By Dennis Crouch
Gunn v. Minton (Supreme Court 2013)
The Supreme Court today heard oral arguments in the case of Jerry Gunn, et al. v. Vernon Minton. In the case, Mr. Minton has alleged that his former litigation counsel committed legal malpractice resulting in a dramatic loss of potential patent licensing revenue.
A malpractice claim against a lawyer is traditionally a state law claim. The question that has reached the Supreme Court is, despite the underlying state law claim, whether the Federal Courts have exclusive jurisdiction over this case because it requires substantial consideration of patent law issues. If the Federal Courts have jurisdiction than the Federal Circuit would also have jurisdiction on appeal.
Although there are some nuances, the basic malpractice claim is that his attorneys should have argued that the public use and sale of his patented product was an experimental use and therefore did not create self-sacrificial prior art or trigger the statutory bar of (old) 102(b).
From prior Supreme Court decisions such as Grable, we know that the current rule is that Federal Courts have subject-matter jurisdiction over State Law claims when the well pled complaint includes a “substantial” “contested issue” of Federal law.
The most likely focus of an opinion in this case will be a further definition of the meaning “substantial” and what is meant by a “contested issue.” My take-away is that the Supreme Court has no inclination of severely restricting arising under jurisdiction.
The first question of the case came from Justice Ginsburg who pointedly asked the law firm’s attorney (Ms. Webre) “what do you mean by ‘substantial’? The answer:
I would answer in two layers. First, Mr. Minton’s claim did not involve a legal question of … how does the experimental use doctrine work; how is it applied, what are its parameters. . . .
And it is not a substantial question because, first, from a unique case perspective, it involved merely a hypothetical determination. There were no actual patent rights that would be at issue. Those were already fully, finally, irrevocably determined in the underlying patent litigation in Federal court.
And second, from a jurisprudence standpoint, the question of uniformity of patent law, any decision by a State court in Mr. Minton’s legal malpractice claim would not be binding in any way on either the PTO in a patent application, or on any subsequent Federal court deciding a real patent case.
Ms. Webre’s key argument here is separate that notion of an issue necessary to resolve the case from that of a “substantial issue.” Both are required for Federal Jurisdiction under Grable.
The discussion later moved to the Federal Circuit’s aggrandizement of jurisdiction. Ms. Webre again:
I think it’s interesting to back up a little bit and look at the Federal Circuit’s evolved perception of its own exclusive jurisdiction. In the early years of the Federal Circuit in 1984, the first Chief Justice — the first chief judge of the court, Chief Judge Markey, in the Atari case … the Federal Circuit wrote, “Congress was not concerned that an occasional patent law decision of a regional circuit court or of a State court would defeat its goal of increased uniformity in the national law of patents.”
That was the view of the Federal Circuit’s own jurisdiction in 1984. But in the time evolved, the Federal Circuit has changed its perception of its own jurisdiction and that’s why we are here today. In 2007, the Federal Circuit went awry and changed the standard that no longer follows what this Court articulated in Grable.
They have improperly conflated the necessity and substantiality components of an appropriate Grable analysis, and they totally disregard a proper balance of the State and Federal interests. The Federal Circuit announced that there’s an interest in — Federal interest in uniformity of patent law, and then that was that. That was the end of the inquiry. There is no balance if you don’t look at the State interest on the other side.
In rebuttal, Mr. Michel (attorney for the plaintiff) argued that patent law is fairly unique because the law exclusive Federal jurisdiction. In his view, the exclusivity shows congressional intent that even seemingly minor patent issues should be seen as substantial. Mr. Michel also discussed the potential impact on patent attorneys in each state who will be bound by the patent law malpractice rules derived from state court decisions even though the state courts are not bound to follow Federal Circuit precedent. He particularly pointed out that the Texas state court did not follow the Federal Circuit in this very case. Here, for instance the Texas trial court based its conclusion of no-malpractice on a concept of experimental use that departs severely from Federal Circuit precedent. In the final minutes of her response, Ms. Webre suggested that patent attorneys buck-up and recognize that they are bound by both federal and state law.
Read the transcript here: /media/docs/2013/01/11-1118.pdf