United States Court of Appeals for the Federal Circuit
2007-1035
AIR MEASUREMENT TECHNOLOGIES, INC., NORTH-SOUTH CORPORATION,
and LOUIS HERBERT STUMBERG,
Plaintiffs-Appellees,
v.
AKIN GUMP STRAUSS HAUER & FELD, L.L.P.,
BRANSCOMB, P.C, (also known as Mathews & Branscomb, P.C.),
Defendants-Appellants.
Paul V. Storm, Storm LLP, of Dallas, Texas, argued for plaintiffs-appellees. With
him on the brief were Robin L. Barnes and Chris J. Kling. Of counsel was John W.
MacPete. Of counsel on the brief were Harrie Samaras, RatnerPrestia P.C., of Valley
Forge, Pennsylvania; Bernard Wm. Fischman, The Ariel House, of San Antonio, Texas;
and Richard Tinsman, Tinsman & Sciano, Inc., of San Antonio, Texas.
E. Joshua Rosenkranz, Heller Ehrman LLP, of New York, New York, argued for
defendants-appellants. With him on the brief was Randy J. Kozel.
Appealed from: United States District Court for the Western District of Texas
Judge W. Royal Furgeson
United States Court of Appeals for the Federal Circuit
2007-1035
AIR MEASUREMENT TECHNOLOGIES, INC., NORTH-SOUTH CORPORATION,
and LOUIS HERBERT STUMBERG,
Plaintiffs-Appellees,
v.
AKIN GUMP STRAUSS HAUER & FELD, L.L.P.,
BRANSCOMB, P.C, (also known as Mathews & Branscomb, P.C.),
Defendants-Appellants.
__________________________
DECIDED: October 15, 2007
__________________________
Before MICHEL, Chief Judge, LOURIE and RADER, Circuit Judges.
MICHEL, Chief Judge.
This is a legal malpractice case between non-diverse parties based on alleged
errors by counsel in patent prosecution and patent litigation. The case was filed in state
court and then removed to federal court. Akin Gump Strauss Hauer & Feld, L.L.P. and
Branscomb, P.C. (collectively “Akin Gump”) appeal the interlocutory decision of the
United States District Court for the Western District of Texas denying their motion to
remand Air Measurement Technologies, Inc., North-South Corporation, and Louis
Herbert Stumberg’s (collectively “AMT’s”) lawsuit, which motion asserted want of
subject matter jurisdiction under federal patent law, 28 U.S.C. § 1338. Air Measurement
Techs., Inc. v. Akin Gump, No. SA-03-CA-0541 (W.D. Tex. Sept. 29, 2006). Because
we conclude that the patent infringement question is a necessary element of AMT’s
malpractice claim and raises a substantial, contested question of patent law that
Congress intended for resolution in federal court, we affirm.
I
AMT alleged the following facts in their complaint, which we accept as true for
purposes of this appeal. Stumberg and his partner James A. Fulton (now deceased and
not a party to the action) developed technology for a safety device for firemen and other
emergency personnel who require supplemental oxygen. Integrated into self-contained
breathing apparatuses (“SCBA”), the safety device calculates the user’s remaining
airtime, measures temperature, and computes the amount of time the user can remain
safely in a fire environment or other hazardous situation. Notice of Removal
(“Complaint”) § IV ¶ 1. The device also contains an alarm that sounds if the wearer is
motionless for a particular period of time. Id. Stumberg and Fulton formed Air
Measurement Technologies, Inc., and North-South Corporation to develop, license, and
market the safety device. In 1989, Stumberg engaged patent attorney Gary Hamilton 1
to secure patent protection for the safety device and related technology.
With Hamilton’s knowledge, Stumberg and Fulton began marketing a prototype
of their invention in 1989. Hamilton filed the first patent application on August 6, 1991,
which issued as U.S. Patent No. 5,157,378 (“’378 patent”) on October 20, 1992 and is
entitled “Integrated Firefighter Safety Monitoring Alarm System.” Hamilton also
prosecuted continuation applications that issued as U.S. Patent Nos. 5,689,234 (“’234
patent”); 5,910,771 (“’771 patent”); 6,201,475; and 6,310,552. During the course of the
1
Hamilton is licensed to practice law in the state of Texas and admitted to
practice before the United States Patent and Trademark Office.
