Bayh-Dole Act is Not a “Patent Law” Sufficient to Create CAFC Jurisdiction

ScreenShot065WARF v. Xenon Pharmaceuticals (Fed. Cir. 2007) (nonprecedential opinion).

In 2006, WARF won a $1 million verdict in a breach of contract case against Xenon. Although contracts are normally issues of state law, WARF’s original complaint also raised technology transfer issues under the Bayh-Dole Act. (35 U.S.C. §§ 200, et seq.).

On appeal, the CAFC found that it lacked subject matter jurisdiction over the appeal because it did not arise under the patent laws. In this vein, the court first concludes that Bayh-Dole’s inclusion in Title 35 does not necessarily indicate that it is a “patent law.” Rather, the general rule is that contract or licensing disputes do not implicate patent laws unless they require some determination of patent issues such as validity or infringement.

“[M]ere inclusion in Title 35 of the United States Code does not make a statute a patent law under which a claim may arise. At its heart, the Bayh-Dole Act concerns government funding agreements – contracts in the language of 35 U.S.C. § 201 – an area that is outside our section 1295(a) jurisdiction.”

Of course, if Title 35 contains non-patent laws, it makes sense that there may also be patent laws not found in Title 35.

Even if Bayh-Dole was a “patent law,” the appellate panel found that it would still not have jurisdiction over the case because the provisions of Bayh-Dole (1) did not create WARF’s cause of action and (2) are not necessary to determine any other rights of relief.

Case transferred to the Seventh Circuit Court of Appeals.

8 thoughts on “Bayh-Dole Act is Not a “Patent Law” Sufficient to Create CAFC Jurisdiction

  1. 6

    Is this the same contract dispute that, shortly after trial, upon reconsideration, the trial judge found the $1M. jury award to be unreasonable, and it was trimmed-back to $300,000?

  2. 5

    Before jumping on the “Bayh-Dole ain’t patent law” bandwagon it is useful to reflect on the definitions employed in the act. While some may argue that they do not present substantial questions of patent law, a forceful argument may be made that they do in fact reflect circumstances under which CAFC jurisdiction can and should be invoked.

    Merely by way of example, the definitions include numerous references to the basic construct of patent law.

    I daresay the far more challenging question is what would have been the precedent cited had the case not involved a run of the mill licensing spat between two private parties, and had instead involved the assertion of rights by the recipient of a “funding” agreement in a dispute with the USG involving the scope and meaning of Bayh-Dole? The act itself is anything but clear on this issue. Interestingly, the act places significant responsibility on the COFC, but in the same breath states that any such action does not arise under the Contract Disputes Act.

    As an aside, Christianson v. Colt did not in any meaningful manner turn upon patent law. It was no more and no less than a former Colt employee’s attempt to try and raise a red herring issue in what was clearly a trade secret matter relevant to claims involving alleged violations of antitrust law. For those unfamiliar with the vagaries of government contract law, trade secrets are always an issue when a new party on the scene wanting to take over from the OEM the manufacture of spare parts raises a legal ruckus that the OEM’s retention of trade secret rights effectively prevents the newcomer from competing for a “spares” contract. Invariably the newcomes loses unless the USG happens to possess an unrestricted copy of the pertinent technical data package that fully sets forth all of the technical information necessary for a newcomer to produce products fully compliant with government specifications. This is virtually never the case…no OEM manufacturer is ever inclined to accept a contract provision requiring the delivery with “unlimited rights” to the USG of such a technical data package, a.k.a. a TDP.

    I daresay the CAFC arrived at the correct conclusion, but via a path of logic much too general in nature. Of course, that is usually the nature of non-precedential, per curiam decisions.

  3. 4

    It might also be the DC Cir that would ultimately decide the appeal. The following is from Wikipedia:

    “The court is given the responsibility of directly reviewing the decisions and rulemaking of many federal agencies based in the national capital, often without prior hearing by a district court. Aside from the agencies whose statutes explicitly direct review by the D.C. Circuit, the court typically hears cases from other agencies under the more general jurisdiction granted to the Courts of Appeals under the Administrative Procedures Act. Given the broad areas over which federal agencies have power, this often gives the judges of the D.C. Circuit a central role in affecting national U.S. policy and law.”

  4. 3

    Yeah, Real, I’ve heard of some of them laws somewhere. Still don’t see it.

    “[M]ere inclusion in Title 35 of the United States Code does not make a statute a patent law under which a claim may arise.” I believe this is saying just because a section from Title 35 is involved, that isn’t sufficient to give CAFC exclusive jurisdiction.

    The claim to CAFC jurisdiction must state that Patent Act creates the cause of action and the the right to relief depends on a substantial question of federal patent law. GSK can’t get any relief under any of the sections you cite, Real, because GSK hasn’t identified any claims that have been rejected, invalidated, or infringed under those sections.

    The case against the PTO looks procedural, not substantial — arising out of the APA and the Due Process Clause. The PTO is not rejecting any claims of GSK here. The validity or infringement of GSK’s patents are not at issue.

    I’ll bet Henry Emery would end up riding this appeal if he were still on the 4CA.

    BTW, I see I spelled the Honorable J. Cacheris’ name wrong. I think he has a brother named Plato who represented Monica and some other high profile perps. They must have had some pretty wild dinner discussions as kids.

  5. 2

    “Sounds to me that applying the WARF ruling, it goes to the 4th Circuit since there are no issues in the GSK case of infringement, validity, et al. “patent law” issues.”

    Continuations, 35 USC 120
    Divisionals, 35 USC 121
    Examination and RCEs, 35 USC 132
    Specification and Claims, 35 USC 112

  6. 1

    Somebody jump in here and help me out.

    USDC Judge Chacheris is riding the GSK challenge to the NiPRs (New 1diot Patent Rules). Getting him to grant a TRO against a gov’t agency is about as likely as getting a DNA sample from a brick.

    Where does the appeal go? Sounds to me that applying the WARF ruling, it goes to the 4th Circuit since there are no issues in the GSK case of infringement, validity, et al. “patent law” issues.

    This is just an off the cuff thought void of even a scintilla of research.

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