Immunocept, LLC v. Fulbright & Jaworski, Llp

• Decision Date: 15 October 2007
• Docket Number: No. 2006-1432.,2006-1432.
• Citation: 504 F.3d 1281
• Parties: IMMUNOCEPT, LLC, Patrice Anne Lee, and James Reese Matson, Plaintiffs-Appellants, v. FULBRIGHT & JAWORSKI, LLP, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

504 F.3d 1281

IMMUNOCEPT, LLC, Patrice Anne Lee, and James Reese Matson, Plaintiffs-Appellants, v. FULBRIGHT & JAWORSKI, LLP, Defendant-Appellee.

No. 2006-1432.

United States Court of Appeals, Federal Circuit.

October 15, 2007.

Rehearing Denied November 9, 2007.

Jon R. Stark, Chao Hadidi Stark & Barker LLP, of Menlo Park, CA, argued for plaintiffs-appellants. With him on the brief was Bernard H. Chao. Of counsel on the brief were Michael P. Lynn, Jeremy A. Fielding, and Aaron Miller, Lynn Tillotson & Pinker, LLP, of Dallas, TX.

David M. Gunn, Beck Redden & Secrest, L.L.P., of Houston, TX, argued for defendant-appellee. With him on the brief were David J. Beck, Russell S. Post, and Constance H. Pfeiffer.

Before MICHEL, Chief Judge, LOURIE and RADER, Circuit Judges.

MICHEL, Chief Judge.

This is a legal malpractice case based on alleged errors in patent prosecution. Immunocept, L.L.C., Patrice Anne Lee, and James Reese Matson (collectively "Immunocept") appeal the decision of the United States District Court for the Western District of Texas granting summary judgment in favor of Fulbright & Jaworski, L.L.P. ("Fulbright") based on the following independent grounds: (1) the malpractice claim is barred by the statute of limitations and (2) the claim for damages is too speculative to be recovered under state law. Immunocept v. Fulbright & Jaworksi, LLP, No. A-05-CA-334, slip op. (W.D.Tex. Mar. 24, 2006) ("MSJ Order"). After Immunocept filed its opening brief, we ordered the parties to address whether there is "arising under" jurisdiction over the malpractice claim under 28 U.S.C. § 1338. Because the claim scope determination involved in the malpractice claim presents a substantial question of patent law, we conclude that jurisdiction is proper under § 1338. We further conclude that Immunocept's malpractice claim is barred by the statute of limitations and, accordingly, affirm the district court's decision.

I

Lee, Matson, and Robert Wilton Pryor (not a party in this suit) developed large pore hemofiltration ("LPHF") technology for the treatment of sepsis, shock, acute renal failure, multiple organ system failure, and systemic inflammatory response syndrome-related diseases. The filtration technology treats these conditions and diseases by continuously removing blood from the body, filtering excessive toxins, and continuously returning the filtered blood to the body. Compl. ¶ 10. The inventors hired Fulbright to secure patent protection for the LPHF technology. On November 5, 1996, U.S. Patent No. 5,571,418 ("'418 patent"), entitled, "Hemofiltration of toxic mediator-related disease," issued with Lee, Matson, and Pryor as the named inventors. The inventors assigned their intellectual property rights to Immunocept L.L.C.

Immunocept subsequently hired patent attorney Thomas Felger, partner at Baker Botts L.L.P., to prosecute additional applications based on the LPHF technology. Felger reviewed the '418 patent and met with Immunocept in 1999 to discuss, inter alia, independent claim 1,¹ i.e., the claim at issue in the malpractice suit. Felger also reviewed the file history of the '418 patent as late as February 2002.

Immunocept sought financial partners to proceed with "the necessary clinical trials and commercialization of their invention." Compl. ¶ 14. In January 2002, Immunocept entered into preliminary investment negotiations with Therakos, Inc., a subsidiary of Johnson & Johnson ("J & J"), to commercialize the invention. J & J discussed claim scope issues with Felger.

During the course of due diligence, J & J's patent attorneys discovered that the '418 patent suffered from a fatal flaw, namely the transition phrase "consisting of" in claim 1.² J & J's patent attorneys did not think that the claimed invention would provide adequate protection from competing methods. Compl. ¶ 17. Therefore, on April 5, 2002, Therakos terminated discussions with Immunocept.

After Immunocept discussed the claim scope issue with Fulbright, the parties entered into a tolling agreement that ran from March 4, 2004 to April 20, 2005. The parties agree that the critical date for the statute of limitations analysis is March 9, 2002.

