Federal Circuit Rejects Appeal of Walker Process Claim
In Xitronix Corp. v. KLA-Tencor Corp., No. 2016-2746 (Fed. Cir. Feb. 9, 2018), the Federal Circuit considered whether it or a regional circuit had jurisdiction over an appeal of a case raising only Walker Process antitrust claims. The court held that, in view of the Supreme Court’s decision in Gunn v. Minton, 568 U.S. 251 (2013), the Federal Circuit did not have jurisdiction and it transferred the case to the Fifth Circuit.
Xitronix filed suit in the Western District of Texas asserting a Walker Process monopolization claim based on alleged fraudulent prosecution of a patent. Walker Process Equip., Inc. v. Food Machinery & Chem. Corp., 382 U.S. 172, 176-77 (1965). Unlike many cases raising such issues, the Walker Process claim was not raised as a counterclaim to a charge of patent infringement. Rather, it was the only claim raised in the case. After the district court dismissed the claim on summary judgment, the plaintiff appealed to the Federal Circuit.
The Federal Circuit sua sponte raised the question of its own jurisdiction and asked for supplemental briefing, which the parties provided prior to oral argument. However, those briefs did not address the Supreme Court’s decision in Gunn, and the Federal Circuit asked for yet another round of supplemental briefs.
Prior to Gunn, the Federal Circuit had issued two decisions that the parties contended supported Federal Circuit jurisdiction in appeals from Walker Process claims. Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1067-68 (Fed. Cir. 1998) and In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323, 1330 n. 8 (Fed. Cir. 2008) (“Cipro”). The Federal Circuit disagreed that either was relevant. Nobelpharma dealt with whether Federal Circuit law applied to Walker Process claims, not which court had jurisdiction; and Cipro involved a transfer from another jurisdiction, so the court did not perform a full-blown jurisdictional analysis.
Regardless, the Federal Circuit determined that the Supreme Court’s holding in Gunn was dispositive that a Walker Process claim did not “arise under” the patent laws and so did not fall within the scope of the Federal Circuit’s jurisdiction. In Gunn, the Supreme Court considered whether a legal malpractice claim relating to the procurement of a patent arose under the patent laws. The Court held that it did not. Even though the state malpractice claim necessarily required the application of patent law and the patent issue was disputed by the parties, the Court held the malpractice claim did not arise under the patent laws. Gunn, 568 U.S. at 259. The Court reasoned that the resolution of the patent issue would have “no effect on ‘the real-world result of the prior federal litigation,” and allowing the state court to resule the underlying patent issue would not undermine the uniform body of patent law because “federal courts are of course no bound by state court case-within-a-case rulings.’” Xitronix, slip op. at 4 (quoting Gunn, 568 U.S. at 261-62).
The Walker Process claim in Xitronix involved an allegation that the patentee made false representations to the PTO on which the examiner relied during prosecution. The Federal Circuit held that this claim did not “‘necessarily depend on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.’” Xitronix, slip op. at 5 (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809 (1988)). There was nothing unique to patent law about allegations of false statements, even if evaluating the alleged misrepresentations required some application of patent law. Nor did the claim require a determination of the validity of the claims; thus, no claims would be invalidated or revived as a result of the case. Thus, as in Gunn, the result would be limited to the parties and the patent involved in the matter.
After Xitronix, it appears that stand alone Walker Process claims based on an alleged false misrepresentation to the PTO must be appealed to the regional circuit. Left unresolved by the Federal Circuit was which court has jurisdiction when the Walker Process claim is based on withheld prior art that is asserted to render one of more of the patent claims invalid. In that circumstance, unlike the facts in Xitronix, the case would require a determination of the validity of the claims in view of the withheld prior art, and the result could have preclusive effect beyond the parties to the case.