Opinion ID: 791020
Heading Depth: 2
Heading Rank: 1

Heading: Jurisdiction Under Section 1338(a)

Text: 12 According to the terms of the statute, jurisdiction exists under section 1338(a) if an action arises under the federal patent laws. Therefore, jurisdiction extends only to those cases in which a 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 in that patent law is a necessary element of one of the well-pleaded claims. Christianson v. Colt, 486 U.S. 800, 809, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). As we have stated, [a] court must review and analyze the plaintiff's pleadings, with special attention directed to the relief requested by the plaintiff, in making the determination as to whether a cause of action arises under the patent laws. Air Prod. & Chem., Inc. v. Reichhold Chem., Inc., 755 F.2d 1559, 1562 (Fed.Cir.1985). 13 Here there is no question that the claims framed in the Complaint assert only causes of action created by the state law of Texas and not the federal patent laws. Accordingly, the issue becomes whether the state law claims asserted or the relief requested by Plaintiffs necessarily depends on resolution of a substantial question of federal patent law. Christianson, 486 U.S. at 809, 108 S.Ct. 2166. 14 NTT identifies only one of Plaintiffs' state law claims that it argues requires the resolution of substantial questions of patent law: the claim for tortious interference with business opportunity and prospective economic advantage. Under Texas law, the elements of tortious interference with prospective business relations are: 15 (1) a reasonable probability that the parties would have entered into a contractual relationship; (2) an independently tortious or unlawful act by the defendant that prevented the relationship from occurring; (3) the defendant did the act with a conscious desire to prevent the relationship from occurring or with knowledge that the interference was certain or substantially certain to occur as a result of his conduct; and (4) the plaintiff suffered actual harm or damage as a result of the interference. 16 Ash v. Hack Branch Distrib. Co., 54 S.W.3d 401, 414-15 (Tex.App.2001). To satisfy the second element, the plaintiff must prove that the defendant's conduct would be actionable under an independent tort, but need not prove all the elements of the independent tort. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex.2001). 17 Here Plaintiffs allege that NTT improperly took proprietary information belonging to UT and adopted it as its own thereby interfering with Plaintiffs' expectations of capitalizing on the inventions. Included in the Complaint is an exemplary list of the economic opportunities allegedly interfered with by NTT: (a) excluding others from making, using, selling, offering for sale, or importing into the United States batteries of the type disclosed in the '382 patent; (b) benefiting financially from licenses; and (c) commercializing the technology. 18 NTT claims that in order for Plaintiffs to establish that they had the requisite reasonable probability of a contractual relationship, substantial questions of U.S. patent law would need to be resolved. First, according to NTT, Plaintiffs would have to show that UT is the rightful inventor of LiFePO 4 and owner of the '382 patent and that the '382 patent is valid. Second, in order to claim that NTT's Japanese patent application interfered with Plaintiffs' business expectancies, Plaintiffs would have to show that the Japanese patent reads onto the '382 patent. Accordingly, NTT asserts that Plaintiffs' tortious interference claim raises issues related to the inventorship, validity, enforceability, and interpretation of the '382 patent. In support of its assertion, NTT points to this court's precedent wherein the issues identified were deemed to present substantial questions of patent law. Univ. of Colo. Found. v. Am. Cyanamid Co., 196 F.3d 1366, 1372 (Fed.Cir.1999) (holding that plaintiffs' claim of equitable title to a U.S. patent required determination of the rightful inventor of the patented technology, which presented a substantial question of patent law); Hunter Douglas, 153 F.3d at 1329 (holding that plaintiff raised a substantial question of patent law by alleging that defendants engaged in an injurious falsehood when the falsehood identified was that defendants held exclusive rights to the patented invention; in order to prove its claims plaintiff had to show that the subject patent was invalid); U.S. Valves, 212 F.3d at 1372 (holding that in order to succeed on its breach of contract action, the terms of the contract required that plaintiff show that certain of defendant's products infringed its patents; accordingly, patent law was a necessary element of plaintiff's breach of contract action). 