Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-00066/USCOURTS-casd-3_09-cv-00066-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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09cv066

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JOHN MARKEY, Ph.D.,

Plaintiff,

v.

VERIMATRIX, INC.,

Defendant.

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Civil No. 09cv066 L(AJB)

ORDER GRANTING MOTION TO

REMAND [doc. #28]

Plaintiff filed his action in the Superior Court of California, County of San Diego. 

Defendant removed the action on the basis of federal question jurisdiction. Currently pending is

plaintiff’s motion to remand which has been fully briefed. The Court finds this motion suitable

for determination on the papers submitted and without oral argument pursuant to Civil Local

Rule 7.1(d)(1).

The federal court is one of limited jurisdiction. See Gould v. Mutual Life Ins. Co. of N.Y.,

790 F.2d 769, 774 (9th Cir. 1986). It possesses only that power authorized by the Constitution

or a statute. See Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986). It is

constitutionally required to raise issues related to federal subject matter jurisdiction, and may do

so sua sponte. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93-94 (1998); see Indus.

Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990). 

"Any civil action of which the district courts have original jurisdiction founded on a claim

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or right arising under the Constitution, treaties or laws of the United States shall be removable

without regard to the citizenship or residence of the parties." 28 U.S.C. § 1441(b). 

The Court has consistently interpreted jurisdictional statutes with an

"arising under" qualification . . . as "giv[ing] the lower federal courts

jurisdiction to hear, originally or by removal from a state court, only those

cases in which a well-pleaded complaint establishes either that [1] federal

law creates the cause of action or that [2] the plaintiff's right to relief

necessarily depends on resolution of a substantial question of federal law." 

Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold and Easement,

524 F.3d 1090, 1100 (9th Cir. 2008) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation

Trust, 463 U.S. 1, 27-28 (1983)); see also Empire Healthchoice Assurance, Inc. v. McVeigh, 547

U.S. 677, 690 (2006). 

Consistent with the limited jurisdiction of federal courts, the removal statute is strictly

construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992);

see also Sygenta Crop Prot. v. Henson, 537 U.S. 28, 32 (2002); O’Halloran v. University of

Wash., 856 F.2d 1375, 1380 (9th Cir. 1988). "Federal jurisdiction must be rejected if there is

any doubt as to the right of removal in the first instance." Gaus, 980 F.2d at 566. "The strong

presumption against removal jurisdiction means that the defendant always has the burden of

establishing that removal is proper." Id.; see also Nishimoto v. Federman-Bachrach & Assoc.,

903 F.2d 709, 712 n.3 (9th Cir. 1990); O’Halloran, 856 F.2d at 1380. "The traditional rule of

burden allocation in determining removal jurisdiction was meant to comport with what the

Supreme Court has termed "‘[t]he dominant note in the successive enactments of Congress

relating to diversity jurisdiction,’ that is, ‘jealous restriction, of avoiding offense to state

sensitiveness, and of relieving the federal courts of the overwhelming burden of business that

intrinsically belongs to the state courts in order to keep them free for their distinctive federal

business.’" Abrego Abrego, 443 at 685, quoting Indianapolis v. Chase Nat’l Bank, 314 U.S. 63,

76 (1941). 

Whether removal is proper is “determined solely on the basis of the pleadings filed in

state court.” Williams v. Costco Wholesale Corp., 471 F.3d 977, 976 (9th Cir. 2006). In the

present case, the complaint, on its face, asserted three state law causes of action:

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1 The Court makes no finding whether plaintiff’s second and third state law causes

of action were preempted under the Federal Copyright Act. Rather, the Court will assume for

purposes of this motion only, that the Court had original jurisdiction of the action at the time it

was removed. The Court notes, however, that plaintiff states that he dismissed the second and

third causes of action on the basis of the exclusivity provision found in California’s Uniform

Trade Secrets Act and not because the claims arose under the Federal Copyright Act. See CAL. CIV. CODE § 3426.7. 

3 09cv066

misappropriation of trade secrets, unjust enrichment, and violation of California Business and

Professions Code § 17200 for unlawful business practices. In its notice of removal, defendant

based removal on federal question jurisdiction stating that “[b]ecause plaintiff’s second and third

causes of action are preempted by the Federal Copyright Act, this Court has original jurisdiction

over plaintiff’s complaint under 28 U.S.C. § 1338(a).”1

 (Notice of Removal at 5.) After an

early neutral evaluation conference and a case management conference, the parties jointly moved

for the dismissal of plaintiff’s second and third causes of action without stating the reason for

their agreement. (Joint Motion at 2. [doc. #20]) Thus, misappropriation of trade secrets

remains the sole cause of action.

Assuming that original jurisdiction existed at the time the complaint was removed

because plaintiff’s second and third state law causes of action were preempted under the Federal

Copyright Act, the dismissal of these federal claims does not affect subject matter jurisdiction.

