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Gunn v. Minton

Supreme Court of the United States

January 16, 2013, Argued; February 20, 2013, Decided

No. 11-1118

Opinion

 [*253]  Chief Justice Roberts delivered the opinion of the Court.

Federal courts have exclusive jurisdiction over cases “arising under  [***77] any Act of Congress  [1667]  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 court.

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 [*254]  substantially on  [****6] 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 v. National Assn. 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  [****7] with Stark was part of ongoing testing of TEXCEN and therefore fell within the  [**1063] “experimental use” exception to the on-sale bar. See generally Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 64, 119 S. Ct. 304, 142 L. Ed. 2d 261 (1998) (describing the exception). The District Court denied the motion. Minton v. NASD, No. 9:00-cv-00019, 2002 U.S. Dist. LEXIS 26587 (ED Tex., July 15, 2002).

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568 U.S. 251 *; 133 S. Ct. 1059 **; 185 L. Ed. 2d 72 ***; 2013 U.S. LEXIS 1612 ****; 105 U.S.P.Q.2D (BNA) 1665; 81 U.S.L.W. 4085; 85 A.L.R.6th 685; 24 Fla. L. Weekly Fed. S 39

JERRY W. GUNN, et al., Petitioners v. VERNON F. MINTON

Prior History:  [****1] ON WRIT OF CERTIORARI TO THE SUPREME COURT OF TEXAS

Minton v. Gunn, 355 S.W.3d 634, 2011 Tex. LEXIS 938 (Tex., 2011)

Disposition: Reversed and remanded.

CORE TERMS

patent, malpractice, infringement, experimental-use, experimental, lease, invalid, on-sale

Patent Law, Jurisdiction & Review, Subject Matter Jurisdiction, General Overview, Civil Procedure, Jurisdiction Over Actions, Constitutional Law, The Judiciary, Jurisdiction, Governments, Courts, Authority to Adjudicate, Federal Questions, Substantial Questions, Torts, Malpractice & Professional Liability, Attorneys, State & Territorial Governments, Licenses, Legal Ethics, Exclusive Jurisdiction