 

vendors under GSA Schedule 84 and potential providers of an infringing “security system.” 

Def.’s First Mot. at 2. With its motion, the government provided a Federal Supply Schedule 

Price List for IndigoVision under contract number GS-07F-0271Y for numerous components 

related to “closed circuit surveillance systems” and “facility management systems.” Id. Ex. A. 

The government also provided a similar price list for Datawatch under contract number GS-07F0634N for components related to an “access control system” and other “security and monitoring” 

systems. Id. Ex. B. Finally, the government provided “Contract Clause Document[s]” for both 

IndigoVision and Datawatch showing that both contracts contained a standard indemnity clause

related to intellectual property, FAR § 52.212-4(h): 

Patent indemnity. The Contractor shall indemnify the ordering activity and its 

officers, employees and agents against liability, including costs, for actual or 

alleged direct or contributory infringement of, or inducement to infringe, any 

United States or foreign patent, trademark or copyright, arising out of the 

performance of this contract, provided the Contractor is reasonably notified of 

such claims and proceedings. 

Id. at 3, Ex. C at A39, Ex. D at A186.4

 The government contended that “pursuant to the patent 

indemnity clause in each underlying contract, the companies . . . may have an interest in the 

subject matter of this suit within the meaning of RCFC 14(b).” Id. at 3.

4

The government provided the exhibits to its motions as separate appendices, but the 

several appendices were paginated sequentially. For ease of reference, this opinion refers to 

these page numbers as “A __.” 

4 

 
2. The government’s second motion: Tyco Integrated Security LLC, Diebold, 

Incorporated, Vidsys, and EFW Inc. 

The government filed its second motion to notify interested third parties on February 12, 

2016, the same day it filed its answer to the amended complaint. Def.’s Second Mot. to Notice 

Third Parties (“Def.’s Second Mot.”), ECF No. 25. The second motion requests that the court 

authorize notices to be issued to Tyco Integrated Security LLC (“Tyco”), Diebold, Incorporated 

(“Diebold”), Vidsys, and EFW Inc. (“EFW”), a wholly owned subsidiary of Elbit Systems of 

America, LLC. Def.’s Second Mot. at 1-2. With its motion, the government provided contract 

number DJM-14-A32-V-0014 between the United States Marshals Service and Tyco relating to 

“management, supervision, manpower, materials, supplies, and equipment necessary to plan, 

schedule, coordinate, and assure effective performance of security services.” Id. Ex. B, at A8.

5

 

It also provided a redacted version of contract number DJM-15-A32-V-0033 between the United 

States Marshals Service and Diebold for the “management, installation, maintenance, and central 

station monitoring” of “[h]ome [i]ntrusion [d]etection [s]ystem[s].” Id. Ex. C. at A1l1. The 

government provided a redacted version of contract number N00406-15-P-1941 between the 

United States Navy and Vidsys for the VidShield software application to be used in video 

surveillance systems operated by the Navy. Id. Ex. D, at A129-30.6 Finally, the government 

provided award information for contract number HSBP1014C0004 between the United States 

Department of Homeland Security and EFW for goods and services related to the Integrated 

Fixed Towers border surveillance system cited in Paragraph 93 of the amended complaint. Id.

Ex. E, at A161, & G; see also Reply in Support of Def.’s Second Mot. Ex. (providing a redacted 

version of the contract with EFW), ECF No. 32. 

