Paul Gugliuzza on “Arising Under” Jurisdiction in Patent Cases

I’ve talked several times on this site about the recently denied cert petition in Xitronix Corp. v. KLA-Tencor Corp. The case involved a maddening back-and-forth between the Federal and Fifth Circuits, with each court saying that the other had appellate jurisdiction to review a Walker Process claim. More specifically, the two circuits disagreed about whether Walker Process claims arose under the patent law. If they did, the Federal Circuit had exclusive jurisdiction; if not, the appeal should have gone to the appropriate regional court.

Paul R. Gugliuzza has posted a new article on SSRN addressing the confusion over when claims arise under the patent law, appropriately titled Rising Confusion About ‘Arising Under’ Jurisdiction in Patent Cases. It’s forthcoming in the Emory Law Journal. Here’s the abstract:

By statute, all cases “arising under” patent law must be heard exclusively by the federal courts (not state courts) and, on appeal, by the Federal Circuit (not the twelve regional circuits). But not all cases involving patents “arise under” patent law. As recently as 2013, the Supreme Court ruled that the mere need to apply patent law in, for example, a malpractice case involving a patent lawyer, is insufficient to trigger exclusive jurisdiction. Rather, the Court held, for a case that does not involve claims of patent infringement to arise under patent law, the patent issue must be “important . . . to the federal system as a whole.”

Despite the Supreme Court’s clear holding that “fact-bound and situation-specific” patent issues do not warrant exclusive jurisdiction outside of infringement cases, the lower courts’ precedent in this area remains unsettled. The Federal Circuit has, at times, tried to resurrect its older case law extending exclusive jurisdiction to practically any patent-related tort, contract, or antitrust case. But, in other decisions, the Federal Circuit has constricted jurisdiction so dramatically that the Fifth Circuit, earlier this year, refused to accept a case transferred to it by the Federal Circuit, deriding the Federal Circuit’s jurisdictional ruling as not just wrong, but “implausible.” All of this uncertainty incentivizes costly and wasteful procedural maneuvering in a field where litigation is already notoriously expensive.

This article is the first to chronicle the rising confusion about the scope of the federal district courts’ and the Federal Circuit’s exclusive jurisdiction over cases arising under patent law. The article critiques the case law emerging in the lower federal courts and proposes a jurisdictional rule that is both clear and consistent with Supreme Court precedent: for a case that does not involve claims of patent infringement to nevertheless arise under patent law, it must present a dispute about the content of federal patent law or a question about the interpretation or validity of the federal patent statute.

In arguing for this new approach, the article also engages broader questions about the jurisdictional structure of patent litigation. Among other things, it suggests that the courts or Congress should rethink longstanding doctrine that makes the test for Federal Circuit appellate jurisdiction precisely the same as the test for exclusive original jurisdiction in the district courts. Exclusive district court jurisdiction entirely precludes state courts from shaping their own state’s law, so federal courts should be hesitant to exercise jurisdiction over a tort or contract claim simply because there is a patent lurking in the background. But when a patent-related case is properly in federal district court, the Federal Circuit’s expertise in patent law and ability to provide uniformity counsel in favor of giving the court a broad scope of appellate jurisdiction.

I read a draft of this article for the recent Civil Procedure Workshop, and it’s excellent. Paul’s discussion of appellate jurisdiction is particularly intriguing (at least to me). I think he’s on to something important when it comes to developing different standards of arising under jurisdiction—one for district courts’ exclusive original jurisdiction and another for the Federal Circuit’s exclusive appellate jurisdiction.

Paul R. Gugliuzza, Rising Confusion About ‘Arising Under’ Jurisdiction in Patent Cases, 69 Emory L.J. (forthcoming 2019), available at SSRN.