By Audrey A. Millemann

United States courts should not adjudicate rights under foreign patents, according to the Federal Circuit Court of Appeals. In an interesting case, the court was divided over whether a district court could decide infringement of a foreign patent. Voda v. Cordis Corporation, 476 F.3d 887 (February 1, 2007).

The plaintiff, Voda, owned several U.S. and foreign patents covering guiding catheters used in interventional cardiology. The plaintiff sued defendant, Cordis Corporation, a U.S. entity, in the Western District of Oklahoma for infringement of three U.S. patents. Cordis denied infringement and alleged invalidity.

The plaintiff sought leave to amend his complaint to add claims for infringement of his foreign patents.  He alleged that the defendant had made, sold, and offered for sale its catheter in violation of the foreign patents, and that the district court had supplemental jurisdiction under 28 USC §1367(a). Defendant admitted that it had sold the accused device in the United States and foreign countries, but opposed plaintiff’s motion to amend on the grounds that the district court did not have subject matter jurisdiction over the claims. The district court granted plaintiff’s motion to amend. Defendant filed an interlocutory appeal to the Federal Circuit.

The issue before the court was whether the district court had supplemental subject matter jurisdiction under §1367 over a claim of infringement of a foreign patent. The court was divided in its decision – two judges joined in the majority and one judge dissented. The majority held that the determination of subject matter jurisdiction under §1367 is a two-part analysis: “(1) whether §1367(a) authorizes such supplemental jurisdiction and (2) whether the district court’s exercise of such supplemental jurisdiction was within its §1367(c) discretion.” Id. at 893. The court held that the district court had failed to satisfy subsection (c).

Under subsection (c), a district court may exercise its discretion to decline supplemental jurisdiction, in its discretion, if: the claim involves a novel or complex state law issue; the claim substantially predominates over the claim over which the district court has original jurisdiction; the district court has dismissed the claims over which it had original jurisdiction; or exceptional circumstances or compelling reasons require jurisdiction to be declined. The court held that the district court had abused it’s discretion in assuming subject matter jurisdiction because “considerations of comity, judicial economy, convenience, fairness, and other exceptional circumstances constitute compelling reasons to decline jurisdiction under §1367(c).” Id. at 898.

The court first analyzed the treaties entered into between the United States and foreign countries related to patent law. Pursuant to the Paris Convention entered into in 1970 and 1973, the parties had agreed that United States patents are to be independent of patents in other countries and that the laws of each country are reserved and to be respected as sovereign. The court held that a United States court should not unilaterally decide to become the adjudicator of the validity and infringement of any foreign patent having an equivalent U.S. patent. Id. at 900. According to the court, the Patent Cooperation Treaty, which the U.S. adopted in 1978, and the Agreement on Trade-Related Aspects of Intellectual Property Rights, adopted in 1995, further supported this conclusion. The court noted that nothing in these agreements permits one country to adjudicate the patent rights of another country. In fact, the court pointed out, the European Patent Convention has not yet created a centralized European patent court for its own patents. The court found that the exercise of jurisdiction by the United States could undermine the ability of the United States to perform its obligations under these treaties and that this was an exceptional circumstance under subsection (c). Id.

Second, the court considered comity — the spirit of cooperation or respect for the laws of foreign countries. The court found that there was no reason that foreign courts could not satisfactorily protect the plaintiff’s rights in his foreign patents. The court also explained that the local action doctrine (which requires rights in real property to be adjudicated by the courts of the state in which the property is located) was instructive — patent rights should be determined by the country that created the patent rights. A United States court deciding foreign patent rights could interfere with procedures established by the foreign countries in determining their own patent rights. Id. at 900-902.

Next, the court stated that the interests of judicial economy were best met by the district court declining jurisdiction. Otherwise, a United States court could spend excessive time learning the complexities of foreign patent law. Id. at 903.

Lastly, the court considered fairness. According to the court, the act of state doctrine would require a United States court to uphold a foreign patent regardless of its validity This would be fundamentally unfair to the defendant, who had asserted invalidity of the foreign patents. Id. at 904.

The court concluded that the district court had erred in exercising supplemental jurisdiction, based on the above factors. The court emphasized that these factors are only some of the factors to be considered, and that others may be relevant.