19 NTT correctly asserts that this court has held that issues of inventorship, infringement, validity and enforceability present sufficiently substantial questions of federal patent law to support jurisdiction under section 1338(a). Hunter Douglas, 153 F.3d at 1330-31. NTT is incorrect, however, in asserting that such issues are raised by Plaintiffs' claim for tortious interference. This is so primarily because the patent law issues identified by NTT are not essential to the resolution of Plaintiffs' claim. Contrary to NTT's assertion, Plaintiffs would not need to prove that the '382 patent is valid in order to establish the business expectancy element of its well-pled tortious interference claim. Issued patents are presumed valid absent proof to the contrary and UT, as the patentee of the '382 patent, is entitled to the benefit of that presumption. 35 U.S.C. § 282; Speedco, Inc. v. Estes, 853 F.2d 909, 913 (Fed.Cir.1988) (determining that a plaintiff could rely on the statutory presumption of validity in establishing an element of his well-pled contract claim). Similarly, a determination of the true inventor of LiFePO 4 may give rise to future claims regarding the validity of the '382 patent, but the presence of a possible question of inventorship does not convert the state law action into one arising under the patent laws. Consol. World Housewares, Inc. v. Finkle, 831 F.2d 261, 265 (Fed.Cir.1987) (That a contract action may involve a determination of the true inventor does not convert that action into one `arising under' the patent laws.). 20 NTT also asserts that the court is required to construe the '382 patent in order to determine if NTT's conduct interfered with Plaintiffs' business opportunities. NTT's argument relies heavily on our holding in U.S. Valves. That reliance is misplaced. In U.S. Valves, Dray, the patentee, granted to U.S. Valves the exclusive right to manufacture, use, sell, advertise and distribute the patented invention. 212 F.3d at 1370. After relations between the parties broke down, U.S. Valves sued Dray claiming breach of contract due to his manufacture and sale of products allegedly covered by the license agreement. Id. at 1371. We held that U.S. Valves' breach of contract action raised substantial issues of patent law, because in order for U.S. Valves to succeed on its claim, it must first show that the valves sold by Dray were within the scope of the subject patents. Id. at 1372. Although the court in U.S. Valves found that the breach of contract action at issue required a determination as to whether the defendant's actions infringed the subject patent, the case does not stand for the proposition that all breach of contract actions involving patents require such a determination. NTT, however, attempts to find broad meaning in the holding of U.S. Valves divorced from its factual context. NTT analogizes to U.S. Valves and argues that Plaintiffs' claim for interference with business opportunities related to the commercialization of the '382 patent requires that Plaintiffs first show that NTT's Japanese patent overlaps with the '382 patent. To the contrary, Texas law requires only that Plaintiffs establish that NTT's alleged conduct, improperly claiming ownership of UT's proprietary technology by filing the Japanese patent application, constituted an independent tort that prevented Plaintiffs from entering into contracts. The construction and scope of the terms of the '382 patent are irrelevant to showing that the technology on which the Japanese patent is based was misappropriated from UT. 21 This case is very similar to two cases in which this court found that the state law claims asserted did not arise under federal patent law. In American Telephone & Telegraph Co. v. Integrated Network Corp., 972 F.2d 1321, 1322 (Fed.Cir.1992), American Telephone & Telegraph Co. (AT & T) sued Integrated Network Corporation (INC) and four of its employees alleging that the INC employees, while employed at AT & T, had conceived of an invention that they had assigned to INC. Id. INC had obtained a U.S. patent on the disputed invention. Id. In its suit, AT & T sought to obtain title to the patent by asserting state law claims for breach of contract; breach of fiduciary duty; misuse and misappropriation of proprietary information; and inducing breach of contract and misuse and misappropriation of proprietary information. Id. We determined that all four counts of AT & T's complaint stemmed from the same allegation: that the employees breached an Agreement for Assignment of Inventions that each individually entered into with AT & T. Id. at 1324. The court determined that the terms of the agreements did not extend only to patentable inventions and therefore AT & T could rely on one theory with patent connotations, and on another theory involving no