The contracts with Tyco, Diebold, and Vidsys contain the standard indemnity clause set 

out at FAR § 52.212-4(h). Id. at 3-6 & Ex. B, at A52, Ex. C, at A95, Ex. D, at A134. The 

contract with EFW contains an indemnity clause related to patents set out at FAR § 52.227-3: 

The Contractor shall indemnify the Government and its officers, agents, and 

employees against liability, including costs, for infringement of any United States 

patent (except a patent issued upon an application that is now or may hereafter be 

withheld from issue pursuant to a Secrecy Order under 35 U.S.C. 181) arising out 

of the manufacture or delivery of supplies, the performance of services, or the 

5

Tyco was one of the “consultants and contractors” listed in Paragraph 11 of the original 

complaint through which plaintiffs alleged the government had “deployed unlicensed and 

infringing surveillance systems.” Compl. ¶ 11. The amended complaint omitted this list, but 

included allegations of government contracts with third parties. Am. Compl. ¶¶ 104-07. The 

amended complaint did not specifically name Tyco as a contractor involved in infringing 

activity.

6

Like Tyco, Vidsys was named in the original complaint as one of the “consultants and 

contractors” with which the government had been working to deploy infringing systems. Compl. 

¶ 11. Vidsys was named in Paragraphs 50, 52-53, and 106 of the amended complaint. 

5 

 
construction, alteration, modification, or repair of real property (hereinafter 

referred to as construction work) under this contract, or out of the use or disposal 

by or for the account of the Government of such supplies or construction work. 

 

Id. at 8 & Ex. G, at A217 (emphasis in original); see also Reply in Support of Def.’s Second 

Mot. Ex. at A334. Accordingly, the government asserted that each of the four entities “may have 

an interest in the subject matter of this suit within the meaning of RCFC 14(b)” by virtue of the 

respective patent indemnity clauses. Id. at 4-6, 8. 

3. The government’s third motion: Tactical Micro, Inc. and ICx Technologies, Inc. 

In its third motion to notify interested third parties, filed February 29, 2016, the 

government requested that the court authorize notice to two additional entities: Tactical Micro, 

Inc. (“Tactical Micro”) and ICx Technologies, Inc. (“ICx”). Def.’s Mot. for Leave of Court to 

Notice Third Parties (“Def.’s Third Mot.”), ECF No. 30.7 With its motion, the government 

provided a redacted version of contract number HSBP1016D00002 between United States 

Customs and Border Protection and Tactical Micro for “procurement of goods and services 

related to the Mobile Video Surveillance System . . . Program.” Def.’s Third Mot. at 3 & Ex. A. 

The government also provided a redacted version of contract number HSBP1011C00024 

between United States Customs and Border Protection and ICx “for procurement of goods and 

services relating to the Mobile Surveillance Capability . . . system.” Id. at 5 & Ex. B.8 The 

government asserts that both programs are part of the “border security technology plan” 

referenced in Paragraph 93 of the amended complaint, which according to plaintiffs involves 

infringing systems. Id. at 3, 5. The contract with Tactical Micro contains the standard indemnity 

clause under FAR § 52.212-4(h), and the contract with ICx contains the standard indemnity 

7

The government filed its third motion seventeen days after submitting its answer on 

February 12, 2016. It acknowledged that its third motion was out of time under RCFC 

14(b)(2)(B)(ii), which requires the government to “file any motion for notice on or before the 

date the answer is required to be filed.” Def.’s Third Mot. at 2. However, Clause iii of the same 

rule states that “[f]or good cause shown, the court may allow a motion for notice to be filed at a 

later time.” Id. (quoting RCFC 14(b)(2)(B)(iii)). The government explained that it had been 

investigating potentially interested third parties since the amended complaint was filed on 

January 26, 2016, and that it did not receive the contract information from the pertinent 

government agency until February 26, 2016. Id. For good cause shown, the government’s 

request for leave to submit its motion out of time is GRANTED. 

8

In their response to the government’s third motion, plaintiffs asserted that ICx “no 

longer exists” because FLIR Integrated Systems, Inc. (“FLIR”) acquired all outstanding shares of 

ICx’s common stock in October 2010. Pls.’ Resp. to Def.’s Third Mot. (“Pls.’ Third Resp.”) at 

6, ECF No. 35. This assertion is not correct. FLIR indeed purchased all of the stock of ICx, not 

ICx’s assets, and ICx remains a viable corporate entity, albeit one wholly owned by FLIR. Hr’g 

Tr. 13:8-24. In its reply supporting the third motion, the government noted that the contract with 

ICx was amended in June 2014 to add FLIR as the “doing business . . . name” for ICx and stating 

that “[a]ll other contract terms and conditions remain the same.” Reply in Support of Def.’s 

Third Mot. at 4 & Ex. A, ECF No. 38. 

