Patent Attorney Malpractice: Case-Within-A-Case-Within-A-Case
Akron Law Journals
Patent Attorney Malpractice: Case-Within-A-Case- Within-A-Case
A. Samuel Oddi
Please take a moment to share how this work helps you through this survey. Your feedback will be important as we plan further development of our repository. Follow this and additional works at: http://ideaexchange.uakron.edu/akronintellectualproperty Part of the Intellectual Property Law Commons Recommended Citation Oddi, A. Samuel (2012) "Patent Attorney Malpractice: Case-Within-A-Case-Within-A-Case," Akron Intellectual Available at: http://ideaexchange.uakron.edu/akronintellectualproperty/vol6/iss1/4
PATENT ATTORNEY MALPRACTICE:
A. Samuel Oddi*
I. INTRODUCTION: CASE-WITHIN-A-CASE
As literary devices, a “story-within-a story” and a
“play-within-aplay” have a long lineage.1 Shakespeare seems to have been particularly
fond of these devices.2 The legal analog may be seen as the
“case* Giles Sutherland Rich Professor in Intellectual Property, University of Akron School of Law. I
would like to thank Dean Martin Belsky and Associate Dean William Jordon, University of Akron
School of Law, for the grant of release time to undertake the completion of this article. I would also
like to thank Kyle Passmore, Deputy Law Librarian, University of Akron School of Law, for her
valuable research assistance, and my research assistant, Angela Cox, J.D. 2013, University of Akron
School of Law, for her dedicated assistance in the preparation of this article. Finally, I would like to
express my gratitude to my wife, Lorys Oddi, for her rigorous, but always helpful, editorial skills in
reviewing numerous drafts of this article.
1. See, e.g., MIGUEL DE CERVANTES SAAVEDRA, DON QUIXOTE: COMPLETE AND
UNABRIDGED (Walter Starkie trans., Signet Classics, reprint ed. 2009); FYODOR DOSTOEVSKY, THE
BROTHERS KARAMAZOV (Andrew R. MacAndrew trans., Bantam Classics 1984); THOMAS KYD,
THE SPANISH TRAGEDY (Charles T. Prouty ed., Harlan Davidson 1951).
2. See Richard L. McGuire, The Play-within-the-play in 1 Henry IV, 18 SHAKESPEARE
QUARTERLY 47, 47 (1967); see also, e.g., WILLIAM SHAKESPEARE, A MIDSUMMER NIGHT’S
DREAM (Simon & Schuster, reprint ed. 2004); WILLIAM SHAKESPEARE, HAMLET (Cyrus Hoy ed.,
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
within-a-case” (“trial-within-a-trial,” “suit-within-a-suit”) arising in
legal malpractice cases.3 The case-within-a-case terminology seems to
be the most commonly used and hence will be used herein.4 While it is
clear that the “case” is the malpractice case,5 it is not so clear what the
“case-within-” is,6 which is usually referred to as the “underlying case.”7
Often, it seems to be presumed that the underlying case is limited to
W. W. Norton Co., 2d. ed. 1992); WILLIAM SHAKESPEARE, THE TAMING OF THE SHREW (Jonathan
Bate and Eric Rasmussen eds., Modern Library, reprint ed. 2010).
3. See 4 RONALD E. MALLEN & JEFFREY M. SMITH, LEGAL MALPRACTICE § 36:12 (2011);
see also RESTATEMENT (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS § 53 cmt. b (2000);
John H. Bauman, Damages for Legal Malpractice: An Appraisal of the Crumbling Dike and the
Threatening Flood, 61 TEMP. L. REV. 1127 (1988) (discussing problems of limiting damages
according to the case-within-a-case methodology to failure to obtain a judgment rather than the
actual harm resulting from the malpractice); Lawrence W. Kessler, Alternative Liability in
Litigation Malpractice Actions: Eradicating the Law Resort of Scoundrels, 37 SAN DIEGO L. REV.
401 (2000) (examining the development of alternative duty and proof doctrines and advocating for
the application of the various doctrines in legal malpractice actions); Joseph H. Koffler, Legal
Malpractice Damages in Trial Within a Trial–A Critical Analysis of Unique Concepts: Areas of
Unconscionability, 73 MARQ. L. REV. 40 (1989) (discussing problems of fairness in applying the
trial-within-a-trial doctrine in legal malpractice actions and making recommendations to eliminate
the fairness problems); Adam J. Myers III, Misapplication of the Attorney Malpractice Paradigm to
Litigation Services: “Suit Within a Suit” Shortcomings Compel Witness Immunity for Experts, 25
PEPP. L. REV. 1 (1997) (analyzing the application of the suit-within-a-suit doctrine in litigation
services malpractice suits); Noreen L. Slank, Suit Within a Suit: A Doctrine Michigan Courts Hate
to Love, 72 MICH. B. J. 1174 (1993) (defending the suit-within-a-suit doctrine and classifying it as
“the tort system’s most powerful predictor of the correct result in a wide variety of legal malpractice
4. See 4 MALLEN & SMITH, supra note 3, § 36:6.
5. Malpractice will be used herein as the generic term with the understanding that the
malpractice claim may be based on professional negligence, breach of fiduciary duty, breach of
contract, fraud, or other theory. See 1 MALLEN & SMITH, supra note 3, § 8:1:
Most actions brought by clients against their attorneys are for negligence, fiduciary
breach, breach of contract or fraud. Although there are other theories, these bases of
liability are familiar, usually easier to establish and provide full relief. Debate about
whether legal malpractice is based on contract or tort, and the nature of the tort, usually
concerns application of a statute of limitations, or a statute providing a special remedy or
damage recovery. Because alternative theories often are based on the same factual
allegations as a negligence cause of action, such claims frequently are treated as
redundant and are disregarded. In several jurisdictions, however, an action for legal
malpractice, though sounding in tort, is an action in contract. (footnotes omitted)
However, negligence will be referred to herein as the default theory in that it is the most commonly
relied upon either solely or in combination of one or more of the other theories. See RESTATEMENT
(THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS §§ 48 cmt. c (2000) (theories of liability:
tort and contract), 49 (breach of fiduciary duty); see also A. Samuel Oddi, Patent Attorney
Malpractice: An Oxymoron No More, 2004 U. ILL. J.L. TECH. & POL’Y 1 (discussing the various
elements and theories of malpractice cases involving patent attorneys).
6. See infra text accompanying notes 21-35.
7. See BLACK’S LAW DICTIONARY 245 (9th ed. 2009) (“case-within-a-case rule. Torts. The
requirement that a legal-malpractice-action plaintiff show that, but for the attorney’s negligence, the
plaintiff would have won the case underlying the malpractice action.”).
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
litigation, which would have involved a trial culminating in a judgment
being entered in favor of one of the parties.8 In many instances,
litigation (real or hypothetical), indeed, is the source of the plaintiff’s
injury and resulting damages as a consequence of an attorney’s
malpractice.9 For example, if an attorney should miss a statute of
limitations, thus barring the plaintiff from recovering against a party
asserting the statute, the plaintiff must prove that, but for the negligence
of its attorney, it would have prevailed against that party had the case
been tried and gone to judgment.10
8. See, e.g., Bebo Const. Co. v. Mattox O’Brien, P.C., 990 P.2d 78, 83 (Colo. 1999) (“The
plaintiff must demonstrate that the claim underlying the malpractice action should have been
successful if the attorney had acted in accordance with his or her duties.”).
9. The RESTATEMENT (SECOND) OF TORTS §§ 1, 7, 12A (1965) provides separate definitions
for “injury,” “harm,” “damages,” and “interest:
§ 7 Injury and Harm
(1) The word “injury” is used throughout the Restatement of this Subject to denote the
invasion of any legally protected interest of another.
(2) The word “harm” is used throughout the Restatement of this Subject to denote the
existence of loss or detriment in fact of any kind to a person resulting from any cause.
. . .
12 A. Damages
The word “damages” is used throughout the Restatement of this subject to denote a sum
of money awarded to a person injured by the tort of another.
The word “interest” is used throughout the Restatement of this subject to denote the
object any human desire.
Mallen & Smith, however, do not find these definitions useful, stating:
The terms “damages” and “injury” frequently are used interchangeably. There is a
difference, however, which can be important. The Restatement (Second) of Torts
defines “injury” as “the invasion of any legally protected interest of another” and
“damages” as “a sum of money awarded to a person injured by the tort of another.”
