Brief Fact Summary.
Plaintiff brought a malpractice action against Defendant, who had represented Plaintiff in a federal patent infringement action. Plaintiff argued in his malpractice suit that his infringement claim had failed because Defendant failed to raise the “experimental use” exception available under federal patent law. On appeal, the Texas Supreme Court found that the case should have been brought in federal court because Plaintiff’s malpractice claim turned on a question of federal patent law.
Synopsis of Rule of Law.
A state court’s resolution of a hypothetical question of patent law is not substantial enough to mandate federal review.
Thus, the key to determining whether a case involving a patent or copyright falls within the federal district court's exclusive jurisdiction is to determine whether the case arises under any Act of Congress relating to patents or copyrights.View Full Point of Law
Plaintiff brought a malpractice action against Defendants, who had represented Plaintiff in a federal patent infringement action. Plaintiff argued in his malpractice suit that his infringement claim had failed because Defendant failed to raise the “experimental use” exception available under federal patent law. Defendants filed for summary judgment, arguing no-evidence due to the fact that Defendants did not know of the earlier sale in order for the experimental use exception to be relevant. The trial court granted summary judgment. Plaintiff appealed to the Second Court of Appeals for Texas. Shortly after he filed his appeal, the United States Court of Appeals for the Federal Circuit decided a case that gave jurisdiction to the federal courts in malpractice suits arising from patent litigation. Plaintiff filed a motion to dismiss his case from the Second Court of Appeals for Texas, but the court denied his motion and affirmed the decision of the trial court. The Supreme Court of Texas reversed and dismissed the case. The U.S. Supreme Court granted certiorari.
Is a state court’s resolution of a hypothetical question of patent law substantial enough to mandate federal review?
No. The court reversed, holding that 28 U.S.C. § 1338(a), which provided for exclusive federal jurisdiction over an case “arising under any Act of Congress relating to patents,” did not deprive the state courts of subject matter jurisdiction over a state law claim alleging legal malpractice in a patent case.
A state court’s resolution of a hypothetical question of patent law is not substantial enough to mandate federal review. Pursuant to 28 U.S.C. § 1338(a), federal courts have exclusive jurisdiction over cases that arise under any act of Congress relating to patents. Most cases that arise under federal law involve those where the cause of action is created by an act of Congress. However, cases that originate in state court might also arise under federal law if: (1) the case necessarily deals with a federal issue; (2) the issue is actually disputed; (3) the issue is substantial; and (4) the federal forum can hear the case without disrupting the balance between federal and state judicial responsibilities. To satisfy the substantial requirement, the issue must be substantial to the federal system as a whole and have real-world consequences.
Here, Plaintiff’s case did not satisfy the third element and the fourth element. It satisfied the first element because Plaintiff’s malpractice action necessarily dealt with a federal patent question. To prove that Defendants were liable for malpractice, Plaintiff would need to show that he would have won the case but for Defendants’ failure to raise an experimental-use argument. To determine whether Plaintiff would have won, the court would necessarily need to decide whether the experimental-use argument would have been successful. It also satisfied the second element, because the parties disagreed on whether the experimental-use exception would have allowed Plaintiff to prevail in the patent infringement suit. However, the federal issue was not substantial to the federal system as a whole because it had no real-world consequences. The state court analysis of the federal patent issue was entirely hypothetical, in that it asked how a case would have turned out in federal court. Since such analyses were purely hypothetical, they had no binding effect upon the federal courts’ development of a uniform body of patent law. If such decisions had any preclusive effect at all, it applied only to the specific parties and patents at issue in that particular case. Lastly, it did not satisfy the fourth element. Such a case would disrupt the balance between federal and state judicial responsibilities, as states had a right to maintain standards in the legal profession through malpractice cases, and there was no indication Congress intended to deprive state courts of such cases solely because a hypothetical patent case was at issue. Because the federal issue was insubstantial and such a case would disrupt a congressionally-approved balance of federal and state judicial responsibilities, the judgment was reversed and the matter was remanded.