CPLRG™ 0055 - ClearPlay, Inc. v. Abecassis - Apr. 21, 2010

ClearPlay, Inc. v. Abecassis, 602 F.3d 1364, CPLRG 0055 (Fed. Cir. 2010) (BRYSON, Archer & Prost) Clearplay04212010

MAJOR ISSUES: Federal Circuit appellate jurisdiction; case not arising under patent law; state law claims arising from dispute over license agreement in settlement of patent infringement suit; claims provable without necessarily resolving patent law issues

COMMENT: NON-HOLISTIC” APPROACHES TO JURISDICTION.  This one of many suits that parse whether a patent-related state law claim, here, a dispute between a patent owner and an accused infringer over a  license agreement, which settled a patent infringement suit, arises under patent law for jurisdictional purposes.  Applying the leading Supreme Court “arising under patent law” jurisdiction decision, Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988), the Federal Circuit held that the suit did not so arise and thus that it did not have appellate jurisdiction.  To the patent owner’s argument that the “underlying dispute” between the parties was “at bottom” over allegations of patent infringement, the court responded: that may be true in a “holistic sense,” but, in Christianson, the Supreme Court “embraces a distinctly non-holistic approach to `arising under’ jurisdiction.”
1. A patent owner filed an infringement suit in a district court against an accused infringer.  The parties settled, entering into a license agreement that allowed the accused infringer to distribute its products upon payment of a royalty.  Thereafter, the patent owner asserted that the accused infringer violated the agreement and filed a motion to enforce it in the district court.  The patent owner also informed the accused infringer’s customers that the accused infringer’s products were not licensed and that their sale would constitute patent infringement.  The accused infringer brought a separate suit in the district court, asserting state law claims, including tortious interference and breach of contract.  In the state law suit, the district court granted a preliminary injunction barring the patent owner from making false assertions about whether the court had determined that the accused infringer’s products were not licensed.  The patent owner appealed.

2.  The Federal Circuit held that the state law case did not arise under patent law, under the principles articulated in Christianson, because each of the state law claims can be supported by at least one theory not requiring proof of patent law.  Consequently, the Federal Circuit lacked appellate jurisdiction and the appeal is transferred to the Eleventh Circuit.
    a. CONTRACT CLAIMS.  The accused infringer’s state law contract claims focused, inter alia, on the patent owner’s conduct with respect to the license agreement, such as failure to submit disputes to a special master, as the agreement required.  Thus, the court could resolve the claims without addressing patent infringement or validity.
     b. TORTIOUS INTERFERENCE CLAIMS.  The accused infringer’s state law tortious interference claims focused, inter alia, on the patent owner’s alleged false statements that the accused infringer’s products were not licensed.  The court could resolve the claims by determining that the products were licensed and thus that the statements were false, without determining whether the products infringed the patent.

3. CONSOLIDATION WITH PENDING PATENT INFRINGEMENT SUIT?  The patent owner “argues briefly that this court has jurisdiction over this appeal because this case has been consolidated in the district court with a pending patent infringement action brought by [the patent owner] ….”  However, the court stressed that “although the two cases have been set for trial together, they have not been formally consolidated.”:  “The court’s coordinated scheduling of discovery and trial in the two cases does not convert them into a single action for purposes of this court’s  jurisdiction.”

1. On “arising under” jurisdiction in patent-related state law claims, see Chisum Patent Law Digest 8111; Chisum on Patents 21.02[1][c].
2. On jurisdictional issues with enforcing settlements, see see Chisum Patent Law Digest 8132.     
3. On Federal Circuit appellate jurisdiction, see Chisum Patent Law Digest 8111; Chisum on Patents 21.02[5].

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