Vernon F. Minton v. Jerry W. Gunn, Individually, Williams Squire & Wren, L.L.P., James E. Wren, Individually, Slusser & Frost, L.L.P., William C. Slusser, Individually, Slusser Wilson & Partridge, L.L.P., and Michael E. Wilson, Individually

CourtTexas Supreme Court
DecidedMay 28, 2013
Docket10-0141
StatusPublished

This text of Vernon F. Minton v. Jerry W. Gunn, Individually, Williams Squire & Wren, L.L.P., James E. Wren, Individually, Slusser & Frost, L.L.P., William C. Slusser, Individually, Slusser Wilson & Partridge, L.L.P., and Michael E. Wilson, Individually (Vernon F. Minton v. Jerry W. Gunn, Individually, Williams Squire & Wren, L.L.P., James E. Wren, Individually, Slusser & Frost, L.L.P., William C. Slusser, Individually, Slusser Wilson & Partridge, L.L.P., and Michael E. Wilson, Individually) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vernon F. Minton v. Jerry W. Gunn, Individually, Williams Squire & Wren, L.L.P., James E. Wren, Individually, Slusser & Frost, L.L.P., William C. Slusser, Individually, Slusser Wilson & Partridge, L.L.P., and Michael E. Wilson, Individually, (Tex. 2013).

Opinion

(Slip Opinion) OCTOBER TERM, 2012 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

GUNN ET AL. v. MINTON

CERTIORARI TO THE SUPREME COURT OF TEXAS

No. 11–1118. Argued January 16, 2013—Decided February 20, 2013 Petitioner attorneys represented respondent Minton in a federal patent infringement suit. The District Court declared Minton’s patent inva- lid under the “on sale” bar since he had leased his interactive securi- ties trading system to a securities brokerage “more than one year prior to the date of the [patent] application.” 35 U. S. C. §102(b). In a motion for reconsideration, Minton argued for the first time that the lease was part of ongoing testing, and therefore fell within the “experimental use” exception to the on-sale bar. The District Court denied the motion and the Federal Circuit affirmed, concluding that the District Court had appropriately held that argument waived. Convinced that his attorneys’ failure to timely raise the argument cost him the lawsuit and led to the invalidation of his patent, Minton brought a legal malpractice action in Texas state court. His former attorneys argued that Minton’s infringement claims would have failed even if the experimental-use argument had been timely raised, and the trial court agreed. On appeal, Minton claimed that the fed- eral district courts had exclusive jurisdiction over claims like his un- der 28 U. S. C. §1338(a), which provides for exclusive federal jurisdic- tion over any case “arising under any Act of Congress relating to patents.” Minton argued that the state trial court had therefore lacked jurisdiction, and he should be able to start over with his mal- practice suit in federal court. Applying the test of Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308, the Texas Court of Appeals rejected Minton’s argument, proceeded to the merits, and determined that Minton had failed to establish experi- mental use. The Texas Supreme Court reversed, concluding that the case properly belonged in federal court because the success of Min- ton’s malpractice claim relied upon a question of federal patent law. Held: Section §1338(a) does not deprive the state courts of subject mat- 2 GUNN v. MINTON

ter jurisdiction over Minton’s malpractice claim. Pp. 4–13. (a) Congress has authorized the federal district courts to exercise original jurisdiction over “any civil action arising under any Act of Congress relating to patents,” and further decreed that “[n]o State court shall have jurisdiction over any [such] claim.” §1338(a). Be- cause federal law did not create the cause of action asserted by Min- ton’s legal malpractice claim, the claim can “aris[e] under” federal pa- tent law only if it “necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain with- out disturbing any congressionally approved balance of federal and state judicial responsibilities.” Grable, 545 U. S., at 314. Pp. 4–6. (b) Applying Grable’s inquiry here, it is clear that Minton’s legal malpractice claim does not arise under federal patent law. Pp. 6–12. (1) Resolution of a federal patent question is “necessary” to Min- ton’s case. To prevail on his claim, Minton must show that an exper- imental-use argument would have prevailed if only petitioners had timely made it in the earlier patent litigation. That hypothetical pa- tent case within the malpractice case must be resolved to decide Min- ton’s malpractice claim. P. 7. (2) The federal issue is also “actually disputed.” Minton argues that the experimental-use exception applied, which would have saved his patent from the on-sale bar; petitioners argue that it did not. Pp. 7–8. (3) Minton’s argument founders, however, on Grable’s substanti- ality requirement. The substantiality inquiry looks to the importance of the issue to the federal system as a whole. Here, the federal issue does not carry the necessary significance. No matter how the state courts resolve the hypothetical “case within a case,” the real-world result of the prior federal patent litigation will not change. Nor will allowing state courts to resolve these cases undermine “the develop- ment of a uniform body of [patent] law.” Bonito Boats, Inc. v. Thun- der Craft Boats, Inc., 489 U. S. 141, 162. The federal courts have ex- clusive jurisdiction over actual patent cases, and in resolving the nonhypothetical patent questions those cases present they are of course not bound by state precedents. Minton suggests that state courts’ answers to hypothetical patent questions can sometimes have real-world effect on other patents through issue preclusion, but even assuming that is true, such “fact-bound and situation-specific” effects are not sufficient to establish arising under jurisdiction, Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U. S. 677, 701. Finally, the federal courts’ greater familiarity with patent law is not enough, by itself, to trigger the federal courts’ exclusive patent jurisdiction. Pp. 8–12. (4) It follows from the foregoing that Minton does not meet Gra- Cite as: 568 U. S. ____ (2013) 3

ble’s fourth requirement, which is concerned with the appropriate federal-state balance. There is no reason to suppose that Congress meant to bar from state courts state legal malpractice claims simply because they require resolution of a hypothetical patent issue. P. 12. 355 S. W. 3d 634, reversed and remanded.

ROBERTS, C. J., delivered the opinion for a unanimous Court. Cite as: 568 U. S. ____ (2013) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Wash- ington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES _________________

No. 11–1118 _________________

JERRY W. GUNN, ET AL., PETITIONERS v.

VERNON F. MINTON

ON WRIT OF CERTIORARI TO THE SUPREME COURT OF TEXAS [February 20, 2013]

CHIEF JUSTICE ROBERTS delivered the opinion of the Court. Federal courts have exclusive jurisdiction over cases “arising under any Act of Congress relating to patents.” 28 U. S. C. §1338(a). The question presented is whether a state law claim alleging legal malpractice in the handling of a patent case must be brought in federal court. I In the early 1990s, respondent Vernon Minton devel- oped a computer program and telecommunications net- work designed to facilitate securities trading. In March 1995, he leased the system—known as the Texas Comput- er Exchange Network, or TEXCEN—to R. M. Stark & Co., a securities brokerage. A little over a year later, he ap- plied for a patent for an interactive securities trading system that was based substantially on TEXCEN. The U. S.

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Vernon F. Minton v. Jerry W. Gunn, Individually, Williams Squire & Wren, L.L.P., James E. Wren, Individually, Slusser & Frost, L.L.P., William C. Slusser, Individually, Slusser Wilson & Partridge, L.L.P., and Michael E. Wilson, Individually, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vernon-f-minton-v-jerry-w-gunn-individually-williams-squire-wren-tex-2013.