Using those definitions, damages are the monetary value of an injury. The difference in
meaning can be significant, if the issue concerns when a statute of limitations
commences to run. Often, the date of injury is earlier than the date when the damages
are ascertainable or fully developed.
The Restatement’s general tort definition of “injury” is vague for use in the context
of legal malpractice claims. A more useful and precise definition for a legal malpractice
injury is the loss of a right, remedy or interest, or the imposition of a liability. Damages
concern the measure of that injury.
1 MALLEN & SMITH, supra note 3, § 21.1 (footnotes omitted). The Restatement (Third) of the Law:
The Law Governing Lawyers, appears to use the terms “injury” and “damages” interchangeably.
See RESTATEMENT (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS § 48 (2000) (using
“injury within the meaning of § 53,” with § 53 referring to “injury, as determined under generally
applicable principles of causation and damages.”). For convenience, the terms “injury” and
“damages” will be used interchangeably herein unless otherwise indicated.
10. See, e.g., Basset v. Sheehan, 184 P.3d 1072, 1077 (N.M. Ct. App. 2008) (granting
summary judgment in favor of defendant firm, where plaintiff was unable to show that it would
have prevailed against underlying defendant if the statute of limitations for the underlying claim had
not been missed).
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
On the other hand, there are many situations where clients are
injured due to the malpractice of attorneys that do not involve being
denied a favorable judgment in litigation.11 An example of this in the
context of patent law would be the negligent failure of a patent attorney
to file a patent application on behalf of a client in a timely manner to
avoid a statutory bar.12 This situation obviously does not involve
litigation; nonetheless, the client has suffered the loss of a patent if it can
be established that a patent would have been granted but for the failure
of the attorney to file the application in a timely manner.13 If no patent
would have been granted (e.g., because of prior art), the plaintiff would
be unable to establish a causal connection between the attorney’s
negligence and any damage suffered.14 On the other hand, even if the
patent would have been granted, plaintiff will still have to establish in
the malpractice case that it suffered damages—perhaps in the form of
loss of infringement damages or license royalties.15
When the malpractice plaintiff has suffered injury in the form of
loss of a favorable judgment as a consequence of the malpractice of its
attorney, this type of case-within-a-case will be termed herein as the
“judgment” model.16 According to this model, the malpractice plaintiff
must prove that it would have received a more favorable judgment in the
underlying case (litigation) but for the malpractice of the attorney.17
However, this model is only a species of the general class of injuries that
may be suffered by clients due to the malpractice of their attorneys.18
When the malpractice plaintiff has suffered injury in other than the
form of the loss of a favorable judgment as a consequence of the
malpractice of its attorney, this type of case-within-a-case will be termed
herein as the “non-judgment” model.19 The plaintiff, of course, bears
the burden of proving it suffered actual damages of a nature other than
the loss of a favorable judgment in the underlying case.20 To further
illustrate these models, a more comprehensive definition of the
“casewithin-” (i.e., the underlying case) may be helpful.
Indeed, “case” has a broader connotation than litigation/trial/suit.
The venerable Black’s Law Dictionary gives the following definition:
“case . . . [a] civil or criminal proceeding, action, suit, or controversy at
law or in equity.”21 Thus, according to this definition, it would be
appropriate to consider a “controversy” as being included within the
“case-within-” (the underlying case) as well as “proceeding, action, suit”
to which “trial” could be added.
Courts, particularly those who are following the judgment model,
often refer to “case-within-a-case” as a doctrine,22 rule,23 requirement,24
A plaintiff may show that the defendant’s negligence or fiduciary breach caused
injury other than the loss of a judgment. For example, a plaintiff may contend that, in a
previous action, the plaintiff would have obtained a settlement but for the malpractice of
the lawyer who then represented the plaintiff. A plaintiff might contend that the
defendant in the previous action made a settlement offer, that the plaintiff’s then lawyer
negligently failed to inform plaintiff of the offer (see § 20(3)), and that, if informed,
plaintiff would have accepted the offer. If the plaintiff can prove this, the plaintiff can
recover the difference between what the claimant would have received under the
settlement offer and the amount, if any, the claimant in fact received through later
settlement or judgment. Similarly, in appropriate circumstances, a plaintiff who can
establish that the negligence or fiduciary breach of the plaintiff’s former lawyer deprived
the plaintiff of a substantial chance of prevailing and that, due to that misconduct, the
results of a previous trial cannot be reconstructed, may recover for the loss of that chance
in jurisdictions recognizing such a theory of recovery in professional-malpractice cases
The plaintiff in a previous civil action may recover without proving the results of a
trial if the party claims damages other than loss of a judgment. For example, a lawyer
who negligently discloses a client’s trade secret during litigation might be liable for harm
to the client’s business caused by the disclosure.
RESTATEMENT (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS § 53 cmt. b.
20. See ASTech, 676 F. Supp. 2d at 402.
21. BLACK’S LAW DICTIONARY 243 (9th ed. 2009). The use of this source seems particularly
apropos in view of the Federal Circuit’s reliance on it in Davis v. Brouse McDowell, L.P.A. for the
definition of a “claim” in a malpractice complaint. 596 F.3d 1355, 1360 (Fed. Cir. 2010).
22. See, e.g., Davis, 596 F.3d at 1360-61 (citing Envtl. Network Corp. v. Goodman Weiss
Miller, LLP, 893 N.E.2d 173, 175 (Ohio 2008) and Vahila v. Hall, 674 N.E.2d 1164, 1168-69 (Ohio
1997)); see also Dan Nelson Constr., Inc. v. Nodland & Dickson, 608 N.W.2d 267, 271 (N.D.
23. See, e.g., Bauer v. Dyer, 782 So. 2d 1133, 1140 (La. Ct. App. 2001); Young v. Gum, 649
S.E.2d 469, 473 (N.C. Ct. App. 2007).
24. See, e.g., Air Measurement Techs., Inc. v. Akin Gump, 504 F.3d 1262, 1269
; Adamasu v. Gifford, No. 273895, 2008 Mich. App. LEXIS 1034, at *3 (Mich. Ct. App. May
or element,25 thus giving the impression that it is mandatory that the
malpractice plaintiff prove that it would have prevailed to judgment in
the underlying case to recover in the malpractice case. Recognizing that
“case” has a broader meaning than “litigation” to include
“controversies” may help to avoid this significant limitation to the scope
of legal malpractice cases (controversies). Other courts have preferred
to categorize “case-within-a-case” as a methodology26 or analysis27
rather than as a doctrine/rule/requirement/element. There seems to be
considerable merit in this usage because the “case-within-a-case”
methodology is being used whether the malpractice plaintiff is alleging
damages for the failure to obtain a favorable judgment in the underlying
litigation (judgment model) or actual damages suffered as a result of
malpractice in representation in the underlying controversy
In both the judgment and non-judgment models, in the context of a
malpractice case based on negligence, the duty and breach elements
(constituting negligence) are the same for both the malpractice case and
the underlying case (controversy), where malpractice is alleged to have
occurred.29 However, in the “judgment” model, the causation and
damage elements are conflated, with the only damage recoverable by the
plaintiff being the hypothetical loss of a favorable judgment had the trial
been held in the underlying case.30 Accordingly, the only “cognizable”
damage in the “judgment” model is the loss of a favorable judgment in
the hypothetical underlying case-within-a-case.31 There is, of course, no
causal relationship between the negligent conduct of the defendant
attorney and any damage suffered by the malpractice plaintiff, if damage
is limited to the loss of a favorable judgment in the underlying case and
the plaintiff cannot establish that specific form of damage.
In the “non-judgment” model, the duty-breach-causation elements
are the same as in the “judgment” model;32 however, the damage
element is determined by the nature of the damage the malpractice
plaintiff pleads it has actually suffered, and such damage is not limited
to prevailing in any hypothetical underlying case that would have
resulted in a favorable judgment.33 In other words, the malpractice
plaintiff in the “non-judgment” model is not required to prove it would
have obtained a judgment in the underlying case, but only that it suffered
actual damages causally related to defendant attorney’s negligence in the
underlying transaction.34 These damages may be based on a variety of
In using the “case-within-a-case” methodology, it is important to
recognize that the underlying case that precipitated the malpractice claim
is not limited to litigation that would have resulted in a favorable
judgment for the malpractice plaintiff, but also includes any controversy
where, due to the malpractice of the attorney, plaintiff has suffered
damages.36 The judgment and non-judgment models provide an
explanatory framework. The elements of a legal malpractice case
remain the same in both models, with the understanding that the damage
element may be satisfied by the loss of a favorable judgment or other
actual damages in the underlying case (controversy).37
Jurisdiction—Federal or State
Malpractice cases brought against patent attorneys have a further
complication. Malpractice cases traditionally fall within the jurisdiction
32. See 4 MALLEN & SMITH, supra note 3, § 36:1.
33. RESTATEMENT (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS § 53 cmt. b.
35. See 3 MALLEN & SMITH, supra note 3, Part IV (damages); see also John C.P. Goldberg,
What Clients Are Owed: Cautionary Observations on Lawyers and Loss of Chance, 52 EMORY L.J.
