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ARTICLE
THE PATENT MALPRACTICE THICKET, OR
WHY JUSTICE HOLMES WAS RIGHT
Paul M. Janicke∗
ABSTRACT
When a state has created a cause of action for legal
malpractice, does the presence of an embedded issue of federal
law in such a case mean that any such action arises under
federal law? If the answer is yes and the federal law is
preemptive—as patent law is—that would mean only federal
courts could hear the case. Justice Oliver Wendell Holmes, Jr.
proposed the best and most workable solution: For purposes of
determining arising under jurisdiction with regard to a statute or
common law cause of action, a case arises under whatever law
created the right. It is neat and clean. It also works well in the
patent malpractice arena because many of the issues in such
cases are actually ones involving state law. However, the Holmes
view was consistently blocked by the seeming tendency of his
colleagues to sweep into the federal judiciary all sorts of cases he
thought belonged in state court. Any worries about uniformity in
patent jurisprudence are misplaced in the realm of patent
malpractice litigation and state handling of such cases will not
upset national doctrinal uniformity for the patent system.
Additionally, the supposed higher experience levels of federal
judges in matters of patent law are not borne out by actual
experience. This has even been the subject of recent legislation to
∗ HIPLA Professor of Law, University of Houston Law Center. I would like to
thank my colleague, Professor Lonny Hoffman, for his gracious assistance on various
points in this Article; Jane Nosbisch, staff counsel to the ABA Standing Committee on
Lawyers’ Professional Responsibility, for her help in collecting statistics and reports on
legal malpractice; and Bill Freivogel for his advice on interpreting trends in legal
malpractice claims and litigation.
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ameliorate the problem through the designation of a few truly
patent-experienced judges to a few federal districts. Moreover,
indications to date do not suggest any endemic lack of ability of
state courts to decide federal patent law questions correctly when
they arise in state court lawsuits. Finally, the balance of judicial
workloads would indicate a somewhat significant saving of
federal time and effort in proportion to the overall federal judicial
workload, while visiting only a very minor increase in average
caseloads for the much larger state jurisdictions. The Holmes test
is the best and would place state-created claims in state courts.
TABLE OF CONTENTS
I.
INTRODUCTION: THE LONGSTANDING PROBLEM OF
“ARISING UNDER” JURISDICTION........................................ 439
A. Background ................................................................. 439
B. Main Thesis ................................................................. 443
II. SUMMARY OF THE KEY SUPREME COURT
PRECEDENTS ...................................................................... 445
A. Federal Ingredient: Osborn v. Bank of the United
States (1824)................................................................ 446
B. Well-Pleaded Complaint Rule: Louisville &
Nashville Railroad Co. v. Mottley (1908).................... 446
C. Meaning of “Based on Federal Law”:
Gully v. First National Bank in
Meridian (1936) ........................................................... 447
D. Welter of Issues; Sensitive Judgment Needed:
Franchise Tax Board v.
Construction Laborers Vacation Trust
for Southern California (1983) .................................... 448
E. Effects of the Welter on Patent-Related Cases:
Christianson v. Colt Industries Operating Corp.
(1988) ........................................................................... 448
F. Attempting to Sort It All Out: Grable &
Sons Metal Products, Inc. v. Darue
Engineering & Manufacturing (2005) ........................ 449
III. JUSTICE HOLMES’S ANALYSIS............................................. 452
IV. THE ROCKY ROAD IN RECENT PATENT MALPRACTICE
CASES ................................................................................. 455
A. The First Pair of Cases ................................................ 456
B. Accusations of Failing to Keep Client Informed.......... 459
C. Accusations of Harm Through Conflicts ..................... 464
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D. Claiming Too Narrowly .............................................. 465
E. Other Assertions of Negligence .................................... 467
V. THE PUSHBACK CASES ....................................................... 469
A. Reactions of the State Courts ...................................... 469
B. Federal Court Decisions .............................................. 471
C. Pushback at the Federal Circuit ................................. 475
VI. CONCLUSIONS: PROS AND CONS OF STATE COURT
JURISDICTION OVER STATE-CREATED CLAIMS ................... 476
I.
INTRODUCTION: THE LONGSTANDING PROBLEM OF “ARISING
UNDER” JURISDICTION
The central question posed in this Article is: When a state
has created a cause of action for legal malpractice, does the
presence of an embedded issue of federal law in such a case mean
that any such action arises under federal law? If the answer is
yes and the federal law is preemptive—as patent law is—that
would mean only federal courts could hear the case. The proposed
answer, following the minority view expressed by Justice Oliver
Wendell Holmes, is that the case arises under state law and,
1
absent diversity, can be heard and decided only in state courts.
A. Background
For the past five years we have been in the midst of a flurry
of state and federal court decisions attempting to decide under
what circumstances a case alleging patent malpractice by
attorneys, either in the patenting process or in patent
infringement litigation, arises under the patent laws or under
state laws governing legal malpractice.2 The question is
determinative of a court’s subject matter jurisdiction, and it
cannot be easily evaded by saying the jurisdiction should be
concurrent, because a recently amended provision in the federal
judicial code states that if the action arises under the patent law,
1. Smith v. Kan. City Title & Trust Co., 255 U.S. 180, 214–15 (1921) (Holmes, J.,
dissenting) (“[A] suit cannot be said to arise under any other law than that which creates
the cause of action.”); Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260
(1916) (“But whether [the defendant’s act] is a wrong or not depends on the law of the
State where the act is done, not upon the patent law, and therefore the suit arises under
the law of the State. A suit arises under the law that creates the cause of action.”).
2. See RONALD E. MALLEN & JEFFREY M. SMITH, 4 LEGAL MALPRACTICE § 31:6, at
454–65 (2011) (canvassing state and federal court opinions involving issues of patent
malpractice jurisdiction decided after the Federal Circuit’s 2007 decisions).
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“[n]o State court shall have jurisdiction.”3 Further complicating
the issue is the fact that causes of action for legal malpractice are
created entirely by state law.4 Can it be that a state may by
statute validly create a cause of action for certain misconduct but
is forbidden to empower its courts to hear complaints about
violation of that statute? It appears that such is the prevailing,
although often disputed, doctrine on patent malpractice
jurisdiction today.5 The purpose of this Article is to seek a
revisiting of that doctrine. To do so, we will need to investigate
the meaning of “arising under” jurisdiction in the legal
malpractice context, the congressional intent underlying general
conferral of federal district court arising under jurisdiction, and
the line of demarcation separating the proper roles of state and
federal courts for cases of mixed character involving both state
and federal issues.
As we shall see, the cases originating the new doctrinal era
for this subject were handed down by the Federal Circuit in 2007.
To gain some idea of the size of the jurisdictional problem here
addressed, we may start with the 2011 annual report of one of
the nation’s larger legal malpractice insurers, Attorneys’
Liability Assurance Society (ALAS), which indicates there are
about 8.1 nonfrivolous legal malpractice claims per thousand
practicing U.S. lawyers in 2011.6 There are about 1.2 million
7
practicing lawyers in the country, so this would mean about
3. 28 U.S.C.A. § 1338(a) (West Supp. 2012).
4. See MALLEN & SMITH, supra note 2, at 452 (“The cause of action . . . for legal
malpractice invokes a state tort cause of action.”); see, e.g., Cosgrove v. Grimes, 774
S.W.2d 662 (Tex. 1989) (involving a legal malpractice action that arises entirely under
Texas state law).
5. Air Measurement Techs., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., 504
F.3d 1262, 1267–70 (Fed. Cir. 2007); see also MALLEN & SMITH, supra note 2, at 452–53
(observing that early state-law decisions that retained jurisdiction over cases involving
state-law causes of action with embedded patent issues are now open to debate).
6. ATTORNEY LIAB. ASSURANCE SOC’Y (BERMUDA) LTD., 2011 ANNUAL REPORT 9
(2011), available at http://www.alas.com/public/ar.aspx [hereinafter ALAS REPORT]. This
number may not be representative for the country overall because ALAS primarily
insures large firms. See Attorneys’ Liability Assurance Society, Inc. Announcement,
PRNEWSWIRE (Nov. 24, 2004), http://prnewswire.com/news-releases/attorneys-liabilityassurance-society-inc-announcement-75559142.html. It is, however, one of the largest
legal malpractice insurance providers. Id.
7. Rodney G. Snow, President’s Message: Practicing Law, a Profession or a
Business?, 24 UTAH B.J., Sept./Oct 2011, at 10 (explaining that “[t]oday we have
approximately 1.2 million lawyers” in the United States). The number quoted varies
slightly with the source. See, e.g., Andrew Jay McClurg, Fight Club: Doctors vs. Lawyers—
A Peace Plan Grounded in Self-Interest, 83 TEMP. L. REV. 309, 364 (2011) (stating the
number of U.S. lawyers as “roughly one million”); What Percent of the US Population Do
Lawyers Comprise?,
WISEGEEK,
http://www.wisegeek.com/what-percent-of-the-uspopulation-do-lawyers-comprise.htm (last visited Dec. 15, 2012) (explaining the number of
practicing U.S. lawyers totals approximately 1.1 million).
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9,720 malpractice claims annually.8 For firms insured by ALAS in
2011, the proportion of malpractice claims that were in the
intellectual property area was 3%,9 so if we extrapolate nationally
10
the IP proportion would be about 292 claims per year. Most of the
claims relate to patent law rather than trademark or copyright
law.11 It is not a huge number of claims, but the litigation associated
with malpractice claims stemming from patent work has occasioned
a great deal of legal thought and controversy over whether such
cases should be handled by the state or federal courts.12 This has
required courts to grapple with the set of problems inherent in
deciding “arising under” jurisdiction.13
8. No published source ventures to estimate the total number of claims but instead
tends to report only trends. See AMES & GOUGH, LAWYERS’ PROFESSIONAL LIABILITY CLAIMS
TRENDS: 2011 INSURER SURVEY 2 (2011) (reporting that four out of six surveyed malpractice
insurers reported increases in the number of malpractice claims in 2011); Catherine Carlock,
Malpractice Claims Rise as Triad Attorneys Stretch into Unfamiliar Territory,
BUS. J. (Mar. 30, 2012, 6:00 AM), http://www.bizjournals.com/triad/print-edition/2012/03/30/
malpractice-claims-rise-as-triad.html?page=all (stating legal malpractice claims were
“above . . . average”); Tom Huddleston Jr., Survey: Law Firm Malpractice Claims on the Rise,
AMLAW DAILY (July 6, 2011, 10:40 AM), http://www.amlawdaily.typepad.com/amlawdaily/
2011/07/lawfirmmalpracticecases.html (indicating that the number of malpractices cases for
about 75% of large and midsize firms increased 11% to 20% between 2010 and 2011); Patrick
G. Lee, Legal Malpractice Suits May Be Coming Your Way, WSJ BLOGS: L. BLOG (July 6, 2011,
9:11 AM), http://blogs. wsj/com/law/201107/06/legal-malpractice-suits-may-be-coming-yourway/ (indicating legal malpractice claims in 2011 were up “as much as 20 percent” from the
prior year). But see AMES & GOUGH, LAWYERS’ PROFESSIONAL LIABILITY CLAIMS TRENDS: 2012
INSURER SURVEY 2 (2012) (reporting that surveyed insurers indicated that malpractice claim
volume flattened in 2012); Judy Greenwald, Legal Malpractice Claims Less Frequent, More
Severe: Survey, BUS. INS. (June 13, 2012, 1:10 PM), http://www.businessinsurance.com/article/
20120613/NEWS07/ 120619962#full_story (reporting that a survey by broker Ames & Gough
showed no increase in legal malpractice claims for 2012, but that insurers noticed an increase
in claims for larger amounts).
9. ALAS REPORT, supra note 6, at 10 tbl.
10. This extrapolation is inexact. ALAS insures primarily mid- to large-size firms.
There is no way of knowing how many IP claims are made against smaller firms and large
or small that are not insured by ALAS. An American Bar Association study of malpractice
claims in the period 2004–2007 indicated a significant number of claims were against
smaller firms. See AM. BAR ASS’N STANDING COMM. ON LAWYERS’ PROF’L LIAB., PROFILE
OF LEGAL MALPRACTICE CLAIMS 2004–2007 6 tbl.2 (2008) [hereinafter ABA PROFILE].
11. See Anthony K. Greene, Trends in Intellectual Property Lawyers Professional
Liability Claims 1983–2010, ABA 37TH ANN. CONF. ON PROF. RESP. (June 3, 2011),
available at http://www.americanbar.org/content/dam/aba/administrative/professional_
responsibility/9_combined_session_documents.authcheckdam.pdf (showing that patentrelated malpractice claims comprised over 70% of intellectual property malpractice
claims); see also Mark E. Gralen, Claims Arising from Intellectual Property Practice, LPL
ADVISORY (ABA Standing Comm. on Lawyer’s Prof’l Liab., Chicago, Ill.), Spring 2008, at 5
(positing that patent practice generates more professional liability claims against lawyers
than either copyright or trademark practice).
12. See generally MALLEN & SMITH, supra note 2, at 452–53 (highlighting the
difficulties and inconsistencies inherent in “arising under” jurisdiction in patent
malpractice cases).
13. Id.
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Arising under jurisdiction seems at first a simple concept.
Article III of the U.S. Constitution specifies that the judicial
power of the new republic shall extend, inter alia, to “all
14
cases . . . arising under . . . the Laws of the United States.” The
same Article provides that in these “arising under” cases, with
certain exceptions, the U.S. Supreme Court “shall have appellate
15
Jurisdiction, both as to Law and Fact.” The Constitution was
essentially a structure-of-government document, so no attempt
was made in it to elucidate when a case would be deemed to arise
16
under a federal law. If there were ever a serious question on
that score, it would have to be worked out later.
In certain special areas of law, including patent law,
provisions were made prior to 1800 for patent infringement cases
17
to be heard by circuit courts of the United States and in some
18
instances by district courts. Since the early twentieth century
the question of what to do when a state-created cause of action
arrives in a court with an issue of federal law embedded in it has
19
been the subject of considerable difficulty. Do such cases arise
under state law or federal law? Tension over the question is
heightened where the federal law in question is one that confers
exclusive jurisdiction in the federal courts when that law is
violated. The patent law is one such case, in that an amended
provision of the federal judicial code gives the federal courts
exclusive jurisdiction for “any civil action arising under any Act
of Congress relating to patents . . . . No State court shall have
jurisdiction over any claim for relief arising under any Act of
Congress relating to patents . . . .”20 The question addressed here,
in its broadest sense, is what to do when a case pleads a cause of
action created solely by state law, but contains within it an
embedded issue of federal patent law, especially one that could
14. U.S. CONST. art. III, § 2.
15. U.S. CONST. art. III, § 2, cl. 2.
16. See U.S. CONST. art. III; Gully v. First Nat’l Bank, 299 U.S. 109, 112–13 (1936)
(analyzing the history of arising under jurisprudence).