6 

 
clause under FAR § 52.227-3. Id. at 4, 6 & Ex. A at A41, Ex. B at A89. As with its prior 

motions, the government asserted that Tactical Micro and ICx “may have an interest in the 

subject matter of this suit within the meaning of RCFC 14(b)” by virtue of the respective patent 

indemnity clauses. Id. at 4, 6. 

JURISDICTION

This court has exclusive jurisdiction to adjudicate patent infringement claims against the 

federal government “[w]henever 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 manufacture the same.” 28 U.S.C. § 1498(a). In that respect, “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.” 28 U.S.C. § 1498(a). “[D]irect infringement of a patent occurs when the 

government directly uses or manufacturers the patented invention without a license, or when, 

through a procurement contract or otherwise, the government consents to the use or the 

manufacture of the patented invention for its benefit without first obtaining a license.” Liberty 

Ammunition, Inc. v. United States, 119 Fed. Cl. 368, 385 (2014) (citing Decca Ltd. v. United 

States, 640 F.2d 1156, 1166-67 & n.15 (Ct. Cl. 1980)) (internal citations omitted), appeal 

docketed, No. 15-5061 (Fed. Cir.). Accordingly, the court has jurisdiction over the present case. 

ANALYSIS

A. Standard for an “Alleged Interest” Under the Notice Provisions of RCFC 14(b)

Plaintiffs’ opposition to the government’s motions rests primarily on their assertion that 

the government has not sufficiently alleged that the third-party entities have an interest in the 

present action such that notice under RCFC 14(b) is necessary or appropriate. As the plaintiffs 

would have it, the standard for an “alleged interest” under this rule should be the plausibility 

standard articulated by the United States Supreme Court in Bell Atlantic Corp. v. Twombly, 550 

U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Pls.’ Resp. to Def.’s Second Mot. 

(“Pls.’ Second Resp.”) at 3, ECF No. 31; Pls.’ Third Resp. at 6-7. This standard, which was 

established in the context of pleading requirements to survive a motion to dismiss under Rule 

12(b)(6) of the Federal Rules of Civil Procedure, states that “a complaint must contain sufficient 

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 

556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).9

 A “plausible” claim requires enough 

“factual content” to allow the court to “draw the reasonable inference” that the requested relief is 

warranted. Id. While appearing to acknowledge that this court has never applied the 

Twombly/Iqbal standard in the context of an RCFC 14(b) motion, plaintiffs nevertheless argue 

that for “public policy” reasons, the court should adopt this standard to prevent the government 

9

Because RCFC 12(b)(6) mirrors the equivalent rule in the Fed. R. Civ. P., the court has 

adopted this pleading standard for motions to dismiss under RCFC 12(b)(6). See, e.g., Wolens v. 

United States, __ Fed. Cl. __, __, 2016 WL 853724 at *4 (Mar. 4, 2016); Palafox St. Assocs., 

L.P. v. United States, 114 Fed. Cl. 773, 780 n.2 (2014). 

7 

 
from “run[ning] roughshod over litigants, especially in patent infringement cases.” Pls.’ Second

Resp. at 3. Otherwise “no standard of review” would appertain in a motion for notice under 

RCFC 14(b), allowing the government to “invoke the names of several contractors as potential 

responsible parties” in an effort to “increase the complexity and cost of a case.” Pls.’ Third

Resp. at 6-7. Plaintiffs draw an analogy to calling upon an “ally in war” through use of a “mere 

allegation” of interest. Pls.’ Second Resp. at 2. 

