Voda v. Cordis: Plaintiff May Not Assert Foreign Patents in US Courts

VodaCatheter_smallVoda v. Cordis (Fed. Cir. 2007).

Jan Voda, an Oklahoma medical doctor sued Cordis for infringement of his patent on an interventional cardiology catheter. Voda had obtained patents both in the US and abroad. Not wanting to waste time and money on multiple suits, Voda asked the US court to also determine his claims of foreign infringement based on his patents in the UK, Canada, France, and Germany.  The US court agreed, but Cordis appealed — arguing that the district court improperly extended its jurisdiction.

In a 2–1 decision, the Federal Circuit (Gajarsa) has held that the district court cannot exercise supplemental jurisdiction over Voda’s foreign patent claims.  Judge Newman dissents.

Supplemental Jurisdiction: Federal courts are designed to hear federal law. But, every day they exercise their power to decide issues that arise under the law of other jurisdictions. Usually the other jurisdictions are US states and municipalities. But, the courts are also regular interpreters of non-US law as well.  Non-Federal questions arise based on either “diversity jurisdiction” or “supplemental jurisdiction.”  Supplemental jurisdiction is spelled-out in 28 USC 1367:

[after establishing] original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

In many cases, supplemental jurisdiction has been found to extend to include foreign law claims. However, the “so related” portion of the statute has been interpreted to require that the supplemental claims arise from a “common nucleus of operative fact” and that the claims would “ordinarily be expected to [all be tried] in one judicial proceeding.”  Here, the CAFC did not determine whether supplemental jurisdiction exists because it found that the district court had abused its discretion (see below).

Discretion and Comity: Even if jurisdiction exists, its exercise is “within the discretion of the district court.”  The CAFC found that the district court abused its discretion by ignoring the Paris Convention, TRIPS and concepts of comity.

 Like the Paris Convention, nothing in the PCT or the Agreement on TRIPS contemplates or allows one jurisdiction to adjudicate patents of another. . . . Based on the international treaties that the United States has joined and ratified as the “supreme law of the land,” a district court’s exercise of supplemental jurisdiction could undermine the obligations of the United States under such treaties, which therefore constitute an exceptional circumstance to decline jurisdiction under § 1367(c)(4). Accordingly, we must scrutinize such an exercise with caution. . . .

The territorial limits of the rights granted by patents are similar to those conferred by land grants. A patent right is limited by the metes and bounds of the jurisdictional territory that granted the right to exclude. Therefore, a patent right to exclude only arises from the legal right granted and recognized by the sovereign within whose territory the right is located. It would be incongruent to allow the sovereign power of one to be infringed or limited by another sovereign’s extension of its jurisdiction. Therefore, while our Patent Act declares that “patents shall have the attributes of personal property,” 35 U.S.C. § 261, and not real property, the local action doctrine constitutes an informative doctrine counseling us that exercising supplemental jurisdiction over Voda’s foreign patent claims could prejudice the rights of the foreign governments.

. . . Because the purpose underlying comity is not furthered and potentially hindered in this case, adjudication of Voda’s foreign patent infringement claims should be left to the sovereigns that create the property rights in the first instance.

Judicial Economy: While the CAFC agreed with voda that “consolidated multinational patent adjudication could be more efficient,” the court worried that it would also cause additional problems of confusion and difficulty understanding and enforcing foreign actions.

Changing Circumstances: Finally, the court left the door open if “circumstances change.”

In addition, we emphasize that because the exercise of supplemental jurisdiction under § 1367(c) is an area of discretion, the district courts should examine these reasons along with others that are relevant in every case, especially if circumstances change, such as if the United States were to enter into a new international patent treaty or if events during litigation alter a district court’s conclusions regarding comity, judicial economy, convenience, or fairness.

Vacated and Remanded


Notes:

 




17 thoughts on “Voda v. Cordis: Plaintiff May Not Assert Foreign Patents in US Courts

  1. I wrote a law school term paper on Voda this past semester that addresses the Federal Circuit’s concerns over “international comity” and the Act of State doctrine. For those of you who are interested, it’s posted on SSRN (see the URL in this post.)

  2. mmmbeer (above) imagines a US District Court being asked to “invalidate” a UK patent. Suppose it did. What would happen next? Would the keeper of the UK Register of Patents then say “Ladies and Gentlemen, we have to strike this patent from our Register because US District Court X just “invalidated” it” How about if it were a District Court in Bongobongostan, not USA? In Europe, the Brussels Convention on the Mutual Enforcement of Judgements expressly reserves to the granting authority the task of revoking a patent. The English courts are not inclined to try actions for infringement of non-UK patents because the standard defence is that the asserted claim is invalid and the tasks of examining the validity of the claim, and whether it is infringed, are inextricably linked.

    For a court in country X to settle a dispute between two nationals of country X, and to find a need during the action to hear evidence on what a foreign law is, seems to me all rather unremarkable. Much more remarkable is for that court to decide whether a foreign patent is or is not valid.

  3. Judge Newman’s views, whether in dissent or otherwise, typically do not reflect the views of the Federal Circuit. More often than not, she displays a good bit more common sense.

