No U.S. Jurisdiction Over Foreign Patents – The Federal Circuit Holds That A Plaintiff’s Reach Exceeded Its Grasp

U.S. courts should not entertain claims for infringement of foreign patents. That is what the Court of Appeals for the Federal Circuit held in Voda v. Cordis Corp. (05-1238), as it reviewed the U.S. District Court for the Western District of Oklahoma’s order exercising supplemental jurisdiction, pursuant to 28 U.S.C. § 1367, over infringement claims based on foreign patents. In its decision, the Federal Circuit vacated the district court’s order granting the patentee leave to amend its complaint to add counts based on foreign patents, holding that the district court abused its statutory discretion when it decided to exercise supplemental jurisdiction over the foreign patents. In particular, the Federal Circuit was troubled by the district court’s failure to consider the exceptional circumstances of potential conflict with U.S. treaty obligations, comity, fairness and judicial efficiency. These factors, the Federal Circuit held, dictate that the district court should not have assumed jurisdiction over foreign patent infringement claims. Both Plaintiff-Appellee Voda and Defendant-Appellant Cordis are based in the United States. The patents at issue relate generally to guiding catheters used for interventional cardiology. In addition to the U.S. patents-in-suit, Voda had obtained foreign patents in Europe, Britain, France, Germany and Canada, all from a common Patent Cooperation Treaty ("PCT") application. Voda initially sued Cordis alleging infringement of his three U.S. patents. He then moved to amend his complaint to add claims of infringement of his five foreign patents based on conduct that he alleged constituted infringement under the corresponding foreign law of the foreign patents. The district court found that it had supplemental subject matter jurisdiction over the foreign patents pursuant to 28 U.S.C. § 1376.

The Federal Circuit, in reviewing the appeal, applied its own law, rather than that of the regional circuit, because the question of whether a district court may assert supplemental jurisdiction over foreign patent claims based on claims of U.S. patent infringement is a question unique to U.S. patent law. Because the existence of jurisdiction is a question of law, the Federal Circuit reviewed the district court decision de novo. The Federal Circuit started the analysis by stating that for supplemental jurisdiction to be proper under Section 1367(a), the initial focus of the inquiry must be whether the foreign claims were "derive[d] from a common nucleus of operative facts." In the instant case, the district court did not perform an analysis as to whether the plaintiff’s foreign patent infringement claims met that test. While this might have been enough to reverse the district court’s decision by itself, the Federal Circuit went on to hold that the district court also erred in granting the patentee leave to add claims based on foreign patents based on the alternative ground that "compelling reasons for declining jurisdiction" exist under section 1367(c).

The Federal Circuit articulated several compelling reasons against exercising supplemental jurisdiction including:

1. possible interference with treaties concerning intellectual property – i.e., the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty and the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPs");
2. issues of comity, including the fact that there is no international duty requiring the U.S. judicial system to adjudicate foreign patent infringement claims, adjudicating the claims in the United States would not be more convenient, there is no evidence that foreign courts would not adequately protect the foreign patent rights of U.S. citizens and assuming jurisdiction over foreign patent claims could prejudice the rights of other sovereign governments;
3. the harm to judicial economy due to U.S. courts’ lack of institutional competence in foreign patent regimes and potential jury confusion and the potential need for separate trials; and
4. the fact that it would be fundamentally unfair for a U.S. court to make a determination as to what acts a foreign sovereign would find regarding foreign patents.

In a strongly worded dissent, Judge Newman stated that the district court did not abuse its discretion since U.S. courts regularly apply foreign law, including some cases involving foreign patents.

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