Opinion ID: 670640
Heading Depth: 2
Heading Rank: 2

Heading: Original Jurisdiction

Text: 8 Mars maintains that the district court has original jurisdiction over the Japanese patent infringement claim pursuant to 28 U.S.C. Sec. 1338(b), 2 which is a jurisdictional statute, giving the district court jurisdiction to hear certain state or [other non-]federal unfair competition claims when joined with a substantial and related claim under the patent laws. Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 669, 7 USPQ2d 1097, 1104 (Fed.Cir.), cert. denied, 488 U.S. 968, 109 S.Ct. 498, 102 L.Ed.2d 534 (1988). Mars contends that for purposes of section 1338(b), the term unfair competition should be broadly construed to cover all business torts, including the infringement of a foreign patent. 9 Section 1338(b) was enacted to authorize a federal court to assume jurisdiction over a non-federal unfair competition claim joined in the same case with a federal cause of action arising from U.S. patent, copyright, plant variety protection, or trademark laws in an effort to avoid piecemeal litigation. See 28 U.S.C. Sec. 1338(b) note; 1 James W. Moore et al., Moore's Federal Practice p 0.62 (2d ed. 1993). However, being a jurisdictional provision, section 1338(b) creates no substantive basis for a claim of unfair competition. See Water Technologies, 850 F.2d at 669, 7 USPQ2d at 1104. Thus, an asserted claim of unfair competition which a plaintiff seeks to join with a related claim under federal patent, copyright, plant variety protection, or trademark law must find a substantive basis in some other, independent source of law. Id. at 670, 7 USPQ2d at 1105. 10 Here, Mars seeks to extend the scope of section 1338(b) to a claim of infringement of a Japanese patent, which it characterizes as a type of unfair competition. Mars, however, does not assert any state or federal basis for its claim of unfair competition. It does not even cite any Japanese precedent holding that patent infringement constitutes unfair competition under Japanese law. Nevertheless, Mars insists that infringement of a foreign patent is an act of unfair competition as a matter of United States law. 11 Whether an act constitutes the tort of unfair competition within the meaning of section 1338(b) is a question of law that we review de novo. See O'Brien v. Westinghouse Elec. Corp., 293 F.2d 1, 13-14, 130 USPQ 79, 88-89 (3d Cir.1961); Telechron, Inc. v. Parissi, 197 F.2d 757, 761 (2d Cir.1952). In determining the breadth of the term unfair competition as it is used in section 1338(b), we bear in mind that when Congress borrows a common law term in a statute, absent a contrary instruction, it is presumed to adopt the term's widely accepted common law meaning. See Morissette v. United States, 342 U.S. 246, 263, 72 S.Ct. 240, 249-50, 96 L.Ed. 288 (1952); see also Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979) ([U]nless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning.). 12 The common law concept of unfair competition has not been confined to any rigid definition and encompasses a variety of types of commercial or business conduct considered contrary to good conscience, International News Serv. v. The Associated Press, 248 U.S. 215, 240, 39 S.Ct. 68, 73, 63 L.Ed. 211 (1918), including acts of trademark and trade dress infringement, false advertising, dilution, and trade secret theft, see 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition Sec. 1.05 (3d ed. 1993); Richard B. Gallagher, Annotation, Modern Status of Pendent Federal Jurisdiction, Under 28 USCS Sec. 1338(b), Over State Claim of Unfair Competition When Joined with Related Claim Under Federal Trademark Laws, 62 A.L.R.Fed. 428 pt. V (1983). However, infringement of patent rights, domestic or foreign, is not generally recognized as coming within the rubric of unfair competition. 3 13 Unfair competition law and patent law have long existed as distinct and independent bodies of law, each with different origins and each protecting different rights. See McCarthy, supra, Sec. 6.01; Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480-82, 94 S.Ct. 1879, 1885-86, 40 L.Ed.2d 315 (1974). The law of unfair competition generally protects consumers and competitors from deceptive or unethical conduct in commerce. See Harry D. Nims, The Law of Unfair Competition and Trade-Marks Sec. 1 (1947); Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 157, 109 S.Ct. 971, 981, 103 L.Ed.2d 118 (1989) (the law of unfair competition, in contradistinction to patent law, has its roots in the common-law tort of deceit.). Patent law, on the other hand, protects a patent owner from the unauthorized use by others of the patented invention, irrespective of whether deception or unfairness exists. 14 The distinction between the law of unfair competition and patent law is also evident in the general statutory framework enacted by Congress. Whereas patent law is completely preempted by federal law, see 35 U.S.C. Secs. 1 through 376 (1988); U.S. Const. art. I, Sec. 8, cl. 8, the law of unfair competition, despite some federal encroachment, see 15 U.S.C. Sec. 1125(a) (1988), remains largely free from federal exclusivity. The provisions of Title 35 governing patents are not in pari materia with the state and federal provisions governing unfair competition. Moreover, section 1338(b) itself expressly sets a claim of unfair competition apart from a claim arising under U.S. patent law. See Ramirez & Feraud Chili Co. v. Las Palmas Food Co., 146 F.Supp. 594, 603 (S.D.Cal.1956) (this section necessarily presupposes a claim of unfair competition arising otherwise than 'under the copyright, patent, and trademark laws,' since, unless so interpreted, Sec. 1338(b) would confer no jurisdiction additional to that already conferred by section 1338(a) and so would be mere surplusage.), aff'd, 245 F.2d 874 (9th Cir.1957), cert. denied, 355 U.S. 927, 78 S.Ct. 384, 2 L.Ed.2d 357 (1958). 15 Although section 1338(b) does not make a comparable distinction between a claim of unfair competition and a claim arising under foreign patent law, that alone does not allow us to simply equate these dissimilar causes of action. Statutes purporting to confer federal subject matter jurisdiction must be narrowly construed, with ambiguities resolved against the assumption of jurisdiction. See Livingston v. Derwinski, 959 F.2d 224, 225 (Fed.Cir.1992). In the absence of clear evidence that a claim of infringement of a foreign patent was intended by Congress to qualify as a claim of unfair competition under section 1338(b), we are unable to read the statute as expansively as Mars urges. To interpret the term unfair competition in section 1338(b) in a manner inconsistent with the ordinary and usual sense of that word would impermissibly expand the jurisdiction of the district courts beyond that clearly envisioned or desired by Congress. 16 We hold as a matter of law that a claim of infringement of a foreign patent does not constitute a claim of unfair competition within the meaning of section 1338(b). Therefore, we conclude that the district court did not err in refusing to entertain Mars' claim of infringement of the Japanese patent under section 1338(b).