Court Opinion

ID: 4284789
Source: CourtListenerOpinion
Date Created: 2018-06-15 15:00:44.882675+00
Date Added: 2024-06-11T14:35:19.580417
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                 ______________________

             XITRONIX CORPORATION,
                 Plaintiff-Appellant

                            v.

KLA-TENCOR CORPORATION, DBA KLA-TENCOR,
      INC., A DELAWARE CORPORATION,
                Defendant-Appellee
              ______________________

                       2016-2746
                 ______________________

   Appeal from the United States District Court for the
Western District of Texas in No. 1:14-cv-01113-SS, Judge
Sam Sparks.
                 ______________________

   ON PETITION FOR PANEL REHEARING AND
            REHEARING EN BANC
             ______________________

    MICHAEL S. TRUESDALE, Law Office of Michael S.
Truesdale, PLLC, Austin, TX, filed a response to the
petition for plaintiff-appellant.

     AARON GABRIEL FOUNTAIN, DLA Piper US LLP, Aus-
tin, TX, filed a petition for panel rehearing and rehearing
en banc for defendant-appellee. Also represented by
BRIAN K. ERICKSON, JOHN GUARAGNA.
                   ______________________
2            XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

    Before PROST, Chief Judge, NEWMAN, MAYER 1, LOURIE,
    DYK, MOORE, O’MALLEY, REYNA, WALLACH, TARANTO,
         CHEN, HUGHES, and STOLL, Circuit Judges.
    NEWMAN, Circuit Judge, dissents from the denial of the
              petition for rehearing en banc.
    LOURIE, Circuit Judge, dissents from the denial of the
       petition for rehearing en banc without opinion.
PER CURIAM.
                           ORDER
     Appellee KLA-Tencor Corporation filed a petition for
panel rehearing and rehearing en banc. A response to the
petition was invited by the court and filed by appellant
Xitronix Corporation. The petition for rehearing and
response were first referred to the panel that heard the
appeal, and thereafter, to the circuit judges who are in
regular active service. A poll was requested, taken, and
failed.
          Upon consideration thereof,
          IT IS ORDERED THAT:
          The petition for panel rehearing is denied.
          The petition for rehearing en banc is denied.
          The mandate of the court will issue on June 22,
2018.
                                   FOR THE COURT

    June 15, 2018                  /s/ Peter R. Marksteiner
        Date                       Peter R. Marksteiner
                                   Clerk of Court

      1 Circuit Judge Mayer participated only in the deci-
sion on the petition for panel rehearing.
  United States Court of Appeals
      for the Federal Circuit
                 ______________________

             XITRONIX CORPORATION,
                 Plaintiff-Appellant

                            v.

KLA-TENCOR CORPORATION, DBA KLA-TENCOR,
      INC., A DELAWARE CORPORATION,
                Defendant-Appellee
              ______________________

                       2016-2746
                 ______________________

   Appeal from the United States District Court for the
Western District of Texas in No. 1:14-cv-01113-SS, Judge
Sam Sparks.
                 ______________________
NEWMAN, Circuit Judge, dissenting from denial of the
petition for rehearing en banc.
    I write because of the importance of this decision to
the judicial structure of patent adjudication, and the
future of a nationally consistent United States patent law.
    In this case, the complaint states that the asserted vi-
olation of patent law may support violation of antitrust
law—a Walker Process pleading based on charges of fraud
or inequitable conduct in prosecution of the patent appli-
2        XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

cation in the Patent and Trademark Office. 1 The three-
judge panel assigned to this appeal held that the Federal
Circuit does not have jurisdiction, did not reach the
merits, and transferred the appeal to the Fifth Circuit. 2
This jurisdictional ruling is contrary to the statute gov-
erning the Federal Circuit, and contrary to decades of
precedent and experience. Nonetheless, the en banc court
now declines to review this panel ruling.
    I write in concern for the conflicts and uncertainties
created by this unprecedented change in jurisdiction of
the Federal Circuit and of the regional courts of appeal.
With the panel’s unsupported ruling that the Supreme
Court now places patent appeals within the exclusive
jurisdiction of the regional circuits when the pleading
alleges that the patent issue may lead to a non-patent law
violation, we should consider this change en banc.

