U.S. Supreme Court to Federal Circuit: No Jurisdiction Over Appeal Where Complaint Does Not Allege Claim Arising Under Patent Law
The U.S. Supreme Court has held that the U.S. Court of
Appeals for the Federal Circuit cannot assert jurisdiction over a case in which
the complaint does not allege a patent law claimóeven though the answer
contains a patent law counterclaim. The Holmes Group, Inc. v. Vornado Air
Circulation Systems, Inc., 535 U.S. ___, 2002 LEXIS 4022 (June 3, 2002). In
Holmes, the Supreme Court vacated the judgment of the Federal Circuit
and remanded the case to the Tenth Circuit, finding the Federal Circuit erred
in asserting jurisdiction over an appeal where the complaint did not allege a
claim arising under patent law.
Holmes filed suit in the district court seeking a declaratory
judgment that its products did not infringe Vornado's trade dress. In its
answer, Vornado asserted a patent infringement counterclaim. The district court
granted Holmes a declaratory judgment of noninfringement and stayed all
proceedings related to Vornado's counterclaim. Vornado appealed to the Federal
Circuit. Not withstanding Holmes' challenge to its jurisdiction, the Federal
Circuit vacated the district court's judgment and remanded the case.
Justice Scalia, writing for the Court, stated that 28 U.S.C.
ß1295(a)(1) vests the Federal Circuit with exclusive jurisdiction over appeals
from a final decision of a district court if the jurisdiction of that court was
based, in whole or in part, on 28 U.S.C. ß1338. Section 1338(a) provides that
district courts shall have original jurisdiction of any civil action
"arising under" any Act of Congress relating to patents. Because
ß1338(a) uses the same operative language as 28 U.S.C. ß1331, which confers
federal question jurisdiction in district courts for actions arising under
federal law, the Court found that "linguistic consistency" requires
the application of the well-pleaded complaint rule to determine whether a case
"arises under" ß1338(a) and vests the Federal Circuit with appellate
jurisdiction under ß1295(a)(1). Justice Scalia explained that under the
well-pleaded complaint rule, the plaintiff's complaint must establish either
that federal patent law creates the cause of action or that the plaintiff's right
to relief necessarily depends on the resolution of a substantial question of
federal patent law. Because Holmes' complaint did not meet either requirement,
the Court held that the Federal Circuit erred in asserting jurisdiction over
the appeal.
The Court pointed out that the "well pleaded complaint
rule" is intended to...
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