  4. hey anon!
    i understand federal judges construe foreign laws but there is something here which i feel incorrect,
    in europe the brussell convention allows cross border actions only because the european countries agreed to have such convention executed between them;
    i am not aware of any such convention executed between a european country or canada and united states on that particular ip matter,including patent matter which may justify to take such decisions;as reminded hereabove in Denis comments of the decision, nothing in the pct or the trips agreements allows one jurisdiction to adjudicate patents of another jurisdiction;this is the basis of the patent system
    Even when a convention like brussel convention exists ,any crossborder decision is highly critized and regarded as a mistake: as if your neighbor was taking decisions on how to trim the trees in your garden ;it may be good not to support such kind of behavior,don’t you think so?

  5. Here’s a brain teaser: party A licenses US & British patents from a party B, a US company. The license specifies that US law governs any disputes arising under the agreement. Under MedImmune, party A seeks to invalidate both US and foreign patents in US district court. Might this tilt the jurisdictional issues?

  6. I am researching this topic from a European point of view.

    The European Court of Justice has recently held a somewhat comparable reasoning under the Brussels Convention with regard to cross-border patent infringment claims (Roche case).

    Is it correct to say that as a consequence of this decision there is now little room left to adjudicate such claims on a consolidated basis or to issue cross-border injunctions in patent matters.

    It would be great if someone could send me a copy of the decision.

  7. Hey Jacques –

    Not sure I am catching your sarcasm as intended, but if you read the dissent, you would realize that federal judges construe foreign laws all the time. Newman states that “United States courts have determined and applied foreign commercial law, foreign property law, foreign inheritance law, foreign citizenship law [!!], foreign copyright law, foreign trademark law, foreign liability and negligence law, and other foreign law . . .” What makes patents so special that we would be infringing on another country’s sovereignty by interpreting their laws? Note also, that Judge Newman posits that “The district court may have recognized that both Dr. Voda and Cordis Corporation, the manufacturer for all five countries, are within the district court’s personal jurisdiction. In _Forbo-Giubiasco_, _supra_, the court explained that its findings with respect to the foreign patents were directed to the obligations of the parties to each other, and not to whether or how a foreign tribunal would view the decision.”

    I found the dissent, as usual, (particularly when written by J. Newman) to be far more enlightening than the majority.

  8. finally i am glad to realize that judge newman would find quite appropriate that a french judge decides about the validity and infringement of a us patent and grants no treble damages to the patentee because the infringer got an opinion from a french patent counsel considering that the us patent was invalid and not infringed!!!
    have the cafc judges no respect for the judges of other countries and their sovereignty?i am stunned by this decision;finally even the judges themselves teach us that whatever is written in the laws and treaties can be overruled by anyone:then see what happens!

  9. Have you read the dissent? I think you have it all wrong — the CAFC would LOATHE to have to start deciding patent cases based on foreign laws in addition to the already overly-complex US laws. That could make their work load much bigger than it already is. My feeling is that they just saved themselves a ton of work.

  10. Is this case even worth a mention?
    This is a no brainer. Everyone knows patents are territorial. Why did they bother going all the way to the supreme court knowing they will loose is beyond logic.

  11. Perhaps a parallel here with the travails of Europe and its patent system. The Dutch courts are the most experienced in granting pan-European injunctions not to infringe a claim of a European patent. England has reservations about putting people out of work by, say, closing a factory in Germany. But Europe does have The Brussels Convention on the Mutual Enforcement of Judgements, and a harmonised patent law. Maybe the Japanese court thinks there is enough harmony in patent law (which is what it wants) to issue supra-national judgements. Maybe it is getting confused with notions of “international exhaustion” (when a patent owner has taken licence revenue in country X then asserts against the licensed goods in country Y) which it also supports.

  12. I don’t know why we need an analogy. Patents exist at the whim of the sovereign that grants them. It would be stunning judicial arrogance to presume to rule on validity and infringement based on a patent granted by another sovereign and on actions occurring within that sovereign’s jurisdiction and almost entirely (if not entirely) outside the jurisdiction of the US sovereign. Same principle applies to tax, criminal, and real property laws.

    I agree with Mr. McDonald though, it seems the Federal Circuit would adore taking supplemental jurisdiction of these claims.

    Oddly, I have a client who is a defendant in Tokyo District Court with a Japanese plaintiff. The plaintiff has argued for damages based on defendant’s world-wide sales (that do not originate in or implicate Japan). The plaintiff in settlement and license negotiations seems quite convinced that the Japanese court will rule in their favor (and against the gai-jin) and our client seems a bit nervous about it. Japan would be one country that could be expected to have undeveloped notions of comity, though.

  13. The closest rule might be rule that one state will not decide title to real property in another state. By analogy, the a US court cannot set aside title (declare invalid) to property (patent) granted by another state (nation).

  14. I’m guessing that the CAFC would love to have decided this case the other way and try to become the world’s patent court, but it knows the Supremes are on its back and would have given it another beatdown.

  15. I very surprised that neither the majority nor the dissent mentioned the “revenue rule” that no sovereign will enforce the tax or criminal laws of another sovereign. Seems to me this is the closest analogy to the majority’s reasoning.

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