EDWARD C. PRADO, Circuit Judge:
This suit, involving state-law claims of fraud and breach of fiduciary duty in connection with a patent application, reaches us for a third time. We most recently reversed the district court's dismissal of the case as time-barred at the pleading stage and remanded for further factual development. USPPS, Ltd. v. Avery Dennison Corp., 326 Fed.Appx. 842 (5th Cir. 2009) (per curiam) (unpublished). Plaintiff-Appellant USPPS, Ltd. ("USPPS") now appeals the district court's grant of summary judgment in favor of Defendants-Appellees Avery Dennison Corp. ("Avery"); Renner, Otto, Boiselle & Sklar, L.L.P. ("Renner"); and Neil DuChez. The district court held that there was no genuine dispute of material fact as to whether USPPS's claims were time-barred such that the defendants were entitled to judgment as a matter of law, and that in the alternative there was no genuine dispute of material fact as to the causation elements of USPPS's claims. We requested supplemental briefing on the issue of whether exclusive appellate jurisdiction rests in the United States Court of Appeals for the Federal Circuit under 28 U.S.C. §§ 1295(a) and 1338(a). After reviewing the record, we conclude that this case raises a substantial issue of patent law such that we lack jurisdiction over the
The Supreme Court has explained that our assessment of whether this Circuit or the Federal Circuit has jurisdiction over the appeal must be made by reference to the allegations made in the plaintiff's "well-pleaded complaint"; that is, "from what necessarily appears in the plaintiff's statement of his own claim in the [complaint], unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose." Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (citation and quotation marks omitted). We therefore limit our recitation of the facts to those relevant to this inquiry.
USPPS filed suit in federal district court against Avery; Avery's law firm, Renner; and one of Renner's partners, Neil DuChez, on the basis of diversity jurisdiction. The dispute stems from the efforts of USPPS and its owner and founder, Joe Pat Beasley, to obtain a patent for an invention of Beasley's related to personalized postage stamps.
In 1999, Beasley filed a patent application with the United States Patent and Trademark Office ("PTO"). While the patent application was pending, Beasley negotiated a licensing and manufacturing contract with Avery. In March 2001, the PTO approved Beasley's patent application and notified him that it would issue the patent upon payment of the requisite fees. In May 2001, Beasley and Avery entered into an agreement under which Avery agreed to assume responsibility for prosecuting Beasley's patent application and to pay all related fees and expenses. Beasley subsequently revoked all previous powers of attorney and appointed attorneys from Renner, Avery's law firm, to act on his behalf. USPPS's complaint alleges that Renner never disclosed to Beasley or anyone at USPPS that the firm did not represent Beasley and held a higher loyalty to Avery's interests.
In June 2001, Renner, acting pursuant to Beasley's power of attorney, formally abandoned Beasley's original patent application and submitted a second application pursuing more claims. In August 2001, USPPS and Avery entered into an agreement under which Avery would pay USPPS a royalty on sales of personalized postage stamps. In mid-2002, the PTO rejected the patent applications. Renner filed responses, but the PTO again rejected the applications. Avery notified USPPS that there was no hope that the applications could be revived by additional claim language. Finally, on May 14, 2003, Renner notified Avery and USPPS that the applications had been abandoned. In 2004, Avery notified USPPS that it intended to sell personalized postage stamps to third parties without further payment of royalties after the royalty agreement expired by its own terms.
USPPS's complaint contends that Renner's representation of Avery created a conflict of interest with its representation of Beasley and USPPS in the patent-prosecution process. Specifically, USPPS argues that Avery benefitted from the rejection of the patent application because Avery could produce the stamps without paying royalties once the patent was rejected. Neither Avery nor Renner supposedly disclosed this conflict to USPPS.
This lawsuit was preceded by a nearly identical one filed with Beasley named as
The lawsuit was then refiled in USPPS's name, including additional allegations based on information learned in the course of discovery in the prior suit. The district court dismissed the claims as time-barred. USPPS appealed, and we reversed and remanded for further factual development, concluding that the discovery rule or fraudulent-concealment doctrine might apply on the face of the complaint. USPPS, 326 Fed.Appx. at 851. The parties made no arguments concerning jurisdiction in that appeal, and our prior opinion makes no mention of the basis for the court's jurisdiction other than to describe the complaint as asserting that the case was "based on diversity of citizenship." Id. at 843.
"We must always be sure of our appellate jurisdiction and, if there is doubt, we must address it, sua sponte if necessary." Castaneda v. Falcon, 166 F.3d 799, 801 (5th Cir.1999). Whether an appeal properly belongs in this Court or the Federal Circuit is such a question of appellate jurisdiction. See 28 U.S.C. § 1295(a). If we conclude that our jurisdiction is lacking, we cannot reach the merits of the appeal. See Christianson, 486 U.S. at 818, 108 S.Ct. 2166.
