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SUPREME COURT OF THE UNITED STATES
JERRY W. GUNN, et al., PETITIONERS
VERNON F. MINTON
on writ of certiorari to the supreme court of
[February 20, 2013]
Chief Justice Roberts delivered the opinion of
Federal courts have exclusive jurisdiction over
cases “arising under any Act of Congress relating to
patents.” 28 U. S. C. §1338(a). The question
presented is whether a state law claim alleging legal malpractice
in the handling of a patent case must be brought in federal
In the early 1990s, respondent Vernon Minton
developed a computer program and telecommunications network
designed to facilitate securities trading. In March 1995, he leased
the system—known as the Texas Computer Exchange Network, or
TEXCEN—to R. M. Stark & Co., a securities brokerage.
A little over a year later, he applied for a patent for an
interactive securities trading system that was based substantially
on TEXCEN. The U. S. Patent and Trademark Office issued the
patent in January 2000.
Patent in hand, Minton filed a patent
infringement suit in Federal District Court against the National
Association of Securities Dealers, Inc. (NASD) and the NASDAQ Stock
Market, Inc. He was represented by Jerry Gunn and the other
petitioners. NASD and NASDAQ moved for summary judgment on the
ground that Minton’s patent was invalid under the “on
sale” bar, 35 U. S. C. §102(b). That provision
specifies that an inventor is not entitled to a patent if
“the invention was . . . on sale in [the United
States], more than one year prior to the date of the
application,” and Minton had leased TEXCEN to Stark more than
one year prior to filing his patent application. Rejecting
Minton’s argument that there were differences between TEXCEN
and the patented system that precluded application of the on-sale
bar, the District Court granted the summary judgment motion and
declared Minton’s patent invalid. Minton
. of Securities Dealers, Inc.
226 F. Supp. 2d 845
, 873, 883–884 (ED Tex. 2002).
Minton then filed a motion for reconsideration
in the District Court, arguing for the first time that the lease
agreement with Stark was part of ongoing testing of TEXCEN and
therefore fell within the “experimental use” exception
to the on-sale bar. See generally Pfaff
, 525 U.S.
, 64 (1998) (describing the exception). The District Court
denied the motion. Minton
v. National Assn
Securities Dealers, Inc.
, No. 9:00–cv–00019 (ED
Tex., July 15, 2002).
Minton appealed to the U. S. Court of
Appeals for the Federal Circuit. That court affirmed, concluding
that the District Court had appropriately held Minton’s
experimental-use argument waived. See Minton
. of Securities Dealers, Inc.
336 F.3d 1373
, 1379–1380 (CA Fed. 2003).
Minton, convinced that his attorneys’
failure to raise the experimental-use argument earlier had cost him
the lawsuit and led to invalidation of his patent, brought this
malpractice action in Texas state court. His former lawyers
defended on the ground that the lease to Stark was not, in fact,
for an experimental use, and that therefore Minton’s patent
infringement claims would have failed even if the experimental-use
argument had been timely raised. The trial court agreed, holding
that Minton had put forward “less than a scintilla of
proof” that the lease had been for an experimental purpose.
App. 213. It accordingly granted summary judgment to Gunn and the
other lawyer defendants.
On appeal, Minton raised a new argument: Because
his legal malpractice claim was based on an alleged error in a
patent case, it “aris[es] under” federal patent law for
purposes of 28 U. S. C. §1338(a). And because, under
§1338(a), “[n]o State court shall have jurisdiction over
any claim for relief arising under any Act of Congress relating to
patents,” the Texas court—where Minton had originally
brought his malpractice claim—lacked subject matter
jurisdiction to decide the case. Accordingly, Minton argued, the
trial court’s order should be vacated and the case dismissed,
leaving Minton free to start over in the Federal District
A divided panel of the Court of Appeals of Texas
rejected Minton’s argument. Applying the test we articulated
in Grable & Sons Metal Products, Inc.
Engineering & Mfg.
, 545 U.S.