1201, 1212-13 (2003) (advocating against the application of the loss-of-chance doctrine in legal
malpractice cases); Kessler, supra note 3, at 516-17 (advocating for the application of the
loss-ofchance doctrine in legal malpractice cases and arguing that calculating the lost settlement value of a
case is the best method by which to calculate loss of chance); Polly A. Lord, Loss of Chance in
Legal Malpractice, 61 WASH. L. REV. 1479 (1986) (discussing the loss-of-chance doctrine and
advocating for application of the doctrine in certain legal malpractice cases); Id. at 1491-94.
(advocating for the application of the loss-of- chance doctrine in legal malpractice actions that meet
36. See supra text accompanying notes 29-35.
37. See supra text accompanying notes 29-35.
of state courts as state common law causes of action.38 Cases “arising
under” the federal patent statute are within the exclusive jurisdiction of
the federal courts.39 The issue then becomes whether malpractice cases
against patent attorneys should fall within the jurisdiction of state courts,
which would then be required to resolve questions of patent law, or
whether such cases should fall within the exclusive jurisdiction of
federal courts, which would then be required to resolve state questions of
For better or worse, depending on one’s point of view, the Court of
Appeals for the Federal Circuit has, at least so far, broadly assumed
federal subject matter jurisdiction in malpractice cases involving patent
attorneys based upon its definition of what constitutes a “substantial
question of federal patent law.”40 The result, essentially, is that federal
courts will decide state malpractice issues rather than state courts
deciding federal patent law issues, although at least two judges on the
Federal Circuit would limit the scope of the court’s jurisdiction but for
stare decisis, and there are pockets of resistance in both state and federal
courts to this perceived usurpation of historic state jurisdiction over legal
The Court of Appeals for the Federal Circuit was created by the
Federal Court Improvement Act of 1982.42 The Federal Circuit was
granted exclusive jurisdiction under 28 U.S.C. § 1295(a)(1) over “an
appeal from a final decision of a district court of the United States . . . in
any civil action arising under, or in any civil action in which a party has
38. See Minton v. Gunn (Minton I), 301 S.W.3d 702, 709 (Tex. App. 2009), overruled on
other grounds by Minton v. Gunn (Minton II), 355 S.W.3d 634 (Tex. 2010).
39. 28 U.S.C. § 1338(a) (2006). See infra text accompanying note 44 (quoting statute).
40. On the federal subject matter jurisdictional issue, see generally 4 MALLEN & SMITH, supra
note 3, § 35:4; DONALD CHISUM, CHISUM ON PATENTS §21.02  & Supp (2011 ed.); see also
Robert A. Mathews, Annotated Patent Digest § 36:19 (database updated Sept. 2011) (digesting
jurisdictional cases involving patent attorney malpractice); Michael Ena, Comment, Jurisdictional
Issues in the Adjudication of Patent Law Malpractice Cases in Light of Recent Federal Circuit
Decisions, 19 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 219 (2008) (discussing Air
Measurement/Immunocept and their implications for patent law practitioners); Christopher G.
Wilson, Note, Embedded Federal Questions, Exclusive Jurisdiction, and Patent-Based Malpractice
Claims, 51 WM. & MARY L. REV. 1237 (2009) (supporting state jurisdiction).
41. See Byrne v. Wood, Herron & Evans,
-1012, 2011 U.S. App. LEXIS 23127
(Fed. Cir. Nov. 18, 2011)
(discussed infra text accompanying notes 267-96); see also infra text
accompanying notes 402-17, 424-53 (discussing cases challenging the jurisdiction of the Federal
Circuit). As stated in Warrior Sports, Inc. v. Dickinson Wright, P.L.L.C., 666 F. Supp. 2d 749, 752
(E.D. Mich. 2009), vacated, 631 F.3d 1367
(Fed. Cir. 2011)
, “[T]he Federal Circuit appears to
impose . . . an all-embracing test, effectively aggregating ever greater swaths of state-law claims
into its jurisdictional sweep.”
42. Federal Court Improvement Act of 1982, Pub. L. No. 97-164, 96 Stat. 25.
asserted a compulsory counterclaim arising under, any Act of Congress
relating to patents . . . .”43 Under § 1338(a), federal district courts are
granted “original jurisdiction of any civil action arising under any act of
Congress relating to patents. . . .”44 Prior to this grant of exclusive
appellate jurisdiction to the Federal Circuit, appeals from patent
decisions of district courts were to the regional court of appeals.45
Among the reasons given for the creation of the Federal Circuit were to
have patent cases decided by the expertise of a specialized court and to
provide greater consistency in decisions relating to patents.46 With this
creation of exclusive appellate jurisdiction in the Federal Circuit,
questions had to arise of the interfaces of that jurisdiction with the
regional federal circuit courts of appeal and with state courts.
This article will first provide a brief history of the jurisdictional
controversy between federal courts and between federal courts and state
courts. Then, the question will be examined of how the subject matter
jurisdictional question has been resolved with respect to patent attorney
malpractice cases to the extent it has been to date in the federal and state
courts. The manner in which the case-within-a-case doctrine or
methodology has been used in deciding the jurisdictional question will
also be investigated. In addition, the relevance of the use of the
judgment or non-judgment model to determine patent attorney
malpractice will be explored. Consideration will also be given to those
decisions that have opposed a broad imposition of federal jurisdiction
over malpractice cases involving patent attorneys. In conclusion, some
general observations will be offered concerning the jurisdictional and
substantive issues raised in patent attorney malpractice cases. A detailed
discussion of all jurisdictional issues arising in patent attorney
malpractice cases, however, will not be undertaken here as the focus of
this article is the case-within-a-case methodology in the resolution of the
basic question of whether there is federal or state jurisdiction over the
1. United States Supreme Court and “Arising Under” Jurisdiction
In 1988, the Supreme Court, in Christianson v. Colt Industries
Operating Corp. (Christianson IV),48 interpreted § 1338(a) in order to
resolve a jurisdictional controversy between the Federal Circuit and the
Court of Appeals for the Seventh Circuit and hence to avoid, as Justice
Brennan referred to it, “a perpetual game of jurisdictional ping pong.”49
Both courts denied having jurisdiction.50 Christianson was a former
employee of Colt who began to sell M-16 rifle parts in competition with
Colt.51 Colt brought suit in a federal district court against Christianson
and others for patent infringement, and breach of proprietary information
and non-disclosure agreements.52 After Colt voluntarily dismissed its
claims against Christianson, he brought antitrust actions under the
Clayton and Sherman Acts against Colt, and also included allegations
that the Colt patents were invalid for failing to satisfy the enabling and
best-made requirement of 35 U.S.C. § 112 of the Patent Act.53 In the
district court, Christianson prevailed on antitrust counts against Colt and
also had nine of Colt’s patents declared invalid.54
Colt appealed to the Federal Circuit; however, the Federal Circuit
declined jurisdiction and referred the case to the Seventh Circuit.55 The
Seventh Circuit, sua sponte, raised the jurisdictional issue and
determined that it did not have subject matter jurisdiction; rather, the
Federal Circuit did.56 The Federal Circuit then “in the interest of
justice” proceeded to take the appeal and reversed the district court.57
The Supreme Court granted certiorari and resolved the controversy
by applying prior “arising under” holdings.58 The Court concluded:
