Federalism and Patent Law: Courts Split on Scope of Federal Circuit Arising Under Jurisdiction

In a trio of decisions, the several members of the Federal Circuit have expressed their disagreement with the court’s expansion of appellate jurisdiction to cover attorney malpractice cases that involve patent law issues.

  • Landmark Screens, LLC v. Morgan Lewis & Bockius, LLP (Fed. Cir. 2012)(O’Malley, J., concurring);
  • Byrne v. Wood, Herron & Evans, LLP (Fed. Cir. 2012)(O’Malley, J., joined by Wallach, J., dissenting from denial of the petition for en banc rehearing); and
  • USPPS, Ltd. v. Avery Dennison Corp. (Fed. Cir. 2012)(O’Malley, J., joined by Mayer, J., concurring).

Attorney malpractice is a state law claim, but the Federal Circuit has (and thus the Federal Courts have) claimed exclusive jurisdiction over many patent prosecution related malpractice claims if the well-pled complaint requires the determination of a substantial issue of patent law.

In Minton v. Gunn, 355 S.W.3d 634 (Tex.2011), the Texas Supreme Court agreed with the Federal Circuit’s extension of jurisdiction, but made an interesting and important statement that Texas courts “are not bound by the holdings of the Federal Circuit.” This situation sets up the need for Supreme Court review. Minton was a 5-3 decision. The dissenting justices argued that state courts should maintain jurisdiction over the case based on its application of the 2005 US Supreme Court case of Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005). In that case, the US Supreme Court held that federalism principles require a cautious and balanced approach to the removal of traditional state court claims to federal court.

The dissent in Minton wrote:

The Federal Circuit’s focus on this mandate [of uniformity] is understandable, but uniformity in patent law is not the be-all and end-all of jurisprudence. It must give way to the contours of federal question jurisdiction provided by the Supreme Court. See Grable. In turn, this Court has its own mandate, of at least equal importance to that of the Federal Circuit. We owe a duty to the people of this state to exercise the judicial power, see Tex. Const. art. V, §§ 1, 3, and that duty includes vital matters such as ensuring consistency and certainty in the civil law of the state, see Tex. Gov’t Code § 22.001, and regulating the practice of law, id. § 81.011(c). Accordingly, we should not risk the confusion and inconsistency that will result from having two sets of binding precedent in Texas legal malpractice law—one stemming from this Court and the other courts of this state, and another, entirely outside of our control after today’s opinion, developing under the direction of the Federal Circuit, largely uninformed by the deep roots of Texas jurisprudence and the requirements of the Texas Constitution.

This Court should not be quick to follow Federal Circuit case law that fails to follow the test set forth by the Supreme Court. Because this case fails to meet three of the four elements required by the Supreme Court for federal-element “arising under” jurisdiction, the court of appeals was correct when it held that exclusive federal patent jurisdiction does not lie here. I therefore respectfully dissent.

In a parallel 2011 case, an Illinois state appellate court held that Magnetek’s claim against Kirkland & Ellis for deficient representation in a patent litigation lawsuit did not arise under patent law. In that case, the court wrote that the largest patent law issue – whether the patent was enforceable or not – had already been decided by a separate court and therefore was not at issue in the case. Magnetek, Inc. v. Kirkland and Ellis, LLP, 954 N.E.2d 803 (Ill.App. 2011).

A petition to the Supreme Court is likely in at least one of these cases.

10 thoughts on “Federalism and Patent Law: Courts Split on Scope of Federal Circuit Arising Under Jurisdiction

  1. 9

    Agreed that the Supreme Court needs to take this issue considering that there are numbers are very competent judges, in the Federal Circuit itself, in the Supreme Court of the various states, in the circuit courts other than the Federal Circuit, and clearly among the district courts, who disagree with the Federal Circuit.

  2. 8

    Sure, you are correct. What I think is unique here is that the very issue decides not only your case, but which Court of Appeals to follow! A district judge usually does not get to say, I disagree with the Federal Circuit, and because I disagree, I don’t have to follow them. (Conversely, if I agreed, then I would have to follow them.) I can’t think of any other situation where that is so.

    (Actually, what is even more bizarre is that the party taking the appeal, who is the aggrieved party, gets to pick the COurt of Appeals. In the Warrior Sports case, the plaintiff wanted to be in federal court. While it lost at the district court level, it got to decide which court to appeal to — surprise, surprise, it picked the federal circuit. OTOH, if the plaintiff had won, the defendant would probably lodged an appeal to the 6th Circuit.)

    Bottom line: this area is a mess and the Supremes really need to intervene.

  3. 7

    Bored, until the Supreme Court takes this case and declares what the law actually is, it appears patent attorneys have two sets of case law to follow.

    Actually, I always believed that the rules should be uniform and set nationally for patent-related work. Makes sense.

  4. 4

    When I was researching this issue for a case (no over), one thing that came up which was pretty bizarre was whether federal courts are even bound by the Federal Circuit’s ruling. The Federal Circuit’s jurisdiction is defined by 28 USC 1291(a)(1) which provides for jurisdiction on appeals “in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection,” similar to the arising under language in 28 USC 1338.

    In one district court case in Michigan, the district judge not only disagreed with the federal circuit, but added that since, acc. to him, the malpractice case did not “arise under” the patent laws, not only did he lack subject matter jurisdiction, but so would the FEderal Circuit on appeal. Therefore, he was not bound by that court’s decisions. IOW, the question of jurisdiction determines not only the district court’s jurisdiction, but which circuit it is supposed to follow. (He opined that the 6th Circuit would agree with him.) In a long footnote, he even opined that the proper Circuit to appeal to was the 6th Circuit. But apparently it was appealed to the FEderal Circuit, which reversed and remanded the case.
    Warrior Sports, Inc. v. Dickinson Wright, L.L.C.
    666 F.Supp.2d 749 (E.D.Mich. 2009), rev’d 631 F.3d 1367 (Fed.Cir. 2011).

  5. 2

    I believe Judge O’Malley is the only member of the Federal Circuit who is a former District Court judge. Given the excellence of her legal reasoning in these and other cases, I think we would be lucky to have other District Court judges appointed to the Federal Circuit.

  6. 1

    There already is a petition for cert. pending before the U.S. Supreme Court in Minton v. Gunn (Docket No. 11-1118). The Supreme Court asked on April 12, 2012 for a brief in opposition in the case (the respondent had waived its response to the petition).

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