patent question. Id. Because no patent issue was necessary to AT & T's claim, this court reversed a district court holding that jurisdiction over the case was proper under section 1338(a). Id. 22 We reached a similar result in Uroplasty, Inc. v. Advanced Uroscience, Inc., 239 F.3d 1277 (Fed.Cir.2001). Uroplasty alleged that its former CEO had filed a patent application as co-inventor of a technology based on an Uroplasty trade secret. Id. at 1279. The claims at issue in Uroplasty were for misappropriation of trade secrets, breach of fiduciary duty and breach of contract under Minnesota law. Id. Advanced Uroscience removed the action from state court citing an interference Uroplasty had attained against the subject patent. Id. Advanced Uroscience argued that the interference `called into question whether such Application and Patent make use of or are in any way based upon confidential information and trade secrets of Uroplasty [and] . . . by the nature of the claimed misappropriation . . . raised issues relating to an Application for a United States Patent and the issuance of a United States Patent' thereby alleging causes of action under 28 U.S.C. 1338(a). Id. We vacated the district court's finding of jurisdiction on the grounds that while the cited patent may be evidence in support of Uroplasty's allegations . . . the mere presence of the patent does not create a substantial issue of patent law. Id. at 1280. 23 In Uroplasty and AT & T, the plaintiffs raised contract and misappropriation claims that implicated U.S. patents, yet we found that resolution of those state law claims were not sufficient to establish jurisdiction under section 1338(a). In the case at hand, the state law claims raised by Plaintiffs are one step further removed in that they implicate the validity not of a U.S. patent, but of a patent issued under Japanese law. The fact that UT owns a U.S. patent on the invention allegedly misappropriated may be evidence of its claims, but the presence of the patent does not require resolution of a substantial question of U.S. patent law. See Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1574 (Fed.Cir.1997) (holding that a complaint alleging breach of a patent assignment and royalty agreement does not state a claim arising under the patent laws even though a consequence of finding such a breach may lead to allegations of infringement); Speedco, 853 F.2d at 913 (holding that the fact that patent issues are relevant under state contract law to the resolution of a contract dispute cannot possibly convert a suit for breach of contract into one `arising under' the patent laws as required to render the jurisdiction of the district court based on section 1338. (internal citation omitted)); Consol. World Housewares, 831 F.2d at 265 (the mere presence of a patent issue cannot of itself create a cause of action arising under the patent laws); Ballard Med. Prod. v. Wright, 823 F.2d 527, 531 (Fed.Cir.1987) (same). 24 Consideration of the relief requested by the Complaint does not change our conclusion. NTT asserts that it was improper for Plaintiffs to seek an injunction prohibiting NTT from disseminating information disclosed in the '382 patent because its trade secret claims were extinguished when it filed the patent application. NTT grounds its challenge to the Plaintiffs' injunction in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989). In Bonito Boats, the Supreme Court struck down as preempted a Florida law that protected for an unlimited number of years boat hull designs without regard for whether the designs had been denied patent protection, were protected by an expired patent, or had been freely revealed to the public by their creators. 489 U.S. at 159, 109 S.Ct. 971. Unquestionably the Court in Bonito Boats distinguished between protection afforded inventors under federal patent laws and state trade secret laws and held that states could not provide trade secret protection that conflicted with the federal patent scheme. Id. at 151, 109 S.Ct. 971. The Court did not, however, hold that patent laws preempt a patentee's right to recover under theories sounding in either contract or tort for misappropriation of property protected under state law at the time of its misappropriation. Nothing in the injunction requested by Plaintiffs would improperly expand the scope of rights granted under the '382 patent and Plaintiffs' quest for such an injunction does not require resolution of a substantial question of patent law. 25 For the reasons stated above, the district court erred in holding that it had jurisdiction to hear this case pursuant to 28 U.S.C. § 1338(a). Because this court's jurisdiction is premised on the district court's exercise of jurisdiction under section 1338(a), this court does not have jurisdiction to hear NTT's appeal.