Linguistic consistency, to which we have historically adhered,
demands that § 1338(a) jurisdiction likewise extend only to those cases
in which a well-pleaded complaint establishes either that federal patent
law creates the cause of action or that the plaintiff’s right to relief
necessarily depends on resolution of a substantial question of federal
patent law, in that patent law is a necessary element of one of the
The Court concluded that neither the antitrust claims nor the state claim
arose under patent law, so the jurisdictional issue here depended upon
“whether patent law ‘is a necessary element of one of the well pleaded
[antitrust] claims.’”60 As the antitrust claims could be resolved without
reference to patent law, the Court held that the Federal Circuit did not
have “arising under” jurisdiction.61
Thus, there are two prongs to the appellate jurisdiction of Federal
Circuit: (1) “primary” jurisdiction where “federal patent statute creates
the cause of action”62 (e.g. patent infringement), and (2) “substantial
question” jurisdiction where “plaintiff’s right to relief necessarily
depends on resolution of a substantial question of federal patent law, in
that patent law is a necessary element of one of the well-pleaded
With respect to the interface between state jurisdiction and federal
jurisdiction, in 1986, the Supreme Court had held in Merrell Dow
Pharmaceuticals, Inc. v. Thompson64 that “a complaint alleging a
violation of a federal statute as an element of a state cause of action,
when Congress has determined that there should be no private, federal
cause of action for the violation, does not state a claim ‘arising under the
Constitution, laws, or treaties of the United States,’” that would grant
federal jurisdiction under 28 U.S.C. § 1331.65
58. Christianson IV, 486 U.S. 800, 807 (1988).
59. Id. at 808-09 (emphasis added).
61. Id. at 812-13. The Court also concluded that in the “interests of justice” trying to resolve
a “ping pong” situation did not authorize a court to decide a case in the absence of subject matter
jurisdiction. Id. at 818.
62. Id. at 808-09.
64. Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804 (1986).
65. Id. at 817 (citation omitted).
In Grable & Sons Metal Products, Inc. v. Darue Engineering &
Manufacturing,66 decided in 2005, the Court resolved a conflict within
the circuits as to whether Merrell Dow required a federal cause of action
“arising under” the statute in question as a condition for exercising
federal jurisdiction.67 The Court held that it did not when the question
involved the interpretation of an Internal Revenue Code provision
relating to the notice requirement for quieting title.68 The Court stated
that Merrell Dow was not to the contrary;69 however, it did provide the
Because arising-under jurisdiction to hear a state-law claim always
raises the possibility of upsetting the state-federal line drawn (or at
least assumed) by Congress, the presence of a disputed federal issue
and the ostensible importance of a federal forum are never necessarily
dispositive; there must always be an assessment of any disruptive
portent in exercising federal jurisdiction. . . .
These considerations have kept us from stating a “single, precise,
all-embracing” test for jurisdiction over federal issues embedded in
state-law claims between nondiverse parties. . . . Instead, the question
is, does a state-law claim necessarily raise a stated federal issue,
actually disputed and substantial, which a federal forum may entertain
without disturbing any congressionally approved balance of federal
and state judicial responsibilities.70
As will be seen by the following decisions of the Federal Circuit
defining its subject matter jurisdiction under § 1338(a) in patent attorney
malpractice cases, it has laid primary emphasis on Christianson VI,
liberally interpreting what constitutes a “substantial question of federal
patent law” within the context of the “case-within-a-case.”71
2. Federal Circuit Jurisdiction and Case-Within-a-Case
In a series of cases prior to any case dealing with patent attorney
malpractice, the Federal Circuit held that it had jurisdiction based on a
substantial question of patent law arising in a number of contexts.72 In
Additive Controls & Measurement Systems, Inc. v. Flowdata, Inc.,73
decided in 1993, the court held that there was federal jurisdiction over a
state business disparagement claim that required proof of
noninfringement of a patent to resolve the case.74 Similarly, in Hunter
Douglas, Inc. v. Harmonic Design, Inc.,75 decided in 1998, the court
found federal jurisdiction over a state law claim of injurious falsehood
that required proof of the invalidity of a patent.76 In 2000, the court in
U.S. Valves, Inc. v. Dray,77 held that there was § 1338 jurisdiction over a
breach of contract claim that required proof of patent infringement.78 In
2002, the court held in University of West Virginia v. VanVoorhies79 that
there was § 1338 jurisdiction over the issue of whether there was a
breach of duty to assign a patent required determination if the disputed
patent application was a continuation-in-part application.80
It was not, however, until 2007 that the Federal Circuit had an
opportunity to address the issue of whether it had subject matter over a
state malpractice case involving patent attorneys in two cases, decided
on the same day by the same panel.81 In Air Measurement
Technologies, Inc. v. Akin Gump (Air Measurement),82 plaintiff (AMT)
filed a malpractice claim against its former patent firms (defendants) in
a Texas state court alleging that, due to the defendants’ negligence,
plaintiff was “forced . . . to settle the prior litigation far below the fair
market value of the patents because the prior litigation defendants were,
inter alia, able to raise as defenses invalidity (e.g., an on sale bar) and
unenforceability (due to inequitable conduct) that would not have
existed without attorney error.”83 Indeed, six infringement cases were
settled by AMT “for a total of approximately $10 million without a
judicial determination of infringement, invalidity, or unenforceability of
AMT’s patents.”84 The defendants then removed the case to the Federal
District Court for the Western District of Texas.85 Plaintiff then moved
to have the case remanded to state court, which was denied.86
The parties then changed their jurisdictional positions, with
defendants now moving to have the case remanded to state court, which
was opposed by plaintiff AMT.87 The district court again refused to
remand the case.88 Defendants appealed the jurisdictional issue to the
Federal Circuit, which accepted it as presenting an issue of “first
impression.”89 To resolve the question, the Federal Circuit (opinion by
Chief Judge Michel, joined by Judges Lourie and Rader) applied the
“second prong” of Christianson test to determine “whether patent law is
a necessary element of [plaintiff’s] malpractice claim.”90 The court
recited the elements of a malpractice case in Texas91 and concluded that
the case-within-a-case “requirement” applied:
Because AMT’s malpractice claim stems in part from unsuccessful
prior litigation, AMT must establish that they would have prevailed in
the prior litigation but for Akin Gump’s negligence that compromised
the litigation. This is called the “case-within-a-case” requirement of
the proximate cause element of malpractice.92
As authority for the proposition that the “case-within-a-case
requirement” is a component of the “proximate cause” element of a
malpractice action, the court cites and quotes from a Texas appellate
court case: “Because the plaintiff must establish that the underlying suit
would have been won ‘but for’ the attorney’s breach of duty, this ‘suit
within a suit’ requirement is necessarily a component of the plaintiff’s
burden on cause in fact.” 93 This reliance is not further explained, but
the court goes on to conclude:
Because proof of patent infringement is necessary to show AMT
would have prevailed in the prior litigation, patent infringement is a
“necessary element” of AMT’s malpractice claim and therefore
apparently presents a substantial question of patent law conferring §
While “proof of patent infringement is necessary to show AMT would
have prevailed in the prior litigation,” it does not follow that “patent
infringement is a ‘necessary element’ of AMT’s malpractice claim . . .
.”95 The damages being claimed by AMT in the malpractice claim are
not infringement damages, but rather “impaired settlement value” as a
consequence of defendants’ alleged malpractice.96 Thus, the Federal
Circuit seems to adopt, without elaboration, the “judgment” model of the
case-within-a-case methodology, leading to the same requirements for a
finding of federal jurisdiction as for malpractice action where the
plaintiff must prove that it would have obtained a judgment in the
underlying case.97 This result will be further explored below.98
To buttress its jurisdictional finding the Federal Circuit reasoned:
Indeed, we would consider it illogical for the Western District of Texas
to have jurisdiction under § 1338 to hear the underlying infringement
suit and for us then to determine that the same court does not have
jurisdiction under § 1338 to hear the same substantial patent question
in the “case-within-a-case” context of a state malpractice claim.99
Thus, the logical conclusion would seem to be that, if the underlying
case (infringement) would invoke the “first prong” of the “arising under”
jurisdiction interpretation of § 1338(a) in Christianson VI, then the
“second prong” would also be satisfied. It seems clear that if plaintiff
must prove patent infringement, there is a “significant question of patent
law,” but the fact that a district court has jurisdiction over a patent
infringement case does not necessarily lead to the conclusion that a
finding of patent infringement is the only means by which the patent
93. Id. at 1269 (citing Ballesteros, 985 S.W.2d at 489) (emphasis added).
94. Id. (citing Christianson IV, 486 U.S. 800, 809 (1988)) (emphasis added).
95. Id. (emphasis added).
96. See id. at 1270-71.
97. See id.
98. See infra text accompanying notes 119-29.
99. Air Measurement Techs., Inc. v. Akin Gump, 504 F.3d 1262, 1269
(Fed. Cir. 2007)
owner might have suffered damages as a consequence of patent attorney
As the court considered proof of infringement as critical to the
jurisdiction issue, it also noted that, in addition to proving patent
infringement within the “‘case-within-a-case’ context,” the plaintiff
would have to show that it would have prevailed against the defenses
that the prior litigants raised.101 These defenses included allegations of a
statutory bar and inequitable conduct.102 The court did not consider
these as “jurisdiction-defeating defenses contemplated by Christianson, .