    1    In Walker Process Equipment, Inc. v. Food Ma-
chinery & Chemical Corp., the Supreme Court held that
the use of a patent obtained through intentional fraud on
the USPTO to create or preserve a monopoly may expose
the patent holder to antitrust liability. 382 U.S. 172,
176–77 (1965). This court has summarized that: “In order
to prevail on a Walker Process claim, the antitrust-
plaintiff must show two things: first, that the antitrust-
defendant obtained the patent by knowing and willful
fraud on the patent office and maintained and enforced
the patent with knowledge of the fraudulent procurement;
and second, all the other elements necessary to establish
a Sherman Act monopolization claim.” TransWeb, LLC v.
3M Innovative Props. Co., 812 F.3d 1295, 1306 (Fed. Cir.
2016).
    2   Xitronix Corp. v. KLA-Tencor Corp., 882 F.3d 1075
(Fed. Cir. 2018) (“Transfer Order”).
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION          3

The District Court’s Decision was Limited to Patent
Issues 3
    The district court received a complaint for “Walker
Process antitrust claims based on KLA’s alleged fraudu-
lent procurement of a patent.” Dist. Ct. Dec. at *1.
Xitronix alleged that the “entire prosecution” of the
patent was tainted by fraud or inequitable conduct in the
Patent and Trademark Office. J.A. 54 (¶111); J.A. 63
(¶145).
     The panel now rules that the appealed issues of fraud
and inequitable conduct in obtaining the patent do “not
present a substantial issue of patent law,” Transfer
Order, 882 F.3d at 1078, and therefore that the jurisdic-
tion of the Federal Circuit, 28 U.S.C. § 1295(a)(1), does
not apply to this appeal. The panel states: “The underly-
ing patent issue in this case, while important to the
parties and necessary for resolution of the claims, does
not present a substantial issue of patent law,” and that
“[s]omething more is required to raise a substantial issue
of patent law sufficient to invoke our jurisdiction.” Trans-
fer Order, 882 F.3d at 1078. We are not told what that
“[s]omething more” might be.
    Neither party had questioned our appellate jurisdic-
tion. The panel raised the question sua sponte, and now
holds that a Supreme Court decision on state court mal-
practice jurisdiction, Gunn v. Minton, 568 U.S. 251 (2013),
removed Federal Circuit jurisdiction of Walker Process
patent appeals.
    If the issues of inequitable conduct or fraud in procur-
ing the patent are no longer deemed to be a substantial

   3     2016 WL 7626575 (W.D. Tex. Aug. 26, 2016)
(“Dist. Ct. Dec.”).
4         XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

issue of patent law, the court should speak en banc. Here,
the district court reviewed the patent prosecution, includ-
ing the references and other information relevant to
examination for patentability; reviewed the applicant’s
arguments, the examiner’s responses, and the examiner’s
reasoning in allowing the claims; and reviewed infor-
mation from the concurrent infringement litigation. Dist.
Ct. Dec. at *5–8. The district court wrote a detailed
opinion, concluding that fraud or inequitable conduct in
patent prosecution had not been shown. Id. at *9. This is
the issue on appeal—the only issue. Xitronix argues on
this appeal that the district court erred in its analysis and
conclusion, and that the patent is invalid or permanently
unenforceable.
    The panel holds that patent validity and enforceabil-
ity are not substantial questions of patent law, and there-
fore this case does not arise under the patent law. The
panel removes the Federal Circuit from jurisdiction over
appeals of Walker Process claims, and challenges Federal
Circuit jurisdiction of all appeals where the complaint
includes non-patent issues. This is a vast jurisdictional
change for the regional circuits as well as the Federal
Circuit.
The Federal Circuit Jurisdictional Statute
    28 U.S.C. § 1295(a)(1). The United States Court
    of Appeals for the Federal Circuit shall have ex-
    clusive jurisdiction of an appeal from a final deci-
    sion of a district court . . . in any civil action
    arising under . . . any Act of Congress relating to
    patents or plant variety protection.
The Supreme Court has summarized that for the purpose
of “desirable uniformity [] Congress created the Court of
Appeals for the Federal Circuit as an exclusive appellate
court for patent cases, observing that increased uniformi-
ty would ‘strengthen the United States patent system in
such a way as to foster technological growth and industri-
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION           5

