Metropolitan News-Enterprise


Tuesday, March 30, 2010


Page 1


C.A. Holds Malpractice Suit Against Patent Lawyer Preempted




An action alleging that a lawyer’s mishandling of a patent application caused his client to lose intellectual property rights cannot be brought in state court, the Sixth District Court of Appeal ruled yesterday.

The justices affirmed a Santa Clara Superior Court judge’s dismissal of an action by Landmark Screens, LLC against the law firm of Morgan, Lewis & Bockius and attorney Thomas Kohler. Federal law preempts the action, Justice Franklin Elia said, because it raises substantial issues of federal patent law.

Landmark, which developed an electronic billboard and began operating it along Highway 101 in San Carlos almost 10 years ago, retained Kohler, then with another firm, to pursue patent protection.

Incomplete Application

In the malpractice complaint, Landmark alleged that the application filed by Kohler with the Patent and Trademark Office was incomplete, delaying the date as of which its rights were protected. It also alleged that Kohler, subsequent to his joining Morgan Lewis, failed to disclose that the application was incomplete and that a petition to recognize the earlier filing date was denied by the PTO based on “applicants’ failure to exercise due care, or lack of knowledge of, or failure to properly apply, the patent statutes or rules of practice.”

Santa Clara Superior Court Judge James Kleinberg sustained a Morgan Lewis demurrer, holding that the court lacked subject matter jurisdiction. Landmark then sued in federal court, but the malpractice claim was dismissed as untimely, the judge holding that Kleinberg’s ruling was not unforeseeable and the statute of limitations was not tolled.

Subject Matter Jurisdiction

Elia, writing for the Court of Appeal, agreed with Kleinberg that the court lacked subject matter jurisdiction.

The justice explained that 28 U.S.C. § 1338 gives federal courts exclusive jurisdiction in patent cases, and that the U.S. Supreme Court has held that the statute precludes state courts not only from hearing patent claims, but from hearing any claim the validity of which depends on resolution of patent law issues.

While Landmark’s malpractice cause of action is not a patent claim, Elia elaborated, it would not be possible for the state courts to determine damages and causation without deciding patent issues.

The jurist cited Immunocept, LLC v. Fulbright & Jaworski, LLP (Fed. Cir. 2007) 504 F.3d 1281, which held that a malpractice cause of action against a lawyer who allegedly misdrafted a patent claim was properly removed to federal court because the plaintiff could not prevail without establishing the scope of the underlying patent claim.

Elia rejected Landmark’s claim that Immunocept was a “rogue” case and that the Federal Circuit had overreached. He distinguished Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, which held that a breach-of-contract action by the purchaser of equipment that later became the subject of a patent infringement suit was not preempted.

Linear, the justice said, “is of limited application in the case before us.” It was not a malpractice case, he pointed out; it involved the purchaser’s claim that the seller breached its obligation to indemnify it for costs incurred in defending the infringement suit.

No Determination Required

The case, Elia explained, “did not require a determination of patent infringement, enforceability, validity, or even scope.” He took issue with out-of-state cases cited by Landmark for the proposition that a properly pled tort claim may be adjudicated by a state court if the defendant cannot present sufficient evidence to establish a triable issue of federal law.

“Merely because infringement may be a question of fact in a tort created under state law does not mean that it necessarily belongs in state court,” the justice said, concluding that the courts in the cases cited by Landmark had overstepped their jurisdiction by considering the factual bases for the federal claims.

The case is Landmark Screens, LLC v. Morgan, Lewis & Bockius LLP, H033285.


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