. . for they are part of the malpractice causation element rather than the
defenses raised by [defendants] in the current litigation.”103 However, in
the context of whether these defenses had to be valid or merely
available, the court states rather cryptically: “To the extent that AMT
has to prove or overcome invalidity, invalidity may be a substantial
question of patent law.”104 The court then states the ultimate importance
of proving infringement for jurisdictional purposes: “Regardless of the
defenses AMT would have to address, if any, AMT would certainly have
to prove patent infringement; that alone confers § 1338 jurisdiction.”105
The court does not address the question of whether the defenses
themselves would raise a substantial question of patent law justifying the
grant of federal jurisdiction.106 Certainly, the potential invalidity of a
patent because of a statutory bar or its unenforceability because of
inequitable conduct is as critical to the patent owner as is proving
infringement.107 Indeed, the issue of infringement, of course, depends
on the validity and enforceability of the patents being asserted.108
The Federal Circuit finally addressed the damage issue, but still
within the context of patent infringement.109 In an attempt to avoid
federal jurisdiction, defendants contended that the “impaired settlement
value theory . . . is a novel theory of malpractice that does not require the
resolution of a substantial question of patent law.”110 The court
dismisses this argument, viewing “the impaired settlement value theory
as a theory of damages not a theory of liability for malpractice.”111 It
defined “the impaired settlement value theory as calculat[ing] the
difference between the actual settlement amount and the predicted
settlement amount absent [of] malpractice.”112 But then the court goes
on without further elaboration: “In addition to computation of damages,
AMT must still prove it would have been successful in the underlying
litigation but for the alleged errors, which will require proof of patent
infringement.”113 This conclusion begs the question: Why in addition
to the computation of damages (presumably according to the loss of
settlement value theory) must plaintiff prove infringement? It would
appear that the purpose of a settlement is to avoid the expense and
uncertainty of the outcome of an infringement trial.114 The settlement
presumably would have occurred prior to any judgment of infringement
being reached.115 Indeed, in this case, the six infringement cases were
settled for about $10 million without any determination of infringement
or entering of a judgment to that effect.116 What plaintiff is claiming is
that, because of the negligent handling of the litigation, it was unable to
settle the infringement case at a higher value than it would otherwise
have had defendants not been negligent.117 This determination is
109. Air Measurement, 504 F.3d at 1271.
110. Id. at 1270.
111. Id. at 1271.
112. Id. The court presumably accepts this theory of damages based on Texas state law.
However, Professor Dobbs observes:
[T]he fact that every case has a settlement value, even if it is very small, does not mean
that the plaintiff-client whose case would have been lost even by the best lawyering
should recover a settlement value from her malpracticing lawyer. It is convenient to
treat these examples in the discussion of remedies, but they suggest that the case with a
case puzzle probably has not been finally solved.
DAN B. DOBBS, THE LAW OF TORTS § 486 (2000).
113. Air Measurement, 504 F.3d at 1271.
114. See Jay P. Kesan & Gwendolyn G. Ball, How Are Patent Cases Resolved? An Empirical
Examination of the Adjudication and Settlement of Patent Disputes, 84 WASH. U. L. REV. 237, 312
(2006) (finding that “most patent cases settle fairly quickly . . . thereby reducing the actual cost of
patent litigation considerably.”).
116. Air Measurement, 504 F.3d at 1266.
independent of any finding of infringement. The value of the settlement
would, seemingly, depend on the strength of the patent, which,
according to plaintiff, was undermined by defendants’ negligence.118 If
plaintiff must prove that the patent was infringed, this eliminates loss of
settlement value as a theory of damages.
The confusion is confirmed by the following sentence of the court:
“Thus, the impaired settlement value theory does not obviate the
‘casewithin-a-case’ element of AMT’s claim.”119 Indeed, the
case-within-acase methodology is essential to plaintiff’s malpractice claim, because, if
plaintiff can prove impairment of the settlement value that would not
have occurred but for the negligence of defendants, plaintiff would have
satisfied the elements of its malpractice case—presuming that the
nonjudgment model is recognized.120 Plaintiff may be able to prove that
there was a loss of settlement value even if the patents would
hypothetically have been found not to be infringed. It would seem, if
patents involved in litigation have a settlement value prior to a judgment
being entered by a court for infringement, that settlement value may be
adversely affected by negligent conduct on the part of plaintiff’s
attorneys in the infringement litigation. It does not seem justified to
presume that a patent has a settlement value only if it would have been
The final argument raised by defendants in Air Measurement
against the grant of federal jurisdiction was that “Grable adds a new
dimension to the Christianson test based on the
congressionally118. Id. at 1271; On settling patent infringement cases, see Kesan & Ball, supra note 114, at
243 (footnotes omitted):
There is general agreement that the costs associated with pursuing a patent lawsuit are
high. Previous authors have cited legal costs of patent litigation running from $500,000
to $3 million per suit or $500,000 per claim at issue per side. These costs create
incentives for the parties to settle their dispute rather than seek a final judgment on the
merits. Throughout the case, the parties will be receiving additional information about
the strength of their positions through the results of discovery, the court’s construction of
the patent claims at issue, rulings on motions for summary judgment, rulings on
preliminary injunctions, and the like. Economic theory suggests that when it becomes
obvious that a patent is very likely to be invalidated, it is in the best interests of the
patent holder to offer a cheap license to keep the patent rights intact, and it is in the best
interests of the defendant to accept such an offer rather than incur further significant
legal costs. Specifically, it is in the interest of the alleged infringer to accept a license if
its cost would be less than the cost of continued litigation. Only patent disputes where it
is difficult to predict who will win are likely to proceed further to a final determination
on the merits.
119. Air Measurement, 504 F.3d at 1271 (emphasis added).
120. See supra text accompanying notes 19-20 and 26-34.
approved balance between federal and state jurisdiction.”121 The
Federal Circuit rejects this argument, asserting that there is a strong
federal interest in adjudicating patent infringement issues in federal
courts as patents are issued by a federal agency and also that litigants
benefit from the expertise of federal judges in “construction and
It is not apparent from the reasoning in Air Measurement whether
the Federal Circuit is adopting a judgment model of the
case-within-acase methodology. The problem faced by plaintiff—now having
prevailed on the federal jurisdiction issue—is whether, in order to
recover any damages, it must prove infringement of its patents and
prevail over the defenses of invalidity as being statutorily barred and
unenforceability for inequitable conduct.123
If the court is adopting the judgment model, it would result in the
introduction of a case-within-a-case methodology in the underlying case
(the case-within-) to establish jurisdiction
(duty-breach-causationdamages (infringement)).124 The same case-within-a-case methodology
would then be applied to the underlying case to resolve the malpractice
(duty-breach-causation–damages (infringement or “impaired settlement
value”?)).125 Hence, the result is the application of the
case-within-acase-within-a-case “approach.”126 The consequences of this approach
would seem to result in “the tail wagging the dog,” with the resolution of
the jurisdiction issue seemingly determining the scope of the malpractice
case. For jurisdiction, the malpractice plaintiff must prove infringement
and must also prove infringement for malpractice damages to be
awarded, even though the claimed damage is diminished settlement
value, not infringement damages.127 The court conflates the
jurisdictional issue (“substantial question of patent law”) with the
malpractice case,128 while federal “arising under” jurisdiction need only
be established by a substantial question of patent law being raised,
presumably with respect to any element (duty, breach, causation,
damage) of the malpractice case.129
121. Air Measurement, 504 F.3d at 1271.
122. Id. at 1272.
123. See id. at 1270-71.
124. See supra text accompanying notes 31-35.
125. See supra text accompanying notes 31-35.
126. The word “approach” is used here for want of a better term.
127. Air Measurement, 504 F.3d at 1271.
129. See infra text accompanying notes 251-55.
malpractice action453 where the defendant attorney was accused of
negligently allowing plaintiff’s patent to expire and hence losing the
benefit of a broadened claim in a reissue patent, which would have been
otherwise infringed by a third party.454 With respect to the patent in
question and the issue of its hypothetical infringement, the state trial
court, inter alia, had held a Markman hearing, construed the claims,
including determining whether mean plus function claims, and applied
the doctrine of equivalents.455 The Nebraska Supreme Court concluded
on the jurisdictional issue:
We conclude that contrary to the defendant’s suggestion, this case is
not one “arising under” the patent law within the meaning of
§ 1338(a). The sole cause of action presented in this case is
professional negligence. Patent law is implicated only incidentally, in
that the measure of New Tek’s alleged damages requires consideration
of the hypothetical infringement of the [reissue] patent. But the
precise question is not whether Orthman Manufacturing infringed on
the [reissue] patent; rather, the question is whether, absent [defendant
attorney’s] negligence, New Tek would have been successful in an
infringement action against Orthman. . . . The construction and alleged
infringement of the [reissue] patent is relevant only insofar as it helps
us to determine who would have prevailed in that hypothetical action.