al innovation.” Markman v. Westview Instruments, Inc.,
517 U.S. 370, 390 (1996) (quoting H.R. Rep. No. 97–312,
pp. 20–23 (1981)).
    Precedent has construed the clause “civil action aris-
ing under . . . any Act of Congress relating to patents,” for
the creation of the Federal Circuit as a national court
raised occasional questions of appellate jurisdiction, as
the courts sought to implement the legislative purpose.
Precedent considered specific circumstances as they arose:
for example, when the district court action included issues
in addition to patent issues and the patent issues were
not appealed; when the patent issue arose only by coun-
terclaim; when the patent issue arose in a contract dis-
pute; when the patent issue arose in connection with
various antitrust claims; when the patent issue arose in a
state court action; when the patent issue was later re-
moved from the complaint; when the patent issue arose in
a malpractice action.
    Thus, we and the Supreme Court and the regional cir-
cuits have considered the boundaries of “civil action
arising under . . . any Act of Congress relating to patents,”
across an array of diverse circumstances. Those bounda-
ries produced helpful guidance in special or complex
cases. However, the present case is simple, for the issue
of fraud or inequitable conduct in prosecution of the
patent application, the foundation of Walker Process
jurisprudence, is cemented in its jurisdictional path to the
Federal Circuit. If that path is to be changed, such
change warrants en banc action.
Supreme Court and Federal Circuit Precedent are
Contravened by the Panel Decision
    The Supreme Court reviewed Federal Circuit jurisdic-
tion early in our existence, in a case where the Seventh
Circuit and the Federal Circuit each “adamantly disa-
vowed jurisdiction” and insisted that the other was the
correct appellate body. Christianson v. Colt Indus. Oper-
6         XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

ating Corp., 486 U.S. 800, 803 (1988). In Christianson, a
former employee of Colt asserted Clayton Act and Sher-
man Act violations by Colt as well as tortious interference
with business relationships; the employee requested
damages and injunctive and equitable relief. An antitrust
allegation related to patent validity. The district court
decided for the former employee on both the antitrust and
tortious interference claims, and Colt appealed to the
Federal Circuit. We held that we did not have jurisdiction
because the case did not arise under the patent law, and
transferred the appeal to the Seventh Circuit.
    The Seventh Circuit stated that the Federal Circuit
was “clearly wrong,” and transferred the appeal back to
us. The Federal Circuit then decided the appeal “in the
interests of justice,” while protesting that we lacked
jurisdiction. Christianson, 486 U.S. at 806–07. The
Supreme Court then stepped in, and held that the case
did not arise under the patent law, and that the appeal
belonged in the Seventh Circuit. The Court observed that
the phrase “arising under” the patent law “mask[ed] a
welter of issues regarding the interrelation of federal and
state authority and the proper management of the federal
judicial system.” Id. at 808 n.2 (quoting Franchise Tax
Bd. of Cal. v. Constr. Laborers Vacation Tr. for S. Cal.,
463 U.S. 1, 8 (1983)).
    The Court defined “arising under” patent law as re-
quiring:
    a well-pleaded complaint [that] establishe[s] ei-
    ther that federal patent law create[s] the cause of
    action or that the plaintiff’s right to relief neces-
    sarily depends on resolution of a substantial ques-
    tion of federal patent law, in that patent law was
    a necessary element of one of the well-pleaded
    claims.
Id. at 809. This standard has guided ensuing jurisdic-
tional determinations.
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION            7

