Case: 12-1401 Document: 30 Page: 1 Filed: 01/03/2013
NOTE: This order is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
JOHN L. DEROSA,
Plaintiff-Appellee,
v.
J.P. WALSH & J.L. MARMO ENTERPRISES, INC.,
Defendant-Appellant.
__________________________
2012-1401
__________________________
Appeal from the United States District Court for the
Eastern District of Virginia in case no. 10-CV-0287, Judge
Claude M. Hilton.
Before BRYSON, LINN and REYNA, Circuit Judges.
LINN, Circuit Judge.
ORDER
J.P. Walsh & J.L. Marmo Enterprises, Inc. (“Marmo”)
responds to the court’s order requiring it to show cause
why this appeal should not be transferred to the United
States Court of Appeals for the Fourth Circuit.
The November 1998 agreement at the center of this
dispute assigned John L. Derosa’s patent rights in his
router chuck invention exclusively to Marmo, and, in
exchange, Marmo agreed to manufacture and sell the
Case: 12-1401 Document: 30 Page: 2 Filed: 01/03/2013
JOHN DEROSA v. J.P. WALSH 2
router chuck from which DeRosa would receive a certain
percentage of the sales.
In March 2010, apparently unsatisfied with Marmo’s
efforts to manufacture and sell his invention, DeRosa filed
the underlying complaint in Virginia state court. The
thrust of that complaint was as follows:
[T]he failure by [Marmo] to abide by its con-
tractual and financial obligations under the
contract have denied [DeRosa] the bargained
for benefit thereof, that is steady flow of
manufacturing business and the timely
payment for the product by [Marmo] which
may be remedied only by rescission or cancel-
lation of the contract and the restoration of
ownership of the patent rights in [DeRosa’s]
intellectual property, his invention, the
DeRosa Chuck.
The action was removed to the United States District
Court for the Eastern District of Virginia and subse-
quently referred to an arbitrator. The arbitrator found
Marmo in breach of the assignment contract and awarded
damages to DeRosa but declined to rescind the contract.
The decision was ultimately confirmed by the district
court, and this appeal followed.
This court is a court of limited jurisdiction. See
28 U.S.C. § 1295. The Supreme Court has explained that
in order for this court to have appellate jurisdiction over a
patent infringement case, the case must have arisen
under the patent laws such that the plaintiff's well-
pleaded complaint must “establis[h] either that federal
patent law creates the cause of action or that the plain-
tiff's right to relief necessarily depends on resolution of a
substantial question of federal patent law....” Holmes
Group, Inc. v. Vornado Air Circulation Systems, Inc., 535
Case: 12-1401 Document: 30 Page: 3 Filed: 01/03/2013
3 JOHN DEROSA v. J.P. WALSH
U.S. 826, 830 (2002); see also 28 U.S.C. §§ 1295(a)(1) and
1338.
Causes of action based on contractual rights in a pat-
ent assignment or license agreement as a general rule do
not arise under the patent laws. See Luckett v. Delpark,
Inc., 270 U.S. 496, 502-03 (1926); New Marshall Engine
Co. v. Marshall Engine Co., 223 U.S. 473 (1912). Marmo
nonetheless argues that the appeal is properly before this
court because the complaint specifically requests a resto-
ration of ownership in patent rights.
That DeRosa’s complaint ultimately sought to restore
ownership in the invention is of no great significance.
The focus of the jurisdictional inquiry is whether the
plaintiff “set up some right, title or interest under patent
laws, or at least makes it appear that some right or
privilege will be defeated by one construction, or sus-
tained by the opposite construction of these laws.”
Christianson v. Colt Industries Operating Corp., 486 U.S.
800, 807-08 (1988).
The complaint in this case did not turn on such a
claim. The alleged harm stated was Marmo’s failure to
abide by its “contractual and financial obligations under
the contract” resulting in DeRosa not having received the
“bargained for benefit” of “a steady flow of manufacturing
business and the timely payment for the product.” Al-
though a restoration of patent ownership is sought in the
complaint, such relief is entirely premised on the claim
that Marmo’s failure to fulfill its obligations under the
contract warrants a remedy of rescission. As such, this
case does not arise under the patent laws, and we do not
have jurisdiction.
In Jim Arnold Corp. v. Hydrotech Systems, Inc., 109
F.3d 1567 (Fed. Cir. 1997), a case very similar to this one,
this court held that a plaintiff seeking rescission of a
patent assignment agreement in order to restore owner-
Case: 12-1401 Document: 30 Page: 4 Filed: 01/03/2013
JOHN DEROSA v. J.P. WALSH 4
ship rights in a patent could not meet the jurisdictional
test set forth in Christianson. As in the present case, the
plaintiff in Jim Arnold had no rights in the patent with-
out judicial intervention and was thus left only to argue
that ownership of the patents should be restored based
upon a breach of contract claim. Because a plaintiff under
such circumstances could at best only present a frivolous
allegation of ownership of the patents at issue sufficient
to confer jurisdiction under section 1338, we transferred
the case to the regional circuit. Since the same outcome is
warranted here, pursuant to 28 U.S.C. § 1631, we transfer
the case to the Fourth Circuit.
Accordingly,
IT IS ORDERED THAT:
The appeal is transferred pursuant to
28 U.S.C. § 1631 to the United States Court of Appeals for
the Fourth Circuit.
FOR THE COURT
/s/ Jan Horbaly
Jan Horbaly
Clerk
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