Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_05-cv-00601/USCOURTS-alsd-1_05-cv-00601-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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1 According to plaintiffs, the ‘048 Patent “is for the formula of a liquid compound

used to clean iron sulfide deposits from pipelines and other conduits.” (Complaint, ¶ 7.)

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

BRYAN R. GIPSON, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 05-0601-WS-C

 )

MARK A. MATTOX, )

 )

Defendant. )

ORDER

This matter comes before the Court on defendant’s Motion to Dismiss or Alternatively to

Stay (doc. 8). The Motion has been briefed and is ripe for disposition.

I. Background.

On October 17, 2005, plaintiffs Bryan R. Gipson (“Gipson”) and Chem Technologies of

Mississippi, Inc. (“ChemTech”) filed a Complaint for Declaratory Judgment and Relief Pursuant

to 35 U.S.C. § 256 (doc. 1) in this District Court. The Complaint alleges that the United States

Patent and Trademark Office wrongfully issued U.S. Patent No. 6,866,048 (the “‘048 Patent”) to

defendant Mark A. Mattox (“Mattox”) on or about March 15, 2005.1

 According to the

Complaint, Gipson developed the formula for the ‘048 Patent on his own, prior to being

employed by Mattox’s company; however, Mattox applied for and received the ‘048 Patent,

allegedly by concealing and misrepresenting material facts. (Complaint, ¶¶ 8-10.) It is further

alleged that Gipson has assigned all of his interests in the invention that is the subject of the ‘048

Patent to plaintiff ChemTech. (Id., ¶ 12.)

Based on these allegations, Gipson and ChemTech request the following relief: (a) a

declaration that Mattox improperly obtained the ‘048 Patent and is not the inventor of the

formula at issue; (b) a declaration invalidating any assignment of the ‘048 Patent by Mattox or

Case 1:05-cv-00601-WS-C Document 19 Filed 02/21/06 Page 1 of 6
2 That case is styled Southern Water Management, Inc., et al. v. Bryan Gipson, et

al., CV-2003-117. For brevity’s sake, it will be referred to herein as the “State Court Action.”

3 The removed incarnation of the State Court Action was styled Southern Water

Management, Inc., et al. v. Bryan Gipson, et al., Civil Action No. 05-0357-BH-C.

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anyone else; (c) a declaration invalidating any contracts, agreements or commitments by Mattox

concerning manufacture, use or sale of the invention; (d) an order pursuant to 35 U.S.C. § 256,

directing the U.S. Patent and Trademark Office to correct the ‘048 Patent by substituting Gipson

for Mattox as its inventor; and (e) an award of attorney’s fees.

This action is neither the first nor the only litigation among these parties concerning the

underlying invention. In January 2003, Southern Water Management, Inc. (a company

apparently owned by Mattox) filed suit in the Circuit Court of Baldwin County, Alabama against

Gipson, ChemTech and various other defendants, alleging, inter alia, that Gipson willfully and

maliciously misappropriated trade secrets belonging to Mattox’s firm, in violation of the

Alabama Trade Secret Act, Ala. Code §§ 8-27-1 et seq., and an employment agreement.2

 The

purported trade secrets are characterized in the State Court Action as “processes, formulae,

applications and inventions for the treatment and elimination of black powder / iron sulfide

deposits in both fluid and gas pipelines.” (State Court Complaint, ¶ 24.) There can be little

doubt that the invention which is the subject of the ‘048 Patent and the trade secrets at issue in

the State Court Action overlap substantially, if not completely. Southern Water Management

later amended the Complaint in the State Court Action to include a state-law conversion claim.

The State Court Action briefly visited this District Court when Gipson and ChemTech

filed a Notice of Removal in June 2005.3 As grounds for removal, Gipson and ChemTech

maintained that Southern Water Management’s state-law conversion claim was actually a

disguised claim for patent infringement under 35 U.S.C. §§ 271 et seq., and that this claim would

require resolution of substantial issues of federal patent law. On September 19, 2005, Senior

District Judge Hand remanded the State Court Action back to Baldwin County Circuit Court on

the ground that the conversion claim did not allege conversion of the chemical formula/process

that is the subject of the ‘048 Patent and therefore did not implicate federal patent law. The State

Court Action remains pending at this time.

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4 The Motion also cites Rule 12(b)(3) as a basis for dismissal. That rule sets forth a

defense of improper venue; however, nothing in Mattox’s filings suggests any impropriety with

this venue. Mattox neither argues nor suggests that this action would be more appropriately

litigated in a different federal court sitting in a different district; rather, he asserts that this action

belongs in state court, not federal court. That objection is not properly framed in venue terms. 

