United States Court of Appeals
for the Federal Circuit
__________________________
WARRIOR SPORTS, INC.,
Plaintiff-Appellee,
v.
DICKINSON WRIGHT, P.L.L.C.,
Defendant-Appellant,
AND
JOHN A. ARTZ, P.C., DOING BUSINESS AS ARTZ &
ARTZ P.C.,
JOHN A. ARTZ, AND JOHN S. ARTZ,
Defendants.
__________________________
2010-1091
__________________________
Appeal from the United States District Court for the
Eastern District of Michigan in case No. 09-CV-12102,
Judge Gerald E. Rosen.
___________________________
Decided: January 11, 2011
___________________________
ANDREW J. KOCHANOWSKI, Sommers Schwaertz, P.C.,
of Southfield, Michigan, argued for plaintiff-appellee.
With him on the brief was DAVID M. BLACK.
WARRIOR SPORTS v. DICKINSON WRIGHT 2
MEGAN K. CAVANAGH, Garan Lucow Miller PC, of De-
troit, Michigan, argued for defendant-appellant. With her
on the brief was JOHN E. MCSORLEY.
__________________________
Before NEWMAN, BRYSON, and PROST, Circuit Judges.
BRYSON, Circuit Judge.
This case requires us once again to consider the cir-
cumstances under which a federal district court has
subject-matter jurisdiction over a claim for legal malprac-
tice arising out of a patent dispute. Warrior Sports, Inc.,
a patent owner, filed a malpractice action against the law
firm of Dickinson Wright, P.L.L.C. (“Dickinson”), in the
United States District Court for the Eastern District of
Michigan. The district court regarded Warrior’s claims as
raising only state law issues and therefore dismissed the
action for lack of subject-matter jurisdiction. We conclude
that at least one of Warrior’s malpractice claims requires
the court to resolve a substantive issue of patent law. We
therefore hold that 28 U.S.C. § 1338, which grants district
courts exclusive jurisdiction over cases arising under a
statute relating to patents, invests the district court with
subject-matter jurisdiction over the plaintiff’s claims in
this case. Accordingly, we vacate the dismissal order and
remand this case to the district court for further proceed-
ings.
I
Warrior owns a number of patents directed to lacrosse
sticks and heads. One of the patents, U.S. Patent No. RE
38,216 (the ’216 patent), is the focus of this litigation.
During the prosecution of the application as well as the
reissue proceedings and litigation asserting the ’216
patent, Warrior was represented by attorneys John S.
3 WARRIOR SPORTS v. DICKINSON WRIGHT
Artz and John A. Artz. For much of the relevant period,
the two practiced together as Artz & Artz, P.C. Artz &
Artz merged with Dickinson in June of 2007. For pur-
poses of this appeal, Dickinson is treated as the successor-
in-interest to Artz & Artz.
In January of 2004, Warrior asserted the ’216 patent
against a competitor, STX, L.L.C. STX argued that the
’216 patent was unenforceable because of inequitable
conduct. The unenforceability defense was based on
conduct that occurred during the reissue proceedings,
when John S. Artz allegedly mischaracterized the struc-
ture of a prior art lacrosse stick to the Patent and Trade-
mark Office (“PTO”). The conduct that formed the basis
for the inequitable conduct charge is one of the grounds
alleged in Warrior’s malpractice action against Dickinson.
A second ground of alleged malpractice is Warrior’s
attorneys’ failure to pay the maintenance fee for the ’216
patent when it became due in October of 2004. Artz &
Artz did not pay the fee at that time, and the patent
lapsed on October 29, 2004. STX later discovered that the
patent had lapsed. Artz & Artz then initiated proceedings
at the PTO seeking to have the patent reinstated, al-
though Warrior alleges that Artz & Artz initiated the
reinstatement proceedings without consulting Warrior.
The district court in the STX case bifurcated the liti-
gation and stayed the infringement action pending the
outcome of a bench trial on inequitable conduct, which
was held in July of 2008. Warrior and STX settled the
entire case in October of 2008, before the court issued its
ruling regarding enforceability. Accordingly, the in-
fringement action was never tried.
WARRIOR SPORTS v. DICKINSON WRIGHT 4
Following the settlement of the STX litigation, War-
rior sued Dickinson for malpractice in Michigan state
court. Dickinson filed a motion for summary judgment
challenging the state court’s subject-matter jurisdiction.
The parties stipulated to the dismissal of the case and
refiling in federal court. Warrior filed this action in the
district court in June of 2009. In its complaint, Warrior
cited a number of alleged errors by counsel, including the
conduct that led to the allegation of inequitable conduct
and the failure to pay the maintenance fee. Warrior
argued that as a result of the alleged malpractice it was
forced to settle the infringement action for less than the
true value of its claim. Shortly before the complaint was
filed in this case, the PTO accepted the late maintenance
fee and reinstated the ’216 patent.