2007-1035 2
patent prosecution, Hamilton was associated with Akin Gump and now practices law
with Hamilton & Terrile, L.L.P.
A. Prior Litigation
AMT filed six infringement suits in the Western District of Texas (“prior litigation”)
against SCBA manufacturers. 2 Hamilton allegedly belatedly filed the first patent suit in
2000, and Stumberg retained new counsel in 2002 for the pending patent litigation. All
six suits settled between 2001 and 2003 for a total of approximately $10 million without
a judicial determination of infringement, invalidity, or unenforceability of AMT’s patents.
During the course of the prior litigation, AMT, with the help of new counsel,
discovered various errors Hamilton allegedly made during patent prosecution and
patent litigation. The alleged errors are that Hamilton (1) failed to file the initial patent
application within the one year ‘on sale bar’ of 35 U.S.C. § 102(b); (2) failed to disclose
two prior patents and other facts during the prosecution of the patent applications; (3)
failed to file in a timely fashion the application that resulted in the ’771 patent, which
contains the broadest claims to the invention; (4) miscalculated the settlement damages
in the Draeger prior litigation; (5) failed to inform AMT of his mistakes despite his
fiduciary duty to do so; (6) failed to inform AMT adequately of the existence of the prior
litigant’s defenses of on sale bar and inequitable conduct; and (7) made
misrepresentations to AMT. Compl. § IV ¶¶ 5-8, 11.
2
The six suits are Air Measurement Technologies, Inc. v. Draeger Safety,
Inc., No. SA-00-CA-0427; Air Measurement Technologies, Inc. v. Mine Safety
Appliances Co., No. SA-00-CA-1562; Air Measurement Technologies, Inc. v. Interspiro,
No. SA-01-CA-0135; Air Measurement Technologies, Inc. v. Scott Techs., Inc., No. SA-
01-CA-0774; Air Measurement Technologies, Inc. v. Bacou USA, Inc., No. SA-01-CA-
0507; and Air Measurement Technologies, Inc. v. International Safety Instruments, No.
SA-02-CA-0455.
2007-1035 3
B. Current Litigation
AMT filed suit against Hamilton 3 and several law firms in a Texas state court on
May 28, 2003, for legal malpractice, negligence, negligent misrepresentation, and
breach of fiduciary duties–all state law claims. AMT alleges that Akin Gump’s errors
forced them to settle the prior litigation far below the fair market value 4 of the patents 5
because the prior litigation defendants were, inter alia, able to raise as defenses
invalidity (e.g., on sale bar) and unenforceability (due to inequitable conduct) that would
not have existed without attorney error.
Akin Gump removed the case to the Western District of Texas on June 27, 2003,
under 28 U.S.C. § 1338, arguing that the resolution of AMT’s suit requires the resolution
of a substantial question of patent law. Akin Gump counterclaimed for a declaration of
invalidity of the patents on various grounds and a declaration that the patents are not,
by reason of attorney conduct, unenforceable based on inequitable conduct or invalid
based on § 102(b).
AMT filed a motion to remand on July 18, 2003, which the district court denied on
September 5, 2003, on the ground that AMT’s suit “‘necessarily depends on resolution
of a substantial question of federal patent law,’” because, in order to prevail, AMT “must
establish that their infringement claims were otherwise valid, but that Hamilton’s
negligence afforded the patent defendants certain defenses under patent law.” Air
Measurement Techs., Inc. v. Hamilton, No. SA-03-CA-0541, 2003 U.S. Dist. LEXIS
3
Hamilton and Hamilton & Terrile, L.L.P. settled their dispute with AMT;
therefore, they are not listed as appellants in the instant appeal.
4
Sales of SCBA products allegedly covered by the patents have been $100
million per year since 1998. Compl. § IV ¶ 7.