, 314 (2005), it held that the federal interests implicated
by Minton’s state law claim were not sufficiently substantial
to trigger §1338 “arising under” jurisdiction. It
also held that finding exclusive federal jurisdiction over state
legal malpractice actions would, contrary to Grable
commands, disturb the balance of federal and state judicial
responsibilities. Proceeding to the merits of Minton’s
malpractice claim, the Court of Appeals affirmed the trial
court’s determination that Minton had failed to establish
experimental use and that arguments on that ground therefore would
not have saved his infringement suit.
The Supreme Court of Texas reversed, relying
heavily on a pair of cases from the U. S. Court of Appeals for
the Federal Circuit. 355 S.W.3d 634, 641–642 (2011)
(discussing Air Measurement Technologies, Inc.
Gump Strauss Hauer & Feld, L. L. P.
, 504 F.3d
1262 (2007); Immunocept, LLC
v. Fulbright & Jaworski,
, 504 F.3d 1281 (2007)). The Court concluded that
Minton’s claim involved “a substantial federal
issue” within the meaning of Grable
success of Minton’s malpractice claim is reliant upon the
viability of the experimental use exception as a defense to the
on-sale bar.” 355 S. W. 3d, at 644. Adjudication of
Minton’s claim in federal court was consistent with the
appropriate balance between federal and state judicial
responsibilities, it held, because “the federal government
and patent litigants have an interest in the uniform application of
patent law by courts well-versed in that subject matter.”
at 646 (citing Immunocept
1285–1286; Air Measurement Technologies
Justice Guzman, joined by Justices Medina and
Willett, dissented. The dissenting justices would have held that
the federal issue was neither substantial nor disputed, and that
maintaining the proper balance of responsibility between state and
federal courts precluded relegating state legal malpractice claims
to federal court.
We granted certiorari. 568 U. S. ___
“Federal courts are courts of limited
jurisdiction,” possessing “only that power authorized
by Constitution and statute.” Kokkonen
Life Ins. Co. of America
, 511 U.S.
, 377 (1994). There is no dispute that the Constitution
permits Congress to extend federal court jurisdiction to a case
such as this one, see Osborn
v. Bank of United
, 9 Wheat. 738, 823–824 (1824); the question is
whether Congress has done so, see Powell
, 395 U.S.
, 515–516 (1969).
As relevant here, Congress has authorized the
federal district courts to exercise original jurisdiction in
“all civil actions arising under the Constitution, laws, or
treaties of the United States,” 28 U. S. C.
§1331, and, more particularly, over “any civil action
arising under any Act of Congress relating to patents,”
§1338(a). Adhering to the demands of “[l]inguistic
consistency,” we have interpreted the phrase “arising
under” in both sections identically, applying our §1331
and §1338(a) precedents interchangeably. See
v. Colt Industries Operating Corp.
, 808–809 (1988). For cases falling within the
patent-specific arising under jurisdiction of §1338(a),
however, Congress has not only provided for federal jurisdiction
but also eliminated state jurisdiction, decreeing that “[n]o
State court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents.”
§1338(a) (2006 ed., Supp. V). To determine whether
jurisdiction was proper in the Texas courts, therefore, we must
determine whether it would have been proper in a federal district
court—whether, that is, the case “aris[es] under any
Act of Congress relating to patents.”
For statutory purposes, a case can
“aris[e] under” federal law in two ways. Most directly,
a case arises under federal law when federal law creates the cause
of action asserted. See American Well Works Co.
& Bowler Co.
, 241 U.S.
, 260 (1916) (“A suit arises under the law that
creates the cause of action”). As a rule of inclusion, this
“creation” test admits of only extremely rare
exceptions, see, e.g., Shoshone Mining Co.
, 177 U.S.
(1900), and accounts for the vast bulk of suits that arise
under federal law, see Franchise Tax Bd. of Cal.
Construction Laborers Vacation Trust for Southern Cal.
, 9 (1983). Minton’s original patent infringement suit
against NASD and NASDAQ, for example, arose under federal law in
this manner because it was authorized by 35 U. S. C.