Venue unquestionably is proper in this judicial district, given the apparent lack of dispute that

Mattox is an individual residing in Baldwin County, Alabama, which lies within this district. 

See 28 U.S.C. § 1391(b) (stating that venue is proper in any “judicial district where any

defendant resides, if all defendants reside in the same State”).

5 That statute provides that when a patent names persons who are not inventors,

“[t]he court before which such matter is called in question may order correction of the patent on

notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.” 

35 U.S.C. § 256.

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II. Analysis.

Defendant Mattox now requests that this action be dismissed for want of subject matter

jurisdiction, pursuant to Rule 12(b)(1), Fed.R.Civ.P.4

 As grounds for his Motion, Mattox

presents the following arguments: (a) the underlying dispute concerns ownership of certain

technologies and is a state-law issue; (b) that dispute is and has been for three years the subject

of state court litigation; (c) Judge Hand previously remanded the State Court Action based on a

determination “that the parties[’] underlying dispute was a matter for the state court” (Motion, ¶

5); (d) Gipson and ChemTech have engaged in creative pleading to remedy their failure to assert

a timely compulsory counterclaim in the State Court Action; and (e) the mere presence of a

patent does not create an issue of patent law. The Court finds all of these contentions to be

lacking in merit.

Federal subject matter jurisdiction plainly exists here. On its face, the Complaint asks the

Court to declare that the ‘048 Patent was improperly obtained by Mattox, and specifically

invokes the procedure set forth in 35 U.S.C. § 256 for correcting the name of an inventor on an

issued patent.5

 These claims fall squarely within federal patent jurisdiction, which vests federal

district courts with original jurisdiction “of any civil action arising under any Act of Congress

relating to patents .... Such jurisdiction shall be exclusive of the courts of the states in patent ...

cases.” 28 U.S.C. § 1338(a). For § 1338(a) purposes, an action arises under an Act of Congress

relating to patents “where the complaint includes allegations either that federal patent law creates

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6 Mattox correctly points out that the mere presence of a patent, without more, does

not create a substantial issue of patent law triggering § 1338(a) jurisdiction. See Consolidated

World Housewares, Inc. v. Finkle, 831 F.2d 261, 265 (Fed. Cir. 1987) (“[A]s this court has

repeatedly said, the mere presence of a patent issue cannot of itself create a cause of action

arising under the patent laws.”). For the reasons identified above, however, the well-pleaded

complaint in this case does far more than identify the existence of a patent. Indeed, the focal

point of the Complaint is not whether there was a breach of a contract or a misappropriation of

trade secrets (which issues are not substantial questions of patent law), but is instead whether

this Court should order the Director of the U.S. Patent and Trademark Office to correct the ‘048

Patent to identify an inventor other than Mattox. Under any reasonable construction, that claim

presents a substantial question of federal patent law. See MCV, Inc. v. King-Seeley Thermos Co.,

870 F.2d 1568, 1570 (Fed. Cir. 1989) (“Is a suit in district court for determination of

co-inventorship and correction of a patent under 35 U.S.C. § 256 permissible, and is it an action

"arising under" the patent laws for purposes of 28 U.S.C. § 1338(a) so that we have jurisdiction

under 28 U.S.C. § 1295(a)(1)? The answer is yes.”); FFOC Co. v. Invent A.G., 882 F. Supp. 642,

650 (E.D. Mich. 1994) (concluding that federal subject-matter jurisdiction under § 1338(a) is

triggered by claim under § 256 raising joint inventorship issue among contending co-inventors).

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the cause of action or that federal patent law is a necessary element of the claim or that some

right or interest will be defeated or sustained by a particular construction of federal patent law.” 

Franchi v. Manbeck, 947 F.2d 631, 633 (2nd Cir. 1991); see also Holmes Group, Inc. v. Vornado

Air Circulation Systems, Inc., 535 U.S. 826, 830, 122 S.Ct. 1889, 153 L.Ed.2d 13 (2002) (in §

1338(a) context, a case “arises under” patent law if 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”). The well-pleaded

complaint in this case unambiguously alleges that federal patent law (specifically 35 U.S.C. §

256) creates the cause of action; therefore, federal jurisdiction is not only proper over the

Complaint, but it is also exclusive.6 Gipson and ChemTech could not have brought this claim in

the State Court Action; rather, federal district court is the only forum in which it could have been

presented.

