InterDigital Inc (IDCC)

[olddog967]

loophole: This is from my previous post (213035) on the subject of the Federal Circuit's jurisdiction. Apparently just because there is some patent relationship doesn't mean that they will have jurisdiction.

Supreme Court Restricts Federal Circuit Jurisdiction

July 24, 2002
New York Law Journal
by Robert C. Scheinfeld and Parker H. Bagley

In 1982, with an eye toward eliminating forum shopping and promoting uniformity throughout the country regarding the application of United States patent law, Congress created the United States Court of Appeals for the Federal Circuit, an appellate court having exclusive jurisdiction to hear all appeals arising under the United States patent laws. For twenty years, the Federal Circuit was the central forum for all patent appeals. Recently, however, the Supreme Court tightened the reins on the Federal Circuit's appellate jurisdiction, holding that the Federal Circuit may not hear appeals from cases where the patent claims were not part of the plaintiff's complaint. In Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., although the defendant had alleged patent infringement as part of a compulsory counterclaim, the Supreme Court found this insufficient to confer appellate jurisdiction on the Federal Circuit. The case was remanded to the appropriate circuit court of appeal for review.
In addition, less than a month after the Supreme Court's Holmes decision, the Federal Circuit has itself recognized this newly-imposed jurisdictional limitation. On July 2, 2002, the Federal Circuit, in Telcomm Technical Services, Inc. v. Siemens Rolm Communications, Inc., held that it did not have jurisdiction over an appeal where the plaintiff's complaint in the underlying case did not contain a claim arising under the patent laws. In light of Holmes, the Federal Circuit transferred the appeal to the Eleventh Circuit.
This article discusses the Supreme Court's reasoning behind the Holmes decision and the Federal Circuit's reaction to this decision.

The Holmes Decision
Vornado makes patented fans and heaters with a spiral grill design. In November 1999, despite a previous holding in a separate case that its spiral grill design did not warrant trade dress protection, Vornado filed a complaint against Holmes in the International Trade Commission, alleging that Holmes infringed a Vornado patent and the same trade dress that was earlier held unprotectable. Shortly thereafter, Holmes filed an action in the United States District Court for the District of Kansas, requesting a declaratory judgment that it did not infringe Vornado's trade dress. Vornado answered the complaint and also asserted a compulsory counterclaim for patent infringement.
The district court granted Holmes a declaratory judgment on the grounds that Vornado was collaterally estopped from relitigating its trade dress claims. The district court also stayed Vornado's patent counterclaim. Vornado appealed to the Federal Circuit, which heard the appeal and remanded to the district court for further determinations on the trade dress claim. The Supreme Court granted certiorari to consider whether the Federal Circuit had jurisdiction to hear Vornado's appeal.
The Supreme Court first looked to 28 U.S.C. §1295(a), the statute giving the Federal Circuit exclusive jurisdiction to hear patent appeals. Under section 1295(a), the Federal Circuit may hear appeals from a final decision of any United States district court that was based in whole or in part on 28 U.S.C. §1338. Section 1338 confers "original jurisdiction of any civil action arising under any Act of Congress relating to patents" upon the district courts. Read together, the two statutes set the boundaries of Federal Circuit jurisdiction to those cases that "arise under" the patent laws.
Because the same "arising under" language also appears in 28 U.S.C. §1331, the statute conferring general jurisdiction on federal district courts, the Supreme Court reasoned that "arising under" should be interpreted the same for both statutes. Under section 1331, whether a claim "arises under" a given statute is determined by the well pleaded complaint rule. Under the well pleaded complaint rule, a court must look to the face of the plaintiff's complaint. If the relevant claim is set forth in the complaint, then that claim is considered to "arise under" the corresponding federal law and jurisdiction is appropriate. Thus, to determine if a case "arises under" the patent laws, as required by section 1338, the plaintiff's complaint controls. If the plaintiff did not assert a claim arising under any federal patent law, no jurisdiction exists.
In Holmes, because the patent claim was not part of the plaintiff's complaint, but was instead alleged in Vornado's counterclaim, it was not sufficient under the well-pleaded complaint rule to confer jurisdiction on the Federal Circuit. The Supreme Court reasoned that the plaintiff, as the "master of his complaint," should be allowed to determine in which forum he wishes to bring his case. If defendants are able to add on patent counterclaims to remove a state case to federal court, the plaintiff would be deprived of this choice of forum. According to the Supreme Court, this would, in turn, "radically expand" the number of cases removed to federal courts, which is "contrary to the 'due regard for the rightful independence of state governments.'"
The Supreme Court also firmly rejected respondent's reliance on Congressional intent as support for including patent counterclaims in the "arising under" language. Although Vornado cited Congress's goal of creating the Federal Circuit to avoid inconsistent opinions among the various circuits (a goal that could be furthered by including patent counterclaims within the Federal Circuit's jurisdiction), the Supreme Court noted that its "task here is not to determine what would further Congress's goal …, but to determine what the statute's words must fairly be understood to mean." The Supreme Court further noted that it would be "an unprecedented feat of interpretive necromancy to say that §1338(a)'s 'arising under' language means one thing in its own right, but something quite different when referred to by §1295."

Federal Circuit Recognizes New Limitations on Its Jurisdiction
Just one month after the Supreme Court redefined the Federal Circuit's jurisdiction in Holmes, the Federal Circuit adhered to these new jurisdictional restraints in Telcomm v. Siemens.
The appeal in Telcomm came to the Federal Circuit after a jury trial before the United States District Court for the Northern District of Georgia. In the underlying action, the plaintiff, Telcomm, filed a suit against Siemens for, among other things, anti-trust violations including monopolization and attempted monopolization under the Sherman Act. Siemens filed a counterclaim alleging patent and copyright infringement by Telcomm. The district court granted Siemen's motion for summary judgment on the antitrust claims and the jury subsequently found in favor of Siemens on both the patent and copyright infringement claims as well. Telcomm appealed the summary judgment order and, among other things, challenged the jury's finding of patent and copyright infringement in Siemens' favor. Siemens cross-appealed on the District court's denial of its motion for summary judgment for "computer copying" under 17 U.S.C. §117.
Without addressing the claims raised by either party, the Federal Circuit invoked its power to determine the scope of its jurisdiction sua sponte. Citing Holmes, the Federal Circuit reasoned that because the plaintiff's complaint was devoid of any reference to a patent claim, "jurisdiction for this appeal does not lie in this circuit." Instead, the Federal Circuit transferred the appeal to the Eleventh Circuit.

Conclusion
Whether Congress's goal of uniformity in the application of our patent laws will be attained in the wake of the Supreme Court's newly imposed jurisdictional restraints on the Federal Circuit remains to be seen. A risk certainly arises that other Circuit Courts will rule inconsistently on issues of patent law or on issues which affect patents. For now, however, one thing is clear--the Federal Circuit is very aware of its jurisdictional limits.


http://www.bakerbotts.com/infocenter/publications/Detail.aspx?id=1c3a13a1-7a9c-4601-9d7c-5ea4f09a39a3


I am amazed that the CCA did not take jurisdiction of this mess.