July 21, 2021
Summer Associate, Tyler A. Gruttadauria
Chandler v. Phoenix Servs. LLC, No. 20-1848 (Fed. Cir. July 13, 2021)
The Federal Circuit held that it did not necessarily have jurisdiction over Walker Process antitrust claims involving a patent, where the cause of action was not derived from patent law nor was there a substantial patent law question left to resolve.
Chandler, the plaintiff, alleged that Phoenix Services, the defendant, committed a Walker Process antitrust violation by maintaining and enforcing a patent on a fracking process that was unenforceable due to inequitable conduct. Prior to this suit, the Federal Circuit had affirmed the unenforceability of Phoenix’s patent in view of the applicant’s failure to disclose numerous public uses of the claimed subject matter more than one year before the application’s filing date.
A Walker Process claim is a cause of action arising under antitrust law. A plaintiff is required to prove that the antitrust-defendant obtained its patent by fraud on the Patent Office and maintained and enforced that patent with knowledge of the fraudulent procurement, and that the plaintiff can satisfy all of the other elements necessary to establish a Sherman Act monopolization claim.
Chandler alleged that a Walker Process violation existed because Phoenix continued to list its patent on the Phoenix website after it had been held unenforceable. Chandler alleged this represented continued maintenance and enforcement of the patent. The district court disagreed and granted summary judgment to Phoenix in 2019. Chandler appealed to the Federal Circuit. But Phoenix moved to transfer the case to the Fifth Circuit because it argued the Federal Circuit lacked jurisdiction.
Although the Federal Circuit has jurisdiction over any final decision of a district court in any civil action arising under any Act of Congress relating to patents, not all cases involving a patent fall withing its jurisdiction. A cause of action that involves an underlying patent is not sufficient to require Federal Circuit jurisdiction unless patent law creates the federal cause of action or the plaintiff’s right to relief necessarily depends on resolution of a substantial question of patent law.
Here, the Federal Circuit determined that it lacked jurisdiction to hear the appeal of a final determination on this Walker Process claim because (1) the cause of action arose under the Sherman Act rather than patent law, and (2) the claims at issue did not depend on the resolution of a substantial question of patent law. Because the enforceability of the patent was no longer at issue given the Federal Circuit’s prior 2018 decision, there were no patent law questions left to answer. Thus, this case would have no effect on the real-world result of the prior federal patent litigation.
Not all causes of action that relate to a patent invoke the Federal Circuit’s jurisdiction over patent appeals. In some cases, such as some Walker Process antitrust claims, if the cause of action does not arise under the Patent Act and does not depend on the resolution of a substantial question of patent law, the Federal Circuit will not have jurisdiction over an appeal notwithstanding the fact that the litigation concerned a patent.
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