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High Court Set To Consider Proper Patent Malpractice Forum
By Ryan Davis
Law360, New York (January 11, 2013, 9:30 PM ET) -- The U.S. Supreme Court will have the tough task of
deciding exactly when a legal malpractice case is so dependent on patent issues that it belongs in
federal, not state, court, as it is set to hear oral arguments on the issue Wednesday.
In the case, Gunn v. Minton, the justices will review a pair of Federal Circuit rulings from 2007 that found
legal malpractice suits, which are typically heard in state court, must be filed in federal court if they
involve substantial issues of patent law, over which the federal courts have exclusive jurisdiction.
When deciding whether an attorney committed malpractice requires a court to interpret federal patent
statutes or U.S. Patent and Trademark Office rules, the case belongs in federal court to ensure uniform
application of patent law, said Peter Toren of Weisbrod Matteis & Copley PLLC, who is following the
case. However, it may be difficult for the justices to establish a bright-line rule on when the patent law
issues in a malpractice case are substantial enough to convey federal jurisdiction, he said.
“The important question is where the court wants to draw the line and how much they want to open
the door to the federal courts [in] these cases,” he said.
Rather than saying that all malpractice cases involving patents belong in state or federal court, the
Supreme Court might decide that those determinations must be made on a case-by-case basis, Kelly
Williams of Picadio Sneath Miller & Norton PC said.
"In certain situations, such as Gunn, it appears that the patent questions are so intertwined with the
malpractice issue that there is an argument that federal jurisdiction should apply," she said. "However,
that may not be the case in every legal malpractice case involving patents."
The high court case involves a malpractice suit by inventor Vernon Minton, who claimed that inadequate
counsel by his attorneys from Williams Squire & Wren LLP, Slusser & Frost LLP and Slusser Wilson &
Partridge LLP in an infringement case he filed against the Nasdaq Stock Market Inc. resulted in his patent
being found invalid.
In a 5-3 decision, the Texas Supreme Court ruled in 2011 that the malpractice case belonged in federal
court, citing the Federal Circuit's 2007 rulings.
Those decisions noted that the federal courts have jurisdiction over suits "arising under any act of
Congress relating to patents." The Federal Circuit concluded that when the alleged misconduct in a
malpractice case was related to an infringement suit, it arises under patent law, giving the federal courts
jurisdiction.
The attorneys Minton accused of malpractice have argued to the U.S. Supreme Court that patent
malpractice cases belong in state court and that the Federal Circuit's standard is “sweeping broad
swaths of state law claims — which involve no actual patents and have no impact on actual patent rights
— into the federal courts.”
The Federal Circuit has addressed jurisdiction for patent malpractice claims in several cases since 2007,
and while it has almost always ruled that they belong in federal court, the issue has divided the judges.
"State court decisions imposing attorney discipline for conduct before the [U.S. Patent and Trademark
Office] and in federal patent litigation based on an incorrect interpretation of patent law are almost
certain to result in differing standards for attorney conduct," the Federal Circuit majority wrote in one
case in March.
Federal Circuit Judge Kathleen O'Malley has consistently dissented, arguing that malpractice cases
belong in state court because they don't involve patent law per se, but rather whether patent litigation
would have had a different result had the attorney acted differently.
"Finding federal jurisdiction over malpractice cases involving questions of hypothetical patent claims
opens the federal courthouse to an entire class of actions, thereby usurping state authority over this
traditionally state-law tort issue," she wrote in one case.
According to John Garretson of Shook Hardy & Bacon LLP, who is not involved in the case, the issue for
the U.S. Supreme Court boils down to “is patent law and are patent lawyers special?”
Legal malpractice cases in most other areas of law are heard in state court, so the question is whether
the decision by Congress to give federal courts jurisdiction over patent law and create a specialized
appeals court for patents “reaches so far as to have state law causes of action that require resolutions of
patent issues heard in federal court,” Garretson said.
Although resolving a patent malpractice suit does not require courts to adjudicate actual patent rights, it
still involves questions of whether the attorney followed federal regulations governing patents, so “the
notion that there's no federal rule in play seems to have a blind spot,” said Paul Swanson of Lane Powell
PC.
It's important for patent attorneys around the country to know when certain conduct violates the
standard of care to clients, so having all such cases heard by federal courts familiar with patents will
generate a uniform body of case law that will be beneficial to practitioners, he said.
While states generally have the right to decide what is acceptable in that state in terms of attorney
conduct, “patent law is a federal practice. We don't want one state to have one practice and other
states to have a different practice,” said Michael Samardzija of Bracewell & Giuliani LLP.
Swanson, who litigated patent malpractice cases in state court before the 2007 rulings, said that state
court judges are often unfamiliar with patent-law issues like claim construction, which can make the
cases time-consuming and difficult to litigate.
“It can work in state court, but it takes a lot of education,” he said, adding that the Federal Circuit's
decision to keep patent malpractice cases in federal court “is bringing more order, efficiency and clarity
to the process.”
While the Gunn case focuses on malpractice suits, the outcome could affect other state law claims
involving patents, such as disputes over licensing agreements, said Carolyn Chang of Fenwick & West
LLP.
She filed an amicus brief on behalf of Los Alamos National Laboratory and others, which argued that the
interest in ensuring uniform application of patent law should dictate that federal courts have jurisdiction
over any state law claims requiring the application of patent law to specific facts.
The lab is concerned that if the U.S. Supreme Court were to rule that patent malpractice suits belong in
state court, suits of patent license could be confined to state court as well, Chang said.
"No one is saying that all patent licensing disputes belong in federal court, but certainly the ones that
require an adjudication of federal patent law do," she said.
The attorneys accused of malpractice are represented by Jane M.N. Webre and Cynthia S. Connolly
of Scott Douglass & McConnico LLP.
Minton is represented by Thomas M. Michel and Robley E. Sicard of Griffith Jay & Michel LLP.
The case is Gunn et al. v. Minton, case No. 11-1118, in the U.S. Supreme Court.
--Editing by Elizabeth Bowen and Chris Yates.
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