In Tesco Corp. v. National Oilwell Varco, L.P., No. 15-1041 (Fed. Cir. Oct. 30, 2015), the Federal Circuit held that an intervening settlement agreement prevented attorneys from challenging a judge’s critical remarks as attorney sanctions.
Tesco sued National Oilwell Varco, alleging patent infringement of well-drilling technology. To rebut NOV’s on-sale bar defense during trial, Tesco’s attorneys represented to the court that a poorly-rendered sales brochure “unequivocally” did not show the patented invention. That representation was later discovered to be false. The district court sanctioned Tesco by dismissing its case with prejudice. In the order, it also called Tesco’s attorneys’ conduct “troubling.” Tesco appealed. The parties settled during the appeal and NOV released its claim for attorneys’ fees. Tesco’s attorneys continued to appeal the judge’s order alleging that it amounted to attorney sanctions.
On appeal, the Federal Circuit held that it did not have jurisdiction to hear Tesco’s attorneys’ appeal because it could not redress any injury to the attorneys’ reputations. The Court explained that the settlement agreement ended the dispute and none of the parties had any interest in the underlying order dismissing the case, except for Tesco’s attorneys for reputational reasons. Although it acknowledged that the district court’s statements could cause reputational harm, the Court concluded that it lacked jurisdiction because there was “no remaining sanction which could be vacated or punishment imposed upon the Attorneys which could be reversed.”