    As applied to the case at bar, it is not disputed that
patent law is a “necessary element” of the antitrust claim,
for without determination that a patent was obtained by
fraud or inequitable conduct, there can be no antitrust
violation. While “a claim supported by alternative theo-
ries in the complaint may not form the basis for § 1338(a)
jurisdiction unless patent law is essential to each of those
theories,” id. at 810, Xitronix alleged a theory of antitrust
violation based solely on patent law. And, as Xitronix
states, its purpose is to invalidate the patent or render it
unenforceable. However, the panel rules that in Gunn v.
Minton, 568 U.S. 251 (2013), the Supreme Court changed
Federal Circuit jurisdiction such that only the regional
circuits now have jurisdiction over Walker Process ap-
peals.
     Gunn did not make the jurisdictional change ascribed
to it. In Gunn the Court held that the appeal of a state
law attorney malpractice case was properly in the state
court, although the malpractice charge related to a patent
issue. The Court observed that the patent had been
invalidated ten years earlier, and described the patent
aspect as “hypothetical” because whatever the attorney’s
malfeasance, there could be no rights in this long-dead
patent. Id. at 261 (“No matter how the state courts
resolve that hypothetical ‘case within a case,’ it will not
change the real-world result of the prior federal patent
litigation. Minton’s patent will remain invalid.”).
    In this context of federal-state authority, Gunn dis-
cussed the requirements for federal “arising under” juris-
diction. The Court stated, “a case can ‘arise under’ federal
law in two ways. Most directly, a case arises under
federal law when federal law creates the cause of action
asserted.” Id. at 257 (internal alteration omitted). Even
where federal law does not create the cause of action,
“federal jurisdiction over a state law claim will lie if a
federal issue is: (1) necessarily raised, (2) actually disput-
ed, (3) substantial, and (4) capable of resolution in federal
8         XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

court without disrupting the federal-state balance ap-
proved by Congress.” Id. at 258.
     Gunn explained that the substantiality inquiry looks
“to the importance of the issue to the federal system as a
whole,” id. at 260, and that when the claim “finds its
origins in state rather than federal law,” it must be “ca-
pable of resolution in federal court without disrupting the
federal-state balance approved by Congress.” Id. at 258.
The Court’s discussion of federal-state balance shows the
ill fit between Gunn and the panel’s application of Gunn
to remove the jurisdiction of the Federal Circuit over the
issues of fraud and inequitable conduct in patent prosecu-
tion when an antitrust violation is asserted in the com-
plaint.
    I agree that “[w]hile not perfectly translatable to the
question before us, the[] guideposts [of Gunn] are helpful.”
Madstad Eng’g, Inc. v. USPTO, 756 F.3d 1366, 1370 (Fed.
Cir. 2014). In Madstad, this court considered how adjudi-
cation of the constitutional challenge to the America
Invents Act would affect the “balance [of] matters com-
mitted to the jurisdiction of this court and those commit-
ted to the regional circuits.” Id. at 1371. The court stated
that the “balance would be upset by placing jurisdiction
over interpretations of the AIA and an assessment of its
constitutional validity in the hands of any circuit other
than this one.” Id. The same applies here, as the panel
upsets the balance established by Congress and moves to
the regional circuits the issue of fraud or inequitable
conduct in the PTO.
    The case at bar is not a “hypothetical ‘case within a
case,’” as in Gunn, 568 U.S. at 261. The adjudication of
fraud in procuring the patent in the PTO is a substantial
issue of patent law. The panel states that Gunn requires
moving the appeal to the Fifth Circuit because in the case
at bar “[t]here is no dispute over the validity of claims.”
Transfer Order, 882 F.3d at 1078. This is a puzzling
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION         9

