Revolutionary Concepts, Inc. v. Clements Walker, PLLC
| Decision Date | 05 July 2011 |
| Docket Number | NO. COA10-627,COA10-627 |
| Parties | REVOLUTIONARY CONCEPTS, INC., a North Carolina corporation; and RONALD CARTER, Plaintiffs v. CLEMENTS WALKER, PLLC, a North Carolina professional limited liability company; F. RHETT BROCKINGTON; RALPH H. DOUGHERTY; GREG N. CLEMENTS; and CHRISTOPHER L. BERNARD, Defendants. |
| Court | North Carolina Court of Appeals |
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
Mecklenburg County
Appeal by defendants from order entered 9 March 2 010 by Judge Ben F. Tennille in Mecklenburg County Superior Court. Heard in the Court of Appeals 26 October 2010.
Poyner Spruill LLP, by Cynthia L. Van Horne and E. Fitzgerald Parnell, III, for defendants Clements Walker, PLLC, F. Rhett Brockington, Greg N. Clements, and Christopher L. Bernard.
James, McElroy & Diehl, P.A., by Edward T. Hinson, Jr. and John S. Arrowood, for defendant Ralph H. Dougherty.
Harrington Cipriani LLP, by James M. Harrington and Glen A. Cipriani, for plaintiff Revolutionary Concepts, Inc.
Defendants appeal from an order entered by the trial court denying their motions to dismiss the complaint filed byPlaintiffs for lack of subject matter jurisdiction. On appeal, Defendants contend that the trial court erred by refusing to find that Plaintiffs' claims involved substantial questions of federal patent law and were, for that reason, subject to the exclusive jurisdiction of the federal courts. After careful consideration of Defendants' challenge to the trial court's order in light of the record and the applicable law, we conclude that Defendants have appealed from an unappealable interlocutory order, that their alternative petition for the issuance of a writ of certiorari should be denied, and that their appeal should, for that reason, be dismissed.
On 29 February 2008, Plaintiffs Revolutionary Concepts, Inc., and Ronald Carter,1 filed a complaint in Mecklenburg County Superior Court2 asserting claims against Defendants Clements Walker PLLC; F. Rhett Brockington; Ralph H. Dougherty; Greg N. Clements; and Christopher L. Bernard, sounding in professional negligence by a patent agent, professional negligence by an attorney, failure to supervise a non-attorney employee,misappropriation of funds, and breach of contract.3 Plaintiffs alleged that they retained Defendant Clements Walker PLLC, to represent them in, advise them about, and guide them through the processes required in order to gain patent protection for a technology known as the Automated Audio Video Messaging and Answering System or the Digital Video Messaging System. As part of this process, Plaintiffs allege that Defendants were required to file an international patent application with the United States Patent and Trademark Office pursuant to the Patent Cooperation Treaty. A filing of this nature is necessary in order for an applicant to obtain patent protection in numerous foreign countries. Prior to filing the required international application, however, Defendants withdrew a request that Plaintiffs' domestic patent application not be published, causing the application to be made publicly available. According to Plaintiffs, Defendants' failure to file the international application prior to publication of the domestic application precluded Plaintiffs from satisfying the "absolute public novelty" requirement necessary for a successful patent application in many foreign countries, including those of the greatest economic interest to Plaintiffs. Plaintiffs allegedthat Defendants' error precluded them from patenting the invention in the most important foreign jurisdictions.
On 15 and 16 May 2008, Defendants filed answers, motions to dismiss Plaintiffs' complaint for lack of subject matter jurisdiction, and motions to dismiss Plaintiff Ronald Carter's claims for lack of standing. On 9 June 2009, Plaintiffs voluntarily dismissed their breach of contract claim. After receiving briefs and hearing arguments concerning the merits of Defendants' dismissal motions, the trial court entered an order on 9 March 2010 (1) denying Defendants' motions to dismiss for lack of subject matter jurisdiction and (2) granting Defendants' motions to dismiss Plaintiff Ronald Carter's claims for lack of standing given that his rights to the underlying technology had been assigned to Plaintiff Revolutionary Concepts. On 7 April 2010, Defendants noted an appeal to this Court from the trial court's decision to deny their motions to dismiss for lack of subject matter jurisdiction. On 13 July 2010, Defendants filed a petition for writ of certiorari in which they sought review of their challenges to the trial court's order pursuant to N.C.R. App. P. 21 on a discretionary basis in the event that this Court concluded that their appeal had been taken from an unappealable interlocutory order.