The district court directed the parties to brief the
question whether it had jurisdiction over Warrior’s mal-
practice case. Each party filed a response stating that 28
U.S.C. § 1338 required the malpractice action to be heard
in federal court. The district court, however, disagreed
with the parties and dismissed Warrior’s lawsuit for lack
of subject-matter jurisdiction. The court characterized
the patent-related issues as tangential; in the court’s
view, the alleged acts of malpractice could all be analyzed
without reference to patent law. Dickinson then appealed
to this court.
II
We first address our jurisdiction to hear Dickinson’s
appeal. This court has jurisdiction to decide an appeal
from a final decision of a district court “if the jurisdiction
of that court was based, in whole or in part, on section
1338.” 28 U.S.C. § 1295(a)(1). Section 1338 provides that
the federal district courts have exclusive jurisdiction over
5 WARRIOR SPORTS v. DICKINSON WRIGHT
“any civil action arising under any Act of Congress relat-
ing to patents.” 28 U.S.C. § 1338(a). It is true that the
district court held that it did not have jurisdiction under
section 1338. But it does not follow, as Warrior contends,
that the district court’s decision divests this court of
appellate jurisdiction under section 1295(a)(1).
In C.R. Bard, Inc. v. Schwartz, 716 F.2d 874 (Fed. Cir.
1983), we addressed the same jurisdictional issue. In that
case, a district court held that it did not have section 1338
jurisdiction over a patent licensee’s action for a declara-
tory judgment of invalidity. When the licensee appealed
to this court, the defendant argued that the regional
circuit, not this court, was the appropriate appellate
forum to review the district court’s dismissal order. We
rejected that argument, noting that “in order to determine
the scope of our own jurisdiction we must decide whether
the jurisdiction of a district court whose decision is before
us is based on § 1338.” Id. at 877. We stated that the
contrary rule—that a lower court’s holding that it lacks
section 1338 jurisdiction places exclusive appellate juris-
diction in the regional circuits—would be “an absurd
result.” Id. For the reason given in C.R. Bard, we plainly
have jurisdiction to decide whether the district court has
subject-matter jurisdiction in this case.
III
A
In Christianson v. Colt Industries Operating Corp.,
486 U.S. 800 (1988), the Supreme Court explained that
federal jurisdiction under section 1338 extends to two
categories of patent-related cases. The first category
consists of cases in which patent law creates the cause of
action for which the plaintiff seeks relief. Id. at 809. The
WARRIOR SPORTS v. DICKINSON WRIGHT 6
second category consists of cases in which “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. at 808-09; see Clearplay, Inc. v. Abecassis,
602 F.3d 1364, 1367 (Fed. Cir. 2010). The district courts
have exclusive jurisdiction over the second category of
cases only if the plaintiff’s well-pleaded complaint estab-
lishes that the adjudication of at least one of the claims
depends on the “resolution of a substantial question of
federal patent law.” Christianson, 486 U.S. at 808-09.
Conversely, “if there is a theory of liability for each of the
asserted claims for which it is not necessary to resolve an
issue of federal patent law,” the district court lacks sec-
tion 1338 jurisdiction. Clearplay, 602 F.3d at 1367; Air
Measurement Techs., Inc. v. Akin Gump Strauss Hauer &
Feld, L.L.P., 504 F.3d 1262, 1267-68 (Fed. Cir. 2007).
In Air Measurement Technologies, we held that fed-
eral courts have exclusive jurisdiction over state-law legal
malpractice actions when the adjudication of the malprac-
tice claim requires the court to address the merits of the
plaintiff’s underlying patent infringement lawsuit. 504
F.3d at 1269. The plaintiff in Air Measurement Technolo-
gies alleged that its attorneys’ failure to file an applica-
tion within the one-year on-sale bar period and their
failure to disclose pertinent references during prosecution
forced the plaintiff to settle its action against an accused
infringer for less than the claim would otherwise have
been worth. Id. at 1266. The defendant law firm sug-
gested that the “impaired settlement value” theory did
not require the court to determine the hypothetical merits
of the underlying infringement claim from which the
malpractice claim arose, because the plaintiff’s theory was
that it would have received a more generous settlement
but for the malpractice, not that it would necessarily have
7 WARRIOR SPORTS v. DICKINSON WRIGHT
prevailed absent the malpractice. We disagreed. We
“view[ed] the impaired settlement value theory as a
theory of damages, not a theory of liability for malprac-
tice,” because “[i]n addition to computation of damages,
[the plaintiff] must still prove it would have been success-
ful in the underlying litigation but for the alleged errors.”
