Federal Circuit Jurisdiction Over Patent Contract Disputes

In a precedential order issued in Jang v. Boston Scientific Corp., the Federal Circuit held that it has jurisdiction over the parties' patent-related contract dispute under Gunn v. Minton even though the patents at issue have been invalidated. Despite having found Federal Circuit jurisdiction, the court denied the parties' petition for permission to bring an interlocutory appeal because too many potentially relevant facts were unresolved.

Procedural History

As noted in the Federal Circuit's order, this decision marks the third time the Federal Circuit has heard issues in this case. The bare facts laid out for the latest proceeding are as follows:

The parties had "entered into an agreement whereby Jang assigned his rights in various patents to petitioners in exchange for an upfront payment and a promise under defined circumstances to pay additional compensation if petitioners sold stents covered by Jang's patents." In 2005, Jang sued BSC "in federal court for breach of contract and other various state law claims, basing jurisdiction on diversity of citizenship and alleging that petitioners had failed to compensate Jang for the sale of certain covered stent products. While the case was pending, "petitioners filed requests for ex parte reexamination" of the patents, pursuant to which "the claims at issue were canceled in issued reexamination certificates." "Petitioners moved for summary judgment in the district court, arguing, inter alia, that under Lear, Inc. v. Adkins, 395 U.S. 653 (1969), the parties' assignment agreement cannot require payment for practice of claims subsequently held to be invalid." The district court denied the motion, citing Studiengesellschaft Kohle, M.B.H. v. Shell Oil Co., 112 F.3d 1561 (Fed. Cir. 1997) ("Kohle"), for the proposition that "a patentee is not precluded underLear from recovering royalties until the date the licensee or assignee first challenges the validity of the patent." The district court certified an interlocutory appeal under 28 U.S.C. § 1292(b) as to the interplay between Lear and Kohle in this case.

Federal Circuit Jurisdiction under Gunn v. Minton

The petition for interlocutory appeal was heard by Judges Dyk, Plager, and Linn. Judge Linn authored the order denying the petition.

The first issue addressed in the order was whether the Federal Circuit has jurisdiction over the interlocutory appeal, e.g., whether the underlying civil action arises under the patent laws. The court applied Gunn v...