Civil Practice – Appeals – Interlocutory – Attorneys – Tort/Negligence – Legal Malpractice – Intellectual Property – Foreign Patents – Subject Matter Jurisdiction

Revolutionary Concepts, Inc. v. Clements Walker, PLLC (Lawyers Weekly No. 11-16-0692, 25 pp.) (Sam Ervin IV, J.) Appealed from Mecklenburg County Superior Court. (Ben F. Tennille, J.) N.C. App. Unpub. Click here for the full-text opinion.

Holding: Plaintiffs; legal malpractice claim against defendants alleges that defendants’ actions prevented plaintiffs from obtaining foreign patents, not a U.S. patent; therefore, this case does not fall within the exclusive jurisdiction of the federal courts.

Even if an unsuccessful challenge to subject matter jurisdiction under 28 U.S.C. § 1338(a) were entitled to immediate appellate review, this case does not fall under § 1338(a). We dismiss as interlocutory defendants’ appeal of the trial court’s denial of their motion to dismiss.

Even though G.S. § 1-277(b) provides that an appeal may lie from denial of a motion to dismiss for lack of personal jurisdiction, § 1-277(b) does not apply equally to the denial of a motion challenging subject matter jurisdiction.

In seeking to persuade us to allow an immediate appeal from the trial court’s order, defendants rely on a claimed “substantial right” (1) “to have any civil action in which Plaintiffs’ right to relief necessarily depends on the resolution of a substantial question of federal patent law heard in the federal courts” and (2) to avoid the inconsistent verdicts which they claim will result absent immediate review by this court of the trial court’s order. We do not find either argument persuasive.

Only those cases 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 — come within the scope of the statutory provision upon which defendants rely. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988).

Although defendants concede that “malpractice and breach of contract claims are created by state law” rather than federal patent law, they argue that plaintiffs’ claims are subject to the exclusive patent jurisdiction of the federal courts because “patent law is a necessary element of [plaintiffs’ state law] claims under the circumstances of this case.”

The claims pending before the trial court concern whether or not defendants’ actions during their representation of plaintiff constituted actionable professional negligence.

In order for plaintiffs to recover from defendants on the basis of professional negligence, plaintiffs must establish that they had a right to obtain various foreign patents and that they lost the ability to obtain these patents as a result of defendants’ negligence.

According to defendants, plaintiffs cannot establish that they have standing without proving that plaintiff Ronald Carter invented the technology for which plaintiffs sought patent protection. In addition, defendants claim that determining the identity of the persons who invented the technology in question will require resolution of a substantial question of federal patent law that is subject to the exclusive jurisdiction of the federal courts.

We are not persuaded by this logic, however, since the extent to which one is considered an inventor for purposes of foreign patent law must be determined by reference to the law of the particular country in which patent protection is sought rather than by reference to federal law. Thus, despite the fact that “inventorship” might well be a critical issue in this litigation, we do not believe that the “inventorship” determination in this case involves a question of federal, as compared to foreign, patent law.

Defendants cite numerous cases establishing that, when a plaintiff’s ability to prove his or her right to recover hinges upon federal patent law, the case is subject to exclusive federal jurisdiction. However, plaintiffs assert that, but for defendants’ negligence, their invention would have benefitted from foreign, not domestic, patent protection.

The claims that plaintiffs have asserted against defendants, arising from the loss of foreign patent rights, do not raise any issue of U.S. patent law and are not subject to the exclusive jurisdiction of the federal courts.

As a result, even if the right “to have any civil action in which Plaintiffs’ right to relief necessarily depends on the resolution of a substantial question of federal patent law heard in the federal courts” is a substantial right for purposes of G.S.  §§ 1-277(a) and 7A-27(d), the resolution of plaintiffs’ claims against defendants does not appear to require the adjudication of any substantial issues of federal patent law. Thus, we are precluded us from finding that defendants’ appeal is properly before this court on the basis of a “substantial right” theory.

Defendants also seek immediate review based on a risk of inconsistent verdicts. Plaintiffs have filed suit in the U.S. District Court for the Western District of North Carolina for the purpose of obtaining a declaratory judgment that plaintiff Carter is the sole inventor of the technology for which patent protection has been sought.

A party does not have a substantial right to have related claims addressed and resolved in a single proceeding. A party does, however, have a substantial right to avoid two separate trials of the same issues.

There is no risk of inconsistent verdicts when the issues under consideration are governed by different legal standards.

Here, there is no danger of inconsistent verdicts resulting from the separate litigation of the claims at issue in plaintiffs’ federal declaratory judgment action and in this case because the issues under consideration in the two cases differ. The sole issue to be resolved in the pending federal litigation concerns the identity of the inventor or inventors of the technology for purposes of federal patent law. As we have already established, the “inventorship” that is relevant to the claims before us in this case is governed by foreign law rather than federal patent law.

Since different bodies of law control the resolution of the “inventorship” issue in the related federal case and in this case, we do not believe that there is any genuine risk of inconsistent verdicts in the event that we decline to hear defendants’ appeal on the merits at this time.

We also deny defendants’ request for the issuance of a writ of certiorari.

Appeal dismissed.