The opinion and order in this post take a look at whether the Federal Circuit’s jurisdiction over legal malpractice claims in patent prosecution matters reaches too deep and too far. Just a couple of weeks ago, I discussed Judge O’Malley’s concurrence on this topic in the USPPS case, in which she concluded that the Federal Circuit’s exercise of jurisdiction in these malpractice cases overreaches. She reiterated that point in the Herman Minkin case discussed below. Her dissent in the court’s denial of a petition for rehearing in the Byrne case explains her position in more detail.
Byrne v. Wood, Herron, and Evans, LLP, No. 2011-1012 (Fed. Cir. Mar. 22, 2012) (Chief Judge Rader, Circuit Judges Newman, Lourie, Bryson, Gajarsa, Linn, Dyk, Prost, Moore, O’Malley, Reyna, and Wallach) (per curiam order)
Herman Minkin v. Gibbons, P.C., No. 2011-1178 (Fed. Cir. May 4, 2012) (Chief Judge Rader, Circuit Judges O’Malley and Reyna)
Judge O’Malley’s Byrne dissent raises several concerns about federal jurisdiction in state law malpractice cases that allege negligence in the way an attorney handled patent prosecution. The Supreme Court’s test in Grable & Sons Metal Prods., Inc. v. Darue Engineering and Manufacturing, on which Judge O’Malley relies heavily, gives a 4-factor test to determine if a federal court should exercise jurisdiction over a state law claim:
- Is a federal issue a necessary element of the state law claim?
- Is a federal issue actually disputed?
- Is a federal issue substantial?
- Would exercising federal jurisdiction disturb the balance of federal and state responsibilities?
Since I talked about some of these factors in the USPPS post, I’ll just touch on a couple of the other interesting points Judge O’Malley raised here:
- The Federal Circuit’s approach to these cases seems to equate “substantial” with the “necessary” requirement of factor 1. Judge O’Malley remarks that Federal Circuit case law seems to presume that just because patent prosecution malpractice cases require a patentability analysis, then the federal interest is substantial. (In fact, Judge Dyk’s concurrence underscores this point.) But under the Grable test, “substantial” and “necessary” are two different inquiries, as Judge O’Malley notes.
- The Federal Circuit’s current approach puts only patent-related malpractice cases in federal court. Judge O’Malley says: “[O]ur case law produces the odd result that malpractice claims stemming from an underlying federal suit will only belong in federal court when the federal issue is one of patent law. That result is peculiar because states undoubtedly have a strong interest and role in regulating the conduct of all their respective attorneys, as well as in protecting all of their residents from negligent legal services.” (See page 31 of Judge O’Malley’s dissent.)
- The court is in an awkward situation when lower federal or state courts disagree with the Federal Circuit’s jurisdictional analysis. Judge O’Malley cites some cases where the lower courts concluded there wasn’t federal jurisdiction, but the Federal Circuit couldn’t claim jurisdiction to correct the error.
- The patent rights at issue are only hypothetical—even if the plaintiff wins her malpractice suit, she won’t get new or different patent rights.
From Jurisdiction Theory to Practice
Now that I’ve told you about all the potential issues with the federal jurisdiction in patent malpractice cases, the Herman Minkin case shows the “suit-within-a-suit” patentability analysis that occurs in these malpractice cases.
In Herman Minkin, Minkin applied for a patent in 1996 for his extended reach pliers, which allowed airplane mechanics to reach deep into an airplane engine without taking the engine apart. Although his patent issued, another tool company, Danaher, was able to design around the patent to make its own version of extended reach pliers. Minkin sued his law firm for malpractice, arguing that his attorneys drafted the claims too narrowly to protect against competitors.
In order to prove his case, Minkin had to show that his pliers would have been patentable even if the claims had been drafted more broadly. If he couldn’t show that, his malpractice claim fails. But even if he could show patentability, he would still have to prove the other elements of a malpractice claim—hence, the “suit-within-a-suit.”
Minkin provided 2 expert reports from a patent attorney, which presented broader alternative claims that, he opined, wouldn’t have been anticipated by the prior art references. But his reports didn’t address whether the claims would overcome an obviousness rejection. In fact, he testified in his deposition that he hadn’t considered obviousness in his analysis. The district court concluded that Minkin failed to provide any evidence as to obviousness, and granted summary judgment for the law firm. The Federal Circuit agreed.
It’s true that the “suit-within-a-suit” analysis involved assessing hypothetical patent claims—in theory, anyway. But this case ultimately came down to a failure of evidence.
Personally, I think Judge O’Malley makes some valid points. But it looks like the court has decided to punt on this jurisdictional issue for the time being.
Photo credit: Army Medicine