5
The malpractice case only involves the ’378, ’234, and ’771 patents.
2007-1035 4
16391, at *13 (W.D. Tex. Sept. 5, 2003) (quoting Christianson v. Colt Indus. Operating
Corp., 486 U.S. 800, 809 (1988)).
On June 23, 2006, i.e., a little over three years after the removal of the case, the
parties changed postures. Branscomb, P.C. 6 moved to remand the case, asserting that
§ 1338 subject matter jurisdiction was lacking, and AMT opposed. The district court
denied the motion to remand on the ground that it had jurisdiction under § 1338. In so
holding, the district court determined that Grable & Sons Metal Products, Inc. v. Darue
Engineering & Manufacturing, 545 U.S. 308 (2005), did not veto its jurisdiction and
certified the following issue for interlocutory appeal pursuant to 28 U.S.C. § 1292(b):
[w]hether a Texas state-law legal malpractice claim arising out of
underlying patent prosecution and patent litigation necessarily raises a
question of federal patent law, actually disputed and substantial, that a
federal forum may entertain without disturbing any congressionally
approved balance of federal and state judicial responsibilities.
Air Measurement Techs., Inc. v. Hamilton, No. SA-03-CA-0541, slip op. at 9 (W.D. Tex.
Sept. 29, 2006). On October 13, 2006, Akin Gump petitioned for permission to appeal
under 28 U.S.C. § 1292(b). We exercised our discretion and granted the petition on
November 2, 2006. Air Measurement Techs., Inc. v. Akin Gump Strauss Hauer & Feld,
L.L.P., 206 F. App’x 980 (Fed. Cir. 2006) (non-precedential).
II
This appeal presents an issue of first impression in this court. The issue
concerns whether, under the circumstances of this case, the district court properly
exercised § 1338 jurisdiction over AMT’s legal malpractice suit. 7 We review the district
6
Akin Gump Straus Hauer & Feld, L.L.P. later joined the remand motion.
7
Although AMT filed claims for legal malpractice, negligence, negligent
misrepresentation, and breach of fiduciary duties, the focus of the district court’s ruling,
2007-1035 5
court’s jurisdictional determinations without deference. Bd. of Regents v. Nippon Tel. &
Tel. Corp., 414 F.3d 1358, 1362 (Fed. Cir. 2005). Where, as here, there is no diversity
of citizenship, there must be federal question jurisdiction. See generally 28 U.S.C.
§§ 1331, 1332, 1338 (providing district courts with subject matter jurisdiction over
diversity and federal question cases). AMT asserts that jurisdiction is proper under
§ 1338, which provides district courts with exclusive federal jurisdiction over “any civil
action arising under any Act of Congress relating to patents.” 28 U.S.C. § 1338(a) (“The
district courts shall have original jurisdiction of any civil action arising under any Act of
Congress relating to patents, plant variety protection, copyrights and trademarks. Such
jurisdiction shall be exclusive of the courts of the states in patent, plant variety
protection and copyright cases.”).
In Christianson, the United States Supreme Court set forth a two-part test for
determining whether federal courts have exclusive jurisdiction over a case pursuant to
28 U.S.C. § 1338(a). 486 U.S. at 809. Section 1338 jurisdiction extends to any case “in
which a well-pleaded complaint establishes either that federal patent law creates the
cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal patent law, in that patent law is a necessary element of
one of the well-pleaded claims.” Id. The parties to this appeal concede that the first
part of the Christianson test is inapplicable because the malpractice cause of action
asserted by AMT in their complaint is created by state law. Therefore, our analysis
concerns whether patent law is a necessary element of AMT’s malpractice claim.
and thus of this appeal, is on AMT’s legal malpractice claim. Therefore, we do not
address whether there is § 1338 jurisdiction over AMT’s additional causes of action.
