Jang v. Boston Scientific: Fed. Cir. Has Jurisdiction over Contract Claims Relating to Patent Royalties

Category: Civil Procedure 
By: Christian Hannon, Contributor  
TitleJang v. Boston Scientific Corp., No. 2014-134 (Fed. Cir. Sept. 16, 2014).
IssueBoston Scientific Corporation and Scimed Life Systems, Inc. petition for permission to appeal an order of the United States District Court for the Central District of California that denied summary judgment.
Jang at *2.
Holding[W]e conclude that the limited circumstances under which an interlocutory appeal might be
permitted are not met in this case.
Id. at *9.
Procedural History
Petitioners Motion for Interlocutory AppealOn petitioners' motion, the district court certified an interlocutory appeal of the order denying summary judgment pursuant to 28 U.S.C. § 1292(b) as to the following questions: 1. Where an assignor is suing under an assignmnet agreement for payments allegedly due for practicing claims now determined to be invalid, and where there is no allegation of dishonest or dilatory conduct on the part of the assignee, does the exception to Lear, Inc. v. Adkcins, 395 U.S. 653 (1969), identified in Studiengesellschaft Kohle, M.B.H. v. Shell Oil Co., 112 F.3d 1561 (Fed. Cir. 1997), apply? 2. If the Kohle exception does apply, what is the appropriate tandard for its appliation where the assignee has never made payments on sales of the accused product and has consistently maintained that no such payments could be due because the claims cannot properly be construed to cover the accused product and would be invlaid under any construction that did cover the accused product?
Jang at 3-4.
Court's Request for Briefing on Jurisdictional IssueThis petition for permission to file an interlocutory appeal followed, and we directed the parties to address the jurisdictional question [in light of Gunn v. Minton, 133 S. Ct. 1059 (2013)] prior to consideration of the merits of the petition.
Id. at *4.
Legal Reasoning (Dyk, Plager, LINN)
Jurisdictional Issue
Stautory Jurisdictional BasisThis court has exclusive jurisdiction to decide an appeal from a final decision of a district court in any civil action “arising under” any Act of Congress relating to patents. 28 U.S.C. §§ 1338(a), 1295(a)(1). Even though petitioners do not contend that federal patent law creates the asserted causes of action [which relate to a contract claim for payment of royalties on a no-longer valid patent], we agree that this case nonetheless presents a patent issue that is “(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” Gunn, 133 S. Ct. at 1065.
Jang at *4.
Gunn Requirements Met[T]he disputed federal patent law issues presented by Jang’s well-pleaded complaint are substantial and neither entirely 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 resolution of the breach-of-contract claim by the language of the contract itself.
Id. at *6.
Importance of Maintaining Certainty in Patent-Related LitigationPermitting regional circuits to adjudicate questions of patent validity, for example, could result in inconsistent judgments between a regional circuit and the Federal Circuit, resulting in seriouos uncertainty for parties facing similar infringement charges before district courts within that regional circuit. Maintainin 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 *7 (internal citations and quotations ommitted).
Basis for Federal Circuit's Exclusive Appellate JurisdictionJust as subject matter jurisdiction in diversity cases such as this one is determined on the facts as they existed at the time the claim was filed, the Federal Circuit's exclusive appellate jurisdiction is predicated on the cause of action and the basis of the facts as they existed at the time the complaint or any compulsory counterclaim was filed.
Id. at *7-8.
Conclusion of Jurisdictional IssueBecause the patent law issues raised in the complaint were at that time substantial for the reasons noted above, and because the Gunn test was otehrwise met in all respects, jurisdiction of the petitoin is and proproperly remains before this court.
Id. at *8.
Merits Issue
Statutory Basis for Interlocutory Appeal28 U.S.C. § 1292(b) authorizes a district court to certify for appeal an otherwise-unappealable order under circumstances in which it is “of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation[.]” Ultimately, this court must exercise its own “discretion” in deciding whether to “permit an appeal to be taken” under this provision.
Jang, at *8 (citations omitted).
Fed. Cir. Interlocutory Appellate Review a Rare OccurenceAs a general proposition, our court grants interlocutory review in these multi-faceted patent cases only rarely.In this case, we decline to grant such review. There are several reasons why this case is not appropriate for such review. It is not clear that the legal issues identified in the questions will in fact be controlling, and each question depends on the resolution of factual issues not yet addressed by the district court.
Id. at *9.
Requirements to Consider Interlocutory Appeal Not MetWithout taking any position on the merits of the issues presented, we conclude that the limited circumstances under which an interlocutory appeal might be permitted are not met in this case.
Id. at *9.
It is ordered that this petition is denied.
Jang, at *9.
 Image Attribution Statement: Rudlf Wilke, “Wilke Serenissimus in Oberammergau,” image available as a public domain image, http://commons.wikimedia.org/wiki/File:Wilke_Serenissimus_in_Oberammergau.jpg (image edited) (last visited Nov. 23, 2014).
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