17. Act of Feb. 21, 1793, ch. 11, § 5, 1 Stat. 318, 321.
18. Act of Feb. 21, 1793, ch. 11, § 10, 1 Stat. 318, 323. This section empowered
district judges to hear petitions to order repeal of invalidly issued patents. Id.
19. See, e.g., Smith v. Kan. City Title & Trust Co., 255 U.S. 180, 201 (1921); Am.
Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 259–60 (1916).
20. 28 U.S.C.A. § 1338(a) (West Supp. 2012). The statute provides in part that:
The district courts shall have original jurisdiction of any civil action arising
under any Act of Congress relating to patents, plant variety protection,
copyrights and trademarks. No State court shall have jurisdiction over any claim
for relief arising under any Act of Congress relating to patents, plant variety
protection, or copyrights.
Id.
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be case determinative. There are many types within this group;
for example, a state-created unfair competition claim saying that
the plaintiff’s business is being injured by the defendant’s falsely
stating that the defendant has patents covering certain subject
matter.21 To solve the case we will probably need to know the
scope of those patents, a matter decided under federal law.22
Another type is the one I have chosen to treat here: those
involving allegations of patent malpractice against lawyers and
law firms. One reason for the selection is the growth of reported
23
cases on the subject over the past five years. Another is that
these cases present what is in many ways an ideal vehicle for
analyzing the federal and state interests involved; an analysis
24
now required as part of the jurisdictional decision. My hope is
that the exploration may serve to shed light on other areas of law
as well, where Congress has given exclusive jurisdiction to
federal courts but where mixed-issue cases arise in real-life
controversies.
B. Main Thesis
The cases positing federal jurisdiction over patent
malpractice claims against lawyers, either for their conduct in
proceedings before the Patent and Trademark Office or for their
handling of patent infringement suits, proceed on the following
premises: (1) to know whether the lawyer violated his duty to
the client, we may have to delve into what the lawyer ought to
have done; (2) that inquiry may lead to the question of
whether, if the lawyer had acted differently, a better result for
the client would have been obtained; (3) to answer the second
question we will need to examine the patent law. For example,
if the lawyer had obtained a patent of broader scope, would it
have been infringed by XYZ Corporation? And if so, what
would the client’s damages have been? Thus, embedded in
patent
malpractice
cases
are
questions
requiring
21. See, e.g., Schulman v. Huck Finn, Inc., 472 F.2d 864, 865 (8th Cir. 1973);
O’Brien v. Westinghouse Elec. Corp., 293 F.2d 1, 11–14 (3d Cir. 1961).
22. See Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP, 107 Cal. Rptr.
3d 373, 377–78 (2010) (explaining that the “claim scope” is an essential element of a
patent malpractice cause of action and serves as the basis for arising under jurisdiction
under § 1338(a)).
23. See Greene, supra note 11.
24. Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312–14
(2005) (holding that an analysis of federal and state interests is now required as part of
the jurisdictional decision for patent malpractice cases); Air Measurement Techs., Inc. v.
Akin Gump Strauss Hauer & Felt, L.L.P., 504 F.3d 1262, 1266 (Fed. Cir. 2007); see also
MALLEN & SMITH, supra note 2, at 452–53.
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determination under patent law. In 2007, the U.S. Court of
Appeals for the Federal Circuit, the exclusive appellate
tribunal for cases that arose in the district courts in whole or
in part under the patent laws, launched a new analysis,
concluding that such cases belong entirely in federal court,
notwithstanding the fact that the states created the causes of
action in the first place.25 The new doctrine has caused
considerable consternation in both state and federal courts and
more than a little pushback, as will be developed herein.
There are in general many aspects of arising under
jurisdiction. This Article will address only the points involving
federal district court jurisdiction where the substantive cause of
action is created by state law. Beyond the scope of this piece are
aspects such as the Supreme Court’s appellate jurisdiction to
decide federal issues coming up in its review of state court
appellate decisions, review of the actions of state officials, and
possible absence of district court jurisdiction even where the
substantive law is federal.26
My thesis is that Justice Oliver Wendell Holmes Jr.
proposed the best and most workable solution: For purposes of
determining arising under jurisdiction with regard to a statute or
common-law cause of action, a case arises under whatever law
27
created the right. It is neat and clean. It also works well in the
patent malpractice arena because, as we shall see, many of the
issues in such cases are actually ones involving state law, such as
the standard of care owed by a professional to a client, possible
causation of the harm to the client, and the applicable statute of
25. 28 U.S.C.A § 1295(a) (West Supp. 2012) (“The United States Court of Appeals
for the Federal Circuit shall have exclusive jurisdiction . . . of an appeal from a final
decision of a district court of the United States . . . in any civil action arising
under . . . any Act of Congress relating to patents . . . .”); Immunocept, LLC v. Fulbright &
Jaworski, LLP, 504 F.3d 1281, 1284–86 (Fed. Cir. 2007) (concluding that the claim scope
involves substantial questions of federal law that satisfy the Grable and Christianson
standards); Air Measurement Techs., 504 F.3d at 1267–70 (concluding, in “an issue of first
impression,” that patent law “is a necessary element” of a malpractice claim under the
U.S. Supreme Court’s decision in Christianson). The appellate court’s jurisdiction is thus
derivative: If the district court’s jurisdiction was based on a claim arising under the
patent laws, then the Federal Circuit is the exclusive appellate path. Otherwise, appeal
will lie to the regional court of appeals. 28 U.S.C.A § 1295(a) (West Supp. 2012).
26. For works addressing aspects of arising under jurisdiction more generally, see
generally Erwin Chemerinsky, FEDERAL JURISDICTION 275–95 (5th ed. 2007); AM. L.
INST., STUDY OF THE DIVISION OF JURISDICTION BETWEEN STATE AND FEDERAL COURTS
187–207 (1968) [hereinafter STUDY OF THE DIVISION OF JURISDICTION]; Paul J. Mishkin,
The Federal “Question” in the District Courts, 53 COLUM. L. REV. 157 (1953); Felix
Frankfurter, Distribution of Judicial Power Between United States and State Courts, 13
CORNELL L.Q. 499 (1928).
27. Smith v. Kan. City Title & Trust Co., 255 U.S. 180, 214–15 (1921) (Holmes, J.,
dissenting); Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916).
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limitations. Unfortunately, with one exception,28 the Holmes
view was expressed only in his dissenting opinions,29 and the
Supreme Court over the past eighty years has fostered a far
more complex approach—undoubtedly regarded by the Justices
as having the virtue of being “flexible”—but which has turned
out to be rather slippery for all concerned, and which the
Court itself has now characterized as involving a “welter” of
sensitive issues.30 Plaintiffs in recent patent malpractice cases
have found themselves in the wrong court, with state statutes
of limitations often barring them from starting over again in
another tribunal.31 Lawyers accused of malpractice have often
been denied any realistic opportunity for a resolution that
might clear their names and reputations. Judges have been
pummeled with jurisdictional challenges of considerable
difficulty and uncertainty. Many cases are settled, but the
average duration of a patent malpractice case is about three
years.32
II. SUMMARY OF THE KEY SUPREME COURT PRECEDENTS
A complete history of arising under jurisprudence, even of
cases limited to arising under federal statutes, is, as stated
earlier, beyond the scope and purposes of this article. A brief
synopsis of the key developments in “arising under”
jurisprudence leading to the present controversy over patent
malpractice, is as follows.
28.
Am. Well Works Co., 241 U.S. at 260.
29.
See, e.g., Smith, 255 U.S. at 214–15.
30.
See Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312–
14 (2005) (analyzing Smith and earlier cases to demonstrate the evolution of the
jurisdictional test); Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 8–9
(1982) (opining that arising under jurisdiction involves a “welter of issues” in balancing of
federal and state authority); Smith, 255 U.S. at 199–201 (concluding that federal
jurisdiction is appropriate as long as the plaintiff reasonably asserts that his right to
relief depends upon the Constitution or on federal law).
31. See, e.g., Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP, 107 Cal.
Rptr. 3d 373, 376–77 (Cal. Ct. App.), reh’g denied, (2010), cert. denied, 131 S. Ct. 1472
(2011) (stating that the district court ruled that plaintiff’s first four claims were barred by
the statute of limitations set forth in the California Code of Civil Procedure).
32. See ABA PROFILE, supra note 10, at 15 tbl.9 (reporting the time lapsed between
notice and closing the malpractice case file, although not breaking the information down
by area of law). The ABA profile also shows the duration of these cases from the date of
alleged error to the closing of the file. Id. While not broken down by area of law, the
figures are somewhat unsettling for plaintiffs and perhaps especially so for the defendant
lawyers—nearly one-third of cases take thirty-six months or longer to close. Id. Half the
cases are abandoned by the claimants, one-third are settled, and fewer than one percent
end up with a judgment in favor of the claimant. Id. at 9 tbl.4.
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A. Federal Ingredient: Osborn v. Bank of the United States
(1824)33
A federal statute creating the Bank of the United States
provided that the bank could sue and be sued in state or
34
federal courts. Chief Justice Marshall took this to mean that
any suit to which the bank was a party, even if substantively
governed by state law, such as an action to collect a debt, arose
under federal law, because federal law “forms an ingredient” of
the action.35 Some commentators have pointed out that
Marshall was construing only the appellate power of the
Supreme Court to review such cases, and that the rule may
well be different for district courts attempting to define their
original jurisdiction.36 Nonetheless, this broad view of the
arising under clause came to be regarded as applicable to cases
arising under federal statutes generally and is called the
“federal ingredient” view.37 Obviously, it could open the federal
courthouse doors to nearly every kind of case, because
somewhere in the background was lurking the use of such
things as money, or the mails, or interstate telephone lines, or
naturalized citizens, all of which are established or regulated
by federal law. Marshall’s view did not require that the federal
ingredient be contested in any way for jurisdiction to attach.38
He was concerned in Osborn only with protecting the interests
of a federal creature.39
B. Well-Pleaded Complaint Rule: Louisville & Nashville
Railroad Co. v. Mottley (1908)40
Perhaps unhappy with the implications of the broad
ingredient theory on the workload of the federal courts, later
33. Osborn v. Bank of the U.S., 22 U.S. (9 Wheat.) 738 (1824).
34. Id. at 817.
35. Id. at 816, 823–27 (holding that a case arises under federal law if the law “forms
an ingredient of the original cause”).
36. See Mishkin, supra note 26, at 160–63 (recognizing the impracticalities of
including all cases that conceivably implicate federal law within the original jurisdiction
of lower federal courts).
37. Osborn, 22 U.S. at 823; O’Conner v. Commonwealth Edison Co., 13 F.3d 1090,
1097–99, 1101 (7th Cir. 1994).
38. Osborn, 22 U.S. at 824 (“The questions which the case involves, then, must
determine its character, whether those questions be made in the cause or not.”); see also
David P. Currie, The Constitution in the Supreme Court: The Powers of the Federal
Courts, 40 U. CHI. L. REV. 646, 695–96 (1982) (noting that under Osborn federal arising
under jurisdiction was proper when the case merely involved general questions of federal
principles).
39. Osborn, 22 U.S. at 823–28.
40. Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149 (1908).
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decisions of the Court required more than a lurking federal
ingredient for jurisdiction.41 In Louisville, the Court held that a
cause of action based on federal law must appear on the face of
the complaint, and even then, not by way of anticipating defenses
under federal law.42
C. Meaning of “Based on Federal Law”: Gully v. First National
Bank in Meridian (1936)43
After Louisville, it remained for the courts to define the
meaning of a cause of action based on federal law. In Gully,
Justice Cardozo gave the clearest explanation up to that time:
To bring a case within the statute, a right or immunity
created by the Constitution or laws of the United States
must be an element, and an essential one, of the plaintiff’s
cause of action. The right or immunity must be such that it
will be supported if the Constitution or laws of the United
States are given one construction or effect, and defeated if
they receive another. A genuine and present controversy,
not merely a possible or conjectural one, must exist with
reference thereto, and the controversy must be disclosed
upon the face of the complaint, unaided by the answer or by
44
the petition for removal.
Cardozo added, in something of an understatement: “Looking
backward we can see that the early cases were less exacting than
45
the recent ones in respect of some of these conditions.” Indeed they
were. What Cardozo did not seem to see was that his stated criteria,
although well established in the case law of the time, were destined
46
to cause a great deal of continuing difficulty in their application.
For example, if we look only at the complaint, how do we know what
is in controversy and what is not? In some cases the pleader may
tell us that the defendant denies certain allegations, but such
pleadings are relatively unusual.47 And how do we know if the
federal element is “essential” or not? Many cases proceed on
alternative bases, even through trial and judgment.
41. See id. at 152 (“[A] suit arises under the Constitution and laws of the United
States only when the plaintiff’s statement of his own cause of action shows that it is based
upon those laws or that Constitution.”).
42. Id.
43. Gully v. First Nat’l Bank, 299 U.S. 109 (1936).
44. Id. at 112–13 (citations omitted).
45. Id. at 113.
46. See, e.g., id. at 112–13 (citing to multiple cases for the proposition that arising
under jurisdiction depends upon whether a right or immunity requires the construction or
effect of federal law).
47. See Mishkin, supra note 26, at 168–70.
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Despite these problems, Cardozo was helpful in stating the role
of the underlying federal right that needs to be asserted. It must be
one that would be upheld by one construction or effect of the law
48
and defeated by another. The “or effect” language is important
today because it shows that construction of a statute does not have
to be in issue for arising under jurisdiction to exist. Indeed, more
commonly, especially in a patent case, the parties might agree on
the meaning of a statutory provision but disagree how it applies
under the facts of their case.49
D. Welter of Issues; Sensitive Judgment Needed: Franchise Tax
Board v. Construction Laborers Vacation Trust for Southern
California (1983)50
In Franchise Tax Board, the Court engaged in a candid
appraisal of what its prior decisions had wrought in this area.
The Court conceded that the arising under phrase has:
resisted all attempts to frame a single, precise definition for
determining which cases fall within, and which cases fall
outside, the original jurisdiction of the district courts. . . . [T]he
phrase “arising under” masks a welter of issues regarding the
interrelation of federal and state authority and the proper
51
management of the federal judicial system.
True enough, as time would further tell.