On appeal, Defendants argue that the trial court erred by refusing to dismiss Plaintiffs' complaint for lack of subject matter jurisdiction. In essence, Defendants argue that Plaintiffs' claims are subject to the exclusive jurisdiction of the federal courts pursuant to 28 U.S.C. § 1338(a), which provides as follows:
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.
However, we need not finally decide the merits of Defendants' challenge to the trial court's order because Defendants' appeal has been taken from an unappealable interlocutory order, effectively depriving this Court of jurisdiction over Defendants' appeal, and because we conclude, in the exercise of our discretion, that Defendants' certiorari petition should be denied.
The order from which Defendants have sought relief on appeal was "made during the pendency of [the] action[,]" "[does] not dispose of the case," and assumes the necessity for "further action by the trial court . . . to settle and determine the entire controversy," Carriker v. Carriker, 350 N.C. 71, 73, 511S.E.2d 2, 4 (1999) (citing Veazey v. Durham, 231 N.C. 357, 361, 57 S.E.2d 377, 381 (1950)), rendering it interlocutory in nature. As a general proposition, interlocutory orders are not subject to immediate appellate review. Steele v. Hauling Co., 260 N.C. 486, 491, 133 S.E.2d 197, 201 (1963) (citing Perkins v. Sykes, 231 N.C. 488, 490, 57 S.E.2d 645, 646 (1950)); Goldston v. American Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). The rule precluding immediate appellate review of interlocutory orders is intended "to prevent fragmentary and premature appeals that unnecessarily delay the administration of justice and to ensure that the trial divisions fully and finally dispose of the case before an appeal can be heard," Bailey v. Gooding, 301 N.C. 205, 209, 270 S.E.2d 431, 434 (1980) (citations omitted), and is predicated on the understanding that " [t]here is no more effective way to procrastinate the administration of justice than that of bringing cases to an appellate court piecemeal through the medium of successive appeals from intermediate orders." Veazey, 231 N.C. at 363, 57 S.E.2d at 382. However, immediate appellate review of interlocutory orders is available in a number of circumstances, including instances in which the interlocutory order addresses the extent to which the trial court has "jurisdiction over the person" under the "minimum contacts" doctrine pursuant to N.C. Gen. Stat. § 1-277(b), Love v. Moore, 305 N.C. 575, 581, 291S.E.2d 141, 146 (1982), or the interlocutory order "affects a substantial right" pursuant to N.C. Gen. Stat. §§-277(a) and 7A-27(d)(1). Sharpe v. Worland, 351 N.C. 159, 162, 522 S.E.2d 577, 579 (1999).
On appeal, Defendants contend that they are entitled to immediate appellate review of the trial court's order pursuant to N.C. Gen. Stat. § 1-277(b), which provides that "[a]ny interested party shall have the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the defendant^]" However, while "[N.C. Gen. Stat. §] 1-277(b) provides that [an] appeal [may] lie from denial of a motion to dismiss for lack of personal jurisdiction, t[he statute] does not apply [equally] to the denial of a motion challenging subject matter jurisdiction." Duke University v. Bryant-Durham Electric Co., 66 N.C. App. 726, 727, 311 S.E.2d 638, 639 (1984) (citing Shaver v. N.C. Monroe Construction Co., 54 N.C. App. 486, 487, 283 S.E.2d 526, 527 (1981)). Thus, Defendants' argument to the contrary notwithstanding, the trial court's order denying Defendants' "motion[s] to dismiss for lack of subject matter jurisdiction is interlocutory and notimmediately appealable" pursuant to N.C. Gen. Stat. § 1-277(b). Id. (citing Shaver, 54 N.C. App. at 487, 283 S.E.2d at 527.4
Secondly, Defendants argue that the trial court's decision to deny their dismissal motions is immediately appealable because it affects a substantial right. We disagree.
Pursuant to N.C. Gen. Stat. § 7A-27(d)(1), a party may appeal from an interlocutory order which "[a] ffects a substantial right[.]" See also N.C. Gen. Stat. § 1-277(a) (). "The 'substantial right' test for appealability is more easily stated than applied." Bailey, 301 N.C. at 210, 270 S.E.2d at 434. An interlocutory order affects a...
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