Davis v. Brouse McDowell, L.P.A., 596 F.3d 1355 (Fed. Cir. 2010) (MOORE, Newman & Bryson) Davis03022010
MAJOR ISSUES: patent attorney malpractice; failure to file Patent Cooperation Treaty (PCT) application; federal court jurisdiction; state law requiring proof of “case within a case”; plaintiff’s burden to show invention was patentable
COMMENT: Legal malpractice actions against patent attorneys pose complicated issues concerning jurisdiction. Typically, a former client sues in a state court, relying on state malpractice law. However, if the state claim is deemed to require resolution of issues of patent law, which is, of course, exclusively federal, federal court jurisdiction is exclusive. That means the defendant attorney may remove the state action. Indeed, if the action is not removed, the state court’s lack of jurisdiction is a fundamental flaw that can be raised by either party or the court at any time. Unfortunately, the jurisdictional question may not be as clear as it should be, given the consequences of making an initial mistake about jurisdiction.
In this case, the Federal Circuit upheld jurisdiction and also summary judgment in the accused patent attorney’s favor.
1. FACTS. In January 2008, an inventor filed suit in a state court against her former patent attorney, alleging in her complaint that the attorney committed malpractice by failing to file in timely fashion a Patent Cooperation Treaty (PCT) international application for her invention. In May 2008, the inventor filed an amended complaint alleging that the attorney committed malpractice by the PCT filing failure and by “other omissions.” In June 2008, the accused attorney removed the suit to federal court, noting that the inventor had testified in a deposition that “other omissions” including negligence in preparing and filing United States applications. HELD: the district court correctly ruled that the suit was properly removed because the suit arose under United States patent law within the meaning of Section 1338(a). Consequently, the Federal Circuit had exclusive jurisdiction over an appeal in the suit. Further, on the merits, the district court correctly granted summary judgment dismissing the inventor’s malpractice claim because the inventor did not offer sufficient evidence that her invention was patentable under United States law and the laws of other countries, such evidence being necessary to establish malpractice under the applicable (Ohio state) law on malpractice.
2. Under Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988), a case arises under federal patent law if either (1) patent law creates a cause of action (claim) stated in a plaintiff’s well-pleaded complaint or (2) federal patent law is a necessary element of one well-pleaded cause of action (claim). If a complaint presents multiple theories for a claim, patent law must a necessary element of every theory.
3. State law, here Ohio law, created the inventor’s cause of action for legal malpractice. Therefore, to support federal question jurisdiction, United States patent law must be an essential element of all theories in support of at least one claim.
4. In this case, the parties disputed whether the inventor’s complaint presented one claim with multiple theories or multiple claims.
a. The inventor argued that her complaint presented a single malpractice claim supported by multiple theories, a federal patent law theory based on negligence in filing the United States applications and a non-federal patent theory based on negligence in filing the PCT application. The parties agreed that issues regarding the PCT application filing were not ones of United States patent law.
b. In opposition, the attorney argued that the complaint presented “multiple claims for legal malpractice.”
c. HELD: there were multiple claims.
d. A “claim” is defined as the operative facts giving rights to a judicially enforceable right. Here, the inventor’s allegations arose out of “different sets of operative facts”: the PCT application filing and the preparation and filing of the U.S. application.
5. The applicable Ohio law requires that a plaintiff in a legal malpractice suit prove that an attorney breached a duty owed to the plaintiff and that there is a causal connection between the attorney’s conduct and the resulting damage or loss to the plaintiff.
a. “CASE-WITHIN-A-CASE”. Under the “case-within-a-case” doctrine, a plaintiff must “prove that she would have been successful in the underlying matter but for the alleged malpractice.”
b. Ohio law recognized that the doctrine was a substantial burden on legal malpractice plaintiffs and was not a categorical requirement. Vahila v. Hall, 77 Ohio St. 3d 421, 674 N.E.2d 1164 (Ohio 1997). Nevertheless, as held in Environmental Network Corp. v. Goodman Weiss Miller, L.L.P., 119 Ohio St. 3d 209, 893 N.E.2d 173 (Ohio 2008), the doctrine applies when the plaintiff’s recovery depends upon her success in the underlying action.
c. In Environmental Network, the plaintiffs alleged that an attorney improperly coerced them to accept a settlement of a case. The court held that the plaintiffs could show loss only if they proved that they would have succeeded in the case.
6. Here, the inventor’s malpractice claims was analogous to Environmental Network.
a. The inventor alleged that (1) the attorney’s negligence “ultimately cost her the opportunity to secure patents on her inventions,” (2) the failure to obtain patents caused the inventor’s investors to withdraw funding, and (3) the withdrawal of funding left the inventor unable to operate the business (a Website based on the invention).
b. Thus, the alleged negligence “could not have caused” the inventor “to suffer any damages” unless her inventions were patentable.
7. “Because the case-within-a-case doctrine applies, [the inventor] Ms. Davis must prove, by a preponderance of the evidence, that she would have obtained patents on her inventions but for [the attorney] Mr. Thomson’s alleged negligence. … The patentability of Ms. Davis’s inventions is controlled by U.S. patent law. Therefore, patent law is a necessary element of one of the legal malpractice claims presented in Ms. Davis’s complaint, and the district court properly exercised jurisdiction pursuant to 28 U.S.C. § 1338(a).”
8. The district court granted the accused attorney’s motion to strike a paragraph in the supplemental affidavit of the inventor’s expert. In the paragraph, the expert opined that an invention’s patentability could be routinely assessed “without knowing what claims will eventually be made” and that he had assessed the invention in question to be patentable. The expert did not include the opinion on patentability in his original expert report, and the accused attorney had already attacked the expert for failing to perform an adequate patentability assessment. The district court did not abuse its discretion.
9. SUMMARY JUDGMENT ON MERITS. The district court correctly granted summary judgment dismissing the inventor’s malpractice claims
a. The inventor’s expert’s report established a fact question on whether the attorney breached his duty to the inventor. The attorney “went on vacation, missed filing dates,” and filed a poorly drafted specification. Such conduct was “not standard or adequate patent attorney representation,” especially if the attorney had not informed the inventor of an “intention to proceed this way.”
b. The inventor’s burden “is to establish the likelihood that her inventions would have been held patentable on examination in the PTO or any applicable national patent office, in accordance with the criteria of patentability applied during examination.”
c. The expert’s naked conclusion that the inventor would have obtained United States patents on her inventions was not sufficient to establish a genuine issue of material fact.
d. On the inventor’s claims regarding failure to file a PCT application, the expert did not address at all whether the inventions were patentable in other countries.
e. There was no requirement that the inventor “identify claims for her inventions or perform a patentability analysis similar to that required in an invalidity trial.”
f. The inventor’s initial burden was to “introduce evidence sufficient to establish an issue of material fact as to patentability.” To satisfy the burden, the inventor’s expert could have reviewed and discussed the prior art that the PTO had cited in its rejections of claims in two of the inventor’s three U.S. applications.
CROSS-REFERENCES: For a complete discussion of federal jurisdiction issues with malpractice suits, see Chisum on Patents 21.02[c][vi].