09/10/14

Microsoft Corp. v. Motorola, Inc.: Federal Circuit Jurisdiction During Consolidation of District Court Actions

 Category: Civil Procedure
 
 
 By: John Kirkpatrick, Contributor 
 
TitleMicrosoft Corp. v. Motorola, Inc., No. 2014-1089 (Fed. Cir. May 5, 2014) (non-precedential).
Issue[Does the Federal Circuit have jurisdiction under 28 U.S.C. § 1338(a)] based on the district court’s consolidation of Microsoft’s contract action with its patent infringement action[?]
Microsoft Corp. at *6 (text added).
HoldingThe patent infringement complaint is not part of this appeal, not having been decided by the district court. Under such circumstances, it is plausible to conclude, as the Ninth Circuit seems to have done here, that the act of “consolidation d[id] not merge the suits into a single cause, or change the rights of the parties.” Id. at *6 (internal citations removed).
 
 
Procedural HistoryMicrosoft [...] filed suit against Motorola in [...] the [federal] Western District of Washington asserting that Motorola’s licensing proposal [for standard-essential patents] was in breach of its RAND obligations. [...] Motorola [then sued] Microsoft in [...] the [federal] Western District of Wisconsin, [for] infringement of [the] patents. [The Wisconsin court] transferred Motorola’s patent infringement action to the [Washington court, which] consolidated the actions [...] in view of its conclusion that “at least some common questions of law or fact, and the interests of judicial economy will be served by consolidation.” [...] [The court] enjoined Motorola from enforcing [a German] injunction [against Microsoft] on the grounds that the U.S. and German actions involved the same issues and Microsoft’s contract action could resolve whether injunctive relief is [an appropriate remedy]. Motorola appealed [...] to the Ninth Circuit. [T]he Ninth Circuit [...] affirmed the injunction. [A] jury trial on Microsoft’s breach of contract claims [found for Microsoft]. [...] Motorola [appealed] naming [the Federal Circuit]. Microsoft now moves to transfer the case to the Ninth Circuit.
Microsoft Corp. at *2-4 (text added).
 
 
 
Legal Reasoning (LOURIE, Dyk, Reyna)
Analysis
Federal Circuit Jurisdiction Relates to Patents[The Federal Circuit] has jurisdiction to decide an appeal from a final decision of a district court “if the jurisdiction of that court was based, in whole or in part, on section 1338.” [...] Section 1338 provides that the federal district courts have exclusive jurisdiction over “any civil action arising under any Act of Congress relating to patents.” [...] The Supreme Court has held that in order to demonstrate that a case is one “arising under” patent law, the plaintiff must “set up some right, title or interest under the patent laws, or at least make it appear that some right or privilege will be defeated by one construction, or sustained by the opposite construction of these laws.”
Microsoft Corp. at *4 (text added, internal citations removed).
Appeal Does Not Arise Under the Patent Laws "In its injunction ruling, the Ninth Circuit rejected the position that this court had jurisdiction over the matter based on its view that Microsoft’s complaint sounds in contract."  Id. at *5 (internal citation removed) "[...] Under the law of the case doctrine, we must adhere to a coordinate court’s jurisdictional ruling unless there is a showing of “extraordinary circumstances such as where the initial decision was clearly erroneous and would work a manifest injustice.” [...] Here, there is no manifest justice. Nor is there a “clearly erroneous” result. The requested relief in Microsoft’s complaint plausibly supports the Ninth Circuit’s conclusion that this matter does not arise under the patent laws. Motorola contends that the cases arise at least in part under § 1338 based on the district court’s consolidation of Microsoft’s contract action with its patent infringement action. In fact, however, it appears that the district court merely consolidated the cases for purposes of judicial economy. The patent infringement complaint is not part of this appeal, not having been decided by the district court. Under such circumstances, it is plausible to conclude [...] that the act of “consolidation d[id] not merge the suits into a single cause, or change the rights of the parties.” Id. at *6 (text added, internal citations removed).
Conclusion
While we have considered Motorola’s other arguments, because we conclude that the Ninth Circuit’s decision was, at a minimum, plausible, we grant the motion to transfer. Microsoft Corp. at *6.

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