Opinion ID: 457170
Heading Depth: 2
Heading Rank: 2

Heading: State Causes of Action

Text: 68 The two California State causes of action contained in Cable's amended complaint will be treated together below. In one, a count for unfair competition, it is charged that Genmark, desiring not to create its own original night light design, but rather to trade upon the good will reposed by the purchasing public in the configuration and packaging of Cable's night light, deliberately copied both. In the other state count, the use of the configuration chosen by Genmark for its night light is alleged to contribute to the dilution and to constitute infringement of Cable's rights in California State trademark registration number 70905, which is apparently substantially identical in appearance to that of Cable's night light. 69 The district court granted summary judgment as to both state causes, dismissing them for essentially the same reasons. 586 F.Supp. at 1508, 223 USPQ at 293. The state counts were said to present a paradigm case in which to apply the established principles of federal preemption of state-law intellectual property protection found in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661, 140 USPQ 525, reh'g denied, 376 U.S. 973, 84 S.Ct. 1131, 12 L.Ed.2d 87 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669, 140 USPQ 528, reh'g denied, 377 U.S. 913, 84 S.Ct. 1162, 12 L.Ed.2d 183 (1964). As an alternative ground for its decision, the district court relied on its conclusion mentioned above that the functionality of Cable's product configuration was beyond dispute. That configuration was thus held not to be susceptible to protection under California law, either in the form of a registered state trademark, or as a product capable of being unfairly copied by competitors. Id. The error in the conclusion of the district court on functionality has already been addressed in relation to the Lanham Act count. Those same remarks are equally applicable to the dismissal of state causes of action. The discussion which follows will accordingly treat solely the issue of federal-state preemption.
70 The Federal Circuit is vested with exclusive jurisdiction over the appeals of final decisions in cases before federal district courts only where the jurisdiction of those courts was based in whole or in part on the patent provisions of 28 U.S.C. Sec. 1338. See 28 U.S.C. Sec. 1295(a)(1). 20 In creating this nationwide subject matter jurisdiction in the area of patent appeals, it was the intention of Congress to provide a forum that would increase doctrinal stability in the area of patent law and reduce forum shopping, which was considered to be common in patent litigation. 21 Nevertheless, section 1295(a)(1) does not limit the jurisdiction of the Federal Circuit over appeals from the district courts exclusively to the review of claims based on the patent laws. When patent claims are joined in the same case with other counts, the appeal of nonpatent counts accompanies the appeal of the patent count to this court. In such mixed cases this avoids the bifurcation of appeals between the Federal Circuit and the regional circuit to which appeals from the district court of nonpatent counts would otherwise be directed. See H.R.Rep. No. 312, 97th Cong., 1st Sess. 41 (1981), quoted and discussed in Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1435, 223 USPQ 1074, 1083-84 (Fed.Cir.1984) (in banc). 71 Congress recognized that this solution for reducing forum shopping in patent litigation and for avoiding bifurcated appeals, could through the joinder of frivolous patent causes of action, for example, create forum shopping opportunities between the Federal Circuit and the regional courts of appeals on other [nonpatent] claims. S.Rep. No. 97-275, 97th Cong., 2d Sess. 20, reprinted in 1982 U.S.Code Cong. & Ad.News 11, 30. Several appropriate responses by the circuit courts were recommended. Id. 72 In due course it became apparent that even the joinder of nonfrivolous patent counts with other nonpatent causes of action creates a potential for forum shopping in the appeal of the nonpatent causes. Recognizing that the motivation for such appeal forum shopping resides in the perceived opportunity to secure on appeal the application in the nonpatent counts of law differing from that which would otherwise be used in the regional circuit, this court sitting in banc at its own initiative declared in Atari, 747 F.2d at 1440, 223 USPQ at 1087, its intention in the review of certain nonpatent matters to apply the discernable law of the involved circuit from which the appeal originated. 22 2. Preemption 73 Notwithstanding the fact that the Supreme Court has made several pronouncements on the interrelationship of the federal patent laws to state protection of intellectual property, 23 we conclude that the proper reach of the preemptive effect of the federal patent laws in relation to the diverse assortment of trade regulation laws existing in the fifty states is not a matter over which this court has a mandate to unify the law evolved in the regional circuits. 74 This issue is not one that can come before this court in the appeal of a case that was based at the district court level solely on the patent provisions of 28 U.S.C. Sec. 1338(a). The federal-state preemption question is presented exclusively in state intellectual property causes of action. When a patent cause is joined with a state intellectual property cause of action in a single mixed case, and both causes are appealed, the issue of federal-state preemption can reach this court for review. In the absence of a patent count below, the appeal of the state action and the associated preemption issue will be resolved in the regional circuit. Thus, the correct application of the preemption priniples voiced in Sears and Compco is a responsibility which is shared between this court and the regional circuits. 75 Consequently, under the guidance of Atari, when the preemption issue is reviewed in this circuit we will apply the law that has evolved in the regional circuit in which the case containing the issue was originally tried. Adopting this course will then assure that preemption is applied uniformly in the cases of a given regional circuit, whether they are appealed there or, by including a nonfrivolous patent cause of action, reviewed here. Such a rule will reduce the incentive for forum shopping with respect to a significant threshold issue in state causes of action. 3. Disposition 76 Unfortunately, when it decided whether the state counts pled by Cable in this case were preempted by Sears and Compco, the district court did not look to the law of the Ninth Circuit for standards or methodology. This was understandable because at that time the gathering consensus of this court regarding the correct body of law under which to review certain nonpatent matters had yet to be announced in our decision in Atari. 24 Accordingly, neither the district court nor this one has had the benefit of any presentation by the parties on the issue of federal-state preemption in terms of the Ninth Circuit law which is proper to consult in this instance. 25 77 Accordingly, the grant of summary judgment as to both state actions is vacated, and these counts are remanded for reconsideration by the district court in light of the Atari mandate to use local circuit law in doing so. This is done out of fairness to the litigants who should be able in our view to address the state causes in such terms before a decision is rendered. Nevertheless, we do so without making any suggestion as to what would be a correct resolution of the federal-state preemption issue when considered under the law of the Ninth Circuit. 26