Simply stated, it is difficult to see how this case arises under federal
patent law when on the record before us, the only patent that has been
construed, and of which infringement is alleged, has expired. The
federal government has no interest in hypothetical determinations
regarding an unenforceable patent.456
The court remanded the case to the lower court to reconsider the issue of
infringement under the doctrine of equivalents.457
Magnetek, Inc. v. Kirkland & Ellis,458 decided by the Appellate
Court of Illinois, First District, in 2011, presents a malpractice case
against a patent firm, which denies federal jurisdiction on the basis of
collateral estoppel.459 The controversy began in 1998 when the
underlying infringement case was brought in the District Court for the
Northern District of Illinois by the patent owner Nilssen against the
plaintiff Magnetek, who was represented in the infringement case by
453. Id. at 346.
454. Id. at 343-44.
455. Id. at 344.
456. Id. at 346.
457. Id. at 355.
458. Magnetek, Inc. v. Kirkland & Ellis, 924 N.E.2d 803 (Ill. App. Ct. 2011).
459. See id. at 818-19.
defendant Kirkland.460 The parties agreed to arbitrate the claim and, as
part of the settlement agreement, Nilssen agreed not to pursue willful
infringement and Magnetek agreed not to assert inequitable conduct as a
defense.461 The arbitration resulted in an award of over $23 million for
Nilssen, which was settled for $18.75 million.462 It was
not until 2008
that Nilssen petitioned for the certification of the arbitration award in
federal district court.463 Magnetek, with new counsel, then moved to
have the arbitration award vacated on the grounds that it had, in the
meantime, discovered facts that would have rendered the patent in
question unenforceable based upon the inequitable conduct of
Nilssen.464 In fact, in an infringement case originally filed in 2001, the
patent in question (‘409), among others, had been held unenforceable in
Nilssen v. Osram Sylvania, Inc. (Osram I),465 decided by the District
Court for the Northern District of Illinois in 2006, because of inequitable
conduct, which was affirmed by the Federal Circuit the following
year.466 Kirkland had represented Osram in the infringement case and
does not deny that it asserted the inequitable conduct defense on
Nonetheless, the district court refused to vacate the arbitration
award because Magnetek could not produce clear and convincing
evidence of the fraud before the Patent Office, and that such evidence
was not discoverable prior to the arbitration.468 After this decision,
Magnetek filed a malpractice claim against defendant Kirkland in the
Circuit Court for Cook County.469 The defendant moved to have the
case dismissed for lack of subject matter jurisdiction, which was granted
by the state court, and Magnetek appealed.470 The Illinois Appellate
Court concluded that the inequitable conduct holding against the patent
owner Nilssen was governed by the doctrine of collateral estoppel,471
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
The doctrine of collateral estoppel dictates that the final determination
of the unenforceability of the ‘409 patent applies in the underlying
lawsuit. The Supreme Court and the Federal Circuit have long
recognized that when a patent has been held to be unenforceable in a
suit involving one alleged infringer, an unrelated party may rely on
that unenforceability decision under the principles of collateral
Then the court relied upon the Federal Circuit’s interpretation of Grable
in Lab. Corp. as requiring a “disputed” question of federal patent law:
Consequently, as the Federal Circuit discussed in [Lab. Corp.], the
issue of the unenforceability of the ‘409 patent, based on the defenses
asserted by Osram and now claimed by Magnetek, “has been resolved
and is no longer disputed.” [citing LabCorp] While a finding of legal
malpractice would depend on the unenforceability of the ‘409 patent,
the circuit court would not have to conduct an independent analysis of
unenforceability because the district court established, and the Federal
Circuit affirmed, the merits of that claim and neither party contests
those decisions. . . . Therefore, there is no “disputed” federal patent
issue raised by Magnetek’s legal malpractice complaint that would
give rise to federal jurisdiction.473
The presumably “substantial” but not “disputed” question of patent law
of inequitable conduct having been once and for all determined thus
eliminated any further basis for federal jurisdiction.474 The malpractice
case would have to proceed in state court under that determination to
resolve whether the plaintiff Magnetek could establish all elements of its
malpractice case accordingly.475 The court did not consider that
Kirkland was prejudiced by the fact that the Osram case was decided
after the arbitration because the law of inequitable conduct was the same
at both times.476
Other courts that have either refused to follow or have
distinguished Air Measurement and Immunnocept are detailed in the
472. Id. at 818 (citations omitted).
473. Id. at 819 (citing Lab. Corp. IV, 599 F.3d 1277, 1284 (Fed. Cir. 2010) (citations omitted)).
474. Magnetek, 924 N.E.2d at 810.
475. Id. at 819.
476. Id. at 820.
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
Most courts, federal and state, appear to accept the jurisdictional
scope of Air Measurement and Immunocept and apply the
case-within-acase methodology in resolving the jurisdictional question of whether a
significant question of patent law is raised within the elements of the
malpractice case. It also appears that malpractice plaintiffs prefer state
jurisdiction, while defendant patent attorney prefer federal jurisdiction.
Conventional wisdom might suggest that plaintiffs perceive that state
courts provide a local advantage and judges familiar with handling
malpractice cases, while defendant attorneys may perceive it to be
advantageous to be in the more familiar federal court system and also to
rely upon the expertise in patent matters of the federal courts,
particularly appeals to the Federal Circuit. Presumably, the federal
district courts that seem to reject or severely limit Air
Measurement/Immunocept will be brought into line as seen in Warrior
Sports and what may be expected in the Fifth Circuit under USPPS.
Also, it may be expected that decisions like that of the Nebraska
Supreme Court in the New Tek cases may be blunted by defendant patent
attorneys using the removal process to federal district courts, presuming
these courts will be receptive to removal.
III. OTHER JURISDICTIONAL ISSUES BEYOND CASE-WITHIN-A-CASE
There are a number of issues relating to jurisdiction in patent
attorney malpractice cases that are beyond the scope of this article and
will have to wait for further developments. These include: how should
a “claim” in a complaint as the basis for federal jurisdiction be defined
as contrasted to a “theory” underlying the claim;477 when, if ever, should
a defense raising a substantial question of patent law justify the grant of
477. See, e.g., Eddings v. Glast, Phillips & Murray, Civil Action No. 3:07-CV-1512-L, 2008
U.S. Dist. LEXIS 48589 (N.D. Tex. June 24, 2008) (if the malpractice plaintiff can recover on any
theory not involving patent law, no federal jurisdiction); Danner, Inc. v. Foley & Lardner, LLP, No.
CV 09-1220-JE, 2010 U.S. Dist. LEXIS 63590 (D. Or. June 23, 2010) (remanded malpractice case
to state court distinguishing Davis as only involving one claim and at least one of the theories did
not involve patent law). Compare Davis v. Brouse McDowell, L.P.A., 596 F.3d 1355, 1359-60
(Fed. Cir. 2010) (broadly defining “claims” and finding federal jurisdiction on one claim raising
substantial question of patent law and assuming supplemental jurisdiction over claim of failure to
file PCT applications) with Clearplay, Inc. v. Max Abecassis, 602 F.3d 1364 (Fed Cir. 2010)
(finding no jurisdiction because none of claims required patent law to resolve) (see text
accompanying notes 233-44). See also Revolutionary Concepts, Inc. v. Clements Walker PLLC,
2010 NCBC 4 (N.C. Super. Ct. 2010) (malpractice plaintiff permitted to voluntarily dismiss claim
involving question of patent law to retain state jurisdiction).
