U.S. Supreme Court to Federal Circuit: No Jurisdiction Over Appeal Where Complaint Does Not Allege Claim Arising Under Patent Law

Author:Ms Mary Chapin
Profession:McDermott Will & Emery

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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