Williams v. Costco Wholesale Corporation, 471 F.3d 975, 977 (9th Cir. 2006). But dismissal of

all federal claims authorizes the district court to remand the pendent state law claims. Id. In

other words, the Court has discretion to continue the exercise of its jurisdiction over the state law

claim on the basis of supplemental jurisdiction, or it may remand the claim to state court. See 28

U.S.C. § 1367(c)(3). But if, as defendant argues, the “plaintiff’s trade secret misappropriation

claim is actually a claim for patent infringement,” the Court must exercise its original

jurisdiction over the federal claim that was removed. Williams, 471 F.3d at 977.

The question therefore is whether the state law misappropriation of trade secrets claim

provides a basis for federal jurisdiction. "[F]or a state law claim to provide a basis for federal

jurisdiction, the state law claim must ‘turn on substantial questions of federal law,’ and ‘really

and substantially involv[e] a dispute or controversy respecting the validity, construction or effect

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of [federal] law.’" Williston Basin Interstate Pipeline, 524 F.3d 1090, 1102 (9th Cir. 2008)

(quoting Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005)). 

The elements of a claim for misappropriation under California law consist of the

following: (a) the plaintiff invested substantial time, skill or money in developing its property;

(b) the defendant appropriated and used the plaintiff's property at little or no cost to the

defendant; (c) the defendant's appropriation and use of the plaintiff's property was without the

authorization or consent of the plaintiff; and (d) the plaintiff can establish that it has been injured

by the defendant's conduct. United States Golf Assn. v. Arroyo Software Corp., 69 Cal. App.4th

607, 618 (1999).

A patent infringement analysis involves two steps: (1) the court must “determine[ ] the

scope and meaning of the patent claims asserted”; and (2) the court must then compare “the

properly construed claims ... to the allegedly infringing device to determine whether the accused

device infringes the asserted claims.” CyborCorp. v.FASTechs., Inc., 138 F.3d 1448, 1454 (Fed.

Cir.1998) (internal citation omitted). “A patentee claiming infringement must present proof that

the accused product meets each and every . . . limitation” of the claim at issue. Forest Labs.,

Inc. v. Abbott Labs., 239 F.3d 1305, 1310 (Fed. Cir. 2001). Moreover, “[a]n accused device

cannot infringe, as a matter of law, if even a single [claim] limitation is not satisfied.” Digital

Biometrics, Inc. v. Indentix, 149 F.3d 1335, 1349 (Fed. Cir. 1998). Furthermore, literal

infringement of a claim exists if “every limitation recited in the claim is found in the accused

device, i.e. when the properly construed claim reads on the accused device exactly.” Amhil

Enters., Ltd. v. Wawa, Inc., 81 F.3d 1554, 1562 (Fed. Cir. 1996).

A careful review of plaintiff’s misappropriation of trace secret claim as found in the

complaint does not suggest a basis for federal jurisdiction. The issue presented for decision is

not whether plaintiff’s patents are valid or invalid or are or are not being infringed but whether

his intellectual property was misappropriated. Mere reference to the fact that plaintiff’s

intellectual property was patented does not turn on a substantial question of federal law. 

Plaintiff is not seeking to prove his trade secrets are protected under federal patent law and that

defendant infringed on the patent. And the Court is not called to determine in any manner the

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scope and meaning of plaintiff’s patent in order to consider the alleged trade secret

misappropriation. The misappropriation of trade secret claim does not ‘turn on substantial

questions of federal law,’ and does not ‘really and substantially involv[e] a dispute or

controversy respecting the validity, construction or effect of [federal] law.’" Williston Basin,

524 F.3d at 1102. Instead, the sole remaining claim in the complaint is based solely on

California law. As a result, the Court does not have original jurisdiction over plaintiff’s claim.

As noted above, a district court may decline to exercise supplemental jurisdiction if: (1)

the claim raises a novel or complex issue of state law; (2) the state law claim substantially

predominates over the federal claims; (3) the district court has dismissed all claims over which it

has original jurisdiction; or (4) if there is some other exceptional and compelling reason to

decline jurisdiction. 28 U.S.C. § 1367(c). In deciding whether to exercise supplemental

jurisdiction, the court considers the interests of judicial economy, convenience, fairness and

comity. City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 173 (1997); Smith v.

Lenches, 263 F.3d 972, 977 (9th Cir. 2001). Here, the claims over which the Court arguably had

original jurisdiction have been dismissed, and the only remaining claim is a state law claim.

Because only a single state law claim remains, the state law claim necessarily substantially

predominate over the federal claims. Furthermore, the interests of judicial economy and

convenience do not militate in favor of exercising supplemental jurisdiction. 

For the foregoing reasons, the Court in its discretion declines to exercise its supplemental

jurisdiction over plaintiff’s state law claim and plaintiff’s motion to remand is GRANTED. The

Clerk of the Court is directed to promptly return this action, Markey v. Verimatrix, Case No. 37-

2008-00099311-CU-IP-CTL, to the Superior Court of California, County of San Diego.

IT IS SO ORDERED. 

DATED: July 22, 2010

M. James Lorenz

United States District Court Judge

/ / /

/ / /

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COPY TO: 

HON. ANTHONY J. BATTAGLIA

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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