Opinion ID: 2822000
Heading Depth: 3
Heading Rank: 1

Heading: jurisdiction

Text: In 2012, Motorola appealed to this court to review the district court’s grant of a preliminary anti-suit injunction. See MICROSOFT CORP. V. MOTOROLA, INC. 17 Microsoft I, 696 F.3d 872. In that appeal, Motorola maintained that this court, not the Federal Circuit, had jurisdiction, “[b]ecause Microsoft’s complaint is pleaded in terms of contractual rather than patent rights.” Opening Br. of Defs.-Appellants, Microsoft I, 696 F.3d 872, No. 1235352, 2012 WL 2132503, at . Upon entry of judgment in the district court on the breach of contract claim, however, Motorola switched gears and appealed to the Federal Circuit, which has jurisdiction over cases “arising under” federal patent law—that is, “those cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or . . . that patent law is a necessary element of one of the well-pleaded claims.” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808–09 (1988) (citing 28 U.S.C. § 1338(a)). The Federal Circuit then transferred the case here. See Microsoft, 564 F. App’x 586. Our exercise of jurisdiction over this very case on an interlocutory appeal, and the Federal Circuit’s decision to transfer the instant appeal to this circuit because we have jurisdiction, are both the law of the case. See Christianson, 486 U.S. at 817. Accordingly, we may now decline jurisdiction only if “(1) the [earlier] decision[s] w[ere] clearly erroneous; (2) there has been an intervening change in the law; (3) the evidence on remand is substantially different; (4) other changed circumstances exist; or (5) a manifest injustice would otherwise result.” United States v. Renteria, 557 F.3d 1003, 1006 (9th Cir. 2009). Motorola’s argument that the district court “constructively amended” the complaint by holding a bench trial on the RAND rate tacitly invokes the “changed circumstances” exception, although Motorola does not so specify. But because our jurisdictional determination on the interlocutory appeal was made knowing the RAND bench trial would occur and the Federal Circuit’s decision to 18 MICROSOFT CORP. V. MOTOROLA, INC. transfer the case was made after the bench trial, we conclude that no changed circumstances are present. As the earlier jurisdictional determinations were not clearly erroneous, we have jurisdiction.
As we explained in the interlocutory appeal opinion in this case, “‘[n]ot all cases involving a patent-law claim fall within the Federal Circuit’s jurisdiction.’” Microsoft I, 696 F.3d at 881 (quoting Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 834 (2002)). The Federal Circuit, we noted, would have jurisdiction over Motorola’s appeal of the anti-suit injunction “only if it would have jurisdiction over a final appeal in the case under 28 U.S.C. § 1295.” Id. (citing 28 U.S.C. § 1292(c)(1)). Looking to Microsoft’s complaint, we explained that this action is not one “arising under any Act of Congress relating to patents,” 28 U.S.C. § 1338(a), but rather “sounds in contract and involves the district court’s diversity jurisdiction.” Microsoft I, 696 F.3d at 881. We therefore concluded that we had jurisdiction over the interlocutory appeal, thereby necessarily deciding also that we would have jurisdiction over a final appeal of the breach of contract claim. Id.