"Under 28 U.S.C. § 1295(a), the Federal Circuit has exclusive jurisdiction of an appeal where the district court's jurisdiction was based, in whole or in part, on 28 U.S.C. § 1338." Natec, Inc. v. Deter Co., 28 F.3d 28, 29 (5th Cir.1994) (per curiam). Where an appeal over which the Federal Circuit has exclusive jurisdiction is taken to this Court in error, we are directed by statute to, "if it is in the interest of justice, transfer such . . . appeal to" the Federal Circuit. See 28 U.S.C. § 1631. The Supreme Court has clarified that if such a transfer is not "in the interest of justice," our sole alternative is to dismiss the appeal. See Christianson, 486 U.S. at 818, 108 S.Ct. 2166. All the parties agree that if we lack jurisdiction, then transfer rather than dismissal best serves the interest of justice. We agree that "a balancing of equities weighs in favor of transfer because a new appeal . . . at this point would be barred as untimely and we find nothing to indicate that the [appellants] acted in bad faith by filing the instant appeal" with this Court. Scherbatskoy v. Halliburton Co., 125 F.3d 288, 292 (5th Cir.1997).
We therefore must transfer this appeal to the Federal Circuit if the district court's jurisdiction was based, even in part, on § 1338. In relevant part, § 1338(a) grants exclusive jurisdiction to the federal district courts over "any civil action arising under any Act of Congress relating to patents." In Christianson, the Supreme Court summarized its precedents delimiting the scope of this language:
486 U.S. at 807-09, 108 S.Ct. 2166 (internal citations and quotation marks omitted). In Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, the Supreme Court clarified the role that federalism concerns should play in this analysis: "[T]he question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities[?]" 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).
This is therefore a two-part inquiry: first, whether the case requires deciding an issue of patent law; and second, where a patent issue must be decided, whether that issue rises to the level of creating a substantial federal interest such that the Federal Circuit has exclusive appellate jurisdiction. In evaluating these questions, we frequently look to the jurisdictional decisions of the Federal Circuit, see, e.g., Scherbatskoy, 125 F.3d at 291; DuVal Wiedmann, LLC v. Inforocket.com, Inc., 374 Fed.Appx. 482, 484 (5th Cir.2010) (per curiam) (unpublished), although we are not bound by them. See Singh v. Duane Morris LLP, 538 F.3d 334, 340 (5th Cir.2008).
Several opinions of the Federal Circuit applying Christianson suggest that USPPS's claim "arises under" patent law within the meaning of § 1338. In Air Measurement Technologies, Inc. v. Akin Gump Strauss Hauer & Feld, LLP, 504 F.3d 1262 (Fed.Cir.2007), and its companion case Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281 (Fed.Cir. 2007), the Federal Circuit held that a Texas state-law claim of attorney malpractice in a patent infringement case "arises under"
504 F.3d at 1268-69 (internal citations omitted) (quoting Christianson, 486 U.S. at 809, 108 S.Ct. 2166).
In Immunocept, decided on the same day as Air Measurement Technologies, the Federal Circuit addressed the federalism question that Grable reemphasized in a case presenting nearly identical issues to Air Measurement Technologies. The Immunocept plaintiffs filed suit against their law firm alleging a Texas state-law claim of attorney malpractice in prosecuting a patent on their behalf, specifically claiming a drafting mistake. Echoing Air Measurement Technologies, the court held that,
504 F.3d at 1285 (internal citations omitted). The court then briefly turned to the propriety of federal jurisdiction as a question of federalism, an issue not explicitly addressed in Air Measurement Technologies:
Id. at 1285-86 (citing Pub.L. No. 97-164, 96 Stat. 25) (other internal citations omitted).
Both Air Measurement Technologies and Immunocept thus concluded that the exercise of § 1338 federal jurisdiction was proper over state-law claims of malpractice where the alleged malpractice required the
The relevant facts of this case are similar to those in Davis, though there are of course some distinctions. Here, USPPS alleges that Renner's misconduct constituted a breach of fiduciary duty that ultimately led to USPPS's loss of patent protection in its invention.
It therefore seems clear that, were we to merely apply the Federal Circuit's case law to this appeal, our inquiry would be at an end. Two complications preclude us from that simple resolution, however. First, our Circuit has expressed some skepticism of Air Measurement Technologies, see Singh, 538 F.3d at 340, and second, we must address USPPS's contention that the prior panel's decision on the merits at the motion-to-dismiss stage constitutes the "law of the case" that jurisdiction is proper before this court.
