Federal Circuit Gives Malpractice Case New Hope by Remanding to State Court

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, [2] actually disputed and [3] substantial, [4] 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.

26 thoughts on “Federal Circuit Gives Malpractice Case New Hope by Remanding to State Court

  1. 6

    An unfortunate part of the Gunn v. Minton analysis is that some cases will be close calls on subject matter jurisdiction. The cases can be litigated intensely, all the way though jury trials. And then poof! on appeal — there was no subject matter jurisdiction. Start over in the other courts.

    Maybe Congress could address this problem. I don’t think it’s that critical that the cases generally go to federal or state courts. The important part is clarity, one way or the other. Otherwise we risk having years of expense litigation that was a complete waste of time and money.

  2. 4

    I ran into this issue in a malpractice case I filed against a couple of stink-bag patent attorneys in Virginia. They removed to the USDC. The day after defendants filed their response to our motion to remand, the excellent DC judge remanded based solely on briefs — no oral argument was required. This was 2006 — the lack of federal subject-matter jurisdiction in patent malpractice was abundantly clear 7 years before Gunn. I can’t believe the USDC SD Ca got sucked into this trap.

    A USDC can be reversed at any level of appeal for lack of federal subject-matter jurisdiction, even if first raised on appeal — b/c subject matter jurisdiction cannot be waived. I have read cases where defendants removed to USDC, lost on the merits, and then — after judgment was entered against them — petitioned the circuit court to vacate/remand, arguing that their own removal to USDC wasn’t proper. And it worked!

    Counsel on both sides have an ethical duty to raise subject-matter jurisdictional issues if they are aware of them, but proving that a lawyer who removes was competent enough to know the law can be a pretty rough row to hoe — especially if you’re suing him/her for malpractice.

    Of course, plaintiffs can play the same game: decline to challenge removal, then, when they lose on the merits, move the USDC or appeals court to vacate/remand. Bingo! You’re back in state court with a fresh start.

    This is a “rough patch” in American federalism that has been kicked around the courts since Dred Scott and beyond. 2015 and it’s still tripping people up.

  3. 2

    They always issue on a Tuesday. Usually, it takes a month or more for the patent to issue once you pay the issue fees. (It used to take multiple months, but things are faster now.) I haven’t heard of a case issuing so quickly, but I assume it’s possible.

    1. 2.2

      Thank you very much, PatentBob.

      I am worried that a quick-issue from USPTO is a possibility, and I can’t find any rule or law which compels USPTO to give an applicant at least a couple weeks to file a continuation, before issuance.

      1. 2.2.1

        My suggestion is to try to have the CON ready to go by the time you pay the issue fee. IIRC you have about two months from the mailing of the allowance to pay the issue fee.

      2. 2.2.2

        I’m not your lawyer, and this is not a substitute for advice from a licensed practitioner with whom you’ve discussed your specific situation. But, speaking to generalities, if you’re really talking about a continuation (not a continuation-in-part), then the new application can be (and usually is) identical to the old one, with the exception of different claims. To be on the safe side, and since it’s so easy to prepare, a careful lawyer would generally not count on any delay, and would write at least one new placeholder claim and file the application immediately. That placeholder claim can be replaced with a new set of claims by preliminary amendment later (but before the case is picked up for examination.) Note that the application fee doesn’t have to be paid immediately (if you’re willing to eat the late charge) to get a filing date, so filing a continuation with a placeholder claim and without a fee is a very inexpensive way to preserve a priority claim for a few months, while you decide whether you want to follow through or not.


          Good advice, except I would file the original claims and then file an amendment. Much safer.


            This is what I would do, too. You have at least several months (if not years, depending on which art unit you’re in) to file an amendment. Even if I wanted to amend the claims, normally I file the original case and then contemporaneously file a Preliminary Amendment anyway. Thus, you’re just delaying the Preliminary Amendment a bit by filing the original case and filing an amendment sometime later.


          You don’t even need to file claims any longer in a continuation. Just file the spec with no claims, and you can add in the claims in response to the missing parts when you’ve had more time.


            Not a good idea. You lose the claims as support. You want to file the original spec and then a preliminary amendment.

  4. 1

    Pro se filer humbly asks:

    — Do patents always, without fail, issue on a Tuesday?
    — Has anybody ever heard of USPTO issuing a patent within just a few days, or a week or so, after an applicant pays an issue fee?

    1. 1.1

      Always on Tuesdays. Should issue within about two months from payment of fees. At this point, I don’t think you can expedite that outcome. At some point (before issuance) the USPTO can tell you the expected date of issuance.

      1. 1.1.1

        Thank you very much.

        I should have explained that I’m hoping to file a continuation, and don’t want to lose that right if USPTO, somehow, issues the patent much more quickly than usual.


          If you’re pro se, do you know that you can go to public pair and see the status of your application?

          link to portal.uspto.gov

          You need the serial number and you have to get past the absolutely horrid “captcha” screen.


            PatentBob, if the applicant wanted to preserve the option of retaining his/her invention as a trade secret and was not planning to file overseas, he/she could have requested non-publication, in which getting the info through Public Pair/captcha would not be possible.

            On the other hand, if the application was filed the way so many are, mindlessly ignoring the possibility that the better choice in the long run would be to keep the application as a trade secret, then you are right.



              Are you aware that in the case of a pro se inventor, the option of private PAIR is available?


                Good point. Often pro se inventions seem to go through the system faster and you can’t get into public pair until the application publishes (about 18 months after the priority date). If it’s before the 18 month period, then you’d have to use private pair. (The same with not publishing, but I personally haven’t filed many request not to publish — maybe one.)

                Personally, I use public pair 95%+ of the time. I rarely have to go into private pair.


                I am sure a pro se applicant can do it, but I have not looked into how it is done by a pro se. I would assume they have to get a customer number, etc.

                My primary point is, though, that I think most members of the patent bar erroneously fail to protect their client’s option to keep the invention a trade secret when filing and not requesting non-publication.

                I think it is a failure to watch out for the client’s interests. One explanation I heard is that the attorney is afraid of being accused of malpractice if he requests non-publication and then foreign files a year later, causing automatic abandonment. If that is in fact the rationale, I think it is putting the attorney’s interests ahead of the clients, which I find ethically troubling. If you can docket all the other things we keep track of, you can docket a reminder to request publication if you later foreign file.

                1. Ok – like you, I am an advocate for non-publication. Such is not for every client, but the client most definitely should be made aware of the benefits. I find it unfathomable that some would make the ‘malpractice’ excuse – that boggles my mind.

    2. 1.2

      Echoing what NotYourLawyer said, I am not your lawyer either and the following is not legal advice pertaining to your specific situation.

      Generally speaking, before filing a continuing application, the inventor should also consider whether the broadest possible claim is being issued in view of the known and cited art. If not, the inventor should consider whether a broader claim could be drafted when filing the continuing application or preliminary amendment. Inventors, especially pro se inventors, need to make sure they don’t disclose an invention without claiming that invention. Generally speaking, anything disclosed but not claimed is dedicated to the public.

      By the way, congrats on getting a patent issued pro se; that’s no small accomplishment.

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