2007-1035 6
In making this determination, we are limited to an analysis of AMT’s well-pleaded
complaint. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Under the well-
pleaded complaint rule, “arising under” jurisdiction “must be determined from what
necessarily appears in the plaintiff’s statement of his own claim in the bill or declaration,
unaided by anything alleged in anticipation or avoidance of defenses which it is thought
the defendant may interpose.” Christianson, 486 U.S. at 809 (citations omitted). This
rule applies “even if both parties admit that the defense is the only question truly at
issue in the case.” Id. (citations omitted). Thus, a claim does not arise under the patent
laws if a patent issue appears only in a defense to that claim, Thompson v. Microsoft
Corp., 471 F.3d 1288, 1292 (Fed. Cir. 2006), or appears in an answer as a
counterclaim, Holmes Group, Inc. v. Vornado Air Circulation Sys., 535 U.S. 826, 831
(2002).
AMT argues that their malpractice claim requires resolution of a substantial
question of patent law. Based on our review of AMT’s removal complaint, 8 without
consideration of allegations that may be made in anticipation or avoidance of Akin
Gump’s defenses and without contemplation of Akin Gump’s counterclaims, we agree.
A review of the complaint reveals that approximately seven allegations of error in the
context of patent prosecution or patent litigation, see supra § I.A., are the bases of
8
AMT has filed numerous amended complaints in district court. However,
the complaint in question is the complaint at the time of removal. See Bd. of Regents,
414 F.3d at 1360 n.* (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)). But see
Holmes, 535 U.S. at 829 n.1(“[T]his case does not call upon us to decide whether the
Federal Circuit’s jurisdiction is fixed with reference to the complaint as initially filed or
whether an actual or constructive amendment to the complaint raising a patent-law
claim can provide the foundation for the Federal Circuit’s jurisdiction.”). We note that
there are no substantial differences between the seven alleged errors in the removal
complaint and the amended complaints.
2007-1035 7
AMT’s legal malpractice claim. See Compl. § V ¶ 1 (“Defendant’s acts and omissions
as pleaded above, jointly and severally, constitute legal malpractice and professional
negligence, and negligent misrepresentations, each of which acts or omissions was the
proximate cause of Plaintiffs’ loss of recovery on their claims asserted in the Patent
Litigation.”). AMT alleges that these errors forced them to settle prior litigation “for sums
demonstrably and significantly less than their fair value.” Id. § IV ¶ 12.
Under Texas state law, the elements of a malpractice claim are (1) an attorney
owed plaintiff a duty stemming from the attorney-client relationship, (2) the attorney
breached that duty, (3) the breach proximately caused plaintiff’s injuries, and (4)
damages. Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995) (internal citation
omitted). Because AMT’s malpractice claim stems in part from unsuccessful prior
litigation, AMT must establish that they would have prevailed in the prior litigation but for
Akin Gump’s negligence that compromised the litigation. This is called the “case within
a case” requirement of the proximate cause element of malpractice. See Ballesteros v.
Jones, 985 S.W.2d 485, 489 (Tex. App. 1998).
In order to prevail on a legal malpractice claim which arises from prior
litigation, the plaintiff has the burden to show that ‘but for’ the attorney’s
negligence, he or she would be entitled to judgment, and show what
amount would have been collectible had he or she recovered the
judgment. This is commonly referred to as the ‘suit within a suit’
requirement.
Because the plaintiff must establish that the underlying suit would have
been won ‘but for’ the attorney’s breach of duty, this ‘suit within a suit’
requirement is necessarily a component of the plaintiff's burden on cause
in fact.
Id. (internal citations omitted). Because the underlying suit here is a patent
infringement action against SCBA defendants, the district court will have to adjudicate,
hypothetically, the merits of the infringement claim. Because proof of patent
2007-1035 8
infringement is necessary to show AMT would have prevailed in the prior litigation,
patent infringement is a “necessary element” of AMT’s malpractice claim and therefore
apparently presents a substantial question of patent law conferring § 1338 jurisdiction.
See Christianson, 486 U.S. at 809.
