Change the Look of the Room: Appeal Transferred to Federal Circuit
The US Court of Appeals for the Second Circuit transferred an appeal of a preliminary injunction enjoining alleged copyright and trademark infringement to the US Court of Appeals for the Federal Circuit because the operative complaint included six counts of patent infringement and thus arose under patent law. Hudson Furniture, Inc. et al. v. Lighting Design Wholesalers Inc., Case No. 20-3299 (2d Cir. Dec. 21, 2021) (Livingston, CJ; Kearse, Lee, JJ.) (per curiam).
Hudson filed a complaint against Lighting Design alleging patent, trademark and copyright infringement. The district court granted Hudson’s preliminary injunction and enjoined Lighting Design from alleged infringement of Hudson’s copyrights and trademarks. The district court also denied Lighting Design’s motion to dismiss for lack of personal jurisdiction and its motion for reconsideration permitting alternative service of process. Lighting Design appealed the rulings to the Second Circuit.
Hudson asked the Second Circuit to dismiss the appeal, arguing that the appeal arose from a complaint involving patent law claims and thus fell under the exclusive jurisdiction of the Federal Circuit. Under 28 U.S.C. §§ 1292 and 1295, the Federal Circuit has exclusive jurisdiction over interlocutory appeals involving any action that arises under any act of US Congress relating to patents. An action arises under patent law when a well-pleaded complaint establishes that (1) federal law creates the cause of action or (2) the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law.
The Second Circuit agreed that exclusive jurisdiction rested with the Federal Circuit, explaining that the operative complaint included six counts of patent infringement, and the appeal concerned the district court’s ruling on a motion for injunctive relief involving patent law and non-patent law claims. The Court rejected Lighting Design’s argument that patent law did not constitute a substantial part of the overall success of the case since Hudson failed to secure preliminary injunctive related to the patent law claims. The Court explained that Lighting Design’s argument focused on only the second basis for Federal Circuit jurisdiction (whether the right to relief depends on a “substantial question” related to patent law). The Court found that even if it accepted Lighting Design’s argument, the fact that federal patent law created the cause of action was sufficient to establish Federal Circuit jurisdiction under the first basis of jurisdiction. While the Second Circuit agreed with Hudson, it declined to dismiss the appeal and instead opted to transfer the appeal to the Federal Circuit because the original appeal was timely filed in good faith and transferring the appeal was in the interest of justice.