statement, for that is the dispute: Xitronix states that a
finding of fraud or inequitable conduct will “result in the
’260 patent claims being rendered collaterally invalid
and/or unenforceable.” Reh’g Resp. Br. 9. The dispute is
indeed over the validity and enforceability of the patent.
The Court did not obliterate this jurisdiction of the Fed-
eral Circuit in Gunn’s resolution of state court malprac-
tice jurisdiction.
    I turn briefly to Federal Circuit precedent, for this
court has traditionally resolved antitrust aspects of
Walker Process appeals when raised in conjunction with
patent prosecution in the PTO.
The Panel Rejects Federal Circuit Precedent
    In Nobelpharma AB v. Implant Innovations, Inc., the
en banc court considered the question of whether Federal
Circuit or regional circuit law should apply to the fraudu-
lent “procuring or enforcing” aspect of a Walker Process
claim. 141 F.3d 1059, 1068 (Fed. Cir. 1998). 4 We held
that: “Whether conduct in the prosecution of a patent is
sufficient to strip a patentee of its immunity from the
antitrust laws is one of those issues that clearly involves
our exclusive jurisdiction over patent cases.” Id. at 1068.
The en banc court further explained that “we hereby
change our precedent and hold that whether conduct in
procuring or enforcing a patent is sufficient to strip a
patentee of its immunity from the antitrust laws is to be
decided as a question of Federal Circuit law.” Id.
    The panel’s ruling contradicts this en banc holding;
this alone requires en banc attention, for precedent may

   4   This section of Nobelpharma was “considered and
decided unanimously by an in banc court.” 141 F.3d
1068 n.5.
10        XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

not be changed by a panel, see South Corp. v. United
States, 690 F.2d 1368, 1370 n.2 (Fed. Cir. 1982) (en banc).
    In re Ciprofloxacin Hydrochloride Antitrust Litigation
was a transfer to the Federal Circuit from the Second
Circuit, because “the determination of fraud before the
PTO necessarily involves a substantial question of patent
law.” 544 F.3d 1323, 1330 & n.8 (Fed. Cir. 2008), abro-
gated on other grounds by FTC v. Actavis, 570 U.S. 136,
146–47, 160 (2013). Although there were also non-patent
issues in this litigation, the Second Circuit and Federal
Circuit agreed that the patent issues were substantial
and that the action arose under the patent law, placing
jurisdiction in the Federal Circuit.
    The panel now announces that Nobelpharma and
Ciprofloxacin were rendered “invalid” by Gunn. Transfer
Order, 882 F.3d at 1079. Gunn, a malpractice case on the
question of state-federal authority for attorney discipline,
made no such dramatic holding pertaining to patent
jurisdiction, even in dictum. The panel’s discard of dec-
ades of precedent requires more than silent inference
from unrelated situations.
    Other rulings on our jurisdiction are in tension with
the panel’s decision. In Jang v. Boston Scientific Corpora-
tion, 767 F.3d 1334, 1337 (Fed. Cir. 2014), an action for
breach of contract, this court was clear in its rejection of
the concept that Gunn had broadly deprived the Federal
Circuit of jurisdiction: “Here, by contrast [with Gunn], the
disputed federal patent law issues presented by Jang’s
well-pleaded complaint are substantial and neither en-
tirely backward-looking nor hypothetical. In addition to
infringement, the court may be called upon to determine
the extent to which validity is made relevant to the reso-
lution of the breach-of-contract claim by the language of
the contract itself.” Id. at 1337. This court deemed
patent validity a “substantial” issue of patent law and
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION         11