But even where a claim finds its origins in
state rather than federal law—as Minton’s legal
malpractice claim indisputably does—we have identified a
“special and small category” of cases in which arising
under jurisdiction still lies. Empire HealthChoice Assurance,
, 547 U.S. 677, 699 (2006). In outlining
the contours of this slim category, we do not paint on a blank
canvas. Unfortunately, the canvas looks like one that Jackson
Pollock got to first. See 13D C. Wright, A. Miller, E. Cooper,
& R. Freer, Federal Practice and Procedure §3562, pp.
175–176 (3d ed. 2008) (reviewing general confusion on
In an effort to bring some order to this unruly
doctrine several Terms ago, we condensed our prior cases into the
following inquiry: Does the “state-law claim necessarily
raise 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
, 545 U. S., at 314.
That is, federal jurisdiction over a state law claim will lie if a
federal issue is: (1) necessarily raised, (2) actually disputed,
(3) substantial, and (4) capable of resolution in federal court
without disrupting the federal-state balance approved by Congress.
Where all four of these requirements are met, we held, jurisdiction
is proper because there is a “serious federal interest in
claiming the advantages thought to be inherent in a federal
forum,” which can be vindicated without disrupting
Congress’s intended division of labor between state and
federal courts. Id.,
’s inquiry here,
it is clear that Minton’s legal malpractice claim does not
arise under federal patent law. Indeed, for the reasons we discuss,
we are comfortable concluding that state legal malpractice claims
based on underlying patent matters will rarely, if ever, arise
under federal patent law for purposes of §1338(a). Although
such cases may necessarily raise disputed questions of patent law,
those cases are by their nature unlikely to have the sort of
significance for the federal system necessary to establish
To begin, we acknowledge that resolution of a
federal patent question is “necessary” to
Minton’s case. Under Texas law, a plaintiff alleging legal
malpractice must establish four elements: (1) that the defendant
attorney owed the plaintiff a duty; (2) that the attorney breached
that duty; (3) that the breach was the proximate cause of the
plaintiff’s injury; and (4) that damages occurred. See
v. Turtur & Associates, Inc.
S.W.3d 113, 117 (Tex. 2004). In cases like this one, in which the
attorney’s alleged error came in failing to make a particular
argument, the causation element requires a “case within a
case” analysis of whether, had the argument been made, the
outcome of the earlier litigation would have been different. 355
S. W. 3d, at 639; see 4 R. Mallen & J. Smith, Legal
Malpractice §37:15, pp. 1509–1520 (2012). To prevail on
his legal malpractice claim, therefore, Minton must show that he
would have prevailed in his federal patent infringement case if
only petitioners had timely made an experimental-use argument on
his behalf. 355 S. W. 3d, at 644. That will necessarily
require application of patent law to the facts of Minton’s
The federal issue is also “actually
disputed” here—indeed, on the merits, it is the central
point of dispute. Minton argues that the experimental-use exception
properly applied to his lease to Stark, saving his patent from the
on-sale bar; petitioners argue that it did not. This is just the
sort of “ ‘dispute . . . respecting the
. . . effect of [federal] law’ ” that
envisioned. 545 U. S., at 313 (quoting
, 225 U.S.
, 569 (1912)).
Minton’s argument founders on
’s next requirement, however, for the federal
issue in this case is not substantial in the relevant sense. In
reaching the opposite conclusion, the Supreme Court of Texas
focused on the importance of the issue to the plaintiff’s
case and to the parties before it. 355 S. W. 3d, at 644
(“because the success of Minton’s malpractice claim is
reliant upon the viability of the experimental use exception as a
defense to the on-sale bar, we hold that it is a substantial
federal issue”); see also Air Measurement
, 504 F. 3d, at 1272 (“the issue is
substantial, for it is a necessary element of the malpractice
case”). As our past cases show, however, it is not enough
that the federal issue be significant to the particular parties in
the immediate suit; that will always
be true when the state
claim “necessarily raise[s]” a disputed federal issue,
separately requires. The substantiality inquiry
looks instead to the importance of the issue to
the federal system as a whole.
itself, for example, the
Internal Revenue Service had seized property from the plaintiff and
sold it to satisfy the plaintiff’s federal tax delinquency.