 RCFC 14(b)(1) states that “[t]he court, on motion or on its own, may notify any person 

with the legal capacity to sue or be sued who is alleged to have an interest in the subject matter 

of the suit.” Within 42 days of service, a person notified under this rule “may file an appropriate 

pleading setting forth the person’s interest in the subject matter of the litigation.” RCFC 14(c). 

If a third party receiving notice under RCFC 14(b) decides to file a pleading under RCFC 14(c), 

“that third party has standing to seek adjudication of the claims at issue in the suit.” Uusi, LLC v. 

United States, 110 Fed. Cl. 604, 610 (2013) (citing USHIP Intellectual Props., LLC v. United 

States, 98 Fed. Cl. 396, 405 (2011)). This rule is separate from the provisions for intervention 

under RCFC 24, in which a party can move to intervene of right in a pending action (RCFC 

24(a)) or request the court’s permission to intervene (RCFC 24(b)). However, both RCFC 14(b), 

and RCFC 24(a) refer somewhat similarly to a person “who is alleged to have an interest in the 

subject matter of the suit,” RCFC 14(b)(1), and a person who “claims an interest relating to the 

property or transaction that is the subject of the action,” RCFC 24(a)(2).

This court and its predecessor, the United States Court of Claims, have construed the 

“alleged interest” requirement of RCFC 14(b)(1) broadly, stating that “an apparent interest is 

sufficient for notice to issue ‘[e]ven in those situations where an alleged third party interest in the 

suit is uncertain.’” Uusi, 110 Fed. Cl. at 609 (quoting Allied Oil & Supply, Inc. v. United States, 

60 Fed. Cl. 223, 225-26 (2004) (in turn quoting Del-Rio Drilling Programs, Inc. v. United States, 

17 Cl. Ct. 844, 849 (1989))). The “interest” at issue generally involves a pecuniary interest, 

whether a “direct pecuniary interest” or a “potential pecuniary interest.” Pacific Gas & Elec. Co. 

v. United States, 98 Fed. Cl. 699, 701 (2011) (citing Bowser, Inc. v. United States, 420 F.2d 

1057, 1060 (Ct. Cl. 1970); Allied Oil, 60 Fed. Cl. at 228; Bird v. United States, 51 Fed. Cl. 536, 

541-42 (2002)).10 In the context of a motion by the United States to notify a third party, a 

“pecuniary interest” can be established through an allegation that a third party may be required to 

indemnify the government in the event the government is found liable in the subject action. See, 

e.g., Uusi, 110 Fed. Cl. at 611 (“[The third parties] have identified their clear interest in the 

subject matter of this litigation, namely their potential indemnification responsibilities if the 

[g]overnment is found liable to [p]laintiffs for patent infringement.”). To do this, the 

government need only make a “nonfrivolous claim for indemnity” against the third party. See 

Carrier Corp. v. United States, 534 F.2d 250, 251 (Ct. Cl. 1976) (per curiam); accord

Philadelphia Suburban Corp. v. United States, 211 Ct. Cl. 354, 356 (1976) (applying Carrier in 

denying a motion to quash notice to an entity against whom the government “alleged a nonfrivolous claim”); Uusi, 110 Fed. Cl. at 610; Allied Oil, 60 Fed. Cl. at 226. 

10Contrastingly, a judge of this court has held that “an interest in fulfilling . . . contractual 

obligations,” as opposed to a specific pecuniary interest, is not sufficient for an “alleged interest” 

under RCFC 14(b). Pacific Gas, 98 Fed. Cl. at 702. 