E. Effects of the Welter on Patent-Related Cases: Christianson v.
Colt Industries Operating Corp. (1988)52
In this rather complex antitrust case, Christianson alleged
that Colt was threatening his customers with unfounded trade
secret abuses—unfounded because Colt had, in Christianson’s
view, lost all its trade secrets by failing to disclose them in its
53
patent applications. In finding that the case did not arise under
the patent laws, Justice Brennan phrased the inquiry this way:
[W]e held long ago that in order to demonstrate that a case
is one “arising under” federal patent law “the plaintiff must
48. Gully, 299 U.S. at 112.
49. See, e.g., Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281, 1284–
86 (Fed. Cir. 2007) (agreeing that the application of § 1338 jurisdiction and patent law is
proper, but disagreeing as to whether or not the existence of a drafting mistake requires
the patent claim scope analysis inherent in § 1338 jurisdiction and patent infringement
cases).
50. Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1 (1983).
51. Id. at 8.
52. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988).
53. Id. at 804–06.
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set up some right, title or interest under the patent laws, or
at least make it appear that some right or privilege will be
defeated by one construction, or sustained by the opposite
54
construction of these laws.”
Unfortunately, Justice Cardozo’s “or effect” phraseology that
applies to so many cases was left out here.55 It is highly unlikely,
and there is no indication in the case, that Justice Brennan meant
to adopt a more restrictive jurisdictional test to patent cases than to
other cases involving federal statutes.56 Later cases have not noticed
the difference in language, and have tended to treat “construction”
as embracing either construing or applying a law.57
F. Attempting to Sort It All Out: Grable & Sons Metal Products,
Inc. v. Darue Engineering & Manufacturing (2005)58
This case involved not patent law or any other form of
intellectual property law, but an IRS tax seizure of Grable’s real
59
property, which Darue bought at a tax auction. After the sale,
Grable sued in state court to quiet title in himself, contending the
60
IRS seizure and sale were illegal due to procedural defects.
Darue removed to federal court, asserting that the case arose
under the federal tax laws.61 The Supreme Court agreed with
62
Darue. While recognizing the vagueness surrounding the entire
subject of arising under jurisdiction, the Court held that the
strong federal interest in preserving national uniformity in
interpretation of the tax laws required access to the federal
courts.63 The Court’s emphasis on analyzing the strength or
weakness of the federal interest was not new to jurisdictional
cases, but in two passages it set the framework for patent
malpractice and many other kinds of cases that were to come
54. Id. at 807–08 (quoting Pratt v. Paris Gas Light & Coke Co., 168 U.S. 255, 259
(1897)).
55. See id.
56. See John Donofrio & Edward C. Donovan, Christianson v. Colt Industries
Operating Corp.: The Application of Federal Question Precedent to Federal Circuit
Jurisdiction Decisions, 45 AM. U.L. REV. 1835, 1855–56 (1996) (explaining that the
Christianson Court intended to interpret jurisdiction under § 1338 as identical to the
arising under language in § 1331).
57. See, e.g., USPPS, Ltd. v. Avery Dennison Corp., 647 F.3d 274, 277–78, 281 (5th
Cir. 2011) (interpreting the decision in Christianson as requiring the application of patent
law as the first prong of a “two-part inquiry”).
58. Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005).
59. Id. at 310–11.
60. Id. at 311.
61. Id.
62. Id. at 319–20.
63. Id. at 314–15.
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down from the lower courts shortly afterward.64 The Court’s
language gave some rationale underlying the phrase
“substantial” federal issue:
There is, however, another longstanding, if less frequently
encountered, variety of federal “arising under” jurisdiction,
this Court having recognized for nearly 100 years that in
certain cases federal-question jurisdiction will lie over
state-law claims that implicate significant federal issues.
The doctrine captures the commonsense notion that a
federal court ought to be able to hear claims recognized
under state law that nonetheless turn on substantial
questions of federal law, and thus justify resort to the
experience, solicitude, and hope of uniformity that a federal
65
forum offers on federal issues . . . .
Further hammering the point home, Justice Souter said
substantiality of the federal question must exist in the sense
that it “indicat[es] a serious federal interest in claiming the
advantages thought to be inherent in a federal forum.”66 But
this was not all. The Court now described what it called a
“possible veto” of federal jurisdiction even if the stated prongs
were met:
But even when the state action discloses a contested
and substantial federal question, the exercise of federal
jurisdiction is subject to a possible veto. For the federal
issue will ultimately qualify for a federal forum only if
federal jurisdiction is consistent with congressional
judgment about the sound division of labor between state
and federal courts governing the application of
§ 1331. . . . Because arising-under jurisdiction to hear a
state-law claim always raises the possibility of upsetting
the state-federal line drawn (or at least assumed) by
Congress, the presence of a disputed federal issue and the
ostensible importance of a federal forum are never
necessarily dispositive; there must always be an assessment
67
of any disruptive portent in exercising federal jurisdiction.
64. See Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 813–16 (1986)
(explaining the importance of evaluating the federal interest involved); Andrew D. Bradt,
Grable on the Ground: Mitigating Unchecked Jurisdictional Discretion, 44 U.C. DAVIS L.
REV. 1153, 1173–77 (2011) (discussing the Grable framework’s effect in later cases as
requiring an analysis of federal and state interests).
65. Grable & Sons Metal Prods, Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312
(2005) (emphasis added) (citations omitted).
66. Id. at 313.
67. Id. at 313–14 (emphasis added). The extraordinary delicacy imbuing the subject
had been noticed by the Court some nineteen years earlier. In Merrell Dow
Pharmaceuticals Inc. v. Thompson, Justice Stevens, writing for the majority, remarked
how “determinations about federal jurisdiction require sensitive judgments about
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So now after Grable, in addition to assessment of the
seriousness of the federal issue, the Court has to grapple with the
added considerations of sound division of judicial labor between
state and federal courts and of what Congress thought, if anything,
on that subject.68 Merrell Dow Pharmaceuticals Inc. v. Thompson
and Grable, by adding these several additional considerations to the
arising under analysis, went considerably farther than any prior
Supreme Court case in adding complexity to the subject. In trying to
resolve the welter of issues, they have actually added more.
We can now summarize and enumerate the requirements, as
given by the Supreme Court, for exercise of federal court
jurisdiction over state-created causes of action as follows:
(i) The face of the complaint must reveal an issue of
federal law.69
(ii) The federal issue must be actually contested.70
(iii) The federal issue must be substantial, in the sense
that it justifies resort to “the experience, solicitude, and
71
hope of uniformity that a federal forum offers.”
(iv) Even when (i), (ii), and (iii) are satisfied, assumption
of federal jurisdiction in the particular case must not
have a “disruptive portent” on the sound division of labor
72
between state and federal courts.
After Grable, a district judge trying to decide her own
jurisdiction in a case where the cause of action was created by state
law, as in the patent malpractice cases we are about to study, must
consider either four or six factors, depending on whether one counts
the third one as a single factor or as three separate factors.73 More
important than the numbers, several of these factors are not
amenable to yes or no answers. Certainly the third and fourth are
not; they are evaluative. In many cases, the second requirement is
also subject to guesswork or peeking ahead in the case, because the
complaint seldom shows whether or not a particular allegation is
contested by the opposing party.74
congressional intent, judicial power, and the federal system.” Merrell Dow Pharm. Inc.,
478 U.S. at 810.
68. Grable, 545 U.S. at 313–14.
69. Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152–53 (1908).
70. Gully v. First Nat’l Bank, 299 U.S. 109, 112–14 (1936).
71. Grable, 545 U.S. at 312.
72. Id. at 314.
73. Supra notes 69–72 and accompanying text; see Empire HealthChoice Assurance, Inc.
v. McVeigh, 547 U.S. 677, 688–89 (2006) (discussing the four factors of “arising under”
jurisdiction after Grable).
74. While courts seem not to be bothered by this particular aspect of the problem,
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The succeeding Parts will trace the case developments in
patent malpractice jurisdiction in recent years. I will argue that
the Holmes test is the best and would place all these cases in
state courts. Nonetheless, I will contend that the set of Grable
factors also clearly militate in favor of state court jurisdiction in
patent malpractice cases and against federal handling of them. I
will attempt to show that any worries about uniformity in patent
jurisprudence are misplaced in the realm of patent malpractice
litigation and that state handling of such cases will not upset
national doctrinal uniformity for the patent system, i.e.,
implementation of the patent statute by enforcing valid patents
and eliminating invalid ones in infringement litigation, all of
75
which remains exclusively federal. I will also point out that the
supposed higher experience levels of federal judges in matters of
patent law are not borne out by experience, and have even been
the subject of recent legislation to ameliorate the problem by the
designation of a few truly patent-experienced judges in a few
federal districts. Moreover, indications to date do not suggest any
endemic lack of ability of state courts to decide federal patent law
questions correctly when they arise in state court lawsuits.
Finally, I will show that the balance of judicial workloads would
indicate a somewhat significant saving of federal time and effort
in proportion to the overall federal judicial workload, while
visiting only a very minor increase in average caseloads for the
much larger state judiciaries.
III. JUSTICE HOLMES’S ANALYSIS
We have not yet discussed the details of the view of Justice
Oliver Wendell Holmes about arising under jurisdiction. It has
never caught on or been adopted as a major thread in the
76
development of arising under jurisdiction. My thesis is that the
Holmes view was consistently blocked by the seeming tendency of
his colleagues to sweep into the federal judiciary all sorts of cases
that in his view belonged in the courts of the states that created
commentators over the years have noticed it. See, e.g., STUDY OF THE DIVISION OF
JURISDICTION, supra note 26, at 487 (“From the complaint alone it is impossible to tell
which allegations will be disputed and which admitted, or which controversies will turn
out to be basic and which collateral.”); James H. Chadbourn & A. Leo Levin, Original
Jurisdiction of Federal Questions, 90 U. PA. L. REV. 639, 671 (1942). The problem is
highlighted in cases where default judgments are sought. See id. It is impossible to tell
whether the default occurred because the defendant agrees with some or all of the
allegations, or for other reasons, such as lack of funds for litigation.
75. See 28 U.S.C.A §1338(a) (West Supp. 2012).
76. Amy B. Cohen, “Arising Under” Jurisdiction and the Copyright Laws, 44
HASTINGS L.J. 337, 344 & n.26 (1993).
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the causes of action being adjudicated, notwithstanding the
presence of important issues of federal law embedded in those
cases. Supreme Court cases before his time did not explicitly
support his view that a claim arose under whatever law created
it and did not depend on the issues that needed to be decided in
the case, but they often arrived at the same conclusion that
Holmes would have reached. An early patent case, the Supreme
Court’s 1897 decision in Pratt v. Paris Gas Light & Coke Co. is
illustrative.77 Pratt was a breach of contract suit in an Illinois
78
state court for nonpayment of the price of a machine. A patent
law issue was embedded in the case: the plaintiff warranted that
it had certain patent rights and promised to defend the
79
defendant if anyone else sued for patent infringement. The
defendant said others had sued, but the plaintiff had failed to
defend, rendering the machine worthless for the defendant’s
80
business purposes. The Illinois state courts handled all the
issues, including the patent law ones, and Pratt, the plaintiff,
lost at trial.81 The Illinois Supreme Court affirmed the judgment,
and Pratt went to the U.S. Supreme Court for relief, contending
that by receiving testimony on the patent validity question the
Illinois trial court ousted itself of jurisdiction.82 The U.S.
Supreme Court’s affirmance made short work of Pratt’s
contention about the embedded patent law issue and its asserted
role in the “arising under” analysis:
The action under consideration is not one arising
under the patent right laws of the United States in any
proper sense of the term. To constitute such a cause the
plaintiff must set up some right, title or interest under the
patent laws, or at least make it appear that some right or
privilege will be defeated by one construction, or sustained
83
by the opposite construction of these laws.
The setting up of a federal right would be consistent with the
Holmes view, but the alternative involving “construction” of a
84
federal law would not. That alternative was destined to cause
many difficulties in ensuing years. “Construction” of a federal
77. See Pratt v. Paris Gas Light & Coke Co., 168 U.S. 255, 258 (1897).
78. Id. at 255.
79. Id. at 255–56.
80. Id.
81. Id. at 255–57.
82. Id. at 257.
83. Id. at 259, 262.
84. See Smith v. Kan. City Title & Trust Co., 255 U.S. 180, 213–15 (1921) (Holmes,
J., dissenting) (concluding that federal law must, at a minimum, create a part of the cause
of action to implicate arising under jurisdiction).
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law often became synonymous with “application” of that law, and
such an expansive view would bring many more cases under the
federal umbrella.85
Holmes was successful in promulgating his straightforward
view in one case, the 1916 decision in American Well Works Co. v.
Layne & Bowler Co.86 Like Pratt, the case involved issues of
patent law.87 American Well (AW) sued in an Arkansas state
court, complaining that Layne & Bowler (L&B) had maligned AW
by falsely telling customers that AW’s well pump was an
infringement of L&B’s patent.88 It was also asserted that L&B
had groundlessly sued some of AW’s customers for patent
89
90
infringement. L&B removed the case to federal court. Upon a
motion to remand, the district judge concluded that the case was
one arising under the patent laws and hence, under the removal
91
laws of that time, had to be dismissed. Upon review in the
Supreme Court, Holmes wrote for the majority that “[a] suit for
damages to business caused by a threat to sue under the patent
92
law is not itself a suit under the patent law.” To this he added
his view, central to this Article, that “[a] suit arises under the
law that creates the cause of action.”93
The Holmes expression lacked the “at least be made to
appear” or “construction of these laws” add-ons that were
expressed in the jurisdictional analysis in Pratt.94 Yet in
85. See William Howard Taft, The Jurisdiction of the Supreme Court Under the Act
of February 13, 1925, 35 YALE L.J. 1, 3 (1925).
86. Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916).
87. Id. at 258.
88. Id.
89. Id.
90. Id.
91. Id. Until 1986 removal jurisdiction was said to be “derivative,” meaning that if
the state court lacked subject matter jurisdiction because such jurisdiction was
exclusively federal, the federal court had to dismiss the action. See 28 U.S.C. § 1441(f)
(2006); Mercy Hosp. Ass’n v. Miccio, 604 F. Supp. 1177, 1180 (E.D.N.Y. 1985). It could
neither keep the case (because the case had not been brought in the correct court in the
first place) nor remand it (because the remand court would still lack jurisdiction). This
rather anomalous situation remained the law until the statutory change in 1986. See
Judicial Improvements Act of 1985, Pub. L. No. 99-336, § 3, 100 Stat. 633, 637 (1986)
(current version at 28 U.S.C. § 1441(f) (2006)) (providing that a removed case could be
kept by a federal court regardless of whether the state court from which the case was
removed lacked jurisdiction).
