Gunn v. Minton

Justia.com Opinion Summary: In an infringement suit, the district court declared Minton’s patent invalid under the “on sale” bar since he had leased his interactive securities trading system to a brokerage more than one year before the patent application, 35 U. S. C. 102(b). Seeking reconsideration, Minton argued for the first time that the lease was part of testing and fell within the “experimental use” exception to the bar. The Federal Circuit affirmed denial of the motion, concluding that the argument was waived. Minton sued for legal malpractice in Texas state court. His former attorneys argued that Minton’s claims would have failed even if the experimental-use argument had been timely raised. The trial court agreed. Minton then claimed that the court lacked jurisdiction under 28 U. S. C. 1338(a), which provides for exclusive federal jurisdiction over any case “arising under any Act of Congress relating to patents.” The Texas Court of Appeals rejected Minton’s argument and determined that Minton failed to establish experimental use. The state’s highest court reversed. The Supreme Court reversed, holding that Section 338(a) does not deprive state courts of subject matter jurisdiction over Minton’s malpractice claim. Federal law does not create that claim, so it can arise under federal patent law only if it necessarily raises a stated federal issue, actually disputed and substantial, which may be entertained without disturbing an approved balance of federal and state judicial responsibilities. Resolution of a federal patent question is “necessary” to Minton’s case and the issue is “actually disputed,” but it does not carry the necessary significance. No matter the resolution of the hypothetical “case within a case,” the result of the prior patent litigation will not change. Nor will allowing state courts to resolve these cases undermine development of a uniform body of patent law.

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NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

GUNN et al. v. MINTON

certiorari to the supreme court of texas

No. 11–1118. Argued January 16, 2013—Decided February 20, 2013

Petitioner attorneys represented respondent Minton in a federal patent infringement suit. The District Court declared Minton’s patent invalid under the “on sale” bar since he had leased his interactive securities trading system to a securities brokerage “more than one year prior to the date of the [patent] application.” 35 U. S. C. §102(b). In a motion for reconsideration, Minton argued for the first time that the lease was part of ongoing testing, and therefore fell within the “experimental use” exception to the on-sale bar. The District Court denied the motion and the Federal Circuit affirmed, concluding that the District Court had appropriately held that argument waived. Convinced that his attorneys’ failure to timely raise the argument cost him the lawsuit and led to the invalidation of his patent, Minton brought a legal malpractice action in Texas state court. His former attorneys argued that Minton’s infringement claims would have failed even if the experimental-use argument had been timely raised, and the trial court agreed. On appeal, Minton claimed that the federal district courts had exclusive jurisdiction over claims like his under 28 U. S. C. §1338(a), which provides for exclusive federal jurisdiction over any case “arising under any Act of Congress relating to patents.” Minton argued that the state trial court had therefore lacked jurisdiction, and he should be able to start over with his malpractice suit in federal court. Applying the test of Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308 , the Texas Court of Appeals rejected Minton’s argument, proceeded to the merits, and determined that Minton had failed to establish experimental use. The Texas Supreme Court reversed, concluding that the case properly belonged in federal court because the success of Minton’s malpractice claim relied upon a question of federal patent law.

Held: Section §1338(a) does not deprive the state courts of subject matter jurisdiction over Minton’s malpractice claim. Pp. 4–13.

     (a) Congress has authorized the federal district courts to exercise original jurisdiction over “any civil action arising under any Act of Congress relating to patents,” and further decreed that “[n]o State court shall have jurisdiction over any [such] claim.” §1338(a). Because federal law did not create the cause of action asserted by Minton’s legal malpractice claim, the claim can “aris[e] under” federal patent law only if it “necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Grable, 545 U. S., at 314. Pp. 4–6.

     (b) Applying Grable’s inquiry here, it is clear that Minton’s legal malpractice claim does not arise under federal patent law. Pp. 6–12.

          (1) Resolution of a federal patent question is “necessary” to Minton’s case. To prevail on his claim, Minton must show that an experimental-use argument would have prevailed if only petitioners had timely made it in the earlier patent litigation. That hypothetical patent case within the malpractice case must be resolved to decide Minton’s malpractice claim. P. 7.

          (2) The federal issue is also “actually disputed.” Minton argues that the experimental-use exception applied, which would have saved his patent from the on-sale bar; petitioners argue that it did not. Pp. 7–8.

          (3) Minton’s argument founders, however, on Grable’s substantiality requirement. The substantiality inquiry looks to the importance of the issue to the federal system as a whole. Here, the federal issue does not carry the necessary significance. No matter how the state courts resolve the hypothetical “case within a case,” the real-world result of the prior federal patent litigation will not change. Nor will allowing state courts to resolve these cases undermine “the development of a uniform body of [patent] law.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141 . The federal courts have exclusive jurisdiction over actual patent cases, and in resolving the nonhypothetical patent questions those cases present they are of course not bound by state precedents. Minton suggests that state courts’ answers to hypothetical patent questions can sometimes have real-world effect on other patents through issue preclusion, but even assuming that is true, such “fact-bound and situation-specific” effects are not sufficient to establish arising under jurisdiction, Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U. S. 677 . Finally, the federal courts’ greater familiarity with patent law is not enough, by itself, to trigger the federal courts’ exclusive patent jurisdiction. Pp. 8–12.

          (4) It follows from the foregoing that Minton does not meet Grable’s fourth requirement, which is concerned with the appropriate federal-state balance. There is no reason to suppose that Congress meant to bar from state courts state legal malpractice claims simply because they require resolution of a hypothetical patent issue. P. 12.

355 S. W. 3d 634, reversed and remanded.

     Roberts, C. J., delivered the opinion for a unanimous Court.



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