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Fed. Cir. Fumbles Supreme Court's Original Jurisdiction

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By William Peacock, Esq. on August 23, 2013 3:55 PM

This case should've been simple. The University of Utah sues the University of Massachusetts in a patent inventorship dispute. 28 U.S.C. § 1251(a) quite clearly states, "The Supreme Court shall have original and exclusive jurisdiction of all controversies between two or more States."

Utah versus Massachusetts. Why is this a question?

And yet, after some party-swapping, the Federal Circuit allowed the case to proceed in the District Court, over the dissent of Judge Moore. How?

Party Swapping

UMass wants to take the case to the Supreme Court, likely because SCOTUS, with its discretionary jurisdiction, can decline to hear such a relatively unimportant case. There's a fix for that, however: substitute in named officials from the university and drop UMass itself.

It is a cleaver and transparent maneuver, one that UUtah agrees was done solely to avoid SCOTUS jurisdiction. Apparently, it works.

Subject Matter Jurisdiction

The majority distinguishes the interest in inventorship (at issue here) with the issue of ownership. Using the Second Circuit's Cahill majority approach, it holds that a state cannot have a "core sovereign interest" in inventorship because an individual, not a state, invents.

It also cites the Cahill dissent's approach, which focuses on whether "the effect of the judgment would be to restrain the Government from acting or compel it to act." If UUtah wins, UMass will not be forced to act -- the USPTO will be forced to act when it invalidates the patent.

The dissent argues that this "is a dispute about ownership, plain and simple," as UUtah is seeking to be the "the sole owner or an owner" of the disputed patents, is requesting "all right tile and interest," and will obtain all rights should it prevail.

UMass, as the assignee, is the present owner. None of the Named Officials have any real interest. As for "core sovereign interests," the dissent argues that such a test is "at odds with the plain language of the statute" and has previously been applied to cases where the Supreme Court decided whether to exercise its exclusive jurisdiction, not to decide whether such jurisdiction exists.

Instead, the dissent argues, this "core sovereign interests" test, as presently applied, gives lower courts the power to decide which cases will be presented to the Supreme Court.

As for restraint, if UUtah prevails, UMass will not be able to exploit, license, or practice the inventions covered by the patent. "This certainly 'restrains the Government from acting.'"

Indispensible Party?

The biggest issue with dropping UMass is that the university itself is the assignee of the patent rights at issue. The district court, and the majority here, felt that the Named Officials (including the President, Vice President, and others) could adequately represent the university's interests.

The dissent, however, disagrees with this. Judge Moore first points out that in patent invalidation and infringement suits, precedent requires that the patentee be joined as a defendant. "It would be nonsensical to suggest that all patent owners must be joined in a suit seeking to invalidate the patent, but they need not be joined in a suit over patent ownership."

Judge Moore finishes by pointing out that in past cases, when a patent holder was not joined, it was because the patent holder was a wholly-owned subsidiary of the other defendants, and therefore, the interests were absolutely identical. Here, there is mere overlap in interests, and the possibility exists that the remaining parties could choose to settle, thereby extinguishing UMass's rights.

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