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
federal jurisdiction;478 should federal jurisdiction be granted in
malpractice cases involving foreign or PCT applications or patents;479
what is the impact of 28 U.S.C. § 1447 on the Federal Circuit’s
jurisdiction;480 how should the statute of limitations be applied;481
478. See, for example, E-Pass Techs., Inc. v. Moses & Singer, LLP, 117 Cal. Rptr. 3d 516 (Cal.
Ct. App. 2010), in which a plaintiff’s malpractice claim was that defendant patent attorneys were
negligent in advising it to file infringement suits. Defendants argued that the state court lacked
jurisdiction because its defense was that the patents were infringed. Id. at 520. The court held that
plaintiff’s claim was based on the state issue of whether defendants had breached the standard of
care and the matter of its defense involving patent law did not oust state court jurisdiction. Id. at
525-27. Compare Air Measurement Techs., Inc. v. Akin Gump, 504 F.3d 1262, 1266
, in which the Federal Circuit stated:
In addition to proving patent infringement in the “case-within-a-case” context, AMT will
have to show that it would have prevailed against the defenses the prior litigants raised.
These are not the sort of jurisdiction-defeating defenses contemplated by Christianson,
486 U.S. at 809, for they are part of the malpractice causation element rather than the
defenses raised by Akin Gump in the current litigation.
Id. at 1270. See discussion supra text accompanying notes 81-127. It is interesting to note that
plaintiff E-Pass filed a malpractice action in federal district court after the trial court but before the
appellate court decision alleging that defendant patent attorneys had “misunderstood and
misconstrued the [ ]patent in the underlying federal actions.” E-Pass Techs. v. Moses & Singer,
LLP, No. C-09-5967 EMC, 2011 U.S. Dist. LEXIS 128018, at *31
(N.D. Cal. Nov. 4, 2011)
district court refused to dismiss the action on diversity grounds but also maintained subject matter
jurisdiction on the basis of the allegation, citing Air Measurement. Id. at *30-31.
479. See, e.g., Antiballistic Sec. & Prot., Inc. v. Baker, Donelson, Bearman, Caldwell &
Berkowitz, P.C., 789 F. Supp. 2d 90
(no federal question as alleged malpractice was
not filing Canadian patent applications; U.S. patents had issued); Davis, 596 F.3d at 1357 (one
claim was for failure to file PCT applications and a second claim was for failure to properly file
U.S. applications). See also Revolutionary Concepts, 2010 NCBC 4 (“Where the issues involve
foreign patent rights and issues of whether a lawyer complied with a standard of care, federal
jurisdiction is not mandated.”).
480. See Arc Products, L.L.C. v. Kelly, 424 Fed. App’x 944, 946
(Fed. Cir. 2011)
appeal in No. 4:10-CV-1248 CEJ, 2010 WL 4363427 (E.D. Mo. Oct. 27, 2010) and Genelink
Biosciences, Inc. v. Colby, 423 Fed. App’x 977, 979
(Fed. Cir. 2011)
, dismissing appeal in CIVIL
NO. 09-5573(NLH)(AMD), 2010 U.S. Dist. LEXIS 66177 (D.N.J. July 1, 2010). In both district
court cases, defendant attorneys had moved to remove the malpractice case to federal court and the
malpractice plaintiffs moved to remand to state court. Both district courts granted the remand on
the basis that there was no federal jurisdiction. Defendants appealed to the Federal Circuit, with the
opinions being issued on the same day by the same panel. Although indicating that the district
court’s ruling in the New Jersey case “appears contrary to this court’s precedent,” the Federal
Circuit in Arc Products held that: “We have no authority to reverse or affirm the merits of the
court’s decision beyond a determination of the court’s characterization of its remand as resting upon
lack of subject-matter jurisdiction” according to 28 U.S.C. § 1447(d), which states: “An order
remanding a case to the State court from which it was removed is not reviewable on appeal or
otherwise. . . . ” Arc Products, 424 Fed. App’x at 946. The same result was reached in Genelink
Biosciences, 423 Fed. App’x at 978. See Scott F. Haiber, Removing the Bias Against Removal, 53
CATH. U. L. REV. 609 (2004); Rhonda Wasserman, Rethinking Review of Remands: Proposed
Amendments to the Federal Removal Statute, 43 EMORY L.J. 83 (1994); see also Thomas C.
Goodhue, Note, Appellate Review of Remand Orders: A Substantive/Jurisdictional Conundrum, 91
IOWA L. REV. 1319 (2006).
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
should the broad federal jurisdictional sweep of Air
Measurement/Immunocept be extended to malpractice involving
copyright, trademark or other forms of intellectual property law?482
The case-within-a-case methodology would appear to provide a
workable methodology for resolving the federal or state jurisdictional
issue in malpractice cases involving patent attorneys. In the paradigm
negligence case, a substantial question of patent law can arise with
respect to any of the elements of the case—duty, breach, causation, or
damages. The same is true with respect to malpractice cases based on
other state-based theories of malpractice, including breach of fiduciary
duty, breach of contract, or fraud. Federal jurisdiction should not be
limited to cases where malpractice plaintiffs are claiming the loss of a
favorable judgment in the underlying case (the judgment model). To
avoid this limitation, a broader definition of “underlying case” should be
recognized to expend beyond litigation to any “controversy” (the
nonjudgment model), raising a significant question of patent law in any
element of the malpractice case. Reference to the
judgment/nonjudgment models may avoid the complications raised in Air
Measurement of the “case-within-a-case-within-a-case,” where federal
jurisdiction according to the Federal Circuit required the malpractice
plaintiff to establish that it would have obtained a judgment of
infringement in an infringement suit that had been settled, while
claiming damages in the malpractice based upon “diminished settlement
While the case-within-a-case methodology may be workable, it
appears clear from a review of the post Air Measurement/Immunocept
cases that malpractice plaintiffs prefer state courts and defendant patent
481. The statute of limitations may provide an obstacle to recovery by malpractice plaintiffs
who file in either state or federal district courts and have their cases dismissed for lack of subject
matter jurisdiction. See, e.g., Landmark Screens, LLC v. Morgan, 107 Cal. Rptr. 3d 373 (Cal. Ct.
App. 2010) (plaintiff filed in state court, which dismissed for lack of jurisdiction) (discussed supra
text accompanying notes 407-28).
482. Compare Singh v. Duane Morris LLP, 538 F.3d 334 (5th Cir. Tex. 2008) (no federal
jurisdiction in malpractice case involving trademarks) (discussed supra text accompanying notes
327-34), with Harness, Dickey & Pierce, P.L.C, v. Powerhouse Marks, LLC, Case numbers
0810292&08-10484, 2008 U.S. Dist. LEXIS 78561(E.D. Mich, Sept. 29, 2008) (federal jurisdiction in
trademark malpractice case). Compare James H. Anderson, Inc. v. Johnson, No. 08 CV 6202, 2009
U.S. Dist. LEXIS 65001 (N.D. Ill. July 27, 2009) (copyright malpractice case that follows Singh no
federal jurisdiction), with Katz v. Holland & Knight LLP, No. 1:08cv1137, 2009 U.S. Dist. LEXIS
10721 (E.D. Va. Feb. 12, 2009) (federal jurisdiction in copyright malpractice case).
10- ODDI_MACRO_NEW FOOTNOTES FINAL.DOCM
attorneys prefer federal courts, thus requiring resolution of the
jurisdiction issue in many cases by the lower court (state or federal
district), leading, of course, to many appeals. Whether the jurisdictional
advantages perceived by the parties are worth the additional time and
expense cannot be determined by reading the cases; however, both
parties run the risk of having an appeals court ruling that the trial court,
and hence the appellate court, did not have subject matter jurisdiction,
and there is the potential problem of the statute of limitations. Thus,
careful consideration must be given by both sides in patent attorney
malpractice cases to subject matter jurisdiction beyond perceived (real or
imagined) jurisdictional advantages.
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AKRON INTELLECTUAL PROPERTY JOURNAL
No. 09AP-1051, 2010 Ohio App. LEXIS 1704 (Ohio Ct. App. 10th Dist. May 11, 2010).