92. Am. Well Works Co., 241 U.S. at 259.
93. Id. at 260. He also commented, as though the proposition were self-evident for
contract cases, “The fact that the justification may involve the validity and infringement
of a patent is no more material to the question under what law the suit is brought than it
would be in an action of contract.” Id.
94. Compare Am. Well Works Co., 241 U.S. at 258–62, with Pratt v. Paris Gas Light
& Coke Co., 168 U.S. 255, 259 (1897).
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American Well Works, Holmes was able to muster a majority
for his opinion.95 Only Justice McKenna dissented.96
Unfortunately, the Holmes view was destined to wither away
over the ensuing years, in favor of the looser standard of Pratt,
under which construction of a federal law is a possible trigger
for arising under jurisdiction.97 Holmes tried valiantly to
recapture his view in later cases. In a 1921 dissent he
commented that “it seems to me that a suit cannot be said to
arise under any other law than that which creates the cause of
98
action.”
Holmes’s powerful thought and expression
notwithstanding, the case law would continue to develop along
murkier lines, posing questions about whether the complaint
in a case revealed that a federal law somehow needed to be
construed.99 If so, the case was said to arise under that federal
law; and if the law were one that made federal jurisdiction
100
exclusive, the state courts were ousted.
IV. THE ROCKY ROAD IN RECENT PATENT MALPRACTICE CASES
The troubles that erupted in 2007 in the realm of patent
malpractice jurisdiction trace their roots back to the failure of
Holmes’s colleagues and successors to adopt his arising-under
view in favor of the approach involving the hunt in the complaint
for “substantial” embedded federal issues and possible
alternative constructions of the patent laws. That approach was
seen primarily in the Supreme Court’s 1988 decision in
Christianson, discussed in the previous section.101 Nonetheless, in
deciding embedded questions of patent law when they arose in
adjudication of state-created causes of action, state courts during
the period from 1921 to 2007 were largely left undisturbed in
exercising jurisdiction. For example, a state court would
95. See Am. Well Works Co., 241 U.S. at 258.
96. Id. at 260 (McKenna, J., dissenting). The McKenna dissent reads in its entirety:
“Mr. Justice McKenna dissents, being of the opinion that the case involves a direct and
substantial controversy under the patent laws.” Id.
97. Smith v. Kan. City Title & Trust Co., 255 U.S. 180, 199 (1921); Franchise Tax
Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 9 (1982).
98. Smith, 255 U.S. 180, 214 (1921) (Holmes, J., dissenting); see also S. Pac. Co. v.
Jensen, 244 U.S. 205, 218–20 (1917) (Holmes, J., dissenting) (expressing his view that the
enactment of a federal statute providing remedies for injured seamen under admiralty
jurisdiction did not oust the state from providing other remedies for such injuries,
enforceable in state courts).
99. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808 (1988); Smith,
255 U.S. at 199 (majority opinion).
100. See Christianson, 486 U.S. at 807–08; Gully v. First Nat’l Bank, 299 U.S. 109,
117 (1936); Smith, 255 U.S. at 199.
101. Christianson, 486 U.S. at 807–08.
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sometimes rule on the validity or scope of a patent if such ruling
were necessary to adjudicate the contract case before the court.102
Questions of patent scope arising in license royalty payment
103
disputes were likewise handled by the state courts. Beginning
in 2007, the Federal Circuit utilized the broader articulation seen
in Christianson, and attempted to track the factors of Grable, to
find exclusive federal jurisdiction in a number of patent
malpractice cases, even though the claim was created entirely by
state law.104 It is that line of cases to which we now turn. The
Supreme Court’s long emphasis on the need for a substantial
federal question and its recent articulation of a need to balance
properly the state and federal judicial workloads, suggests that
our review of these cases should group them according to the
various types of accusations leveled against the lawyers
involved.105 As will be seen, nearly all the cases have turned on
state law points, mooting the perceived embedded patent law
issues and suggesting that the concerns over preserving national
uniformity in patent law doctrine by excluding the state courts
were considerably exaggerated.
A. The First Pair of Cases
The genesis of the new federal jurisdiction in patent
malpractice cases was in a pair of cases decided on the same day
102. See, e.g., Consol. Kinetics Corp. v. Marshall, Neil & Pauley, 521 P.2d 1209,
1211–13, 1217 (Wash. Ct. App. 1974) (affirming the Superior Court’s adjudication that the
patent underlying a contract was invalid, thus providing an affirmative defense to the
contract action); Keladiro, Inc. v. Valve & Primer Corp., 177 U.S.P.Q. (BNA) 796, 799
(Cal. Super. Ct. 1973) (determining patent validity and noninfringement).
103. See, e.g., Lear, Inc. v. Adkins, 395 U.S. 653, 655 (1969). Lear was Adkins’s
licensee. Id. at 653. Adkins sued in state court for royalties allegedly due and unpaid.
Adkins v. Lear, Inc., 435 P.2d 321, 324 (Cal. 1967). Lear wanted to defend by asserting
invalidity of the Adkins patent, but was blocked from doing so by the then-existing
doctrine of licensee estoppel. Id. at 336. On certiorari, the U.S. Supreme Court abolished
licensee estoppel, and, pertinent to our point here, remanded the case to the California
state courts for disposition of the invalidity defense. Lear, 395 U.S. at 676, 670–71. See
also Winner Int’l. Corp. v. Common Sense, Inc., 863 So. 2d. 1088, 1089 (Ala. 2003) (state
court exercising jurisdiction over patent license dispute); Darling v. Standard Alaska
Prod. Co., 818 P.2d 677, 683 (Alaska 1991) (royalty dispute adjudicated in state courts);
Core Labs., Inc. v. Hayward-Wolff Research Corp., 136 A.2d 553, 558 (Del. 1958) (dispute
about royalties under a most favored licensee clause, handled by state courts); Grant
Inventions Co. v. Grant Oil Burner Corp., 103 A. 721, 723 (N.J. Chanc. 1929) (action in
state court for accounting under licensing agreement).
104. Air Measurement Techs., Inc. v. Akin Gump Strauss Hauer & Field, L.L.P., 504
F.3d 1262, 1267–69, 1271–73 (Fed. Cir. 2007); Immunocept, LLC v. Fulbright & Jaworski,
LLP, 504 F.3d 1281, 1284–85 (Fed. Cir. 2007).
105. I emphasize “accusations” because this discussion should not be understood as
suggesting that any of the lawyers involved or firms named were or were not guilty of
some breach of duty to their clients. The issue is the tribunal in which such matters
should be heard and decided.
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in 2007, both with opinions by Chief Judge Michel: Air
Measurement Technologies, Inc. v. Akin Gump Strauss Hauer &
Feld, L.L.P.106 and Immunocept, L.L.C. v. Fulbright & Jaworski,
107
L.L.P.
Air Measurement and Immunocept were destined to change
the judicial handling of patent malpractice cases in important
ways, generating additional difficult jurisdictional questions
along the way. They happened to come down at a time when the
main complaints in patent malpractice decisions were gradually
shifting from being nearly all missed-deadline scenarios to a
108
much larger mix of client grievances. Here are some examples:
(1) the lawyer claimed too narrowly, causing the client to have a
weaker litigation posture;109 (2) the lawyer failed to inform the
client promptly about what was going on in the Patent and
Trademark Office (PTO), so the client was blocked from taking
remedial action through another firm;110 (3) the lawyer’s conduct
during prosecution, while not amounting to inequitable conduct,
gave a litigation adversary ammunition by which to raise that
defense, in turn forcing the client to settle for less money from
accused infringers than he otherwise would have been able to
reap.111
In Air Measurement the main malpractice contention was
that the claims had been written in such a manner that they
112
might arguably have been time barred; if the prosecution had
been better handled, then the plaintiff–client could have
extracted even more from the defendant entities in the litigations
that followed.113 Actually, the patent had served the client rather
106. Air Measurement Techs., Inc., 504 F.3d at 1262.
107. Immunocept, 504 F.3d at 1281. A note about law firms whose names appear in
this section is in order. The firms named were often not accused of anything, but were
successors to other firms who were accused, rightly or wrongly, of malpractice, or had
hired lawyers accused by former clients of wrongdoing.
108. Sean B. Seymore, The Competency of State Courts to Adjudicate Patent-Based
Malpractice Claims, 34 AIPLA Q.J. 443, 451–54 (2006).
109. See Immunocept, 504 F.3d at 1285.
110. See TattleTale Portable Alarm Sys., Inc. v. Calfee, Halter & Griswold, L.L.P.,
No. 08AP-693, 2009 WL 790314, at *1–2 (Ohio Ct. App. Mar. 26, 2009).
111. See Air Measurement Techs., Inc., 504 F.3d at 1266.
112. Id.; see also 35 U.S.C. § 102(b) (2006) (providing that a claim is unpatentable if a
product falling within the claim’s language was on sale in the United States or in public
use in this country more than one year prior to the filing of the patent application).
113. Air Measurement Techs., Inc., 504 F.3d at 1266; cf. Molins PLC v. Textron, Inc.,
48 F.3d 1172, 1187 (Fed. Cir. 1995) (holding patents unenforceable due to inequitable
conduct after an attorney “intentionally withheld a material reference from the PTO”).
There were also accusations that the lawyers might have created at least an aura of
inequitable conduct in prosecuting the application. See Air Measurement Techs., Inc., 504
F.3d at 1266 (stating plaintiff’s allegation that the defendant–lawyers failed to inform
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well. The client obtained litigation settlements totaling some $10
million.114 Nonetheless, a malpractice action was filed in state
court against the prosecution counsel.115 The defendant–lawyers
removed it to federal court on the ground that the case arose
under the patent law; embedded patent law questions about
lawful claim scope would have to be resolved to decide the case.116
The client moved to remand, contending that the case arose
under state law.117 The district court refused to remand, finding
that the case arose under the patent law, but certified the
118
The appellate court
question for an interlocutory appeal.
affirmed, holding that resolving the client’s claims against the
lawyers would necessarily entail figuring out what other kinds of
claims could have been validly presented in the PTO, whether such
claims would have been infringed by adverse parties, and what the
remedies would have been.119 This is known as the “case-within-acase” analysis and is needed to determine if harm to the client
occurred and if so, with what impact.120 Therefore, the panel
reasoned, the malpractice case arose under the patent law,
notwithstanding the fact that state law provided the only cause of
action and the damages remedy.121 The Federal Circuit accordingly
affirmed the federal district court’s jurisdictional determination,
122
allowing the case to proceed in the Western District of Texas. The
jury there concluded that neither of the accused attorneys had done
anything wrong, but that the employer law firm had somehow been
negligent, a rather inexplicable verdict under principles of
respondeat superior.123 The case was settled prior to entry of any
judgment.124
plaintiff of the existence of the prior litigant’s defenses of inequitable conduct). If
substantiated, this could render all the claims of the patent unenforceable.
114. Air Measurement Techs., Inc., 504 F.3d at 1266.
115. Id.
116. Id. at 1269, 1272.
117. Id. at 1266–67; see also Air Measurement Techs., Inc. v. Hamilton, No. 5A-03CA-0541-RF, 2003 WL 22143276, at *1, *4 (W.D. Tex. Sept. 5, 2003).
118. Air Measurement Techs., Inc., 504 F.3d at 1267.
119. Id. at 1266, 1268–70.
120. Id. at 1268–69.
121. Id.
122. Id. at 1273.
123. Id. at 1265 (explaining that during the course of the patent prosecution,
Hamilton, defendant in the malpractice action, was associated with Akin Gump Strauss
Hauer & Feld, L.L.P); Verdict Form at 47, Air Measurement Techs., Inc. v. Akin Gump
Strauss Hauer & Feld, L.L.P., No. SA-03-CA-0541-RF (W.D. Tex. May 7, 2009); see
Baptist Mem’l Hosp. Sys. v. Sampson, 969 S.W.2d 945, 947 (Tex. 1998) (explaining that
under the principle of respondeat superior, an employer is vicariously liable for the
negligent acts of an employee).
124. Akin Gump: A Culture of Intentional Deception?, MY DAILY STRUGGLES (Aug. 2,
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In the companion case, Immunocept, the client’s argument
was that the claims had been too narrowly drafted and that, as a
result, investors lost interest in the company and caused it to
125
founder. The legal availability of a larger claim scope would
have to be determined in order to adjudicate this complaint.126
Suit was filed in federal district court in Austin.127 Subject matter
128
jurisdiction was not contested. The district court took up the
case and dismissed it on the ground that the state statute of
limitations had run.129 Notwithstanding the absence of any
jurisdictional contest below, the Federal Circuit, as part of its
customary analysis to determine its own appellate jurisdiction,
did consider the basis of the district court’s jurisdiction and found
it to be based on 28 U.S.C. § 1338, i.e., arising under the patent
law.130 The panel thus concluded that it had appellate jurisdiction
and affirmed the district court’s dismissal on the ground of the
131
state statute of limitations.
Although no actual adjudication of any patent law point had
occurred, the federal courthouse doors were now open to a spate
132
of patent malpractice cases. They were not long in coming.
B. Accusations of Failing to Keep Client Informed
A few decades ago, malpractice claims against patent
practitioners largely included missing deadlines in U.S. or
foreign patent application work.133 Such claims persist, as we
shall see, but the overall mix of claims has changed. Many patent
2011), http://dailstrug.blogspot.com/2011/02/akin-gump-culture-of-intentional.html.
125. Immunocept, LLC v. Fulbright & Jaworski, LLP, No. A-05-CA-334-SS, 2006
U.S. Dist. LEXIS 96912, at *3–4 (W.D. Tex. Mar. 24, 2006).
126. Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281, 1285 (Fed. Cir.
2007).
127. Immunocept, 2006 U.S. Dist. LEXIS 96912, at *1.
128. See Immunocept, 504 F.3d at 1283–84.
129. Id. at 1284.
130. Id.
131. Id. at 1286–87, 1289.
132. See, e.g., id. at 1285–89 (concluding that jurisdiction in patent malpractice cases
is proper under § 1338 but granting summary judgment in the case due to the statute of
limitations defense).
133. See, e.g., Mark E. Gralen, Watch Deadlines, Conflicts of Interest, A.B.A.J., May
1999, at 72–73.
In recent years, intellectual property has become a fast-growing practice
specialty, as well as a source of many professional liability claims filed against
lawyers, particularly in the patent area. Law firms increasingly face claims
when they fail to file domestic and foreign patent applications on time.
Sometimes deadlines are missed because paralegals or clerks with responsibility
for docketing don’t understand the timetables for filing in multiple countries.
