In Gunn v. Minton, the Supreme Court held that federal courts do not have exclusive jurisdiction over patent malpractice claims. Under 28 USC § 1338(a), federal courts have exclusive jurisdiction over cases “arising under any Act of Congress relating to patents,” but the Court determined that patent malpractice claims do not arise under the patent laws. Continue reading this entry
In Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C., the Federal Circuit examined the circumstances under which a charge of malpractice against a patent attorney raises substantive issues of patent law sufficient to confer a federal court with exclusive jurisdiction under 28 U.S.C. § 1338.
The Patent At Issue
The underlying patent at issue is Warrior’s RE 38,216, directed to lacrosse stick heads.
Warrior had asserted the ’216 patent against STX, L.L.C., who argued that the patent was unenforceable due to inequitable conduct. The parties settled the case before the district court issued its ruling on enforceability, and before the infringement charges were tried.
After Warrior asserted its patent, the patent lapsed for failure to pay the maintenance fee. The patent was reinstated shortly before the malpractice suit was filed.
The Malpractice Charges
Warrior asserted several grounds of malpractice against its patent attorneys, Dickinson Wright P.L.L.C.:
- The alleged "mischaracterization of the structure of a prior art lacrosse stick" during prosecution that formed the basis of STX’s inequitable conduct charge.
- Failure to pay the patent’s maintenance fee.
- Alleged failure to promptly pursue reinstatement of the patent and alleged failure to communicate with Warrior about the reinstatement.
The District Court Proceedings
Warrior initially sued Dickinson for malpractice in Michigan state court. After Dickinson filed a motion challenging the state court’s subject matter jurisdiction, the parties stipulated to dismissal and refiling in federal court.
The federal district court asked the parties to submit briefs on its jurisdiction. Both parties argued that 28 U.S.C. § 1338 gave the district court exclusive jurisdiction, but the court disagreed and dismissed the case for lack of subject matter jurisdiction. As summarized by the Federal Circuit:
The court characterized the patent-related issues as tangential; in the court’s view, the alleged acts of malpractice could all be analyzed without reference to patent law.
Dickinson appealed the dismissal to the Federal Circuit.
The Federal Circuit Opinion – Statements of Law
The Federal Circuit first explained that it had jurisdiction to hear Warrior’s appeal under 28 U.S.C. § 1295(a)(1), which gives the court jurisdiction over a district court proceeding “if the jurisdiction of that court was based, in whole or in part, on section 1338.”
The Federal Circuit noted that the district court’s determination that it lacked jurisdiction under 28 U.S.C. § 1338 did not deprive it of jurisdiction. The court cited its 1983 decision in C.R. Bard, Inc. v. Schwartz, where it stated:
[I]n order to determine the scope of our own jurisdiction we must decide whether the jurisdiction of a district court whose decision is before us is based on § 1338.
Turning to the issue of the district court’s jurisdiction, the Federal Circuit referred to the 1988 Supreme Court decision in Christianson v. Colt Industries Operating Corp., where the Supreme Court identified two categories of cases that fall under § 1338:
- Cases in which patent law creates the cause of action.
- Cases in which “the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.”
The Federal Circuit also cited its 2007 decision in Air Measurement Techs., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., where it held:
[F]ederal courts have exclusive jurisdiction over state-law legal malpractice actions when the adjudication of the malpractice claim requires the court to address the merits of the plaintiff’s underlying patent infringement lawsuit.
The Federal Circuit Opinion – Assessing Warrior’s Malpractice Case
Having determined that it had jurisdiction to determine whether the district court had jurisdiction, the Federal Circuit considered whether patent law was a “necessary element” of Warrior’s right to relief under Michigan malpractice law.
In a nutshell, Warrior’s case was based on its allegation that:
Were it not for Defendants’ malpractice (i.e., allowing the ’216 Patent to lapse, engaging in acts that gave rise to the allegations of inequitable conduct, conflict of interest, and failure to communicate) Warrior would not have been forced to settle the STX Litigation on unfavorable terms.
As summarized by the Federal Circuit, Warrior alleged that "but for its attorneys’ malpractice, it would have won a multi-million dollar judgment against STX." Instead, the malpractice "forced it to settle its infringement claim for $275,000.”
Under Michigan law, a malpractice claim has four elements:
- the existence of an attorney-client relationship;
- negligence by the attorney in the legal representation of the plaintiff;
- the negligence was the proximate cause of plaintiff’s injury; and
- the fact and extent of the injury alleged.
In order to establish the third element, the plaintiff "must show that but for the attorney’s alleged malpractice, he would have been successful in the underlying suit.”
Applying these requirements to Warrior’s case, the Federal Circuit noted that in order to prevail in its malpractice case, Warrior must show that it would have prevailed on its infringement claim against STX. This, of course, presents a "substantial question of patent law" over which the federal district court has exclusive jurisdiction under § 1338.
The Federal Circuit therefore vacated the district court’s dismissal and remanded for further proceedings.
What Made This a Federal Circuit Case?
The earlier Federal Circuit decisions cited by the court seem to make it clear that the district court had jurisdiction over Warrior’s malpractice case, and even the parties agreed. So why did the district court dismiss the case?
Some commentators see this as reflecting the fact that most district courts avoid patent cases like the plague. To the extent that is true, maybe that attitude will be ameliorated by the new law establishing a "pilot program in certain United States district courts to encourage "enhancement of expertise in patent cases among district judges." Perhaps if judges are more familiar with patent law and the intricacies of patent litigation, they will be more willing to hear patent cases.
Why Did I Write About This Case?
This case caught my attention because it discusses a topic that strikes fear in the heart of lawyers–malpractice. But I knew I had to write about it when I saw that the invention relates to lacrosse gear. Lacrosse is my son’s favorite sport, and we may have to find him one of these Warrior heads to make sure that he has the best advantage when chasing ground balls.