Indeed, we would consider it illogical for the Western District of Texas to have
jurisdiction under § 1338 to hear the underlying infringement suit and for us then to
determine that the same court does not have jurisdiction under § 1338 to hear the same
substantial patent question in the “case within a case” context of a state malpractice
claim. See Grable, 545 U.S. at 312.
The [arising under] doctrine captures the commonsense notion that a
federal court ought to be able to hear claims recognized under state law
that nonetheless turn on substantial questions of federal law, and thus
justify resort to the experience, solicitude, and hope of uniformity that a
federal forum offers on federal issues.
Id. (citation omitted). There is simply no good reason to deny federal jurisdiction in this
case.
Our decision today follows our precedent. Post-Christianson, we have held that
patent infringement presents a substantial question of federal patent law conferring
“arising under” jurisdiction. For example, in Additive Controls & Measurement Systems,
Inc. v. Flowdata, Inc., 986 F.2d 476, 477 (Fed. Cir. 1993), the plaintiff filed a business
disparagement claim in Texas state court alleging that the defendant had warned
plaintiff’s customers that plaintiff’s product infringed defendant’s patent. The defendant
removed the case to federal court under § 1338. Id. We held that the state law
business disparagement claim arises under the patent laws because plaintiff would
have to prove the falsity of the statement that its products infringe defendant’s patent by
2007-1035 9
proving non-infringement. Id. at 478 (“Thus, [plaintiff’s] right to relief necessarily
depends upon resolution of a substantial question of patent law, in that proof relating to
patent infringement is a necessary element of [plaintiff’s] business disparagement
claim.”); accord Scherbatskoy v. Halliburton Co., 125 F.3d 288, 291 (5th Cir. 1997)
(finding § 1338 jurisdiction and transferring case to this court where proof of breach of
contract claim requires proof of infringement). We see no logical basis for treating a
state law business disparagement tort requiring proof of patent non-infringement any
differently from the present state law malpractice tort requiring proof of patent
infringement.
III
In addition to proving patent infringement in the “case within a case” context,
AMT will have to show that it would have prevailed against the defenses the prior
litigants raised. These are not the sort of jurisdiction-defeating defenses contemplated
by Christianson, 486 U.S. at 809, for they are part of the malpractice causation element
rather than the defenses raised by Akin Gump in the current litigation. The defenses of
the SCBA litigants fall into two categories: those that stem from the alleged attorney
errors (i.e., malpractice-related defenses, such as the defenses of inequitable conduct
and on sale bar) and those that are independent of these errors (i.e., non-malpractice-
related defenses). 9
There is a dispute regarding which of these defenses, if any, AMT will have to
prove had merit (e.g., malpractice-related defenses) or defeat as defenses lacking merit
(e.g., non-malpractice-related defenses). For example, Akin Gump asserts that AMT’s
9
The Draeger defendants, however, did not raise malpractice-related
defenses.
2007-1035 10
position is that it does not have to prove that the malpractice-related defenses were
valid defenses but only has to show that these defenses were available or plausible in
view of the alleged errors. Therefore, per Akin Gump, the district court does not have to
resolve a substantial question of patent law. AMT disagrees.
To the extent that AMT has to prove or overcome invalidity, invalidity may be a
substantial question of patent law. See Hunter Douglas, Inc. v. Harmonic Design, Inc.,
153 F.3d 1318, 1329 (Fed. Cir. 1998) (holding that a state law claim of injurious
falsehood presented a substantial question of patent law where plaintiff had to show the
invalidity of the patent), overruled in part on other grounds by Midwest Indus., Inc. v.
Karavan Trailers, Inc., 175 F.3d 1356, 1358-59 (Fed. Cir. 1999) (en banc in relevant
part). Regardless of the defenses AMT would have to address, if any, AMT would
certainly have to prove patent infringement; that alone confers § 1338 jurisdiction.
Because we consider the patent infringement issue alone to be a sufficient jurisdictional
basis for the case, we do not reach whether, under Texas law, AMT would have to
prove certain defenses were valid or merely available.
