Court Opinion

ID: 9461461
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:14:58.248158+00
Date Added: 2024-06-11T17:37:04.408613
License: Public Domain

LEVENTHAL, Circuit Judge
(dissenting):
In my view, the special long arm jurisdiction provided by § 293 of the Patent Codification Act of 1952, 35 U.S.C. § 293 (1970),1 is applicable in an action against a foreigner holding a United States patent, for breach of an exclusive licensing agreement. This personal jurisdiction is meaningful, of course, only if the District Court has subject-matter jurisdiction under other statutes, as it does here in view of allegations of diversity of citizenship and $10,000 amount in controversy-
1. Generally, of course, a suit about a patent license is not a suit “arising under any Act of Congress relating to patents” within the meaning of 28 U.S.C. § 1338(a) (1970). Therefore, Federal courts generally do not have subject matter jurisdiction over such actions.
However, 35 U.S.C. § 293 (1970) is a quite different statute. Its first sentence provides that a foreign patentee may designate an agent for service of process or notice of “proceedings affecting the patent or rights thereunder.” If the foreign patentee does not designate an agent, the District Court for the District of Columbia “shall have jurisdiction and summons shall be served by publication or otherwise as the court directs.” The third sentence reads: “The court
shall have the same jurisdiction to take any action respecting the patent or rights thereunder that it would have if the patentee were personally within the jurisdiction of the court” (emphasis added).
In sum, § 293 gives the District Court jurisdiction over the person of the foreign patentee, limited to “proceedings affecting the patent or rights thereunder.” It was intended as a “long arm statute,”2 which operates, in the standard mold of long arm statutes, to permit the court to act as if the absent defendant had been directly served with respect to those matters on which he had initiated contacts with the jurisdiction.3
In the North Branch case4 Judge Holtzoff stated that 35 U.S.C. § 293 (1970) should be interpreted in the same way as 28 U.S.C. § 1338(a) (1970). Judge Holtzoff’s opinion is confused, I think, by his concern that there was no *766subject-matter jurisdiction in the case, as appears from his notation that the case lacked the allegations necessary for diversity of citizenship jurisdiction.5 He seems not to have focused on what was then part of the District Court’s subject-matter jurisdiction, the common law and equity jurisdiction of the general trial court in the District of Columbia. (See note 11 infra). And so he did not study the case in the light of the particular characteristics of § 293 as a provision granting personal jurisdiction, as distinguished from subject-matter jurisdiction.
But, even without regard to that, I fail to see why the language of 35 U.S.C. § 293 (1970) should be construed in the same way as the distinctly different language of 28 U.S.C. § 1338 (1970). We must consider the long history of § 1338, the dozens of cases decided under it, the nice distinctions drawn and the care taken to narrow the content of the phrase because it entailed an exclusive grant of subject matter jurisdiction to the Federal courts and a corresponding removal from the state courts.6 None of this applies to § 293, which is intended to supply a remedy that would not otherwise be available in either state or Federal courts. The selection for 35 U.S.C. § 293 (1970) of language different from that in 28 U.S.C. § 1338 (1970), a historic section well known to the patent fraternity, can hardly be deemed inadvertent.
As to legislative purpose, § 293 was intended to cope with the problem that nonresidents could obtain valuable United States patent rights, and yet stay beyond the reach of both state and Federal process as long as they were not present or “doing business” within the United States. Congress sought to assure Americans a forum in the United States for proceedings “affecting the patent or rights thereunder.” The phrasing is in the disjunctive — including not only proceedings affecting the patent but proceedings affecting rights under the patent. The natural meaning of the words used conveys, to me, the thought that a proceeding to determine, e. g., the extent of rights granted by an exclusive license granted by the patentee, or the validity of the license, is a “proceeding affecting rights under the patent.”
The legislative history is not explicit— if it were, presumably we would not have a case for decision — but such as it is, it seems to me to support my view. There were no hearings in the Senate. The hearings in the House present the comments of the State Department on what was then § 252 of the bill, and became § 293 of Title 35. The Department of State commented in a letter: $
4. Section 252, “Service and notice; nonresident patentee.” — -This section provides that a nonresident patentee may designate by notice to the Patent Office a person within the United States on whom process or notice may be served and that in lieu of such designation such notice or process may be served upon the Commissioner. The Department understands that this provision has been added for the benefit of American residents desiring to bring action against foreign owners of United States patents. At the present time American manufacturers threatened by charges of infringement of United States patents by persons resident abroad are especially handicapped by inability to bring suit for declaratory judgment. Most foreign countries in their patent laws require foreign owners of patents issued by them to have resident agents upon whom service may be made.7
The last three sentences were echoed in the testimony of a Department of Justice spokesman.8
*767Here we have the nub of it. The provision is broadly described as “for the benefit of American residents desiring to bring action against foreign owners of United States patents.” American manufacturers threatened with charges of infringement are identified as being “especially handicapped” by present lack of service capability, but they were not the sole beneficiaries of the legislation.
The House and Senate Reports say only this about § 293: “Section 293 is a new section that is needed on some occasions to obtain jurisdiction over foreign patent owners that do not reside in the United States.”9 What occasions are “some occasions”? The Committee Reports do not say. We have to go back to the language of the statute and any other indications of legislative intent.
I take issue with the majority opinion in its statement that the House and Senate Reports describe Section 293 as “part of ‘a group of sections relating to remedy for infringement.’ ” These words appear in those Reports in this sentence: “Beginning with 281 is a group of sections relating to remedy for infringement of a patent, the suit in the courts.”10 That “group of sections” is sections 281 through 287, inclusive, which relate to the presumption of validity, defenses to an infringement action, injunctions, damages, attorney’s fees, limitations and marking and notice. But the group of sections dealing with court suits for infringement plainly stops before section 292 — a criminal statute for falsely marking an article as patented. And § 293 is still another subject.
2. The District Court had subject matter jurisdiction of this case.
Section 293 confers personal jurisdiction on the foreign patentee — either by service on his agent for process, or, if no such agent has been appointed, by publication or other service as the court directs. Upon such service, the District Court has jurisdiction to take any action respecting the patent or rights thereunder that it would have if the patentee were personally within the jurisdiction of the court.
But what jurisdiction may the District Court for the District of Columbia exercise over a foreign patentee within its personal jurisdiction? It may exercise the limited subject matter jurisdiction provided by 28 U.S.C. § 1338(a) (1970), but that generally would not include a suit on a license agreement.
The District Court for the District of Columbia also has jurisdiction to decide any controversy between the citizen of a state and the subject of a foreign state under the diversity of citizenship statute, provided there is the jurisdictional amount of $10,000. 28 U.S.C. § 1332-(a)(2) (1970).11
*768' Assuming that § 293 confers personal jurisdiction, and that subject-matter jurisdiction must be separately located, there is a sound basis for giving § 293 a broad construction notwithstanding the narrow construction given to different language in the provision, 28 U.S.C. § 1338(a) (1970), granting exclusive subject-matter jurisdiction to Federal district courts for cases arising under the patent laws. This may well be the premise of the various rulings of the District Court denying a motion to dismiss an action brought by the United States which invoked § 293 as a basis for personal jurisdiction over foreign corporations in antitrust litigation involving patents.12
I see no constitutional issue in a broad reading of § 293.13 Article III of the Constitution permits Congress to give a Federal court jurisdiction to entertain suits between citizens of the states of the United States and subjects of a foreign state. There may be situations that come within the literal language of § 293 but not Article III — conceivably, defendants who are Americans not residing in the United States, or plaintiffs who are not United States citizens — but they can be excised either as included in the statute but marginal and severable,14 or, more likely, as not included within the statute, whose legislative history makes clear (see text accompanying note 7 supra) that this was a provision “for the benefit of American residents desiring to bring action against foreign owners of United States patents.”
I respectfully dissent.