explained that appeal of the breach of contract claim was
properly to the Federal Circuit:
   Permitting regional circuits to adjudicate ques-
   tions of patent validity, for example, could result
   in inconsistent judgments between a regional cir-
   cuit and the Federal Circuit, resulting in serious
   uncertainty for parties facing similar infringe-
   ment charges before district courts within that re-
   gional circuit.     Maintaining Federal Circuit
   jurisdiction over such contractual disputes to
   avoid such conflicting rulings is important to “the
   federal system as a whole” and not merely “to the
   particular parties in the immediate suit.”
Id. at 1338 (quoting Gunn, 568 U.S. at 260).
    By further example, in Vermont v. MPHJ Technology
Investments, LLC, this court observed that the substantial
question of patent law present in a challenge to a Ver-
mont consumer protection law was not like the malprac-
tice issue in Gunn, a “‘backward-looking . . . legal
malpractice claim’ that would be unlikely to have any
‘preclusive effect’ on future patent litigation.” 803 F.3d
635, 646 (Fed. Cir. 2015) (quoting Gunn, 568 U.S. at 261,
263). Such distinction from Gunn also applies to the case
at hand.
    The panel’s ruling directly contradicts the court’s pri-
or holdings. A contradictory ruling by the panel is im-
proper, for “[t]his court has adopted the rule that prior
decisions of a panel of the court are binding precedent on
subsequent panels unless and until overturned in banc.”
Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 765 (Fed.
Cir. 1988). In the vast number of cases that have raised
non-patent issues along with patent issues, no precedent
of the Supreme Court or the Federal Circuit supports the
panel’s ruling on the panel’s facts.
12        XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

The Panel Also Misconstrues Regional Circuit
Jurisdictional Rulings
    The panel also cites decisions of other circuits to sup-
port transfer of this appeal to the Fifth Circuit. None of
these cases, not their holdings nor their procedural pos-
tures nor their reasoning, supports this transfer.
    In re Lipitor Antitrust Litigation, 855 F.3d 126
(3d Cir. 2017), dealt with the antitrust aspects of reverse-
payments between the patent owner and generic produc-
ers of the patented drug. The panel states that the reten-
tion of jurisdiction in the Third Circuit supports removal
of the instant appeal from Federal Circuit jurisdiction.
Transfer Order, 882 F.3d at 1079. The Lipitor litigation
raised several antitrust aspects unrelated to patent law.
See 855 F.3d at 146 (“Here, plaintiffs could obtain relief
on their section 2 monopolization claims by prevailing on
an alternative, non-patent-law theory . . . .”). The Third
Circuit distinguished this case from the Second Circuit’s
transfer to the Federal Circuit, stating: “But unlike the
Lipitor and Effexor appeals before us, the appeal trans-
ferred from the Second Circuit to the Federal Circuit
involved stand-alone Walker Process claims.” Id. at 148
(referencing In re Ciprofloxacin). The Third Circuit
observed that “Actavis teaches that reverse-payment
antitrust claims do not present a question of patent law”
and found patent law was not “necessary for relief on
every theory of liability supporting an antitrust claim.”
Id. at 146 (citing 570 U.S. at 156–58). The court further
stated that “courts must look to the monopolist’s conduct
taken as a whole rather than considering each aspect in
isolation.” Id. at 147 (quoting LePage’s Inc. v. 3M, 324
F.3d 141, 162 (3d Cir. 2003)). Finding “patent-law related
theories” to be but “aspects of an overall monopolistic
scheme,” the Third Circuit concluded that appellate
jurisdiction was properly found in that court. Id. at 147,
152.
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION        13