Id.
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malpractice claims now are grounded on the assertion that the
lawyers failed to keep the client informed of what was going on in
the PTO and of what the client’s options were in those
circumstances.134 Landmark Screens v. Morgan, Lewis & Bockius
involved a situation that began normally enough.135 A patent
application was filed, and during its pendency a divisional filing
was attempted, but for reasons unknown several pages of
specification and drawings were not included.136 The PTO sent a
notice of the missing parts.137 The missing parts were sent in, but
138
too late to enjoy the benefit of the parent filing date. The parent
139
application was allowed and issued as a patent. The filing date
accorded the divisional by the PTO was too late for patentability,
140
and it was later abandoned. New counsel attempted to rectify the
problem by reissuing the parent patent with broader claims.141 The
client said he was not apprised of the PTO happenings in a timely
manner, and that if he had been he could have taken prompt
remedial action that would have avoided forfeiture of the
divisional.142 From the reports of the case it is unclear whether any
meaningful patent scope had been lost by pursuing the reissue path
rather than the divisional path.143
The client sued in a California state court for professional
144
The defendant–lawyers filed a demurrer,
negligence.
134. Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP, 676 F.3d 1354,
1357–58 (Fed. Cir. 2012) (examining the plaintiff’s assertion that, due to the attorney’s
failure to inform the plaintiff about the problems with patent filing, the plaintiff suffered
a “devastating outcome”); Katims v. Millen, White, Zelano & Branigan, P.C., 706 F. Supp.
2d 645, 646–47 (D. Md. 2010) (explaining the plaintiff’s allegation that the attorneys
failed to inform the plaintiff of the PTO’s notification that a maintenance fee was due,
allowing the patent to expire for nonpayment of the fee).
135. Landmark Screens, LLC, 676 F.3d at 1357–58.
136. Id. at 1358. A divisional is essentially a second application having the same
written description as the first (called the “parent application”), filed because the
PTO determined that more than one distinct invention was being claimed in the
parent. 35 U.S.C. § 121 (2006). The PTO requires the applicant to elect one of them
for further action in the parent application. Id. The divisional, although filed later,
has the same legally effective filing date as that of the parent. See 35 U.S.C. § 120
(2006).
137. Landmark Screens, LLC, 676 F.3d at 1358.
138. Id. To get the benefit of the filing date of the parent (original) application, one
requirement is that the later-filed application be filed during the pendency of the parent.
See 35 U.S.C. § 120 (2006). Thus it is possible for two or more patents to issue, each
having the effective filing date of the original application. See id.
139. Landmark Screens, LLC, 676 F.3d at 1358.
140. Id. at 1358–59.
141. Id. at 1364.
142. See id. at 1359.
143. See id. at 1364–65.
144. Landmark Screens, LLC v. Morgan, Lewis & Bockius LLP, No. C 08-2581 JF,
2008 WL 4483817, at *2 (N.D. Cal. Oct. 2, 2008).
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contending the damages allegations were too vague and that the
pleadings implicated federal law, depriving the court of
jurisdiction.145 The demurrer was sustained, and this ruling was
146
later affirmed by the California Court of Appeals. However, on
the same day the state trial court sustained the demurrer, the
plaintiff–client sued in federal court with amplified claims.147 On
a claim for “fraudulent concealment” of the divisional mishaps,
the federal district court found the allegations lacked sufficient
materiality but gave the plaintiff an opportunity to amend before
ruling on the statute of limitations defense that was asserted by
the defendant–lawyers.148 The defense’s motion for summary
judgment in the federal district court on the limitations ground
was ultimately granted, with the judge finding that the client
had reasonable notice of the divisional situation before the
critical date for limitations.149 However, that ruling was
150
overturned by the Federal Circuit.
The appellate panel first found that the federal courts had
jurisdiction because the complaint would require a determination of
whether the client could have obtained the patent coverage sought
151
in the divisional application had it been filed on time. Then,
applying regional circuit law to the procedural issue of limitations,
the court invoked California’s case law doctrine known as equitable
tolling.152 According to the Federal Circuit opinion, the doctrine calls
for the statute of limitations to be tolled during the time a plaintiff
is seeking, in good faith, to recover for substantially the same wrong
in a court that is ultimately found to lack subject matter
153
jurisdiction. The case was sent back to the federal district court
for further proceedings.154 Once again, the case turned mainly on
state law points with little said by the Federal Circuit on patent law
155
issues.
145. Id.
146. Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP, 107 Cal. Rptr. 373,
384 (Cal. Ct. App.), reh’g denied (2010), cert. denied, 131 S. Ct. 1472 (2011).
147. Landmark Screens, LLC, 2008 WL 4483817 at *2.
148. Id. at *7–9.
149. Landmark Screens v. Morgan, Lewis & Bockius, LLP, No. 5:08-CV-02581-JF,
2011 WL 482771, at *6 (N.D. Cal. Feb. 7, 2011), rev’d, 676 F.3d 1354 (Fed. Cir. 2012).
150. See Landmark Screens, LLC v. Morgan, Lewis, & Bockius, LLP, 676 F.3d 1354,
1362–64 (Fed. Cir. 2012) (reversing dismissal).
151. Id. at 1360.
152. Id. at 1361–62.
153. Id. at 1363. Equitable tolling also requires that fair notice of the claim was
given to the defendant in the first action, and that the defendant was not prejudiced by
the delay in identifying the proper court. Id. at 1362.
154. Id. at 1365.
155. There was some peripheral discussion of reissue patent law in connection with
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The Federal Circuit’s opinion in Landmark Screens seemed
to accept, without discussion, that the client’s loss of the
divisional application was somehow catastrophic to the client’s
156
business. That will remain to be seen upon trial of all the
issues. This will be another of the case-within-a-case trials where
the plaintiff will attempt to show that if the lawyers had done
everything correctly the client would have been able to enhance
its treasury in some amount through licensing, litigation, or
both.157 According to the currently prevailing doctrine, the casewithin-a-case feature for proving damages is what gives the case
an important patent law component and means that it arises
under the patent laws, conferring exclusive federal court
158
jurisdiction.
Establishing such damages is apt to be more
difficult than proving that the attorneys made some mistakes,
yet it drives the jurisdictional analysis.159
Other examples of finding federal court jurisdiction in cases
involving accusations of concealment of PTO prosecution
happenings have appeared in recent years. One of the grievances
in Davis v. Brouse McDowell was that the client was not
informed of the novelty requirements for patentability in other
countries, and as a result she failed to get an early enough filing
date for those countries.160 The court of appeals had little trouble
finding that the case—originally filed in state court but removed
by the defendant–lawyers to federal district court—arose under
the patent laws, noting that proof of harm to the client would
involve, as seen above, a case-within-a-case trial to establish
what would have happened if the client had been more
informed.161 Would she have obtained foreign patents? And if so,
how would that have changed her financial position?162 These
the plaintiff’s damages position. See id. at 1364–65.
156. See id. at 1359 (“For the reasons discussed above, this was a devastating
outcome for Landmark.”). No reasons why this divisional was particularly important were
set out in the opinion. See id.
157. See MALLEN & SMITH, supra note 2, at 452–55.
158. See, e.g., Air Measurement Techs., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P.,
504 F.3d 1262, 1968–69 (Fed. Cir. 2007) (explaining that the “case within a case” doctrine
requires patent malpractice plaintiffs to show they would have prevailed in the patent
litigation).
159. See A. Samuel Oddi, Patent Attorney Malpractice: An Oxymoron No More, 2004
U. ILL. J.L. TECH. & POL’Y 1, 44–45 (2004) (discussing the difficulty presented in proving
damages in a patent malpractice case where the patent attorney misses a filing
deadline).
160. Davis v. Brouse McDowell LPA, 596 F.3d 1355, 1357–59 (Fed. Cir.), cert. denied,
131 S. Ct. 118 (2010).
161. Id. at 1363.
162. Ms. Davis contended that the loss of patent rights caused her investors to
abandon her company. Id. at 1358.
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points do not implicate the patent laws of the United States, so
foreign law should have had no role in the arising under
inquiry.163 In any event, Ms. Davis’s proofs were found wanting in
the district court, leading to the court entering summary
judgment against her.164 This was affirmed by the Federal
Circuit.165
Another example of accusations of inadequate counseling
appears in Gerawan Farming, Inc. v. Worrell & Worrell.166 Plant
patents, i.e., special kinds of patents for new plant varieties, were
involved.167 The accusation was that the lawyers included the
name of each new plant in the title of the patent, and that this in
turn harmed the client’s trademark position, in that the plant
name seemed to describe rather than brand the plant.168 The
client, having run into difficulties in trademark litigation, filed
suit in state court against two patent law firms, contending the
first firm was negligent in naming the plants and in not
informing the client of the possible negative trademark
implications, and that the second firm was negligent in not
pointing out the errors of the first firm.169 The lawyers removed
the case to federal court on the ground that the conduct asserted
170
involved the patent law. A motion to remand to state court was
171
denied. The court found that proof of harm to the client–
plaintiff would necessarily involve delving into issues of both
172
patent and trademark law. In this instance, the court may have
been correct that patent law points would have to be decided.
However, at this juncture none were actually articulated.173
Other patent malpractice cases have raised the insufficient
advice theme, landing them in federal courts.174
163. Id. at 1360.
164. See id. at 1362–64 (affirming the district court’s conclusion that the
patentability opinion “lacked adequate foundation and could not be relied upon . . . as
evidence of patentability”).
165. Id. at 1357.
166. Gerawan Farming, Inc. v. Worrell & Worell, No. 1:10cv02011, 2011 WL 202453,
at *1–2 (E.D. Cal. Jan. 20, 2011).
167. Id. at *1.
168. Id. at *1–2.
169. Id.
170. Id. at *1.
171. Id. at *5.
172. Id. at *4–5.
173. See id. (discussing the trademark law issues that must be resolved for the
plaintiff to recover, but omitting mention of any independent patent issues).
174. See, e.g., Warrior Sports, Inc. v. Dickenson Wright, 631 F.3d 1367, 1371–72
(Fed. Cir. 2011) (finding federal jurisdiction where complaint alleged, inter alia, failure to
communicate with the client about a lapsed patent, its subsequent reinstatement, and the
implications of the lapse); TattleTale Portable Alarm Sys., Inc. v. Calfee, Halter &
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C. Accusations of Harm Through Conflicts
Conflicts of interest are a common theme in ethical
grievances by clients and in motions to disqualify counsel in
litigation.175 Now we are seeing conflicts as a basis for
malpractice actions for damages. These too have often found
their way into federal court as arising under the patent laws,
although the rationales seem considerably weaker than in other
kinds of alleged malpractice.
176
Consider Carter v. ALK Holdings, Inc. Patent attorneys
were engaged to draft a patent application on behalf of an
individual employer and one of his employees as co-inventors.177
The application was filed, the employer and employee later had a
falling out, and the ex-employee then sued the lawyers in federal
court for malpractice, raising two main contentions: (1) the
lawyers should not have taken on representation of foreseeably
adverse clients; and (2) the lawyers should not have favored the
employer–client over the employee–client, as was alleged in the
complaint.178 The district court held for the lawyers, dismissing
the main claims for failure to state causes of action and also
finding the claims to be frivolous.179 It sanctioned the plaintiff’s
counsel $30,356.89 for bringing the case.180 The dismissal order
181
was not appealed by the plaintiff. However, the sanctioned
plaintiff–lawyers did appeal the sanction imposed on them.182 The
appellate panel agreed that some of the claims were indeed
frivolous, but the claim based on conflict of interest was ruled
nonfrivolous and as arising under the patent laws.183 This is
rather difficult to understand, as the court did not identify any
184
question of patent law in the case.
Griswold, LLP, No. 08AP-693, 2009 WL 790314, at *1, *5 (Ohio App. Mar. 26, 2009)
(affirming dismissal by lower court of malpractice case involving alleged losses due to
attorney’s failure to pay PTO fees on time and to advise client of the situation).
175. See MALLEN & SMITH, supra note 2, at 411–12 (describing several different
types of complaints against attorneys based on conflicting interests).
176. Carter v. ALK Holdings, Inc., 605 F.3d 1319 (Fed. Cir. 2010).
177. Id. at 1321.
178. Id. at 1321–22.
179. Id. at 1322.
180. Id.
181. See id. at 1323.
182. Id. at 1322–23.
183. Id. at 1324–26. In so ruling the court appears to have conflated the rules of
professional ethics with the standards of professional care, the breach of which can create
a cause of action for damages. See id. (analyzing the patent attorney’s ethical duties
under PTO standards).
184. See id. at 1321–23. On its own appellate jurisdiction, the court simply
remarked: “Myers & Kaplan timely appealed, and we have jurisdiction under 28 U.S.C.
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Other state-created malpractice complaints similarly
purportedly based on conflicts of interest have found their way
into federal courts as supposedly arising under the patent or
185
trademark laws.
D. Claiming Too Narrowly
A significant number of recent patent malpractice claims
were based on assertions that patent attorneys claimed their
clients’ inventions too narrowly during proceedings before the
PTO, which is known as patent prosecution.186 The complaints
assert that if the claims had been more broadly written then
they would have been allowed by the PTO, would have been
valid, and would have enabled the client to sue infringers
successfully—something she was precluded from doing because
of the narrow claim drafting indulged by the lawyers.187 These
cases all involve the case-within-a-case analysis for damages:
What would have happened if the claims had been more
broadly written?
Air Measurement, the case discussed earlier herein as the
progenitor of inflow of patent malpractice claims into the
federal courts, was one such case.188 Among the complaints
against patent counsel was an assertion that if the claims had
been more broadly written, the client would have achieved
judgments of settlement sums beyond what he actually
achieved.189 Several more such cases have now emerged.
In Minkin v. Gibbons, the client sued in state court for
190
malpractice. A competitor apparently had designed around
§ 1295(a)(1).” Id. at 1323. There was no discussion of how the district court’s jurisdiction
was based, even in part, on the patent laws.
185. See, e.g., Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 594–95 (9th Cir. 2010)
(accusation of attorney conflict of interest in trademark registration work found to
support malpractice claim in federal court, without discussion by the court of
jurisdictional basis); Max-Planck-Gesellschaft E.V. v. Wolf Greenfield & Sacks, PC, 661 F.
Supp. 2d 125, 126–27 (D. Mass. 2009) (case found to arise under the patent law where
accusation was violation of professional standards by representing co-owners of multiple
patent applications pending before the PTO).
186. See, e.g., Minkin v. Gibbons, P.C., 680 F.3d 1341, 1345 (Fed Cir. 2012);
Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281, 1284–85 (Fed. Cir. 2007).
