Gunn v. Minton

PETITIONER: Jerry Gunn, et al.
RESPONDENT: Vernon Minton
LOCATION: District Court of Texas, 48th Judicial District

DOCKET NO.: 11-1118
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: Supreme Court of Texas

CITATION: 568 US (2013)
GRANTED: Oct 05, 2012
ARGUED: Jan 16, 2013
DECIDED: Feb 20, 2013

ADVOCATES:
Jane Webre - for the respondent
Thomas M. Michel - for the petitioners

Facts of the case

In the early 1990s, Vernon Minton, a former securities broker, developed the Texas Computer Exchange Network (TEXCEN) software that allowed financial traders to execute trades on their own. R.M. Stark & Co. (Stark) agreed to lease TEXCEN. More than one year later, Minton filed for a patent that was granted by the United States Patent and Trademark Office on January 11, 2000.

Minton later sued the NASDAQ and the National Association of Securities Dealers (NASD) and alleged that their services infringed on his patent. NASD and NASDAQ argued that a patent is invalid when the invention claimed is sold more than a year before the patent application is filed. The district court granted summary judgment for NASD and NASDAQ. Minton retained new counsel to argue his case under the experimental use exception, which states that the patent remains valid if the invention was sold primarily for experimental, rather than commercial, use. He filed a motion for reconsideration, which the district court denied. The United States Court of Appeals for the Federal Circuit affirmed.

Minton sued his original attorneys (collectively referred to as Gunn) for legal malpractice and argued that their failure to argue the experimental use exception in the original suit cost him the case. Gunn filed for summary judgment arguing no-evidence due to the fact that the attorneys did not know of the earlier sale in order for the experimental use exception to be relevant. The trial court granted summary judgment in favor of Gunn. Minton appealed to the Second Court of Appeals for Texas. Shortly after he filed his appeal, the United States Court of Appeals for the Federal Circuit decided a case that gave jurisdiction to the federal courts in malpractice suits arising from patent litigation. Minton filed a motion to dismiss his case from the Second Court of Appeals for Texas, but the court denied his motion and affirmed the decision of the trial court. The Supreme Court of Texas reversed and dismissed the case.

Question

Do the federal courts have exclusive jurisdiction in any cases that involve patent law, even when the patent issue is not the primary issue in the case?

Media for Gunn v. Minton

Audio Transcription for Oral Argument - January 16, 2013 in Gunn v. Minton

Audio Transcription for Opinion Announcement - February 20, 2013 in Gunn v. Minton

John G. Roberts, Jr.:

I have our opinion this morning in case 11-1118, Gunn versus Minton.

Legal malpractice cases typically go to state court.

Patent cases must go to federal court.

So, what about a legal malpractice case that arises out of the lawyer's mishandling of a patent case?

Now, different courts gave different answers to that question, so we granted review of this case from Texas to resolve that conflict.

Now, in most cases, it's pretty easy to tell which cases should go where.

If it's a state law that lets you sue, as in a malpractice case, you go to state court.

If it's federal law that gives you the right to sue, as in a patent infringement case, you go to federal court.

But there is a tiny group of cases where you can go to federal court even though it's the state law that lets you sue.

That's when The Court has to rule on a very important federal issue to decide the state law claim.

We had a case about a hundred years ago that has become the classic example of this.

The claim was that a bank could not purchase certain bonds because they were invalid.

That's a state law claim.

It should go to state court.

But the reason that the bonds were claimed to be invalid was that they were issued by the federal government and the federal government acted unconstitutionally in issuing them.

Now, in that case, we said that the federal issue had such broader significance to the federal system as a whole that the case could go to federal court even though the right to sue came from state law.

But this case isn't like that.

Now, it's true in deciding whether the lawyers were guilty of malpractice, the state court will have to opine on how the lawyers should've handled the patent case, a federal issue, but that will not have a significant effect on the federal patent system.

The patent case itself is over, the plaintiff lost.

Now, he may win his case claiming that his lawyers messed up, but that won't change the result in the patent case, nor will there be any broader effect on federal patent law.

Even if the state court makes a mistake in explaining how the patent case should've been handled, that will not disrupt the uniformity of federal patent law.

If the issue comes up a lot, the federal courts, where actual patent cases are brought, will clear out any confusion soon enough.

If the issue does not come up a lot, it was not an important one for the system as a whole in the first place.

So the state legal malpractice case goes to state court even though it is about malpractice in a federal patent case.

Our opinion is unanimous.

Sarah from Law Aspect

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