CPLRG™ 0082 - Gunn v. Minton - Feb. 20, 2013

Gunn v. Minton, 133 S. Ct. 1059 (2013) (Roberts).  For the Court’s slip opinion, click here.Gunn02202013

Gunn addresses the question “whether a state law claim alleging legal malpractice in the handling of a patent case must be brought in federal court.”  The issue arose because “Federal courts have exclusive jurisdiction over cases ‘arising under any Act of Congress relating to patents.’ 28 U. S. C. §1338(a).”  The Court held that a state law legal malpractice claim did not arise under patent law, and the Texas state courts erred in dismissing the claim for lack of jurisdiction.

Importantly, though not mentioned by the Court expressly, the holding meant that the Federal Circuit would not have exclusive appellate jurisdiction over most patent law malpractice suits, a jurisdiction that it had regularly exercised over the past several years.SUMMARY OF REASONING.  In brief, the case required resolution, as part of the state law malpractice causation requirement (“case-within-a-case”), of a potential experimental use defense to an on-sale bar to a patent’s validity.  The Court reasoned that the case failed to satisfy two of the four requirements for federal court jurisdiction over a state law claim imposed by its decision in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 314 (2005).  (Note: Grable did not involve patent law.)

The third requirement, that a necessary and disputed federal issue be “substantial,” was not met. The issue was important to the parties but not to the general patent system because the patent at issue had already been held invalid by a federal court in an earlier infringement suit. A state court ruling on experimental use in the malpractice suit was hypothetical and backward-looking. It would only affect the parties (the patent owner-plaintiff and the attorney sued for malpractice). It would have no precedential effect on the district courts or Federal Circuit in adjudicating patent infringement suits.

The fourth requirement, that the claim be “capable of resolution in federal court without disrupting the federal-state balance approved by Congress,” also was not met. The federal interest was not substantial, but the state interest in regulating the behavior of attorneys was great.

TORT, CONTRACT AND OWNERSHIP CLAIMS.  Many questions will arise as to the scope of the Gunn decision’s contraction of federal court “arising under patent law” jurisdiction.

In the past, the Federal Circuit has upheld exclusive federal jurisdiction over suits in which a plaintiff:

(1) alleged that a patent owner committed unfair competition under state law by making false charges of patent infringement by the plaintiff’s customers, Hunter Douglas Inc. v. Harmonic Design Inc., 153 F.3d 1318 (Fed. Cir. 1998), cert. denied, 525 U.S. 1143 (1999);

(2) alleged that a patent owner had granted the plaintiff an exclusive license under a patent and breached it by selling products covered by the patent, U.S. Valves, Inc. v. Dray, 212 F.3d 1368 (Fed. Cir. 2000).

In these cases, the issue of a patent’s scope and validity was, arguably, much more “alive”, that is, not merely hypothetical, than the issue in Gunn.  A court ruling on the patent could have an impact beyond the parties.  Thus, the Federal Circuit may well decide that these precedents are still viable.

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