Motorola nevertheless appealed from the final judgment in this case to the Federal Circuit. In support of Federal Circuit jurisdiction, Motorola maintained that the district court’s consolidation of Microsoft’s breach of contract case with Motorola’s patent infringement suit—the latter of which would fall within the Federal Circuit’s jurisdiction on MICROSOFT CORP. V. MOTOROLA, INC. 19 appeal—conferred Federal Circuit appellate jurisdiction over both cases. See Microsoft, 564 F. App’x at 589. Applying law-of-the-case deference to our prior opinion, the Federal Circuit rejected that argument.10 It noted that the district court did consolidate the two cases under Federal Rule of Civil Procedure 42(a) in the interest of “judicial economy,” but denied a motion to dismiss Motorola’s patentinfringement claims and re-file them as compulsory counterclaims in the contract case. Id. at 588. In so ruling, the district court reasoned that the facts of the two cases were “not so intertwined and logically connected that considerations of judicial economy and fairness dictate that the issues be resolved in one lawsuit.” Id. Given that ruling, the Federal Circuit held, it was “plausible to conclude, as the Ninth Circuit seems to have done here, that the act of ‘consolidation did not merge the suits into a single cause, or change the rights of the parties.’” Id. at 589 (quoting Johnson v. Manhattan Ry., 289 U.S. 479, 496–97 (1933)) (internal alterations omitted). Because the Federal Circuit found our decision not “clearly erroneous,” it transferred the case. Id. at 589. 10 Motorola had argued that law-of-the-case principles should not apply because “‘neither party nor the Ninth Circuit realized the implications of the consolidation of Motorola’s patent infringement claim with Microsoft’s contract claim’ at the earlier stages of this litigation.” Microsoft, 564 F. App’x at 589. As the Federal Circuit recognized, however, our earlier opinion makes clear that we were quite aware of the consolidation of the cases when we heard the interlocutory appeal and nonetheless determined that we had jurisdiction. See id. (citing Microsoft I, 696 F.3d at 878). 20 MICROSOFT CORP. V. MOTOROLA, INC.
We, too, apply law-of-the-case deference to our previous jurisdictional determination, as well as to that of the Federal Circuit. In doing so, we are guided by the Supreme Court’s holding in Christianson, which in very similar circumstances highlighted the importance of deferring to prior jurisdictional determinations. Christianson came before the Supreme Court after both the Federal Circuit and the Seventh Circuit had declined to exercise jurisdiction over an antitrust suit with embedded questions of patent validity. Christianson, 486 U.S. at 803–07. Review was initially sought in the Federal Circuit. See id. at 806. That Circuit concluded that it lacked jurisdiction and transferred the case to the Seventh Circuit. See id. The Seventh Circuit then, sua sponte, addressed its own jurisdiction, concluded that the Federal Circuit was “clearly wrong” in transferring the case, and transferred it back. Id. at 806 (quoting 798 F.2d 1051, 1056–57 (7th Cir. 1986)). The Federal Circuit, in turn, stated that it was the Seventh Circuit that was “clearly wrong,” and had “exhibited ‘a monumental misunderstanding of the [Federal Circuit’s] patent jurisdiction.’” Id. at 807 (quoting 822 F.2d 1544, 1547, 1551 n.7 (Fed. Cir. 1987)). Nevertheless, in the “interest of justice,” the Federal Circuit addressed the merits of the case. Id. (quoting 822 F.2d at 1559–60). Faced with this intercircuit jurisdictional standoff, the Supreme Court held, first, that the Seventh Circuit erred in failing to adhere to the Federal Circuit’s jurisdictional determination, and, second, that the Federal Circuit erred in addressing the merits of the case after having determined that it lacked jurisdiction. While a court always has the authority MICROSOFT CORP. V. MOTOROLA, INC. 21 to revisit a prior jurisdictional determination of its own or of a coordinate court, Christianson explained, “as a rule courts should be loathe to do so in the absence of extraordinary circumstances such as where the initial decision was clearly erroneous and would work a manifest injustice.” Id. at 817 (internal quotation marks omitted). Otherwise, “every borderline case [could] culminate in a perpetual game of jurisdictional ping-pong . . . . Such a state of affairs would undermine public confidence in our judiciary, squander private and public resources, and commit far too much of [the] Court’s calendar to the resolution of fact-specific jurisdictional disputes that lack national importance.” Id. at 818–19. Christianson concluded that because the Federal Circuit’s initial jurisdictional determination was “plausible,” the Seventh Circuit, and the Federal Circuit on its second review, should have adhered to it. Id. at 819. Motorola maintains that Christianson’s firm admonition does not cover the present circumstances. We owe no deference to our earlier opinion, Motorola argues, because the jurisdictional question is different now than it was when this case was previously before the panel. The bench trial on the RAND rate “constructively amended” the complaint, it contends, so that what was once a simple breach of contract case has morphed into a case necessarily requiring the determination of a “substantial question of federal patent law.” Id. at 809. We disagree. The district court’s decision to hold a trial on the RAND rate, whether or not doing so constituted a constructive amendment of the complaint, does not in any manner affect the application of law-of-the-case deference to this appeal. We were aware of the district court’s plans to determine the RAND rate in Microsoft I; indeed, that 22 MICROSOFT CORP. V. MOTOROLA, INC. proceeding-to-come was a major subject of Motorola’s briefing. See Microsoft I, 696 F.3d at 879; Opening Br. of Defs.-Appellants, Microsoft I, 696 F.3d 872, No. 12-35352, 2012 WL 2132503, at –32. Yet, we determined that we would have jurisdiction over the final appeal in the anti-suit injunction appeal. Furthermore, as we have indicated, we owe law-of-the-case deference as well to the Federal Circuit’s decision to transfer the case, a decision made after the district court held the RAND bench trial.