187. See Minkin, 680 F.3d at 1342, 1345–46.
188. See Air Measurement Techs., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P.,
504 F.3d 1262, 1266 (Fed. Cir. 2007).
189. See id. at 1266. The client had apparently collected $10 million in settlements
for his various infringement claims, but contended that he would have done even better if
the lawyers had performed better. The jury absolved the lawyers of any negligence, but
nonetheless found the firm liable. The case was settled prior to entry of judgment.
190. Minkin, 680 F.3d at 1345.
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the patent and thereby escaped infringement.191 The accusation
was that if the patent attorney had claimed the invention more
broadly, the claims would still have been patentable and the
192
competitor would not have been able to design around them. The
193
case was removed to federal district court. That court found it had
jurisdiction because of the presence of a substantial patent law
question, viz., whether broader claims would have been allowable
and patentable.194 The district court found the client’s evidence weak
or nonexistent on this same question, and granted summary
195
196
judgment for the lawyer. The client appealed. Neither party
contested arising under jurisdiction as found by the district court.197
Accordingly, appellate jurisdiction in the Federal Circuit was not in
dispute either, but the court dutifully checked the situation
anyway.198 It found that under the Air Measurement line of cases,
and the case-within-a-case analysis, federal arising under
199
jurisdiction was proper. On the merits, the court agreed with the
district court that the client’s proofs were too speculative to survive
summary judgment.200 The patent law questions were thus found to
201
be really nonexistent. We shall return to Minkin v. Gibbons in the
pushback section of this Article, because in a concurring opinion in
Minkin, Judge O’Malley expressed her misgivings about the whole
situation of state-created malpractice claims being adjudicated in
federal courts.202
As with other forms of accusations, here too the case
literature contains many other instances of client accusations of
203
While these are
too narrow claiming by patent attorneys.
191. Id.
192. Id. at 1342, 1345–46.
193. Id. at 1345.
194. Minkin v. Gibbons, P.C., No. 2:08-02451, 2010 WL 5419004, at *4–5 (D.N.J. Dec.
23, 2010), aff’d, 680 F.3d 1341, 1352 (Fed. Cir. 2012).
195. Id. at *5–8.
196. Minkin, 680 F.3d at 1347.
197. Id.
198. Id.
199. Id.
200. Id. at 1351–52.
201. See id. at 1342–43 (concluding that the client had failed to establish a genuine
dispute of material fact as to the patentability of his alternate claims thus making the
patent law questions nonexistent).
202. Id. at 1353 (O’Malley, J., concurring).
203. See, e.g., Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1408, 1413 (Fed.
Cir. 2009) (finding arising under jurisdiction based on allegation that attorney should
have claimed more broadly); Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d
1281, 1283, 1284–85, 1288 (Fed. Cir. 2007) (client asserting that lawyers should have
claimed more broadly, finding arising under jurisdiction but affirming summary judgment
for the law firm on statute of limitations grounds).
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serious patent law questions, they seldom proceed to any
judgment on the points raised.204
E. Other Assertions of Negligence
In the foregoing Parts, federal jurisdiction has been found
in state-created patent malpractice cases based on several
recurrent themes asserted by clients. Those are, unfortunately,
not the end of the list of cases finding appellate jurisdiction
over the last five years since Air Measurement was decided.
For example, assertions of mishandling litigation have become
fairly common. In Berndt v. Greenwich Insurance Co., the
accusation was that the defendant’s lawyers had mishandled
the defense of a patent infringement case, and that the patent
in suit in that case should have been invalidated, thus
embedding a federal patent law issue in the malpractice
case.205 Federal jurisdiction appeared doubtful to the district
judge, but she rather reluctantly found she had jurisdiction
under Immunocept, the companion case to Air Measurement.206
207
The case settled prior to final judgment.
In Premier Networks, Inc. v. Stadheim & Grear, Ltd., the
former client charged that litigation counsel mishandled a patent
infringement suit, causing the client to lose on summary
208
judgment of noninfringement when it should have won. The
court agreed with the trial court that embedded patent law
issues (which it declined to specify but characterized as
“substantive” and “arcane”—presumably infringement, validity,
and the damages that would have been recovered) meant that the
case could only be adjudicated in federal court.209 A similar
pattern and result appears in the Texas Supreme Court decision
210
in Minton v. Gunn.
204. See generally ABA PROFILE, supra note 10, at 9 tbl.4 (noting in percentages the
disposition of malpractice claims).
205. Berndt v. Greenwich Ins. Co., No. 08-cv-130-bbc, 2008 WL 514269, at *1 (W.D.
Wis. Dec. 2, 2008).
206. Id. at *1 (“Plaintiff’s legal malpractice claim is a state law cause of action,
suggesting that plaintiff’s claim does not ‘aris[e] under’ federal law. . . .However, the
Court of Appeals for the Federal Circuit has adopted an expansive view of § 1338, holding
that a legal malpractice claim arises under patent law whenever success on the claim
requires a ‘determination of patent infringement’ or ‘proof of invalidity.’” (citations
omitted)).
207. Order on Settlement Conference, Berndt v. Greenwich Ins. Co., No. 08-cv-130bbc, 2008 WL 514269 (W.D. Wis. Dec. 22, 2008).
208. Premier Networks, Inc. v. Stadheim & Grear Ltd., 918 N.E.2d 1117, 1120 (Ill.
App. Ct. 2009).
209. Id. at 1118, 1120–22, 1124.
210. Minton v. Gunn, 355 S.W.3d 634, 646–47 (Tex. 2011), cert. granted, 80 U.S.L.W.
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In Tomar Electronics, Inc. v. Watkins, the client, who lost an
earlier infringement case by default after its counsel had been
sanctioned four times for disobeying discovery orders, contended
that with competent counsel it should have been able to win the
case by establishing at least one of the defenses of invalidity,
211
This meant that this
noninfringement, or unenforceability.
malpractice case, begun in state court, was properly removed to
federal court.212
Even when legal problems have seemingly been properly
conquered by patent attorneys, they may face a malpractice suit
anyway. Nomir Medical Technologies, Inc. v. McDermott Will &
213
Emery, LLP was such a case. Some paperwork had apparently
been misplaced at the law firm handling Nomir’s patent
application, causing the application to go abandoned.214 The
problem was corrected, however, by revival of the application,
and the patent issued in due course.215 The client’s state-court
complaint was that the intervening delay caused investors to
delay their pay-in of capital, and the client had to divert funds
from other important projects to cover the shortfall.216
Additionally, the abandonment and revival delayed the issuance
of the patent and hence reduced its term, which commences on
the issue date but expires twenty years from the filing date.217
The lawyers removed the case to federal court, where it was
settled some months later without any significant court rulings
on jurisdiction or on the merits.218
3547 (2012). The accusation in Minton was that litigation counsel should have earlier
presented an argument against invalidity of the client’s patent. Id. at 637–38. In the
underlying infringement case, the court found the patent invalid. Minton v. Nat’l Ass’n of
Sec. Dealers, Inc., 226 F. Supp. 2d 845, 852 (E.D. Tex. 2002), aff’d, 336 F.3d 1373 (Fed.
Cir. 2003). The malpractice case will be further discussed later herein. A petition for
certiorari to the U.S. Supreme Court to review the Texas case on the jurisdictional
question was granted at the time of this writing. See Petition for a Writ of Certiorari,
Gunn v. Minton, 355 S.W.3d 634 (Tex. 2011), cert. granted, 80 U.S.L.W. 3547 (2012).
211. Tomar Elecs, Inc. v. Watkins, No. 2:09-cv-00170-PHX-ROS, 2009 WL 2222707
(D. Ariz. July 13, 2009).
212. Id.
213. Complaint at 4–6, Nomir Med. Techs., Inc. v. McDermott Will & Emery, LLP,
No. 10-CV-11251, 2010 WL 3281070, at *3 (D. Mass. July 1, 2010).
214. Id. at 4–5.
215. Id. at 7–8.
216. Id. at 7.
217. 35 U.S.C. § 154(a) (2006); Complaint, supra note 213, at 5, 7–8. There was also
an assertion in the pleading that some provisional applications were improperly allowed
to run out. Id. at 10. Nonprovisionals were filed, however, and there is as yet no
indication that the earlier provisional date is needed for validity. Id. at 10–11.
218. Settlement Order of Dismissal, Nomir Med. Techs., Inc. v. McDermott Will &
Emory, LLP, No. 10-11251 WGY (D. Mass. Oct. 20, 2011).
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V. THE PUSHBACK CASES
Not all courts have been comfortable with the idea of statecreated causes of action for legal malpractice being shuttled off to
federal courts for exclusive handling merely because issues of
patent law are embedded in the cases. Some state courts have
resisted this thinking. Perhaps more importantly, federal courts
have begun to wonder whether there was any good reason for
their taking on such chores. Even in the Federal Circuit, where
this line of thinking began in 2007, some judges are suggesting
that the matter be reconsidered en banc.
A. Reactions of the State Courts
As we have already seen, state appellate courts in Ohio,
Illinois, and California embraced the ideas of Air Measurement
and relegated patent malpractice cases with embedded patent
law issues to exclusive handling by the federal courts.219 To this
list should be added the Texas Supreme Court, due to its 2011
ruling in Minton v. Gunn.220 The court in Minton addressed all
four prongs of Grable, found them satisfied in a case where the
accusation was the mishandling of an underlying patent
infringement suit, and concluded that the state courts lacked
jurisdiction in the case.221 Concerning Grable’s fourth prong,
potential disruption of the jurisdictional balance between state
and federal courts, the Minton court found that federal courts
could handle the present case without a major upset of that
222
balance. It pointed to the strong interest in uniformity in
application of the national patent laws, likening the situation
to the need for uniformity cited in Grable.223 As mentioned
earlier, the Supreme Court has granted certiorari in the
Minton case.
On the other side of the issue stands Nebraska. It had an
advantage of sorts in that its state supreme court, in New Tek
Manufacturing, Inc. v. Beehner, addressed the patent malpractice
jurisdictional issue two years before Air Measurement came down
219. Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP, 107 Cal. Rptr. 3d
373, 376–77 (Cal. Ct. App.), reh’g denied (2010), cert. denied, 131 S. Ct. 1472 (2011);
Premier Networks, Inc. v. Stadheim & Grear, Ltd., 918 N.E.2d 1117, 1124 (Ill. App. Ct.
2009); TattleTale Portable Alarm Sys. Inc. v. Calfee, Halder & Griswold, LLP, 2009 WL
790314, at *5 (Ohio Ct. App. Mar. 26, 2009).
220. Minton v. Gunn, 355 S.W.3d 634, 636 (Tex. 2011), cert. granted, 80 U.S.L.W.
3547 (2012).
221. Id. at 638, 642.
222. Id. at 644.
223. Id. at 645–46.
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from the Federal Circuit and only one month after the U.S.
Supreme Court had decided Grable, which the Nebraska court
apparently knew nothing about.224 Operating thus in more or less
pristine legal territory, the Nebraska Supreme Court held that
the state courts are perfectly able to handle most federal patent
law issues.225 It noted that jurisdiction might be a valid question
here, due to the presence of significant federal patent law
issues.226 It went on to say cogently, however, that:
not every case involving a patent question is within the
exclusive jurisdiction of the federal courts, because not
every dispute involving a patent arises under the patent
laws within the meaning of § 1338(a). State courts have
jurisdiction to decide questions arising under the patent
law when they are incidental to cases that do not arise
under that law. . . . Patent matters that are primarily
concerned with tortious wrongdoing may be tried in the
state courts, and where such a state court suit is brought,
the validity of a patent or its infringement may properly be
227
considered by the state court.
As seen earlier, this was a reiteration of what had been,
prior to Christianson and its follow-on cases, fairly well
established law for disposition of patent-related claims. The
Nebraska Supreme Court then recited a number of “incidental”
patent law issues embedded in this essentially state cause of
action.228 They included some of the most sophisticated and
difficult subjects in all of patent law.229 The court finally
concluded that the trial court had erred in granting summary
judgment to the defendant on the question of damages from the
lawyers’ conduct, holding that the damages question—primarily
lost revenues from infringement claims that could have been
made under the client’s reissue patent had it not been defective—
had been properly raised.230 The case was remanded for that
224. See Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308
(2005) (decided on June 13, 2005); Air Measurement Techs., Inc. v. Akin Gump Strauss
Hauer & Field, L.L.P., 504 F.3d 1262, 1267–69, 1271–73 (Fed. Cir. 2007) (decided on Oct.
15, 2007); New Tek Mfg., Inc. v. Beehner, 702 N.W.2d 336, 336, 342, 345 (Neb. 2005)
(decided July 29, 2005), aff’d, 751 N.W.2d 135 (Neb. 2008).
225. See New Tek Mfg., Inc., 702 N.W.2d at 345–46.
226. See id. at 345–46 (addressing presence of subject matter jurisdiction).
227. Id. at 345–46 (citations omitted).
228. Id.
229. See id. at 344. Space will not permit a full discussion of these patent law issues
here. They included (i) claim construction; (ii) the status of a reissue patent when,
pending its issuance, the original patent is allowed to lapse for nonpayment of a
maintenance fee; and (iii) the scope of equivalents in infringement determinations when a
means-plus-function expression is used in a patent claim. Id. at 342–44, 346, 349–53.
230. Id. at 342, 355.
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purpose.231 This is the first state court case to take on squarely
the actual and serious embedded issues of patent law raised by
the complaint (plus the usual unspoken peek at the answer).
The case was by no means over. Upon remand the trial court
made several further determinations on patent law questions,
leading to a second appeal to the Nebraska Supreme Court (New
Tek II).232 In New Tek II, the court spent little time on the
jurisdictional question.233 It had asked for additional briefing on the
Federal Circuit’s decisions in Air Measurement and Immunocept,
which had come down in the meantime, but was unpersuaded to
change its earlier view that state courts can and should handle
234
patent law issues embedded in state causes of action. The court
then took on the complex patent law topic of prosecution history
estoppel.235 It concluded that the trial court had correctly applied the
doctrine, and that the plaintiff had not established that it would
have won the hypothetical infringement suit (the case-within-acase) if the reissue patent had been validly obtained.236 Nebraska
remains to date the only state adhering to something doctrinally
akin to Justice Holmes’s view that regardless of serious ancillary
issues that may have to be decided under a federal law, a case
arises under the law that created the cause of action.