545 U. S., at 310–311. Five years later, the plaintiff
filed a state law quiet title action against the third party that
had purchased the property, alleging that the IRS had failed to
comply with certain federally imposed notice requirements, so that
the seizure and sale were invalid. Ibid.
In holding that the
case arose under federal law, we primarily focused not on the
interests of the litigants themselves, but rather on the broader
significance of the notice question for the Federal Government. We
emphasized the Government’s “strong interest” in
being able to recover delinquent taxes through seizure and sale of
property, which in turn “require[d] clear terms of notice to
allow buyers . . . to satisfy themselves that the Service
has touched the bases necessary for good title.” Id.,
at 315. The Government’s “direct interest in the
availability of a federal forum to vindicate its own administrative
action” made the question “an important issue of
federal law that sensibly belong[ed] in a federal court.”
A second illustration of the sort of
substantiality we require comes from Smith
v. Kansas City
Title & Trust Co.
, 255 U.S.
(1921), which Grable
described as “[t]he
classic example” of a state claim arising under federal law.
545 U. S., at 312. In Smith
, the plaintiff argued that
the defendant bank could not purchase certain bonds issued by the
Federal Government because the Government had acted
unconstitutionally in issuing them. 255 U. S., at 198. We held
that the case arose under federal law, because the “decision
depends upon the determination” of “the constitutional
validity of an act of Congress which is directly drawn in
at 201. Again, the relevant point was
not the importance of the question to the parties alone but rather
the importance more generally of a determination that the
Government “securities were issued under an unconstitutional
law, and hence of no validity.” Ibid.
; see also
Merrell Dow Pharmaceuticals Inc.
, 814, n. 12 (1986).
Here, the federal issue carries no such
significance. Because of the backward-looking nature of a legal
malpractice claim, the question is posed in a merely hypothetical
Minton’s lawyers had raised a timely
experimental-use argument, would the result in the patent
infringement proceeding have been different? No matter how the
state courts resolve that hypothetical “case within a
case,” it will not change the real-world result of the prior
federal patent litigation. Minton’s patent will remain
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
, 489 U.S.
, 162 (1989). Congress ensured such uniformity by vesting
exclusive jurisdiction over actual patent cases in the federal
district courts and exclusive appellate jurisdiction in the Federal
Circuit. See 28 U. S. C. §§1338(a), 1295(a)(1).
In resolving the nonhypothetical patent questions those cases
present, the federal courts are of course not bound by state court
case-within-a-case patent rulings. See Tafflin
, 493 U.S.
, 465 (1990). In any event, the state court
case-within-a-case inquiry asks what would have happened in the
prior federal proceeding if a particular argument had been made. In
answering that question, state courts can be expected to hew
closely to the pertinent federal precedents. It is those
precedents, after all, that would have applied had the argument
been made. Cf. ibid.
(“State courts adjudicating civil
RICO claims will . . . be guided by federal court
interpretations of the relevant federal criminal statutes, just as
federal courts sitting in diversity are guided by state court
interpretations of state law”).
As for more novel questions of patent law that
may arise for the first time in a state court “case within a
case,” they will at some point be decided by a federal court
in the context of an actual patent case, with review in the Federal
Circuit. If the question arises frequently, it will soon be
resolved within the federal system, laying to rest any contrary
state court precedent; if it does not arise frequently, it is
unlikely to implicate substantial federal interests. The present
case is “poles apart from Grable
,” in which a
state court’s resolution of the federal question “would
be controlling in numerous other cases.” Empire
HealthChoice Assurance, Inc.
, 547 U. S., at 700.