Id. at 1270-71. Although Air Measurement Technologies
was decided under Texas law and this case is governed by
Michigan law, the same analysis applies in this case
because, as we discuss below, Warrior’s theory is that
counsel’s malpractice forced it to accept an unfavorable
settlement of an otherwise meritorious infringement
claim. Accordingly, this case falls into the second cate-
gory of cases identified in Christianson as “arising under”
patent law. 486 U.S. at 810.
B
Because Michigan law creates Warrior’s cause of ac-
tion, we must decide whether patent law is a “necessary
element” of Warrior’s right to relief as set forth in its
complaint. Davis v. Brouse McDowell, L.P.A., 596 F.3d
1355, 1359 (Fed. Cir. 2010). Warrior asserts a single
count of legal malpractice. Warrior alleges that “[w]ere it
not for Defendants’ malpractice (i.e., allowing the ’216
Patent to lapse, engaging in acts that gave rise to the
allegations of inequitable conduct, conflict of interest, and
failure to communicate) Warrior would not have been
forced to settle the STX Litigation on unfavorable terms.”
Compl. ¶ 66. The defendants’ malpractice, according to
the complaint, “led to the conclusion that the ’216 patent
could not prevent STX in the future from selling lacrosse
head products otherwise infringed in the ’216 patent.” Id.
Warrior’s theory is that but for its attorneys’ malpractice,
it would have won a multi-million dollar judgment
WARRIOR SPORTS v. DICKINSON WRIGHT 8
against STX. The acts of malpractice, Warrior alleges,
forced it to settle its infringement claim for $275,000.
The single count in the complaint can be divided into
three claims: (1) negligence during the ’216 reissue pro-
ceedings, allowing STX to invoke an inequitable conduct
defense; (2) negligence in failing to pay the required
maintenance fee on the ’216 patent; and (3) negligence
during the reinstatement proceedings for the ’216 patent,
including failing to pursue the reinstatement on a timely
basis and failing to communicate with Warrior. See
Davis, 596 F.3d at 1360 (“[a] ‘claim’ is broadly defined as
the aggregate of operative facts giving rise to a right
enforceable by a court”) (internal citation omitted).
Under Michigan law, a malpractice plaintiff has the
burden of proving four elements as part of a prima facie
case:
(1) the existence of an attorney-client re-
lationship;
(2) negligence by the attorney in the legal
representation of the plaintiff;
(3) that the negligence was the proximate
cause of plaintiff’s injury; and
(4) the fact and extent of the injury al-
leged.
Coleman v. Gurwin, 503 N.W.2d 435, 436-37 (Mich. 1993).
This case centers around element (3), proximate cause,
and element (4), the fact and extent of the injury. Michi-
gan law requires that to prove proximate cause, “[a]
plaintiff in a legal malpractice action must show that but
for the attorney’s alleged malpractice, he would have been
successful in the underlying suit.” Coleman, 503 N.W.2d
at 437. Warrior’s theory under its first malpractice claim
is that but for the availability of the inequitable conduct
9 WARRIOR SPORTS v. DICKINSON WRIGHT
defense that was attributable to its attorneys’ conduct, it
would not have settled its meritorious infringement action
against STX, and that the availability of the inequitable
conduct defense forced Warrior to settle for much less
than the true value of the claim. As part of its prima facie
case, Warrior must prove that it suffered a compensable
loss that was proximately caused by appellant’s negli-
gence. If the accused products do not infringe the ’216
patent, then the availability of the inequitable conduct
defense did not proximately cause any harm to Warrior.
That is, to prove the proximate cause and injury elements
of its tort claim, Michigan law requires Warrior to show
that it would have prevailed on its infringement claim
against STX and would have been entitled to an award of
damages as a result. It is true, as Warrior points out,
that the district court in the STX litigation had already
construed the claims of the ’216 patent. But it had not
determined whether the accused products infringed. To
the contrary, it had denied summary judgment of in-
fringement. This case is thus akin to Air Measurement
Technologies, in which we held that when “proof of patent
infringement is necessary to show [plaintiff] would have
prevailed in the prior litigation, patent infringement is a
‘necessary element’ of [plaintiff’s] malpractice claim and
therefore apparently presents a substantial question of
patent law conferring § 1338 jurisdiction.” 504 F.3d at
1269. Because Warrior’s first claim arises under patent
law, we need not address its other claims, all of which are
properly before the district court as a matter of supple-
mental jurisdiction in light of the court’s jurisdiction over
the first claim. We therefore vacate the district court’s
dismissal order and remand for further proceedings.
VACATED and REMANDED