Facts
- Charles R. Christianson, a former Colt employee, formed a corporation to sell M16 rifle parts in competition with Colt Industries Operating Corp., a major M16 rifle and parts manufacturer with patents and asserted trade secrets related to M16 specifications.
- Colt previously sued for patent infringement and included Christianson and his company as defendants, but later voluntarily dismissed its claims against them.
- Colt sent letters to Christianson’s customers and potential customers asserting misappropriation of Colt trade secrets and urging them not to deal with Christianson.
- Christianson sued Colt in federal district court alleging Sherman Act §§ 1 and 2 violations based on Colt’s letters, litigation, and related conduct, later adding a state-law tortious interference claim.
- Colt asserted defenses based on protecting its intellectual property and counterclaimed on multiple theories tied to alleged misappropriation of M16 specifications.
- The district court granted Christianson summary judgment on liability for the antitrust and tortious interference claims.
- On appeal, the Federal Circuit transferred the case to the Seventh Circuit for lack of § 1338 “arising under” patent jurisdiction; the Seventh Circuit transferred it back; the Federal Circuit then decided the merits “in the interest of justice” and reversed.
- The Supreme Court reviewed whether the Federal Circuit had appellate jurisdiction and the effect of law-of-the-case on inter-circuit transfer orders.
Issues
- Whether the action “arose under” federal patent law under 28 U.S.C. § 1338(a), thereby triggering exclusive Federal Circuit appellate jurisdiction under 28 U.S.C. § 1295(a)(1).
- Whether a transferee circuit court may reconsider a transferor circuit’s jurisdictional transfer ruling, or must follow it under law-of-the-case absent clear error and manifest injustice.
Decision
- The Court held the case did not “arise under” patent law for purposes of § 1338(a) and therefore did not fall within the Federal Circuit’s exclusive appellate jurisdiction under § 1295(a)(1).
- The Court held law-of-the-case principles apply to inter-circuit jurisdictional transfer orders; the transferee court should not revisit the transfer ruling unless it is clearly erroneous and would work a manifest injustice.
- Because the Federal Circuit’s initial transfer decision was at least plausible, the Seventh Circuit should have accepted it, ending its jurisdictional inquiry.
- The Court vacated the Federal Circuit’s merits decision, leaving the appeal to proceed in the Seventh Circuit.
Legal Principles
- A case “arises under” the patent laws only if (1) patent law creates the cause of action, or (2) the plaintiff’s right to relief necessarily depends on resolution of a substantial question of patent law as an essential element of a well-pleaded complaint.
- Patent issues raised as defenses, anticipated defenses, background facts, or one of several alternative theories do not satisfy § 1338 “arising under” jurisdiction.
- Exclusive Federal Circuit appellate jurisdiction under § 1295(a)(1) exists only when the district court’s jurisdiction was based, in whole or in part, on § 1338.
- Law-of-the-case generally binds coordinate courts in later stages of the same case, including jurisdictional determinations accompanying transfer orders.
- A transferee court should accept a transferor court’s jurisdictional transfer ruling if it is plausible; reconsideration is limited to situations of clear error causing manifest injustice.
Conclusion
The Supreme Court limited patent “arising under” jurisdiction to well-pleaded claims that necessarily require resolving a substantial patent-law question and held that inter-circuit transfer rulings on jurisdiction ordinarily control later proceedings unless clearly erroneous and unjust, resulting in vacatur of the Federal Circuit’s merits decision.