United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
F. ATLAS SENIOR UNITED STATES DISTRICT JUDGE
case is before the Court on the Motion to Dismiss or for More
Definite Statement (“Motion to Dismiss”) [Doc. #
25] filed by Defendant Weatherford Technology Holdings, LLC
“Weatherford”). Plaintiff iiiTec, Limited
(“Plaintiff” or “iiiTec”) filed a
Response [Doc. # 37], and Weatherford filed a Reply [Doc. #
44]. Having reviewed the record and the applicable legal
authorities, the Court denies the Motion to
iiiTec alleges in the First Amended Complaint that Petrowell
Limited (“Petrowell”) developed a “radio
frequency identification device (“RFID”)
controlled circulating sub for use in the drilling market of
the oilfield service industry.” First Amended Complaint
[Doc. # 14], ¶ 9. Petrowell later discovered that
Marathon Oil Company (“Marathon”) held United
States patents covering the use of RFID in downhole
operations. See Id. Plaintiff alleges that in early
2006, “Petrowell signed an exclusive license agreement
with Marathon for all applications in the downhole
environment for RFID technology.” Id., ¶
10. Later that same year, Marathon moved its RFID technology
to a new company, In-Depth Systems, Inc.
(“In-Depth”). See id., ¶ 11.
alleges that in August 2008, it entered into a Technology
Development Agreement (“TDA”) with Marathon and
Petrowell. See id., ¶ 14. Under the
TDA, Marathon is granted rights to new developments and/or
improvements to the RFID technology made during the course of
the TDA, which are defined as “Assigned IP” in
the TDA. See id., ¶ 16 (citing TDA ¶ 9.9).
The TDA provides further that Marathon “shall grant to
In-Depth or Developers [Petrowell and Plaintiff] licenses in
any Assigned IP” depending on Marathon's agreement
with In-Depth and others. Id. (quoting TDA ¶
9.9). The TDA states that if assigned to the Developers, the
Assigned IP license to Plaintiff shall be exclusive in the
Drilling Field or Coiled Tubing Field. Id. (citing
TDA ¶ 9.9).
alleges that the TDA included a “Program Plan”
for “Program Tools” to be developed, and for the
Developers to pay a technology development fee to Marathon.
See id., ¶¶ 21-22. Plaintiff alleges that
as it developed a specific “Program Tool, ” it
received a license covering that tool. See id.,
¶ 22. Plaintiff alleges that the amount of the
technology development fee was calculated based on a stated
value for each tool and the “Gross Revenues”
Plaintiff received from selling, renting, or using the tool.
See id., ¶ 23. Plaintiff alleges that, pursuant
to the terms of the TDA, it paid a 17.5% fee, totaling $290,
801.24, to Marathon in February 2013. See id.,
April 2017, Weatherford and Marathon entered into an IP
Purchase Agreement which stated that Marathon assigned
ownership rights in the Assigned IP. See id., ¶
26. Plaintiff alleges that the TDA prevents Marathon from
assigning its rights or obligations under that agreement
“without the prior written consent of the Developers
[and] any purported assignment or delegation without such
consent [is] voidable and ineffective.” Id.
(quoting TDA ¶ 23). Plaintiff alleges that it has not
consented to any assignment of the Assigned IP to
Weatherford. See id., ¶ 29. Plaintiff alleges
that the IP Purchase Agreement provides also that the RFID
Technology “shall remain subject to any and all rights
and licenses granted” under the TDA. Id.,
filed this lawsuit against Weatherford seeking primarily a
declaratory judgment that any assignment of the Assigned IP
by Marathon to Weatherford is invalid. See First
Amended Complaint, Count 1. As an alternative, and only if
there is a finding that the assignment to Weatherford is
valid without Plaintiff's consent, Plaintiff seeks a
declaratory judgment that it has a valid license under the
TDA that is binding on Weatherford (Count 2), and asserts a
breach of contract claim (Count 3). In Count 4 of the First
Amended Complaint, Plaintiff seeks to recover its reasonable
and necessary attorney fees.
filed its Motion to Dismiss and Motion for Sanctions.
Weatherford argues that the transfer of the Assigned IP from
Marathon to Weatherford does not require Plaintiff's
consent, that the TDA does not grant Plaintiff a license in
the Assigned IP, and that there is no viable breach of
contract claim because Weatherford is not a party to the TDA.
The pending motions have been fully briefed and are now ripe
for decision. The Court denies the Motion to Dismiss and the
Motion for Sanctions.
STANDARD FOR MOTION TO DISMISS
motion to dismiss under Rule 12(b)(6) of the Federal Rules of
Civil Procedure “is viewed with disfavor and is rarely
granted.” See Leal v. McHugh, 731 F.3d 405,
410 (5th Cir. 2013) (quoting Turner v. Pleasant, 663
F.3d 770, 775 (5th Cir. 2011)); Shaikh v. Texas A&M
Univ. Coll. of Med., 739 Fed.Appx. 215, 218 (5th Cir.
June 20, 2018). The Court accepts the factual allegations in
the complaint as true, and construes the facts in the light
most favorable to the plaintiff. See Alexander v. Verizon
Wireless Servs., L.L.C., 875 F.3d 243, 249 (5th Cir.
2017) (citing Kelly v. Nichamoff, 868 F.3d 371, 374
(5th Cir. 2017)). The complaint must, however, contain
sufficient factual allegations, as opposed to legal
conclusions, to state a claim for relief that is
“plausible on its face.” See Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009); Cicalese v. Univ.
of Texas Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019);
Patrick v. Wal-Mart, Inc., 681 F.3d 614, 617 (5th
Cir. 2012). When there are well-pleaded factual allegations,
a court should presume they are true, even if doubtful, and
“then determine whether they plausibly give rise to an
entitlement to relief.” See Iqbal, 556 U.S. at
679; Doe v. Robertson, 951 F.3d 383, 387 (5th Cir.
court's review is limited to the complaint, any documents
attached to the complaint, and any documents attached to the
motion to dismiss that are central to the claim and
referenced by the complaint.” Lone Star Fund V
(U.S.), L.P. v. Barclays Bank PLC, 594 F.3d
383, 387 (5th Cir. 2010) (citing Collins v. Morgan
Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.
2000)); see also Ironshore Europe DAC v. Schiff Hardin,
L.L.P., 912 F.3d 759, 763 (5th Cir. 2019); Walch v.
Adjutant General's Dep't of Tex., 533 F.3d 289,
294 (5th Cir. 2008) (on a Rule 12(b)(6) motion, documents
attached to the briefing may be considered by the Court if
the documents are sufficiently referenced in the complaint
and no party questions their authenticity).
Count 1 - Assignment to Weatherford ...