IV
Akin Gump contends that the “impaired settlement value” theory (i.e., the
allegation that attorney error compromised the value of AMT’s patents) is a novel theory
of malpractice that does not require the resolution of a substantial question of patent
law. 10 If there is a theory upon which AMT can prevail on their malpractice claim that
does not involve a substantial patent law question, then patent law is not essential to
10
Notably, Akin Gump does not argue that any of the approximately seven
alleged attorney errors constitutes alternative theories of malpractice liability.
Therefore, we focus solely on Akin Gump’s impaired settlement value theory argument.
2007-1035 11
the malpractice claim, and § 1338 jurisdiction is lacking. See Christianson, 486 U.S. at
810 (“[A] claim supported by alternative theories in the complaint may not form the basis
for § 1338(a) jurisdiction unless patent law is essential to each of those theories.”).
The impaired settlement value theory calculates the difference between the
actual settlement amount and the predicted settlement amount absent malpractice. We
view the impaired settlement value theory as a theory of damages, not a theory of
liability for malpractice. 11 In addition to computation of damages, AMT must still prove it
would have been successful in the underlying litigation but for the alleged errors, which
will require proof of patent infringement. Thus, the impaired settlement value theory
does not obviate the “case within a case” element of AMT’s claim.
V
Akin Gump argues that Grable and Empire HealthChoice Assurance, Inc. v.
McVeigh, 126 S. Ct. 2121 (2006), Supreme Court cases that address § 1331 jurisdiction
over state law claims, preclude the district court’s jurisdiction over AMT’s suit. That
these cases do not address § 1338 jurisdiction is of no moment because in
Christianson, the Supreme Court grafted § 1331 precedent onto its § 1338 analysis and
held that the phrase “arising under” has the same meaning in § 1338 as it does in
§ 1331, the general federal-question provision. Christianson, 486 U.S. at 808-09.
Akin Gump further asserts that Grable adds a new dimension to the Christianson
test based on the congressionally-approved balance between federal and state
jurisdiction. However, the concern about federalism in Grable is not new, nor does
Grable change § 1338 caselaw. See Id. at 809 n.2 (“‘Determinations about federal
11
Although we consider the issue to be one of damages, we do not address
whether such a theory is viable under Texas state law, as that issue is not before us.
2007-1035 12
jurisdiction require sensitive judgments about congressional intent, judicial power, and
the federal system’” (quoting Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 810
(1986))). Nonetheless, we reject Akin Gump’s argument that Grable and Empire
preclude the district court’s § 1338 jurisdiction in this case.
Grable involved a state law action to quiet title between a taxpayer-former owner
of a property and a purchaser at a tax sale. 545 U.S. at 310. After providing notice by
certified mail, the Internal Revenue Service seized Grable’s property to satisfy its tax
delinquency and sold it to Darue. Id. at 310-11. Five years later, Grable brought a state
law quiet title action against Darue in state court, alleging Darue’s title was defective
because the IRS had not complied with the notice requirements of 26 U.S.C. § 6335.
Id. at 311. Darue removed the case to federal district court because the state law claim
depended on an interpretation of § 6335. Id.
Retreating from the view that a state law claim conveys federal question
jurisdiction if it appears from the complaint that the right to relief requires construction or
application of federal law, see Smith v. Kan. City Title & Trust Co., 255 U.S. 180, 199
(1921), the Supreme Court restricted “arising under” jurisdiction to those cases where
there is a contested, substantial federal issue, “indicating a serious federal interest in
claiming the advantages thought to be inherent in a federal forum.” Grable, 545 U.S. at
312-13. In addition, the contested, substantial federal issue will qualify for federal
jurisdiction “only if federal jurisdiction is consistent with congressional judgment about
the sound division of labor between state and federal courts governing the application of
§ 1331.” Id. at 313-14 (emphasis added). Thus, the Grable test for “arising under”
jurisdiction involves determining whether “a state-law claim necessarily raise[s] a stated
2007-1035 13
federal issue, actually disputed and substantial, which a federal forum may entertain
without disturbing any congressionally approved balance of federal and state judicial
responsibilities.” Id. at 314.