In Singh, we considered whether federal question jurisdiction existed over a malpractice suit between nondiverse parties. The plaintiff had filed suit in Texas state court alleging malpractice in a prior federal trademark lawsuit. The defendant removed to federal court, contending that jurisdiction was proper in federal court in part on the basis of § 1338(a) and Air Measurement Technologies. The defendant reasoned that, because the plaintiff would be required to prove that he would have succeeded on his federal trademark claim but for the alleged malpractice, the suit raised sufficiently substantial questions of federal trademark law to create jurisdiction under § 1338. On appeal, we vacated the judgment entered and rendered a judgment of dismissal for want of jurisdiction, holding that the case did not meet the standard for federal jurisdiction. We explained that the extension of "federal jurisdiction over this state-law malpractice claim would upend the balance between federal and state judicial responsibilities" in violation of the directive of Grable. 538 F.3d at 339. We emphasized that "[l]egal malpractice has traditionally been the domain of state law," id., and that the federal interest in trademark cases was not sufficiently substantial to justify such a "usurpation of state authority in an area in which states have traditionally been dominant," id. at 340.
Singh expressly "decline[d] to follow or extend" Air Measurement Technologies and offered two reasons for doing so. Id. First, because the Federal Circuit "did not consider the . . . federal interest and the effect on federalism" in its opinion.
We are now squarely faced with the question of whether this state-law tort claim presenting questions of patent law involves a sufficiently substantial federal interest to permit federal jurisdiction over a state-law tort. We hold that it does.
Our decision is guided by both (1) the strong federal interest in the "removal [of] non-uniformity in the patent law" that Immunocept explains exclusive federal jurisdiction was intended to ensure, 504 F.3d at 1285, and (2) our holding in Scherbatskoy, 125 F.3d at 291. In Scherbatskoy, we ordered a breach of contract case transferred to the Federal Circuit after determining that "resolution of the [plaintiffs'] substantive claim implicates the federal patent laws" because "determining whether [the defendant] infringed the [plaintiffs'] patents is a necessary element to recovery." Id. The opinion offers no further analysis of the federalism question, but it is nevertheless binding on us. We see no basis for finding any less of a federal interest in patent law in the present case than in Scherbatskoy. In so holding, we conform both to Singh's requirement of balancing the federal and state interests involved and Scherbatskoy's implicit recognition of the special federal interest in patent law.
Finally, we address USPPS's contention that our prior consideration of the merits of its appeal at the motion-to-dismiss stage without sua sponte disclaiming jurisdiction constitutes law of the case that jurisdiction is proper. We hold that it does not.
"The law of the case doctrine, as formulated in this circuit, generally precludes reexamination of issues of law or fact decided on appeal, either by the district court on remand or by the appellate court itself on a subsequent appeal." Todd Shipyards Corp. v. Auto Transp., S.A., 763 F.2d 745, 750 (5th Cir.1987). The rule, though generally adhered to, is not inflexible:
Christianson, 486 U.S. at 817, 108 S.Ct. 2166 (internal citations and quotation marks omitted). As to its scope, the doctrine "applies only to issues that were
Where the question of jurisdiction was actually raised and argued before the prior panel and the panel subsequently exercised jurisdiction without explanation in its opinion, it is clear enough that "the necessary assumption is that the prior panel found subject matter jurisdiction present," and the ruling constitutes law of the case. Trans World Airlines, Inc. v. Morales, 949 F.2d 141, 144 (5th Cir.1991) (per curiam). Similarly, in cases decided prior to the Supreme Court's rejection of the doctrine of hypothetical jurisdiction in Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 93-102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998),
The Supreme Court's decision in Steel Co. itself offers some insight on this point. There, in addressing a different issue, the Court rejected a prior decision that did not address jurisdiction as nonprecedential on the question of whether jurisdiction was proper:
523 U.S. at 91, 118 S.Ct. 1003. Our Court articulated a similar rule in Kershaw v. Shalala, in which we held that "our exercise of jurisdiction in [a prior case] [did not] constitute a binding precedent, . . . because the issue was neither raised by the parties nor addressed by the Court." 9 F.3d 11, 13 n. 3 (5th Cir.1993). Following this logic, we see no reason to accord a prior panel's ruling the discretionary status of law of the case where the Court's resolution of that issue would not even constitute binding precedent had it been decided in a separate appeal. Cf. Trans World Airlines, 949 F.2d at 144 ("While use of law of the case doctrine is not
We therefore decline to defer to the prior panel's exercise of jurisdiction as correct where the issue was neither raised by the parties nor addressed by the court. The law-of-the-case doctrine presents no bar to transfer.
The federal courts are courts of limited jurisdiction and are tasked with the duty to continually, and sua sponte, assess their jurisdiction. This case raises issues of patent law, and those issues are substantial because of the special federal interest in developing a uniform body of patent law in the Federal Circuit as recognized in Scherbatskoy and expressed by Congress's grant of exclusive appellate jurisdiction over patent cases to that court. We therefore lack jurisdiction over the appeal. The prior panel's unstated assumption of jurisdiction is not the "law of the case" and does not bar us from ensuring that the statutory directive is followed and the federal interest is vindicated in this case.
We therefore order this appeal transferred to the United States Court of Appeals for the Federal Circuit pursuant to 28 U.S.C. § 1631. The clerk of this Court is directed to transmit the record, briefs, and other documents relating to this appeal to the clerk of the Federal Circuit.
APPEAL TRANSFERRED.