B. Federal Court Decisions
The Fifth Circuit, in a trademark malpractice case
wherein the client accused litigation counsel of negligence,
expressly refused to follow the Federal Circuit’s Air
Measurement and Immunocept line of cases.237 The 2008 Fifth
Circuit case, Singh v. Duane Morris, LLP, took as its primary
authority the 2005 Grable case from the Supreme Court,
238
discussed earlier herein. The Fifth Circuit in Singh held that
any issues of federal trademark law were merely subsidiary to
231. Id. at 355.
232. New Tek Mfg., Inc. v. Beehner (New Tek II), 751 N.W.2d 135, 144 (Neb. 2008).
233. See id.
234. Id.
235. Id. at 146–51. Prosecution history estoppel basically holds that when a patent
applicant narrows his claims by amendment during prosecution in the PTO, or makes an
argument to the PTO based on a particular feature recited in the claims, she is thereafter
barred from relying on the doctrine of equivalents in later patent litigation, based on the
amended feature or the argued feature. Id. at 145. For a general discussion of this
doctrine, see Herbert F. Schwartz & Robert J. Goldman, PATENT LAW AND PRACTICE
§ 6.I.D.2, at 193 (7th ed. 2011).
236. New Tek II, 751 N.W.2d at 151.
237. Singh v. Duane Morris LLP, 538 F.3d 334, 340 (5th Cir. 2008).
238. Id. at 338.
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the main complaint of attorney negligence and did not involve
resolution of any important question of federal trademark
law.239 Hence the court ordered the case dismissed for want of
240
federal subject matter jurisdiction.
It was not long until Singh was cited and relied upon in a
241
This was Roof
patent malpractice case in a federal court.
Technical Services v. Hill, in the Northern District of Texas.242 Roof
involved patent prosecution malpractice claims by the client against
243
the patent attorney. Typical of the developing modern line of cases
in this area, the accusations had mostly to do with a defectively filed
application, the PTO’s notice of abandonment, the attorney’s failure
to correct the deficiency, and, perhaps most importantly, the
attorney’s asserted failure to inform the client of any of this.244 The
client also charged that the lawyer failed to cooperate with the
client in explaining to the PTO that the abandonment was
unintentional, and that by the time new counsel were engaged the
period for revival had run out.245
Judge McBryde addressed the jurisdictional issue, citing
to Grable and the Fifth Circuit’s Singh decision for the
proposition that mere presence of federal law issues does not
automatically mean that the case arises under § 1338.246 He
expressed some doubt as to whether Federal Circuit case
authority was at all applicable in general on the threshold
question of jurisdiction:
It is unclear whether decisions of the Federal Circuit
determining the scope of federal jurisdiction in patentrelated matters are binding on this court. See Warrior
Sports, Inc. v. Dickinson Wright, PLLC, 632 F. Supp. 2d
694, 698 n.4 (E.D. Mich. 2009). However, because the court
concludes that this case is factually distinguishable from
Air Measurement and Immunocept, the court does not
247
address the question.
Tracking Grable, he ruled that “substantial” issues are those
that indicate a serious federal interest in claiming the
239. Id. at 339.
240. Id. at 336.
241. Roof Technical Servs., Inc. v. Hill, 679 F. Supp. 2d 749, 749, 754 (N.D. Tex.
2010).
242. Id. at 749, 754.
243. Id. at 750–51.
244. Id.
245. Id.
246. See id. at 750–51 (recognizing that Grable limited the category of actions that
arise under federal law by requiring the balancing of federal and state issues).
247. Id. at 752 n.2.
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advantages thought to be inherent in a federal forum.248 He then
found that no important patent law questions were involved
here, because no actual patent rights had come into existence; it
was purely a matter of the attorney’s conduct in failing to achieve
that end.249 Finally, he held that allowing this action to proceed in
federal court would disturb the balance of federal and state
judicial responsibilities:
All legal malpractice plaintiffs proceeding on a
negligence theory must show that, absent their attorney’s
negligence, they would have won the underlying
litigation, consummated the deal, or acquired the patent.
Thus, every legal malpractice action in which the
attorney commits the alleged malpractice while handling
a federal matter will raise a federal issue. Extending
federal jurisdiction to all such actions would therefore
sweep an entire category of cases, traditionally the
domain of state courts, into federal court. After Grable,
250
that result is untenable.
251
The case was dismissed. No appeal was filed from the
dismissal.252 It is unknown at this point whether the plaintiff
refiled the case in a state court for further proceedings in light of
the federal lack-of-jurisdiction ruling.
Another federal district court found itself in general
disagreement with the whole proposition of legal malpractice
cases being considered to arise under the patent laws merely
because questions of patent law might have to be ruled upon in
253
deciding the case. This issue arose in a case before Judge
Gerald E. Rosen in Detroit.254 In Warrior Sports, Inc. v. Dickenson
Wright P.L.L.C., cited by Judge McBryde in Roof, Judge Rosen
took issue with the entire reasoning of the Air Measurement case
and its progeny.255 He said that no serious issue of patent law
would need to be decided to dispose of the malpractice claim.256 In
Warrior, it was unclear that any such issue would need to be
decided. The allegations were merely negligence in failing to file
maintenance fees on a timely basis and failing to communicate
248. Id. at 753.
249. Id. at 753–54.
250. Id.
251. Id. at 754–55.
252. Id.
253. Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C., 632 F. Supp. 2d 694, 697
(E.D. Mich. 2009), vacated and remanded, 631 F.3d 1367 (Fed. Cir. 2011).
254. Id. at 695–96.
255. Id. at 697–99; Roof Tech. Servs., Inc., 679 F. Supp. 2d at 749.
256. Warrior Sports, Inc., 632 F. Supp. 2d at 699.
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adequately with the client.257 It thus did not appear that claim
scope, infringement by a third party, or any similar patent law
question would need to be decided. Finally, Judge Rosen
questioned, as Judge McBryde did in Roof, whether Federal
Circuit precedents were at all binding on a district court on the
threshold question of subject matter jurisdiction, especially in a
case where the cause of action is created by state law.258 He
dismissed the case for lack of subject matter jurisdiction.259
Unlike Roof, this dismissal was appealed to the Federal
260
Circuit, with perhaps predictable results. The court did not
share Judge Rosen’s critiques of its jurisprudence.261 It took its
usual broad view of “arising under” jurisdiction, vacated Judge
Rosen’s dismissal, and remanded the case to him for further
proceedings.262 The appellate panel found that at least one of the
plaintiff’s malpractice claims did require the court to resolve a
substantive issue of patent law.263 That claim was the one
alleging that the attorneys’ conduct cast a shadow of inequitable
conduct over the patent, and that but for that shadow the client
would have had a more meritorious case against the infringer it
had sued, would not have settled the case, and would have
procured a favorable judgment.264 Because this theory implicates
the patent law—the case-within-a-case scenario again—the
malpractice case was held to arise under the patent law.265 The
266
appellate court’s logic also extended to its own jurisdiction. The
panel ruled that even though Judge Rosen had found his court
had no jurisdiction based on § 1338, the court of appeals was not
bound by that ruling; and because in its view the case below did
arise in part under § 1338, appellate jurisdiction resided with the
Federal Circuit.267
A few federal rulings have held that the embedded patent
law issues in patent malpractice cases were too minor to justify
257. Id.
258. Id. at 698 n.4.
259. Id. at 700.
260. Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C., 631 F.3d 1367 (Fed. Cir.
2011).
261. See id. at 1368–69 (holding that at least one malpractice claim involved “a
substantive issue of patent law,” thus giving the federal courts exclusive jurisdiction over
the dispute).
262. Id. at 1369.
263. Id.
264. Id. at 1371–72.
265. Id. at 1372.
266. See id. at 1370.
267. Id. at 1370, 1372.
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federal court jurisdiction.268 In other words, they were not
“substantial” under Christianson or Grable.269 One case involved
accusations of misconduct by adversary counsel in the underlying
270
infringement litigation. Others involved slipped deadlines for
responding to Japanese and U.S. patent office actions.271 Another
failed to show, according to the court, any connection between
asserted patent litigation errors by counsel and harm to the
plaintiff.272
C. Pushback at the Federal Circuit
The diverse reactions of state and federal courts to the Air
Measurement doctrine that important embedded federal law
questions may cause a state-created cause of action for legal
malpractice to “arise under” the patent laws and hence mandate
exclusive federal court handling led to some recent questioning of
the doctrine by judges of the Federal Circuit. Judge Kathleen
O’Malley, newly arrived on the court after sixteen years of
service as a district judge in the Northern District of Ohio,
questioned the doctrine in four recent cases.273 It began with her
dissent to a denial of rehearing in yet another case where a
plaintiff’s accusation was that the defendant claimed a patent too
274
narrowly.
The district court had dismissed on summary
268. See, e.g., Haase v. Abraham, Watkins, Nichols, Sorrels, Agosto & Friend, LLP,
2010 WL 519757, at *2–6 (E.D. Tex. Feb. 9, 2010) (finding various state law claims did
not implicate patent issues).
269. See id. at *2, *6 (citing Grable and finding Grable inapplicable).
270. Id. at *1.
271. Genelink Biosciences, Inc. v. Colby, 722 F. Supp. 2d 592, 594 (D.N.J. 2010)
(involving a claim that defendants allowed Japanese application to lapse and U.S.
application to be deemed abandoned); Roof Technical Servs., Inc. v. Hill, 679 F. Supp. 2d
749, 750–51 (N.D. Tex. 2010) (involving a claim that defendant’s untimeliness resulted in
missing the ultimate deadline for patent protection). The Genelink court remanded the
case to the state court from which it had been removed. Genelink Biosciences, Inc., 722 F.
Supp. 2d at 594, 602. On appeal of the remand order, the Federal Circuit noted that
federal courts of appeals lack appellate jurisdiction where district courts find an absence
of federal jurisdiction in cases removed from state courts. Genelink Biosciences, Inc. v.
Colby, 423 F. App’x. 977, 977–78 (Fed. Cir. 2011) (citing 28 U.S.C. § 1447(d), which
precludes federal appellate review in such circumstances).
272. Willis, O’Neill & Mellk v. Line Rothman & Glamourmom, LLC, 2012 WL
1854060, at *9 (D.N.J. May 21, 2012) (“Even if the remaining assertions of malpractice
are true, Plaintiffs offer insufficient evidence that Defendants’ malpractice was a
substantial contributing factor to the invalidation of the [Plaintiffs’] ‘029 patent.”).
273. Kathleen M. O’Malley, Circuit Judge, U.S. CT. APPEALS FED. CIRCUIT,
http://www.cafc.uscourts.gov/judges/kathleen-m-omalley-circuit-judge.html (last visited
Dec. 14, 2012).
274. Byrne v. Wood, Herron & Evans, LLP, 676 F.3d 1024, 1027–28 (Fed. Cir. 2012)
(O’Malley, J., dissenting from the denial of the petition for rehearing en banc), petition for
cert. filed, 80 U.S.L.W. 3693 (June 8, 2012) (No. 2011-1012).
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judgment on the ground that the plaintiff’s evidence of what
would have happened if broader claims had been presented was
too sketchy.275 The appellate panel disagreed and ordered the case
276
remanded. Upon a motion for rehearing en banc, a majority of
the full court agreed with the panel decision.277 Judge O’Malley
wrote a lengthy dissent, urging the court to reconsider the Air
278
Measurement doctrine in toto. She urged more “prudence and
restraint” and, in a footnote, cited the view of Justice Holmes on
the subject.279 Only Judge Wallach, another newcomer to the
280
court, joined in her dissent.
Over the next several months Judge O’Malley found occasion
to concur in the judgments of the court of appeals in three other
cases, expressing in all her view of the need for full
281
reconsideration of the Air Measurement doctrine.
VI. CONCLUSIONS: PROS AND CONS OF STATE COURT
JURISDICTION OVER STATE-CREATED CLAIMS
Let us start this Part with some points thus far overlooked in
the case literature. The first is remedies. Because only the states
have created civil actions for legal malpractice, it is only the states
282
that can specify remedies when such malpractice is found. Some
of these could conceivably be difficult for a federal court to
implement. While a money judgment is what is normally sought, a
state might by law specify that malpractice proceedings be held
before some specialized local court.283 Sanctions could be peculiarly
275. Byrne v. Wood, Herron & Evans, LLP, 2010 WL 3394678, at *1–7 (E.D. Ky. Aug.
26, 2010), vacated, 450 F. App’x 956 (Fed. Cir. 2011).
276. Byrne v. Wood, Herron & Evans, LLP, 450 F. App’x 956, 965 (Fed. Cir. 2011).
277. Byrne, 676 F.3d at 1025, 1027 (majority opinion) (per curiam).
278. Id. at 1027–41 (O’Malley, J., dissenting).
279. Id. at 1029 n.2 1030 (O’Malley, J., dissenting from the denial of the petition for
rehearing en banc) (quoting Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 810
(1986)).
280. Id. at 1027; Evan J. Wallach, Circuit Judge, U.S. CT. APPEALS FED. CIRCUIT,
http://www.cafc.uscourts.gov/judges/evan-j-wallach-circuit-judge.html (last visited Dec.
14, 2012).
281. Minkin v. Gibbons, 680 F.3d 1341, 1353 (Fed. Cir. 2012) (O’Malley, J.,
concurring); Landmark Screens LLC v. Morgan Lewis & Bockius, LLP, 676 F.3d 1354,
1366–68 (Fed. Cir. 2012) (O’Malley, J., concurring); USPPS, Ltd. v. Avery Dennison Corp.,
676 F.3d 1341, 1350–51, 1353–54 (Fed. Cir. 2012) (O’Malley, J., concurring).
282. Actions for malpractice should not be confused with ethics rules. The purpose of
those rules is to govern lawyer conduct, not to create actions or remedies for clients, other
than through the grievance process. MODEL RULES OF PROF’L CONDUCT pmbl. (2012).
There are specific ethical regulations governing patent practitioners. See 37 C.F.R. Pt. 10
(2011) (outlining the PTO’s Code of Professional Responsibility).
283. ARNOLD J. GOLDMAN & WILLIAM D. SIGISMOND, BUSINESS LAW PRINCIPLES AND
PRACTICES 89 (2011); see, e.g., Catherine T. Struve, Doctors, the Adversary System, and
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local as well, such as preclusion from practice in the state
courts.284 One wonders how a federal district court could
implement such remedies.
Secondly, in pursuing Grable’s assumption that Congress
has set a balance of judicial responsibilities between state and
local courts for cases involving federal law, one response is
that if Congress wanted to create a cause of action for federal
malpractice—patent or otherwise—it could easily have done
so. Yet in the recent six years of vigorous debate over
numerous patent law reform bills, no one proposed any such
cause of action.285 Presumably Congress did not want the
federal courts involved in such matters.
