In the continuing tug-of-war between antitrust and intellectual property, the US Court of Appeals for the Federal Circuit transferred a Walker Process claim to the Fifth Circuit for lack of appellate jurisdiction. Xitronix Corp. v. KLA-Tencor Corp., Case No. 16-2746 (Fed. Cir., Feb. 9, 2018) (Moore, J).
In Walker Process, the Supreme Court of the United States held that a patent holder may be subject to antitrust liability in a situation where the patent was obtained by knowing and willful fraud on the patent office, and where all the other necessary elements for a Sherman Act charge are present.
Here, Xitronix brought a Walker Process claim alleging that KLA fraudulently obtained a patent. Although both parties agreed that the Federal Circuit had jurisdiction over the claim on appeal, the Federal Circuit was not so certain. After oral argument, the Court specifically asked for supplemental briefing relating to its holding in Gunn v. Minton ( IP Update, Vol. 16, No. 2) to determine whether appellate jurisdiction in the Federal Circuit was proper. In Gunn, the Federal Circuit ruled that although it has exclusive jurisdiction over patent issues, other courts may hear patent-related claims, such as malpractice claims relating to patent prosecution.
Citing Gunn, the Federal Circuit held that although this case would potentially involve "analysis of the [patent] claims and specifications and may require application of patent claim construction principles," the federal question jurisdiction statute required more than "mere resolution of a patent issue." The Court went on to note that the "underlying patent issue in this case, while important to the parties and necessary for resolution of the claims, does not present a substantial issue of patent law," and that "[p]atent claims will not be invalidated or revived based on the result of this case." Instead, "patent law is only relevant to determine if KLA intentionally made misrepresentations."
Thus, finding no "substantial" issue of patent law, the Federal Circuit transferred the case to the Fifth Circuit to determine whether the patent was procured through intentional fraud in order to illegally create or preserve a monopoly.
Practice Note: Gunn v. Minton narrowed the appellate jurisdiction of the Federal Circuit. Tangential resolution of a patent dispute is not necessarily enough to invoke Federal Circuit jurisdiction. Going forward, Walker Process claims will not be heard in the Federal Circuit merely because they require some consideration of a patent issue.
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