On May 6, 2005, Immunocept sued Fulbright in the Western District of Texas for legal malpractice under Texas state law alleging § 1338 as the sole jurisdictional basis. Fulbright moved for summary judgment, arguing that the malpractice claim is barred by the statute of limitations and that damages are too speculative as a matter of law. On March 24, 2006, the district court granted summary judgment in favor of Fulbright on both independent grounds.

Immunocept filed a motion to alter or amend the judgment pursuant to Rule 59 of the Federal Rules of Civil Procedure on April 7, 2006. The district court denied this motion on May 4, 2006. This timely appeal followed. On August 8, 2006, we ordered the parties to brief the § 1338 jurisdictional basis for the case. Both parties filed responsive briefs, agreeing that § 1338 jurisdiction is proper. To the extent that there is § 1338 jurisdiction over the malpractice claim, we have exclusive appellate jurisdiction under 28 U.S.C. § 1295(a)(1).

II

We have inherent jurisdiction to determine our jurisdiction over an appeal and thus address this issue sua sponte. Haines v. Merit Sys. Prot. Bd., 44 F.3d 998, 999 (Fed.Cir.1995); see also In re Alappat, 33 F.3d 1526, 1530 (Fed.Cir.1994) (en banc). Under 28 U.S.C. § 1295(a)(1), we have exclusive jurisdiction over "an appeal from a final decision of a district court of the United States . . . if the jurisdiction of that court was based, in whole or in part, on section 1338." Section 1338, in turn, provides district courts with exclusive jurisdiction over patent cases. See 28 U.S.C. § 1338(a) ("The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks. Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases.").

Under Christianson v. Colt Industries Operating Corp., § 1338 jurisdiction extends to any case "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 well-pleaded claims." 486 U.S. 800, 809, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). The Supreme Court later rephrased the Christianson two-part test as a determination of whether "a state-law claim necessarily raise[s] 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." Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). Because legal malpractice is a state law claim, we must determine whether it satisfies the second part of Christianson in view of the federalism concerns of Grable. We conclude that it does.

Immunocept's well-pleaded complaint alleges, as the only cause of action, attorney malpractice, which under Texas state law requires proof of duty, breach, causation, and damages. See Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995) (stating the elements of a malpractice cause of action). Immunocept alleges as the sole source of attorney error a claim drafting mistake³ that provided inadequate patent protection and could allow competitors to copy the claimed methods without infringing the '418 patent by simply adding another element. Compl. ¶¶ 17-18. Thus, the alleged attorney error narrowed the scope of the patent.

Because it is the sole basis of negligence, the claim drafting error is a necessary element of the malpractice cause of action. As such, there is no way Immunocept can prevail without addressing claim scope. The parties, however, dispute whether there was a drafting mistake. Therefore, if determining claim scope involves a substantial question of federal law that passes the federalism muster of Grable, there is § 1338 jurisdiction over the malpractice claim under both Christianson and Grable.

We have held that where patent infringement is a necessary element of a legal malpractice claim stemming from prior litigation, there is § 1338 jurisdiction. Air Measurement Techs., Inc. v. Akin Gump, No. 2007-1035, 504 F.3d 1262, 2007 WL 2983660 (Fed.Cir.2007); see also U.S. Valves, Inc. v. Dray, 212 F.3d 1368, 1372 (Fed.Cir.2000) (holding that a breach of contract claim requiring proof of patent infringement confers § 1338 jurisdiction); Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 986 F.2d 476, 477-78 (Fed.Cir.1993) (holding that there is § 1338 jurisdiction over a business disparagement claim that requires proof of patent non-infringement). We have also held that there is § 1338 jurisdiction over state claims that involve a comparison of patent applications and the proof of invalidity. See Univ. of W. Va. v. VanVoorhies, 278 F.3d 1288, 1295 (Fed.Cir.2002) (holding § 1338 jurisdiction is proper where breach of duty to assign a patent requires resolution of whether the disputed patent application is a continuation-in-part of a prior application); Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 1329 (Fed.Cir.1998) (holding that a state law claim of injurious falsehood presents a substantial question of patent law where plaintiff has to show invalidity of the patent), overruled in part on other grounds by Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1358-59, 1361 (Fed. Cir.1999) (en banc in relevant part).

Because patent claim scope defines the scope of patent protection, see Johnson & Johnston Assocs. v. R.E. Serv. Co., 285 F.3d 1046, 1052 (Fed.Cir.2002) (en banc), we surely...