    In contrast, here Xitronix presented no “alternative,
non-patent-law theory” for its antitrust claim. Lipitor,
855 F.3d at 146. The only basis of Xitronix’s claim was
the asserted fraud or inequitable conduct in the PTO.
The Lipitor ruling does not support divesting the Federal
Circuit of jurisdiction over appeals where the potential
antitrust issue necessarily turns on finding fraud or
inequitable conduct in patent prosecution in the PTO.
    The panel also cites a Fifth Circuit case in purported
support of this jurisdictional change. In USPPS, Ltd. v.
Avery Dennison Corp., 541 F. App’x 386 (5th Cir. 2013)
the issue was breach of fiduciary duty, where a patent
applicant sued its licensee and attorneys on various
grounds. There was no issue of fraud or inequitable
conduct in prosecution of the patent application. The
appeal bounced from the Fifth Circuit to the Federal
Circuit to the Supreme Court, back to the Federal Circuit,
and then back to the Fifth Circuit, which ruled that any
patent aspects were “hypothetical” because resolution of
the breach of fiduciary duty question would not affect the
validity or enforceability of any patent. Id. at 389–90.
Although the panel cites this case as an example of re-
gional circuit jurisdiction of fraud in the PTO, there was
no issue of fraud in the PTO; the asserted fraud was
common law fraud based on contract and fiduciary rela-
tionships.
    The panel further cites MDS (Canada) Inc. v. Rad
Source Technologies, Inc., 720 F.3d 833 (11th Cir. 2013),
for the proposition that the regional circuit had jurisdic-
tion of the appeal of a “contract claim with an underlying
patent infringement issue.” Transfer Order, 882 F.3d at
1080. In that contract dispute, the court stated that the
case was for breach of a license agreement, and that the
question of infringement was not substantial because the
patent had expired and “resolution of this issue is unlike-
ly to impact any future constructions of claims.” MDS,
720 F.3d at 842. The circuit construed the contract and
14        XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION

the licensed patents, considered the asserted breaches
such as failure to pay the maintenance fees, and certified
other contract issues to the Florida Supreme Court. The
appeal before us is not such a complex case—the appeal
turns on the issue of patent prosecution conduct in the
PTO, for which appellate jurisdiction is in this court.
    Another regional circuit case on which the panel relies
is Seed Co. Ltd. v. Westerman, a malpractice case that
was appealed to the D.C. Circuit. 832 F.3d 325 (D.C. Cir.
2016). The asserted malpractice was the attorney’s
failure to successfully prosecute an application before the
PTO. The panel correctly states that the D.C. Circuit had
“appellate jurisdiction because the case ‘involve[d] no
forward looking questions about any patent’s validity, but
instead solely concern[ed] whether unsuccessful patent
applicants can recover against their attorneys.’” Transfer
Order, 882 F.3d at 1079 (quoting Seed, 832 F.3d at 331).
The Federal Circuit had several years earlier reviewed
the patent questions in Seed, in an interference proceed-
ing. As in Gunn, no patent rights were involved in or
affected by this malpractice action. This case does not
support the panel’s holding that the Federal Circuit does
not have jurisdiction over cases based on fraud or inequi-
table conduct in the PTO.
    Until today, there has been stability in the jurisdic-
tional path of Walker Process appeals. No precedent
deprives the Federal Circuit of jurisdiction of appeals that
turn on issues of fraud or inequitable conduct in patent
prosecution. These issues are not only substantial, but
because they determine patent enforceability and validity,
they are fundamental.
    To summarize why en banc review of this panel deci-
sion is appropriate and necessary:
    1) The panel, at its own initiative, raised the question
of our jurisdiction of Walker Process appeals. Although
supplemental briefing was requested of the parties, the
XITRONIX CORPORATION   v. KLA-TENCOR CORPORATION          15

ramifications of this jurisdictional change were not ex-
posed in public debate.
    2) Precedent is contrary to the panel’s rejection of this
appeal. Neither Gunn nor any other precedent supports
the panel’s ruling that claims turning on patent invalidity
and unenforceability due to fraud or inequitable conduct
in patent prosecution do not “arise under” the patent law.
    3) The reason for formation of the Federal Circuit as a
national court was to stabilize the patent law and provide
uniformity throughout the nation. Patent prosecution is a
complex and specialized interaction between inventors
and examiners. This ruling will require each regional
circuit to review patent prosecution in the PTO, creating
regional precedent and forum-shopping.
    4) Appellate review of cases that arise under the pa-
tent law is our assignment and our obligation. The Su-
preme Court did not silently divest this court of the
jurisdiction that was established in 1982.
    If the court now wishes to remove itself from jurisdic-
tion of cases that may involve issues in addition to patent
issues, we should make this change en banc. From the
court’s denial of en banc rehearing, I respectfully dissent.