Wednesday, September 17, 2008

No federal jurisdiction for licensee-plaintiff

The CAFC tackled a federal jurisdiction issue in the case Excelstor v. Papst . When licensing deals go bad, one is apt to end up in state court. Here, the licensee tried to obtain federal jurisdiction via patent exhaustion. It didn't work-->

But there is no federal cause of action for collecting royalties twice on the same goods. Patent exhaustion prohibits
patentees from enforcing patent rights in certain circumstances, but it does not forbid
multiple licenses on a single product or even multiple royalties. Papst’s alleged
collection of two sets of royalties in this case may, eventually, prove to have been
prohibited by the terms of the individual license agreements, or such a collection
scheme may prove to have been fraudulent, but patent law is not a necessary element
of such determinations. They are properly made in this case by state, not federal,
courts, under state law of contract and fraud.

Of the basics:

In Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (2005), the
United States Supreme Court set forth a two-part test for determining whether federal
courts have exclusive jurisdiction over a case pursuant to 28 U.S.C. § 1338(a). The
Court held that § 1338 jurisdiction extends to any case “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, 486 U.S. at 809. In analyzing whether patent law is
a necessary element of ExcelStor’s claims, we are limited to an analysis of ExcelStor’s
well-pleaded complaint. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). (...)
A claim does not arise under the patent laws if a patent issue appears only in
a defense to that claim. Thompson v. Microsoft Corp., 471 F.3d 1288, 1292 (Fed. Cir.
2006) (quoting Christianson, 486 U.S. at 809).


Post a Comment

<< Home