In arguing for dismissal, Mattox does not call into question any of the foregoing

reasoning. He does not argue that § 1338(a) is inapplicable. He does not assert that the wellpleaded complaint fails to establish a substantial question of patent law. Instead, he proffers a

panoply of equitable contentions that do not militate against the existence of subject matter

jurisdiction here. First, plaintiff asserts that the “underlying dispute” concerns state law

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7 To be sure, in certain narrow, exceptional circumstances, a federal court may

properly abstain when there are parallel state court proceedings. See, e.g., Ambrosia Coal, 368

F.3d at 1328 (describing Colorado River abstention principles); Wexler, 385 F.3d at 1338

(Younger abstention). Inasmuch as Mattox’s Motion to Dismiss fails to invoke any recognized

form of abstention, the Court will not consider sua sponte the propriety of abstention under any

such principles. It is the responsibility of the movant, and not the undersigned, to identify and

explicate the legal grounds on which his Motion is based.

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questions being litigated in the State Court Action. But the centrality of state law issues in

another, related lawsuit in no way forecloses the presence of substantial questions of federal

patent law here. Likewise, the primacy and pendency of the State Court Action have no bearing

on the threshold question of whether federal subject matter jurisdiction exists here. See

Ambrosia Coal and Const. Co. v. Pages Morales, 368 F.3d 1320, 1328 (11th Cir. 2004)

(“generally, as between state and federal courts, the rule is that the pendency of an action in the

state court is no bar to proceedings concerning the same matter in the Federal court having

jurisdiction”); Wexler v. Lepore, 385 F.3d 1336, 1341 (11th Cir. 2004) (“exercise of jurisdiction

by the district court merely preserves the federal forum for federal claims raised by plaintiffs in a

federal proceeding, although a similar state action was also filed”).7

Second, although his argument on this point is unclear, Mattox apparently contends that

Judge Hand’s remand of the State Court Action precludes this Court from exercising jurisdiction

in this case. According to Mattox, Judge Hand effectively ruled that the “underlying dispute was

a matter for the state court.” (Motion, at 3.) The Court disagrees. The remand order did not

make global pronouncements as to whether the dispute belonged in some metaphysical sense in

state court. It certainly did not purport to hold that claims under 35 U.S.C. § 256 must be

litigated in state court. Instead, it merely concluded that federal jurisdiction was lacking because

Southern Water’s conversion claims did not implicate federal patent law, but instead alleged

conversion of job files, photographs and proprietary data. Mattox does not explain why Judge

Hand’s ruling that state-law conversion claims do not give rise to federal jurisdiction should

have any bearing at all on whether plaintiffs’ claims under 35 U.S.C. § 256 give rise to federal

jurisdiction. These are distinct jurisdictional questions involving different pleadings and

different asserted causes of action. Finding federal jurisdiction here would in no way contradict,

undermine or conflict with Judge Hand’s remand ruling in the related case.

Case 1:05-cv-00601-WS-C Document 19 Filed 02/21/06 Page 5 of 6
8 Defendant’s Motion requests, in the alternative, “an order staying these

proceedings pending the outcome of the Baldwin County Circuit Court action.” (Motion, at 4.) 

But the Motion contains no discussion, legal argument, or citations to authority that might

support such relief. The Court cannot and will not resort to guesswork and speculation as to the

legal basis of Mattox’s request. The conclusory request for a stay is denied.

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Third, Mattox protests that this action is an artful attempt to circumvent the deadline for

asserting Rule 13(a) compulsory counterclaims in the State Court Action. The characterization

of plaintiffs’ § 256 claims as compulsory counterclaims in the State Court Action is erroneous. 

Under § 1338(a), Gipson and ChemTech would have been barred from presenting a § 256 cause

of action in the State Court Action because such a claim is subject to exclusive federal

jurisdiction. A claim cannot be a “compulsory counterclaim” in a state court lawsuit if the state

court could not have exercised jurisdiction over such a claim. See Brannan v. Eisenstein, 804

F.2d 1041, 1044-45 (8th Cir. 1986) (recognizing that state court’s compulsory counterclaim rules

do not bar claims from being brought in federal court if such claims were subject to exclusive

federal jurisdiction, such that they could not have been brought in state court).

III. Conclusion.

For all of the foregoing reasons, the Complaint adequately pleads causes of action arising

under Acts of Congress relating to patents. As such, federal subject matter jurisdiction is

conferred by 28 U.S.C. § 1338(a). Defendant’s position that Rule 12(b)(1) relief should be

granted, notwithstanding § 1338(a), is without merit. The Motion to Dismiss is, therefore,

denied.

8

DONE and ORDERED this 21st day of February, 2006.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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