. Section 293 provides:
Every patentee not residing in the United States may file in the Patent Office a written designation stating the name and address of a person residing within the United States on whom may be served process or notice of proceedings affecting the patent or rights thereunder. If the person designated cannot be found at the address given in the last designation, or if no person has been designated, the United States District Court for the District of Columbia shall have jurisdiction and summons shall be served by publication or otherwise as the court directs. The court shall have the same jurisdiction to take any action respecting the patent or rights thereunder that it would have if the patentee were personally within the jurisdiction of the court.

. Japan Gas Lighter Ass’n. v. Ronson Corp., 257 F.Supp. 219, 228 (D.N.J.1966).

. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

. North Branch Products, Inc. v. Fisher, 179 F.Supp. 843 (D.D.C.), rev’d on other grounds, 109 U.S.App.D.C. 182, 284 F.2d 611 (1960), cert. denied, 365 U.S. 827, 81 S.Ct. 713, 5 L.Ed.2d 705 (1961).

. 179 F.Supp. at 845.

. See Note on Federal and State Court Jurisdiction in Patent Matters, in Bator, Mishkin, Shapiro & Wechsler, Hart and Wechsler’s The Federal Courts and the Federal System 874r-79 (2d ed. 1973).

. Patent Law Codification and Revision, Hearings Before the House Judiciary Committee on H.R. 3760, 82nd Cong., 1st Sess., at 91.

. Id. at 93.

. H.R.Rep.No.1923, 82d Cong., 2d Sess. 10 (1952); S.Rep.No.1979, 82d Cong., 2d Sess. 9, U.S.Code Cong. & Admin.News 1952, p. 2403 (1952).

. H.R.Rep.No.1923, 82d Cong., 2d Sess. 10 (1952); S.Rep.No.1979, 82d Cong., 2d Sess. 8, U.S.Code Cong. & Admin.News 1952, p. 2402 (1952).