8 

 
The distinction between the Twombly/Iqbal plausibility standard and the “nonfrivolous” 

standard employed by this court under Carrier and its progeny for notice under RCFC 14(b) is 

significant. As plaintiffs would have it, the plausibility standard applies and requires either an 

admission by the government that the third parties are selling infringing security alarm systems 

to the government or are selling component parts with “no substantial non-infringing uses.” See, 

e.g., Pls.’ Second Resp. at 5 (asserting that only contractors who are selling infringing alarm 

systems have an interest under RCFC 14(b) and stating that “[i]f the [g]overnment properly 

alleges that [the third party] sells to the [g]overnment, or has sold the [g]overnment, an 

infringing system, [p]laintiffs will withdraw [their] opposition”); Pls.’ First Resp. at 2, 4 n.5 

(stating that a contractor “must be . . . providing services that have no substantial non-infringing 

uses before it can be liable” for infringement). For this position, plaintiffs rely on the statute 

governing private-party patent infringement, 35 U.S.C. § 271, which establishes “three possible 

types of infringement: (1) direct infringement, where a party is proven to practice each and every

element of a given claim in a patent; (2) indirect infringement, where a party induces others to 

infringe with knowledge of the patent and knowledge that his or her activities would lead to the 

infringement of the patent; and (3) indirect infringement by parties who sell component parts that 

have no substantial non-infringing uses.” Pls.’ Second Resp. at 3-4. 

Plaintiffs’ reliance on 35 U.S.C. § 271 is misplaced. Although the statutory framework 

for private-party patent infringement in 35 U.S.C. § 271 is “similar” and “parallel” to that 

applied by this court to patent infringement claims under 28 U.S.C. § 1498(a), it is not the same. 

Zoltek Corp. v. United States, 672 F.3d 1309, 1321 (Fed. Cir. 2012) (quoting Motorola, Inc. v. 

United States, 729 F.2d 765, 768 (Fed. Cir. 1984)). Under Section 1498, infringement occurs 

“[w]henever 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 manufacture the same.” 28 U.S.C. § 1498(a) (emphasis added). This framework ties the 

government and contractors together, such that liability for the contractor’s “use and 

manufacture” of an infringing item is assigned to the government. See Penda Corp. v. United 

States, 44 F.3d 967, 970 (Fed. Cir. 1994) (commenting that “no judgment has been or could be 

entered” against a government contractor in a patent infringement suit against the government 

under Section 1498); Decca, 640 F.2d at 1167 (A “contractor’s activity is deemed under 

[S]ection 1498 to be for the [g]overnment.”) Accordingly, the extent of the contractor’s 

contribution to the “use or manufacture” of an infringing item is not relevant to establishing the 

government’s liability for infringement under Section 1498. 

 Plaintiffs also improperly frame the question of “interest” under RCFC 14(b) as whether 

the named entities could be found to be infringing plaintiff’s patents, rather than whether the 

entities could be required to indemnify the government if the government was found liable 

for infringement. The two questions are not the same. Under the indemnity clause in FAR 

§ 52.212-4(h), a contractor agrees to indemnify the government for any patent infringement 

“arising out of the performance of th[e] contract.” Similarly, the patent indemnity clause in FAR

§ 52.227-3 requires the contractor to indemnify the government for patent infringement “arising 

out of the manufacture or delivery of supplies, the performance of services, or the construction, 

alteration, modification, or repair of real property . . . under this contract.” This court does not 

have jurisdiction to determine the extent of a contractor’s obligations to indemnify the 

government under these clauses, as these would be governmental claims against third parties. 

9 
Penda Corp., 44 F.3d at 970 (citing Carrier Corp., 534 F.2d at 251). That said, the language of 

these clauses demonstrates that a contractor could very well have a pecuniary interest in the 

outcome of a patent infringement suit against the government by virtue of these indemnification 

provisions, even if the contractor is not directly manufacturing or selling devices or materials 

that would themselves infringe. 

