U.S. Supreme Court To Decide Jurisdiction In Patent Malpractice Cases

U.S. Supreme Court To Decide Jurisdiction In Patent Malpractice Cases

WASHINGTON, D.C. - (Mealey's) The question of the best forum - state or federal court - for legal malpractice claims stemming from underlying patent litigation will be addressed by the U.S. Supreme Court, which granted certiorari on Oct. 5 (Jerry W. Gunn v. Vernon F. Minton, No. 11-1118, U.S. Sup.). 

(Petition for certiorari. Document #78-120716-007B. Respondent's brief. Document #78-120716-008B.

Attorney and petitioner Jerry W. Gunn persuaded the court to address whether federal courts have exclusive "arising under" jurisdiction where the sole substantive issue is the application of a patent law doctrine.

On-Sale Bar

Gunn represented respondent Vernon F. Minton in an unsuccessful patent infringement action against the National Association of Securities Dealers Inc. (NASD) and the NASDAQ Stock Market Inc. in the U.S. District Court for the Eastern District of Texas. The Federal Circuit U.S. Court of Appeals later affirmed, leading Minton to file legal malpractice claims against Gunn's firm and two others in Texas state court. Specifically, Minton argued that the attorneys failed to plead or brief the experimental use defense, an exception to the on-sale bar cited by the District Court.

The state court granted the attorneys summary judgment and rendered a take-nothing judgment on all of Minton's legal malpractice claims, leading him to appeal to the Texas Second District Court of Appeals. After the Federal Circuit decided Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P. (504 F.3d 1262 [Fed. Cir. 2007]; 2007 U.S. App. LEXIS 24098) and Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P. (504 F.3d 1281 [Fed. Cir. 2007]; 2007 U.S. App. LEXIS 24095) finding that federal courts have exclusive jurisdiction over all legal malpractice suits involving underlying patent matters, Minton moved to dismiss his appeal for lack of jurisdiction. A split appellate panel denied Minton's motion and affirmed the trial court's judgment.

Reversed, Dismissed

Minton appealed to the Texas Supreme Court, which in another split ruling reversed the Court of Appeals and found that Minton's claim was subject to exclusive federal jurisdiction. The Texas Supreme Court majority found that the federal patent issue involved in the case is "necessary, disputed, and substantial within the context of the overlying state legal malpractice lawsuit" and that the case could be decided in a federal court without upsetting the jurisdictional balance between state and federal courts. Without reaching the merits of the legal malpractice claim, the court reversed and dismissed the case, and Minton filed a legal malpractice action in the Eastern District of Texas.

The attorneys and law firms filed a petition for writ of certiorari with the U.S. Supreme Court, presenting the following questions: "Did the Federal Circuit depart from the standard this Court articulated in Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005), for 'arising under' jurisdiction of the federal courts under 28 U.S.C. § 1338, when it held that state law legal malpractice claims against trial lawyers for their handling of underlying patent matters come within the exclusive jurisdiction of the federal courts? Because the Federal Circuit has exclusive jurisdiction over appeals involving patents, are state courts and federal courts strictly following the Federal Circuit's mistaken standard, thereby magnifying its jurisdictional error and sweeping broad swaths of state law claims - which involve no actual patents and have no impact on actual patent rights - into the federal courts?"

In a respondent's brief, Minton posed a question of whether federal courts "have exclusive 'arising under' jurisdiction where the sole substantive issue is the application of a patent law doctrine which is an essential element of Minton's malpractice claim?"

The dispute was distributed for conference three times prior to the grant of certiorari.

Gunn is represented by Jane M.N. Webre and Cynthia S. Connolly of Scott, Douglas & McConnico in Austin, Texas. Thomas M. Michel and Robert E. Sicard of Griffith, Jay & Michel in Fort Worth, Texas, represent Minton. 

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