. The allegations of diversity of citizenship and jurisdictional amount appear in the record. See Neidhart, App. 4A; Hyman, App. 3Q.
The United States Government apparently argues, amicus curiae, that diversity of citizenship and $10,000 amount are not required. They certainly were not required when § 293 was enacted in 1952, for the District Court for the District of Columbia then had the common law and equity jurisdiction of a state court, inherited from Maryland. Pang-Tsu Mow v. Republic of China, 91 U.S.App.D.C. 324, 327, 201 F.2d 195, 198 (1952), cert. denied, 345 U.S. 925, 73 S.Ct. 784, 97 L.Ed. 1356 (1953). It therefore had subject matter jurisdiction not only as a Federal court, over matters arising under the federal patent laws, but also as a state court over contract cases affecting rights under patents, such as license claims. However, the District of Columbia Court Reorganization Act of 1970, 84 Stat. 475, transferred to the Superior Court of the District of Columbia, the general equity jurisdiction formerly held by the District Court. D.C.Code § 11-921 (1973); Palmore v. United States, 411 U.S. 389, 408, 409, 93 S.Ct. 1670, 36 L.Ed.2d 342 (1973). The Government’s amicus curiae memorandum argues that § 293 was a special grant of jurisdiction to the District Court for the patent-related actions against nonresident patentees and that this survives after 1970 because the 1970 law specified that the District Court retained “its jurisdiction as a United States district court and any other jurisdiction conferred on it by law . . .” D.C.Code § 11-501 (1973). *768While, strictly speaking, I need not state my view on this, there being diversity of citizenship and $10,000 jurisdictional amount allegations in this case, my broad reading of § 293 is helped, I think, by the conviction that this was only intended as a long arm statute to provide personal jurisdiction where there was another basis for subject matter jurisdiction.

. The brief of the United States Government, amicus curiae, cites the following:
United States v. Farbenfabriken Bayer, A.G., 1968 Trade Cases ¶ 72,569 (D.C.D.C.), leave to appeal denied, C.A.D.C. No. 586-68, Misc. No. 3277, 1968 Trade Cases ¶ 72,570, appeal dismissed, 393 U.S. 216, 89 S.Ct. 397, 21 L.Ed.2d 358, leave to petition for cert, denied, 393 U.S. 958, 89 S.Ct. 412, 21 L.Ed.2d 384, cert. denied, 393 U.S. 959, 89 S.Ct. 397, 21 L.Ed.2d 373 (1968); United States v. Glaxo Group Ltd., 1970 Trade Cases ¶ 73,000 (D.C.D. C.). The Glaxo case subsequently proceeded to judgment on the merits, but the issue of personal jurisdiction over the defendants under 35 U.S.C. § 293 (1970) was not litigated further. United States v. Glaxo Group Ltd., 302 F.Supp. 1 (1969), supplemented, 328 F.Supp. 709 (D.C.D.C.1971), reversed, 410 U.S. 52, 93 S.Ct. 861, 35 L.Ed.2d 104 (1973). See also United States v. Ziegler, Civil Action No. 1255 (D.C.D.C.), March 18, 1971; In Re Ampicillan Antitrust Litigation, 1971 Trade Cases ¶ 73,449 (D.C.D.C.).

. I assume for purposes of discussion that this action cannot be justified under Article III of the Constitution as a case “arising under . . . the Laws of the United States.” The point is not entirely clear. I do not presume there can be a reversion to the early expansive reading of the clause.. Osborn v. Bank of the United States, 9 Wheat. 738, 6 L.Ed. 204 (U.S. 1824). But we should not be thrown off stride by the cases giving a narrow reading to 28 U.S.C. § 1338 (1970), for they probably bear the hallmarks of the fact that § 1338 gives Federal courts exclusive jurisdiction of cases arising under the patent laws. Chisum, The Allocation of Jurisdiction Between State and Federal Courts in Patent Litigation, 46 Wash.L.Rev. 633, 671 (1971). Compare Friendly, J., in T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir. 1964); Bator, Mishkin, Shapiro & Wechsler, supra, at 879.
In providing one of those narrow readings, Justice Holmes put it in American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 586, 60 L.Ed. 987 (1916): “A suit arises under the law that creates the cause of action.” The vitality of this Holmes view is in doubt. Certainly the correct construction of the “arising under” clause must take into account the development that the putative infringer may bring an action for a declaratory judgment of nonvalidity or non-infringement. E. Edelmann & Co. v. Triple-A Specialty Co., 88 F.2d 852 (7th Cir. 1937). Such actions have become numerous, and the Supreme Court has passed on the merits of such actions without question as to jurisdiction. Bator, Mishkin, Shapiro & Wechsler, supra, at 896.

. Like the “freak” case of a defendant who is stateless.