Minton also suggests that state courts’
answers to hypothetical patent questions can sometimes have
real-world effect on other patents through issue preclusion. Brief
for Respondent 33–36. Minton, for example, has filed what is
known as a “continuation patent” application related to
his original patent. See 35 U. S. C. §120; 4A D.
Chisum, Patents §13.03 (2005) (describing continuation
applications). He argues that, in evaluating this separate
application, the patent examiner could be bound by the Texas trial
court’s interpretation of the scope of Minton’s
original patent. See Brief for Respondent 35–36. It is
unclear whether this is true. The Patent and Trademark
Office’s Manual of Patent Examining Procedure provides that
res judicata is a proper ground for rejecting a patent “only
when the earlier decision was a decision of the Board of
Appeals” or certain federal reviewing courts, giving no
indication that state court decisions would have preclusive effect.
See Dept. of Commerce, Patent and Trademark Office, Manual of
Patent Examining Procedure §706.03(w), p. 700–79
(rev. 8th ed. 2012); 35 U. S. C. §§134(a), 141,
145; Reply Brief 9–10. In fact, Minton has not identified any
case finding such preclusive effect based on a state court
decision. But even assuming that a state court’s
case-within-a-case adjudication may be preclusive under some
circumstances, the result would be limited to the parties and
patents that had been before the state court. Such
“fact-bound and situation-specific” effects are not
sufficient to establish federal arising under jurisdiction.
Empire HealthChoice Assurance, Inc.
Nor can we accept the suggestion that the
federal courts’ greater familiarity with patent law means
that legal malpractice cases like this one belong in federal court.
See Air Measurement Technologies
, 504 F. 3d, at 1272
(“The litigants will also benefit from federal judges who
have experience in claim construction and infringement
matters”); 355 S. W. 3d, at 646 (“patent
litigants have an interest in the uniform application of patent law
by courts well-versed in that subject matter”). It is true
that a similar interest was among those we considered in
. 545 U. S., at 314. But the possibility that a
state court will incorrectly resolve a state claim is not, by
itself, enough to trigger the federal courts’ exclusive
patent jurisdiction, even if the potential error finds its root in
a misunderstanding of patent law.
There is no doubt that resolution of a patent
issue in the context of a state legal malpractice action can be
vitally important to the particular parties in that case. But
something more, demonstrating that the question is significant to
the federal system as a whole, is needed. That is missing here.
It follows from the foregoing that
’s fourth requirement is also not met. That
requirement is concerned with the appropriate “balance of
federal and state judicial responsibilities.” Ibid
have already explained the absence of a substantial federal issue
within the meaning of Grable
. The States, on the other hand,
have “a special responsibility for maintaining standards
among members of the licensed professions.” Ohralik
Ohio State Bar Assn.
, 436 U.S.
, 460 (1978). Their “interest . . . in
regulating lawyers is especially great since lawyers are essential
to the primary governmental function of administering justice, and
have historically been officers of the courts.”
v. Virginia State Bar
, 421 U.S.
, 792 (1975) (internal quotation marks omitted). We have no
reason to suppose that Congress—in establishing exclusive
federal jurisdiction over patent cases—meant to bar from
state courts state legal malpractice claims simply because they
require resolution of a hypothetical patent issue.
* * *
As we recognized a century ago, “[t]he
Federal courts have exclusive jurisdiction of all cases arising
under the patent laws, but not of all questions in which a patent
may be the subject-matter of the controversy.” New
Marshall Engine Co.
v. Marshall Engine Co.
, 223 U.S.
, 478 (1912). In this case, although the state courts must
answer a question of patent law to resolve Minton’s legal
malpractice claim, their answer will have no broader effects. It
will not stand as binding precedent for any future patent claim; it
will not even affect the validity of Minton’s patent.
Accordingly, there is no “serious federal interest in
claiming the advantages thought to be inherent in a federal
, at 313. Section 1338(a)
does not deprive the state courts of subject matter
The judgment of the Supreme Court of Texas is
reversed, and the case is remanded for further proceedings not
inconsistent with this opinion.
It is so ordered.