NeuroRepair, Inc. v. The Nath Law Group et al., No. 2013-1073, 2015 U.S. App. LEXIS 616 (Fed. Cir. Jan. 15, 2015) (Wallach, J.). Click Here for a copy of the opinion.
In 2005, NeuroRepair retained Robert Cogan and the The Nath Law Group (collectively, "Nath"), to prosecute certain patent applications. By 2007 NeuroRepair had become dissatisfied and transferred its cases to another firm. NeuroRepair's allegations included lack of communication, ineffective pursuit of the patent applications, and failure to accurately bill and record time. In 2009, NeuroRepair brought several state-based malpractice claims against Nath in San Diego Superior Court. Nath removed the lawsuit to federal district court on the ground that it was a "civil action relating to patents." The district court ultimately entered a judgment in favor of Nath. NeuroRepair appealed and argued that the district court lacked subject matter jurisdiction over the case.
The Federal Circuit vacated and remanded the case to the district court with instructions that it transfer the case to California state court. The district court lacked subject matter jurisdiction over the lawsuit because the malpractice claims did not arise under patent law. Specifically, the Court echoed the Supreme Court's recent decision in Gunn v. Minton, which made it clear that state-based legal malpractice claims will "rarely, if ever, arise under federal patent law," even if they require resolution of a substantive question of federal patent law. 133 S. Ct. 1059, 1065 (2013). The Court rejected the Defendants' arguments distinguishing the present malpractice case, which was based on patent prosecution, with that of Gunn, which was based on patent litigation. Instead, the Court concluded that there is no carve out that provides federal subject matter jurisdiction to patent prosecution related malpractice claims. Further, the Court found only one patent law issue necessary for decision in this case – whether the patent could have issued earlier and with broader claims. The Court concluded that, as in Gunn, this question was not of substantial importance to the patent system and that trying these cases in federal court would "disrupt the federal-state balance." As a result, NeuroRepair will have a second shot of proving malpractice in California state court.
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