In NeuroRepair v. Nath Law Group (Fed. Cir. 2015), the Federal Circuit has dismissed NuroRepair’s malpractice case against its patent prosecution attorneys – holding that the Federal Courts lack subject matter jurisdiction because the case does not arise under the patent law. Citing Gunn v. Minton, 133 S. Ct. 1059 (2013). The basics of the case here appear to be that the client was upset with the defendants alleged (1) lack of communication; (2) ineffective pursuit of the patent application; and (3) failure to accurately record and bill time. However, the district court had sided with the attorneys – finding no malpractice.
Although patent attorneys are regulated by the USPTO’s Office of Enrollment and Discipline (OED), malpractice cases are generally based upon state law – here, the plaintiff alleged “professional negligence, breach of fiduciary duty, breach of written contract, breach of oral contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, and false promise” – all of which are protected by California law rather than Federal Law. The lawsuit was originally filed in California State Court (Superior Court) but then removed by the defendants to Federal Court on the grounds that the case “related to patents.”
All of that occurred prior to the Supreme Court’s decision in Gunn v. Minton. And, as in the Gunn case, the plaintiff has appealed – asking that the entire case be set aside because of a lack of subject matter jurisdiction.
Federal Law provides for exclusive federal jurisdiction over patent cases – this means that state courts cannot decide patent infringement cases. However, there exists a large grey area of cases that arise under a state cause of action (such as breach of contract or legal malpractice) but that turn on an interpretation of either a patent or the Patent Act. Are those “patent cases?”
In Gunn v. Minton, the Supreme Court released most of this grey-area to state court jurisdiction — holding that a state law claim relating to patents creates arising under jurisdiction if it “necessarily raise[s] a stated federal [patent] issue,  actually disputed and  substantial,  which a federal forum may entertain without disturbing any Congressionally approved balance of federal and state judicial responsibilities.” Quoting Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308 (2005). The Court went on to note that malpractice cases will “rarely, if ever, arise under federal patent law” because their resolution will not substantially impact the patent laws.
The Nath case here was fairly easy to decide because the court found only one patent law issue necessary for decision — whether the patent could have issued earlier and with broader claims. As in Gunn, the appellate court here found that issue not of substantial importance to the patent system and that relegating cases such as this to Federal Court would “disrupt the federal-state balance.”
The case ends with an order to the district court to remand the case back to California state court where the plaintiff will get another shot at proving malpractice.