Plaintiffs make much of the fact that they have affirmatively stated that many of the 

entities the government seeks to notify are not infringing their patents, or at least do not appear to 

be infringing their patents based on presently available information. See Pls.’ Second Resp. at 2 

(characterizing the government’s position as “even when a patent owner disavows infringement 

by [a contractor], this [c]ourt must grant a Rule 14(b) [m]otion if the [g]overnment ‘merely 

alleges’ that it could be entitled to indemnification”); see also Pls.’ First Resp. at 2 (stating that 

“publicly available” information suggests that IndigoVision and Datawatch are not directly 

infringing plaintiffs’ patents); Pls.’ Second Resp. at 6-8 (stating that Tyco and Diebold appear to 

sell “antiquated system[s]” that would not be considered infringing, and that Paragraph 79 of the 

amended complaint states that “Vidsys does not appear to be infringing”); Pls.’ Third Resp. at 8 

(stating that the information provided for Tactical Micro does not establish that it is infringing 

plaintiffs’ patents). Plaintiffs suggest that because they do not presently claim that the entities 

are infringing their patents, these entities do not have a valid interest in the subject proceeding. 

The plaintiffs’ arguments in this respect fail to take into account the early stage of the present 

proceedings, which is dictated in part by the requirement in Rule 14(b) that the government file 

its motions for notice no later than the date of its answer, absent good cause for a later filing. 

RCFC 14(b)(2)(B)(ii).11 As this case proceeds, the parties will have an opportunity to conduct 

discovery and, in due course, the court will conduct claim construction proceedings to 

“determin[e] the meaning and scope of the patent claims asserted to be infringed.” Markman v. 

Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 

(1996). If at any point plaintiffs wish to stipulate that certain systems or components provided 

by contractors to the government do not infringe or contribute to infringement of the patents at 

issue, there is a mechanism for them to do so through a voluntary, partial dismissal of claims 

under RCFC 41(a)(1)(A)(ii). See Reply in Support of Def.’s Third Mot. at 10 (citing, e.g., Joint 

Stipulation of Dismissal, Ensign-Bickford Aerospace & Defense Co. v. United States, No. 13-cv57 (Fed. Cl. July 12, 2013), ECF No. 36; Stipulation to Dismiss Claims, Blue Spike, LLC v. 

United States, No. 13-cv-419 (Fed. Cl. July 10, 2014), ECF No. 55). Unless and until this

11Due process problems can arise with later notice. See Bowser, 420 F.2d at 1060-61 

(concluding in a patent case that where notice and summons to an indemnitor were not issued 

until after entry of judgment, the indemnitor had been deprived of a fair hearing and the 

indemnitor was not required to indemnify government, absent a new action), upheld in pertinent 

part on recons., 427 F.2d 740, 741 (Ct. Cl. 1970). 

 Additionally, the standard indemnity clause in the FAR related to intellectual property, 

FAR § 52.212-4(h), sets out an apparent condition on application of the indemnity, expressed in 

the form of a proviso: “provided the Contractor is reasonably notified of such claims and 

proceedings.” See supra, at 4 (quoting FAR § 52.212-4(h) in full). The government’s motion 

for notice to be given pursuant to RCFC 14(b) would ostensibly serve to implement this proviso. 

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occurs, however, plaintiffs’ statements to this effect do not deprive the third-party entities of an 

interest in this case.

Simply stated, the government is requesting that the court formally notify third parties 

that might otherwise be prejudiced by the outcome of the present proceedings and allow those 

parties to have standing to participate in the proceedings. Uusi, 110 Fed. Cl. at 610. As a result, 

the standard for an alleged interest under RCFC 14(b) must be no higher, and may well be lower, 

than the standard for intervention of right under RCFC 24(a), where a party need only show an 

interest in the subject of the proceeding such that “disposing of the action may as a practical 

matter impair or impede the movant’s ability to protect its interest.” RCFC 24(a)(2) (emphasis 

added). 