Applying this test, the Supreme Court held that the construction of the notice
statute in the context of the quiet title action belonged in federal court. Id. In so holding,
the Court observed that the notice requirement was an essential element of the state
claim, the meaning of the notice statute was the only legal or factual issue disputed in
the case, the Government had a strong interest in the collection of delinquent taxes and
“in the availability of a federal forum to vindicate its own administrative action,” buyers
and tax delinquents may consider it valuable to have the experience of federal judges
used to handling tax matters, and there would only be a “microscopic effect on the
federal-state division of labor.” Id. at 315.
Grable did not hold that only state law claims that involve constructions of federal
statute or pure questions of law belonged in federal court. Instead, the holding was
based on the substantiality and federalism factors, such as the Government as a party,
the experience of federal judges in handling tax matters, and the microscopic effect of
the case, which tipped the federalism balance in favor of federal question jurisdiction.
Here, the patent infringement aspect of the malpractice claim counsels in favor of
federal jurisdiction.
For example, patent infringement is disputed, for there is no concession by Akin
Gump that the prior SCBA litigants infringed AMT’s patents, and the issue is substantial,
for it is a necessary element of the malpractice case. Patent infringement also survives
the federalism analysis of Grable. There is a strong federal interest in the adjudication
2007-1035 14
of patent infringement claims in federal court because patents are issued by a federal
agency. The litigants will also benefit from federal judges who have experience in claim
construction and infringement matters. See Grable, 545 U.S. at 315; see also Lacks
Indus., Inc. v. McKechnie Vehicle Components USA, Inc., 322 F.3d 1335, 1341 (Fed.
Cir. 2003) (stating that patent infringement involves a two-step process where the court
first determines the scope and meaning of the asserted claims and then compares the
construed claims to the accused product). Under these circumstances, patent
infringement justifies “resort to the experience, solicitude, and hope of uniformity that a
federal forum offers on federal issues.” Grable, 545 U.S. at 312. In § 1338, Congress
considered the federal-state division of labor and struck a balance in favor of this court’s
entertaining patent infringement. For us to conclude otherwise would undermine
Congress’s expectations.
Similarly, Empire, which addresses the proper forum for state law reimbursement
claims, does not undermine our decision in this case. In Empire, after a plan
beneficiary’s estate settled a state court tort action, an insurance carrier filed a claim in
federal court under § 1331 seeking reimbursement of the amount it had paid for the
beneficiary’s medical care from the recovery of proceeds in the state court litigation.
126 S. Ct. at 2127. The insurance carrier argued that § 1331 jurisdiction was proper
because the claim sought “to vindicate a contractual right contemplated by federal
statute” and because “federal law is a necessary element of [its] claim.” Id. at 2131.
However, the federal law providing for the health insurance plan did not address
reimbursement rights of insurance carriers. Id. at 2127-28. Instead, reimbursement
rights were covered by contracts. Id. Rejecting Empire’s arguments and applying
2007-1035 15
Grable, the Supreme Court held that because the claim involved no right created by
federal statute and the practical issue is the share of the settlement that belonged to
Empire, federal question jurisdiction did not exist. Id. at 2135-37. “[I]t is hardly apparent
why a proper ‘federal-state balance’ would place such a nonstatutory issue under the
complete governance of federal law, to be declared in a federal forum.” Id. at 2137.
Therefore, Empire, unlike the present malpractice case, failed the substantiality and
federalism aspects of the Grable test. See Grable, 545 U.S. at 313 (observing that a
substantial question indicates a “serious federal interest in claiming the advantages
thought to be inherent in a federal forum”).
VI
For all the foregoing reasons, we hold that at least where, as here, establishing
patent infringement is a necessary element of a malpractice claim stemming from
alleged mishandling of patent prosecution and earlier patent litigation, the issue is
substantial and contested, and federal resolution of the issue was intended by
Congress, there is “arising under” jurisdiction under § 1338. Accordingly, the decision
of the district court is
AFFIRMED.
2007-1035 16