Friday, June 15, 2018

Judge Newman's dissent on en banc in XITRONIX CORPORATION

Judge Newman's dissent:

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 violation
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-
cation in the Patent and Trademark Office.1 The threejudge
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 governing
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.


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 theories
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 appeals.
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.”).


The panel’s ruling directly contradicts the court’s prior
holdings. A contradictory ruling by the panel is improper,
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.


Until today, there has been stability in the jurisdictional
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.


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