We then must consider the supposed heightened
experience of federal judges in dealing with patent matters, as
compared to the lesser exposure of state judges on the subject.
That assumption is highly overstated. Members of Congress
working in recent years on bills to improve patent litigation
have noticed that the typical federal judge seldom sees a
286
patent case. In supporting a predecessor of what in early
287
Representative
2011 became the America Invents Act,
Procedural Reform in Medical Liability Litigation, 72 FORDHAM L. REV. 943, 996–1000
(2004) (discussing the movement for specialized courts in the medical malpractice context
based on the notion that experienced judges should originate precedent and noting that
advantages of such a court “include expertise, decision making speed, and uniformity and
coherence of doctrine”).
284. See, e.g., Illinois Supreme Court Disbars 8, Suspends 14, ILL. L@WYER,
http://iln.isba.org/blog/2012/03/20/illinois-supreme-court-disbars-8-suspends-14
(last
visited Dec. 15, 2012) (listing the suspension of an attorney who did not file patent
applications or respond to requests for information from the PTO in four separate
patent matters); Maryland Attorneys: Disciplinary Actions FY 2012, MD. ATT’Y
GRIEVANCE COMMISSION, http://www.courts.state.md.us/attygrievance/sanctions12.html
(last visited Dec. 15, 2012) (noting two attorneys were reprimanded for misconduct
before the PTO and another attorney was indefinitely suspended for failing to maintain
client filing fees).
285. Ryan Vacca, Patent Reform and Best Mode: A Signal to the Patent Office or a
Step Toward Elimination?, 75 ALB. L. REV. 279, 290 (2012). The debates culminated in
the September 2011 enactment of the Leahy-Smith America Invents Act., Pub. L. No. 11229, 125 Stat. 284 (2011) (amending Title 35); see also Sarah Tran, Patent Powers, 25
HARV. J.L. & TECH. 609, 610 (2012) (opining on the significance of the patent reforms
enacted in 2011).
286. Rep. Lamar Smith, current chairman of the House Judiciary Committee and a
longtime worker for patent reform and improvement of patent adjudication, has estimated
that “the average judge faces [patent] litigation only once in seven years.” 77 PAT.
TRADEMARK & COPYRIGHT J. (BNA) 517 (2009). The number varies widely, however, due
to the concentration of patent filings in a few popular districts. See infra note 311 and
accompanying text (noting the five major districts).
287. Patent Cases Pilot Program, Pub. L. No. 111-349, 124 Stat. 3674 (2011)
(establishing a program “to encourage enhancement of expertise in patent cases among
district judges”); see Joe Matal, A Guide to the Legislative History of the America Invents
Act Part I of II, 21 FED. CIR. B.J. 435, 444–45 & n.58 (2012) (tracing the history of the
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Lamar Smith of the House Judiciary Committee urged his
colleagues:
H.R. 5418 focuses on one aspect of patent litigation—the
recognition that judges are too often inexperienced in dealing
with technical areas of the law and that they rarely have the
opportunity to have a patent case go all the way through trial.
Patent cases equal only 1 percent of cases filed in
U.S. District Courts but are responsible for nearly 10
percent of complex cases. On average, an individual
federal judge has only 1 patent case go all the way
through trial every 7 years, which means trial-level
judges may have no more than 3 or 4 such cases over
their entire judicial career.
These statistics suggest judges could benefit from the
development of greater expertise and that they might
develop this ability by handling these cases, which are so
288
vital to American companies.
Such figures hardly suggest an overall federal judiciary
strongly schooled in patent law. Concededly, some district judges
are highly educated in the subject, due to their own particular
merits and due to the concentration of patent litigation in only a
few districts.289 However, there is no reason to think that patent
malpractice cases will arise more often in those districts than
elsewhere in the country, or that such cases will happen to be
assigned to those knowledgeable judges.
The state courts are admittedly even less familiar with
patent law issues and doctrines, but given the above data on
federal judges, the difference is quite small and not likely to be a
290
major factor in administration of justice.
We come now to the most vaunted and most misplaced
reason thus far advanced for moving patent malpractice cases
into the federal courts. This is the issue of patent law uniformity.
It is true that the main impetus for creating the U.S. Court of
Appeals for the Federal Circuit in 1982 was to achieve uniformity
291
in patent jurisprudence. However, the source of nonuniformity
was not the state courts but the regional courts of appeal, where
Patient Cases Pilot Program, Pub. Law No. 111-349, to the same proposed amendment
that led to the America Invents Act).
288. 152 CONG. REC. H7852 (daily ed. Sept. 28, 2006) (statement of Rep. Smith).
289. Infra note 311 and accompanying text.
290. Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627,
651 (1999) (Stevens, J., dissenting); supra note 288.
291. See, e.g., Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359
(Fed. Cir. 1999) (noting that a principal purpose for creation of the Federal Circuit was to
promote uniformity in areas within its jurisdiction).
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the validity rates ranged from 6% in some circuits to over 50% in
others.292 Procedural maneuvering to land a case in a “favorable”
circuit was common.293 The Federal Circuit was given exclusive
jurisdiction over appeals from district courts where the
jurisdiction of the district court was based, in whole or in part on
section 1338(a) of the Judicial Code, thus ending nearly all
294
appellate patent rulings from other federal courts of appeal.
Save for the inevitable minor differences among the twelve
Federal Circuit judges themselves,295 and occasional missteps in
failing to adhere to the court’s own prior panel decisions, the
desired doctrinal uniformity was achieved.296 Nothing in the long
history of the creation of the Federal Circuit mentioned anything
about uniformity in patent malpractice jurisdiction. The focus
was entirely on infringement litigation.297
What would be the impact if we were to follow the view of
Justice Holmes and visit jurisdiction of patent malpractice
exclusively on the courts of the states that created the causes of
action? The answer is not much, if anything. Let us suppose a
worst case scenario, where the courts of States X, Y, and Z all
were to rule—in the most fundamental disregard of the patent
statute—that neither novelty nor nonobviousness was a
requirement for obtaining a valid patent, and their decisions
were duly reported. Thereafter, patent infringement suits would
still have to be decided by the federal district courts, and those
courts would know that their appellate authority was not the
292. Paul M. Janicke, To Be or Not to Be: The Long Gestation of the United States
Court of Appeals for the Federal Circuit, 69 ANTITRUST L.J. 645, 646 n.3 (2001).
293. SHELDON W. HALPERN, CRAIG ALLEN NARD & KENNETH L. PORT,
FUNDAMENTALS OF U.S. INTELLECTUAL PROPERTY LAW: COPYRIGHT, PATENT, TRADEMARK
195 & n. 16 (3d ed. 2011).
294. See 28 U.S.C. § 1295(a)(1) (2006) (granting exclusive jurisdiction to the Federal
Circuit and outlining exceptions). The regional appellate courts could still decide patent
issues that arose in some other way, such as the state-law question of patent ownership
when it arose in a diversity case, or, as seen earlier in the Christianson case, a patent
issue embedded in an antitrust case. But see HALPERN ET. AL, supra note 293, at 195
(noting that “the court’s jurisdiction includes appeals of nonpatent claims that accompany
patent claims”).
295. See, e.g., R. Polk Wagner & Lee Petherbridge, Is the Federal Circuit Succeeding?
An Empirical Assessment of Judicial Performance, 152 U. PA. L. REV. 1105, 1143–45,
1157 (2004) (elucidating that across patent law opinions, the court has displayed a
“methodological divide,” which has influenced case outcomes).
296. See Matthew F. Weil & William C. Rooklidge, Stare Un-Decisis: The Sometimes
Rough Treatment of Precedent in Federal Circuit Decision-Making, 80 J. PAT. &
TRADEMARK OFF. SOC’Y 791, 794–96, 799–800, 802–06 (1998).
297. George C. Beighley, Jr., The Court of Appeals for the Federal Circuit: Has It
Fulfilled Congressional Expectations?, 21 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 671,
675–83, 705 (2011) (chronicling the creation of the Federal Circuit as a means for creating
uniformity in patent infringement suits).
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court of appeals of State X or Y or Z, but the U.S. Court of
Appeals for the Federal Circuit, a point not disputed by anyone.
Obviously those district courts would adhere to Federal Circuit
precedent and pay no attention at all to out-of-step rulings of any
state court in some prior malpractice case. Moreover, while
reported patent malpractice cases appear to be on the rise in
recent years, the number of appellate rulings on the merits in
such cases is very small relative to the 400 or so contested
decisions per year in patent infringement suits.298 It is difficult to
see how the states, even in the most nightmarish scenario of
concerted erroneous pronouncements about patent law could
have any serious impact on the patent system. Finally, it seems
highly unlikely that these “other” courts would get it wrong very
often. The few data points in the reported literature tend to bear
this out. Nebraska in recent years, beginning shortly before the
2005 Grable decision from the U.S. Supreme Court, undertook a
complex patent malpractice case involving some of the most
sophisticated and complex issues in all of patent law. First, the
court examined whether, but for the alleged malpractice, the client
would have succeeded in an infringement suit against a third
party.299 Then, in New Tek II, the Nebraska Supreme Court
addressed the issue of prosecution history estoppel, examining the
rule-barring use of that doctrine in the case of a reissue patent
where its effect would be to recapture subject matter surrendered
300
during prosecution of the original patent. The Nebraska court
appears to have understood and correctly applied these principles.301
In the course of so doing, it cited twenty-two Federal Circuit
302
decisions. No seeds of nonuniformity seen here.
298. See United States Court of Appeals for the Federal Circuit: Filings of Patent
Infringement Appeals from the U.S. District Courts, U.S. CT. APPEALS FOR FED. CIRCUIT,
http://www.cafc.uscourts.gov/images/stories/the-court/statistics/Caseload_patent_infringe
_02-11.pdf (follow “line chart for appeals filed, for the last ten fiscal years” under
“Caseload, Patent Infringement”) (last visited Dec. 15, 2012) (tracking the number of
patent infringement appeals to the Federal Circuit during the last ten years).
299. New Tek Mfg., Inc. v. Beehner, 702 N.W.2d 336, 342, 344, 346, & 351 (2005)
(finding state court jurisdiction). The doctrine of equivalents basically holds that even if a
product accused of infringement falls outside the language of a patent claim, infringement
can nonetheless be found if the product accomplishes substantially the same function in
substantially the same way as the claimed family of structures. Id. at 351.
300. New Tek Mfg., Inc. v. Beehner (New Tek II), 751 N.W.2d 135, 147–48 (Neb.
2008). This rule essentially states that where a patent applicant initially claims broadly
but then narrows her claims in order to obtain allowance by the PTO examiner, and a
patent issues on the narrower claims, she cannot later, in an infringement action, invoke
the doctrine of equivalents to expand the effective reach of the patent in a direction that is
counter to the narrowing. Id. at 143–45, 147–48.
301. See id. at 151 (affirming the district court’s determinations on the prosecution
history estoppel doctrine).
302. New Tek Mfg., Inc., 702 N.W.2d at 344–47, 349–50, & 352–54.
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Similar adherence to consistent national patent law doctrine
is seen in the Texas intermediate appellate court decision in
303
Minton. The court dealt with the patent law question of an onsale bar, the provision of the patent statute that at the time
specified that the right to file for a patent is forfeited if not
exercised within a year following an offer for sale in the United
304
States of the claimed subject matter. Here, too, the court closely
adhered to U.S. Supreme Court and Federal Circuit doctrine,
citing thirty-one Federal Circuit opinions.305 No lack of uniformity
is apparent.
Finally, although not a state court case, we have the Seventh
306
Circuit ruling on remand in Christianson. As discussed earlier,
the patent law question of disclosure of the best mode of carrying
out the invention was embedded in the plaintiff’s antitrust
307
case. The U.S. Supreme Court had found the case did not arise
under the patent laws and remanded it for disposition by the
Seventh Circuit.308 The Seventh Circuit, as with the later
Nebraska and Texas courts, followed established law in deciding
the issue.309 No lack of uniformity here either.
Common sense also supports the observation that lack of
doctrinal uniformity is a needless worry in letting state courts
decide patent issues embedded in professional malpractice cases.
What other principles would they apply? With what motivation?
And with what effect on subsequent handling of patent
enforcement actions in the federal courts?
With regard to the proper consideration for workload
balance mandated by Grable, there are currently 678 authorized
federal district judgeships,310 and the majority of patent
infringement cases currently fall to only five districts311 having a
303. Minton v. Gunn, 301 S.W.3d 702 (Tex. App.—Fort. Worth 2009), rev’d, 355
S.W.3d 634, 636 (Tex. 2011), cert. granted, 80 U.S.L.W. 3547 (2012).
304. See Minton, 301 S.W.3d at 704 & n.1. (discussing the “on sale bar rule”); 28
U.S.C.A. § 102(b) (West Supp. 2012).
305. Minton, 301 S.W.3d at 704, 706, 708, & 712–14.
306. Christianson v. Colt Indus. Operating Corp., 870 F.2d 1292, 1295 (7th Cir.
1989).
307. Id. at 1296–98.
308. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 818–19 (1988).
309. See Christianson, 870 F.2d at 1301 (citing Spectra-Physics, Inc. v. Coherent,
Inc., 827 F.2d 1524, 1537 (Fed. Cir. 1987)).
310. Federal District Judges Are Vastly Outnumbered by State Judges, PUB. CITIZEN,
http://www.citizen.org/documents/FederalDistricJudgesvastlyoutnumberedbystatejudges.
pdf (last visited Dec. 15, 2012).
311. Lexis Courtlink profile of patent (code 830) filings. Of 2,551 patent cases filed in
the first half of 2012, 1,409 of them were in these five districts: Eastern Texas (537);
Delaware (384); Northern California (189); Central California (189); and Northern Illinois
(110).
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total of seventy-four judgeships.312 The total size of state courts of
original general jurisdiction is said to be 9,200, about fourteen
times larger than the federal district judiciary.313 Of course, these
state judges are not sitting around idle, but looking at size alone
it would appear that there is no reason to shift state-created
causes of action like legal malpractice into federal courts based
on Grable’s “sound division of labor” factor.
In sum, whatever may be said for arising under jurisdiction
in other contexts, in the area of legal malpractice there is no
supportable justification for finding that these state-created
causes of action must be handled by the federal courts. It is time
for the Federal Circuit to revisit Air Measurement and its
progeny.
312. See 28 U.S.C. § 133(a) (2006) (stating that the following number of judges shall
be appointed: E.D. Tex. (7); D. Del. (4); N.D. Cal. (14); C.D. Cal. (27); N.D. Ill. (22)).
313. Federal District Judges Are Vastly Outnumbered by State Judges, supra note 310.