Accordingly, to allege an interest in the present case for the purposes of a motion under 

RCFC 14(b), the government must make a nonfrivolous claim that the entities to whom notice 

would be given could be required to indemnify the government if it was found liable to plaintiffs 

for patent infringement, or that these entities otherwise have a pecuniary interest in the outcome 

of the case. Carrier Corp., 534 F.2d at 251; Pacific Gas, 98 Fed. Cl. at 701. 

B. Applying the Standard for Notice Under RCFC 14(b) to the Government’s Motions 

Applying the “nonfrivolous claim of a pecuniary interest” standard to the government’s 

motions, the court concludes that the government has alleged a sufficient interest for all eight 

named entities in the subject proceeding. 

1. The government’s first motion: IndigoVision and Datawatch. 

The government has provided evidence, in the form of Federal Supply Schedule Lists, 

that both IndigoVision and Datawatch are engaged in activities on behalf of the government that 

involve the manufacture and sale of security systems, or components of them, that appear related 

to the subject matter of the present patent infringement suit. See Def.’s First Mot. at Ex. A & B; 

see also Am. Compl. ¶ 105 (stating that IndigoVision advertises a potentially infringing security 

system, and Datawatch “offers many of the same services”). The government has also provided 

evidence that its contracts with IndigoVision and Datawatch contain the standard indemnity 

clause set out in FAR § 52.212-4(h). Def.’s First Mot. at Ex. C & D. Accordingly, the 

government has made a nonfrivolous claim that IndigoVision and Datawatch, through these 

indemnity provisions, have a pecuniary interest in the subject proceeding. 

2. The government’s second motion: Tyco, Diebold, Vidsys, and EFW. 

The government has provided its contracts (or portions of them) with Tyco and Diebold 

showing that these companies are involved in the manufacture, sale, maintenance, and operation 

of security systems on behalf of the United States Marshals Service. Def.’s Second Mot. Ex. B 

& C. It has also provided portions of its contract with Vidsys sufficient to establish that this 

company provides software to the United States Navy to enable its “video surveillance system.” 

Id. Ex. D. The government similarly provided portions of its contract with EFW showing that 

this company is engaged in providing “goods and services” to U.S. Customs and Border 

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Protection in support of a “border surveillance system.” Id. at 7 & Exs. E & G; Reply in Support 

of Def.’s Second Mot. Ex. All four contracts contain either the indemnity clause stated in FAR

§ 52.212-4(h) or that set out in FAR § 52.227-3. Accordingly, the government has made a 

nonfrivolous claim that Tyco, Diebold, Vidsys, and EFW have a pecuniary interest in the subject 

proceeding.

3. The government’s third motion: Tactical Micro and ICx. 

The government has provided portions of its contracts with Tactical Micro and ICx 

sufficient to show that both companies are engaged in providing to U.S. Customs and Border 

Protection goods and services for mobile surveillance systems along the U.S. border. Def.’s 

Third Mot. Ex. A & C. These contracts contain either the indemnity clause stated in FAR 

§ 52.212-4(h) or that set out in FAR § 52.227-3. Accordingly, the government has made a 

nonfrivolous claim that Tactical Micro and ICx have a pecuniary interest in the subject 

proceeding.

CONCLUSION

 For the reasons stated, the government’s motions to authorize notice to the eight named 

entities pursuant to Rule 14(b) are GRANTED. The clerk shall issue notice to each entity, as 

specified in RCFC 14(b)(3). Service of the notices shall be accomplished in accord with the 

provisions of RCFC 14(b)(4).12

 It is so ORDERED.

s/ Charles F. Lettow 

Charles F. Lettow

Judge 

12The government has also filed a motion for an extension of time to file the joint 

preliminary status report due following the filing of the answer, which occurred on February 12, 

2016. The government suggests that an extension would enable the noticed entities time to 

decide whether to join the action and for the joining entities to participate in developing the joint 

preliminary status report. The government’s motion for an enlargement of time, ECF No. 33, is 

GRANTED, and the joint preliminary status report shall be due on or before May 20, 2016. 

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