Thursday, February 01, 2007

CAFC: Allowing Foreign Patent Claims in U.S. Court Abuse of Discretion

Voda v. Cordis (05-1238) - February 1, 2007

In this long-anticipated decision, the CAFC finally resolved that courts have no discretion in considering infringement alleged on foregn patents. Voda sued Cordis for allegedly infringing his US patents, which had related foreign patents issued from a common Patent Cooperation Treaty ("PCT") application.

During litigation, Voda moved to amend his complaint to add claims of infringement of the European, British, Canadian, French, and German foreign patents. The district court found subject matter jurisdiction over the foreign patent claims pursuant to the supplemental jurisdiction statute § 1367, and then certified its order for interlocutory review to the CAFC.

The burning question here was that the district court exercised its discretion in choosing to hear the issues surrounding the foreign patents. Courts have often granted supplemental jurisdiction to include foreign law claims (e.g., commercial law, property law, inheritance law, citizenship law, copyright/trademark law, liability and negligence law). After reviewing the case, the district court found that the law also supported hearing the foreign patent claims as well.

The CAFC reversed in a 2-1 decision. While not addressing whether or not supplemental jurisdiction applied, the court found that the district court had nevertheless abused its discretion, by ignoring the Paris Convention, TRIPS and concepts of comity.

The CAFC ruled that neither the Paris Convention, PCT nor TRIPS contemplated or allowed one country's jurisdiction to adjudicate patents of another. By exercising supplemental jurisdiction, the CAFC reasoned that the district court "could undermine the obligations of the United States . . . [and] prejudice the rights of the foreign governments."

Interestingly, the CAFC's ruling did not bar the possibility of future cases where U.S. courts could adjudicate infringement based on foreign patents:

In addition, we emphasize that because the exercise of supplemental jurisdiction under § 1367(c) is an area of discretion, the district courts should examine these reasons along with others that are relevant in every case, especially if circumstances change, such as if the United States were to enter into a new international patent treaty or if events during litigation alter a district court’s conclusions regarding comity, judicial economy, convenience, or fairness. However, "[d]iscretion is not whim, and limiting discretion according to legal standards helps promote the basic principle of justice that like cases should be decided alike . . . a page of history is worth a volume of logic."

VACATED AND REMANDED

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