661 F. Supp. 2d 125 (D. Mass. 2009).
No. 2:08-02451, 2010 U.S. Dist. LEXIS 135847 (D.N.J. Dec. 23, 2010).
585 F. Supp. 2d 995 (N.D. Ill. 2008).
918 N.E.2d 1117 (Ill. Ct. App. 2009).
No. C 09-04013 MHP, 2010 U.S. Dist. LEXIS 62404 (N.D. Cal. June 22, 2010).
No. 08-cv-582-bbc, 2009 U.S. Dist. LEXIS 9910 (W.D. Wis. Feb. 10, 2009).
No. 8:07-cv-1291-T-23TBM, 2008 U.S. Dist. LEXIS 22449 (M.D. Fla. Mar. 21, 2008).
No. 08 CVS 4333, 2010 NCBC LEXIS 8 (N.C. Super. Ct. Mar. 9, 2010).
3 A.3d 518 (N.J. Super. Ct. App. Div. 2010).
I. Introduction : Case-Within-a- Case ...................................... 71
A. Jurisdiction-Federal or State ..................................... 77
B. Brief History of Jurisdictional Issues........................... 80
State Courts....................................................................... 115
A. Federal Circuit Versus Regional Circuit Tension ...... 115
B. Courts following Air Measurement/Immunocept ...... 117
Measurement/ Immunocept ....................................... 128
C. Summary .................................................................... 134
Other Jurisdictional Issues Beyond Case-Within-a-Case . 134
Conclusions ...................................................................... 136 25 . See, e.g., Spaise v . Dodd, No. A03 - 1430 , 2004 Minn. App. LEXIS 607, at * 22 ( Minn. Ct .
App . June 1, 2004 ) (requiring appellant to prove that he would have been successful in the
Adams , 466 N.W.2d 39 , 42 (Minn. Ct. App. 1991 ). Air Measurement , 504 F.3d at 1269, uses case-
within-a-case “context” (quoted infra text at note 478). 26. See , e.g., Cecala v . Newman , 532 F. Supp . 2d 1118 , 1140 (D. Ariz . 2007 ) ; ASTech , LLC
v. Husick, 676 F. Supp . 2d 389 , 400 - 01 (E.D. Pa. 2009 ); Herrington v . Superior Court , 132 Cal.
Rptr. 2d 658 , 659 (Cal. Ct. App. 2003 ). 27 . See , e.g., Stockbridge v . Chedraue, No. 206942 , 1999 Mich. App. LEXIS 417, at *3 (Feb.
26, 1999 ); Apollo Enters ., Inc. v. ScripNet, Inc., 301 S.W.3d 848 , 870 (Tex. App. 2009 ) (citing Tex.
Logos , L.P. v. Brinkmeyer, 254 S.W.3d 644 , 654 (Tex. App. 2008 )). 28 . See ASTech , 676 F. Supp . 2d at 401 -02 (discussing application of the case-within-a-case
which it did not) . 29. See 4 MALLEN & SMITH, supra note 3 , § 36 : 1 . 30. RESTATEMENT (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS § 53 cmt . b
( 2000 ). 31 . Id . 43 . 28 U.S.C.S. § 1295 ( a)(1) (Lexis 2011 ). 44 . 28 U.S.C. § 1338 (a) ( 2006 ). 45 . See Rochelle Cooper Dreyfuss , The Federal Circuit: A Case Study in Specialized Courts,
64 N.Y.U.L. REV . 1 , 6 - 8 ( 1989 ) (discussing the divergence among the regional circuits in patent
cases as a region for the creation of the Federal Circuit). 46. For the historical background of the creation of the United States Court of Appeals for the
APPEALS FOR THE FEDERAL CIRCUIT: A HISTORY 1982-1990 (Marion T . Bennett ed., 1991 );
Federal Circuit 25th Anniversary Edition , 17 FED. CIR. B.J. 123 ( 2007 ); Richard H. Seamon, The
Provenance of the Federal Courts Improvement Act of 1982 , 71 GEO. WASH. L. REV. 543 ( 2003 );
Randall R. Rader , Specialized Courts: The Legislative Response, 40 AM. U. L. REV. 1003 ( 1991 ). 47 . See infra text accompanying notes 477-82 (identifying a number of these jurisdiction
issues) . 48 . Christianson v. Colt Indus. Operating Corp. (Christianson IV) , 486 U.S. 800 ( 1988 ). 49. Id. at 818-19. 50. Id. at 803. 51. Id. at 804. 52. Id. 53. Id. at 805 . 54. Christianson v. Colt Indus. Operating Corp. (Christianson I) , 613 F. Supp . 330 , 331 - 32
(C.D. Ill . 1985 ). 55 . Christianson v. Colt Indus. Operating Corp. (Christianson II) , 798 F.2d 1051 , 1055 (7th
Cir . 1986 ). 56 . Id . 57 . Christianson v. Colt Indus. Operating Corp. (Christianson III) , 822 F.2d 1544 , 1560 (Fed.
Cir . 1987 ), vacated by 486 U.S. 800 ( 1988 ). 66 . Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 ( 2005 ), reh'g
denied , 545 U.S. 1158 ( 2005 ). 67. Id. at 311-12. 68. Id. at 319-20. 69. Id. at 316. 70. Id. at 314 . 71. However, more recently in Laboratory Corp. of America Holdings v. Metabolite (Lab.
Corp. IV) , 599 F.3d 1277 ( Fed. Cir . 2010 ), the Federal Circuit appeared to be giving more deference
to Grable. See infra text accompanying note 221 (discussing this case). Moreover, in the most
LLP , 2011 - 2012 , 2011 U.S. App. LEXIS 23127, at *13, * 15 - 17 (Fed Cir. Nov. 18 , 2011 ), two
judges would revisit the scope of federal jurisdiction . See infra text accompanying notes 267-96
(discussing this case) . 72 . Additive Controls & Measurements Sys ., Inc. v. Flowdata, Inc., 986 F.2d 476 , 478 - 79
(Fed. Cir . 1993 ); Hunter Douglas, Inc . v. Harmonic Design, Inc., 153 F.3d 1318 ( Fed. Cir . 1998 );
U.S. Valves , Inc., v. Dray, Sr., 212 F.3d 1368 , 1372 (Fed. Cir. 2000 ); Univ. of W. Va., Bd. of Trs.
v. Vanvoorhies, 278 F.3d 1288 , 1295 (Fed. Cir. 2002 ). 73 . Additive Controls, 986 F.2d 476 . 74 . Id. at 478 . 75. Hunter Douglas, 153 F. 3d 1318, overruled on other grounds by Midwest Indus ., Inc. v.
Karavan Trailers , Inc., 175 F.3d 1356 ( Fed. Cir . 1999 ), overruled in part by Traffix Devices v .
Mktg . Displays, 532 U.S. 23 ( 2001 ). 76 . Id. at 1329 . 77. U.S. Valves, 212 F.3d 1368 . 78 . Id. at 1372. Accord Scherbatskoy v. Halliburton Co., 125 F.3d 288 , 291 ( 5th Cir . 1997 )
(finding § 1338 jurisdiction and transferring case to Federal Circuit court where proof of breach of
accompanying notes 324-40 . 79. Univ. of W. Va., Bd. of Trs. v. Vanvoorhies, 278 F.3d 1288 ( Fed. Cir . 2002 ). 80 . Id. at 1295 . 81. See Air Measurement Techs., Inc. v. Akin Gump , 504 F.3d 1262 , 1265 (Fed. Cir. 2007 ). 82 . Id .
No. 08 -cv-130-bbc, 2008 U.S. Dist. LEXIS 98079 (W.D. Wis . Dec. 2 , 2008 ).
No. 07 -cv-02447 - MSK-MSH, 2008 U.S. Dist. LEXIS 13471 (D. Colo . Feb. 13 , 2008 ).
762 F. Supp . 2d 543 (D. Mass . 2011 ).
No. 11-C-0148, 2012 U.S. Dist. LEXIS 27621 (E.D. Wis . Mar. 2 , 2012 ).
No. 09-cv-311 , 2010 U.S. Dist. LEXIS 101567 (S.D. Ohio Sept . 13 , 2010 ), aff'd, 418 Fed. App'x 924
(Fed. Cir . 2011 ).
No. 07 - 12097 -GAO, 2008 U.S. Dist. LEXIS 63117 (D. Mass. Aug. 15 , 2008 ).
786 F. Supp . 2d 240 (D.D .C. 2011 ).