Finally, looking briefly at the merits of Motorola’s current jurisdictional argument, there was no “clear error” or “manifest injustice” in concluding that the RAND bench trial did not transform this case into a matter necessarily requiring the resolution of a substantial question of federal patent law. See Christianson, 486 U.S. at 809, 817; Arizona v. California, 460 U.S. 605, 618 n.8 (1983). A complaint that alleges breach of contract and seeks damages sounds in contract; its nature “does not change because the contract is a patent license.” See Bonzel v. Pfizer, Inc., 439 F.3d 1358, 1363 (Fed. Cir. 2006); see also Barnhart v. W. Md. Ry. Co., 128 F.2d 709, 714 (4th Cir. 1942) (collecting Supreme Court cases). Even if a court, in interpreting a contract and assessing damages, “deems it appropriate to apply the law of patent infringement, that of itself does not change the complaint into one arising under the patent law.” Bonzel, 439 F.3d at 1363; see also Complex Litigation Committee of the American College of Trial Lawyers, Anatomy of a Patent Case Ch.16.I.A.1. (2d ed. 2012) (“Anatomy of a Patent Case”) (explaining that application of patent law for purposes of determining MICROSOFT CORP. V. MOTOROLA, INC. 23 damages “does not by itself present a substantial issue of patent law”). Motorola points out that the Federal Circuit has exercised jurisdiction in some breach-of-contract cases. See Parental Guide of Tex., Inc. v. Thomson, Inc., 446 F.3d 1265 (Fed. Cir. 2006); U.S. Valves, Inc. v. Dray, 212 F.3d 1368 (Fed. Cir. 2000); Portney v. CIBA Vision Corp., 401 F. App’x 526 (Fed. Cir. 2010). But those cases involved questions of patent infringement, patent validity, or claim construction, or included an embedded, outcome-determinative interpretation of a patent law statute. See Anatomy of a Patent Case Ch.16.I.A.1. (2d ed. 2012). This case, in contrast, is a straight breach of contract action. Calculation of appropriate royalty amounts in contractual patent license cases involves similar determinations to those that arise when calculating damages in patent infringement cases. So there is some overlap in that regard between breach of patent license cases and Federal Circuit patent infringement cases. But Motorola has cited no case in which the Federal Circuit has exercised jurisdiction over a breach of contract claim for damages where the mode of calculating contract damages, not any pure patent issue, was at stake. In sum, there was no “clear error[]” or “manifest injustice” that would justify disrupting ours and the Federal Circuit’s prior determinations that we have jurisdiction. Christianson, 486 U.S. at 817. Nor is any other exception to the law-of-the-case doctrine applicable. We therefore reject Motorola’s challenge to our jurisdiction. 24 MICROSOFT CORP. V. MOTOROLA, INC.