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Patent Prosecution Malpractice Claim Properly Dismissed Because of Plaintiff’s Failure to Show That Her Alleged Invention Was Patentable

March 02, 2010

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Last Month at the Federal Circuit - April 2010

Judges: Newman, Bryson, Moore (author)

[Appealed from: N.D. Ohio, Judge Lioi]

In Davis v. Brouse McDowell, L.P.A, No. 09-1395 (Fed. Cir. Mar. 2, 2010), the Federal Circuit held that the district court properly exercised jurisdiction under 28 U.S.C. § 1338(a) because patent law was a necessary element of a patent prosecution malpractice claim.  The Court also concluded that the trial court properly granted SJ dismissing the plaintiff’s prosecution malpractice claims because the plaintiff failed to demonstrate that her alleged invention for which she had sought patent protection was patentable. 

Heather Davis developed The IP-Exchange, a social networking platform for intellectual property professionals.  In 2003, Davis contacted Daniel Thomson, an attorney at the law firm Brouse McDowell, L.P.A. (“Brouse McDowell”).  Davis requested general information about patent protection and told Thomson that she was interested in obtaining international patent coverage.  In his response, Thomson explained various aspects of a PCT application but did not mention the absolute novelty rule that applied in some countries.

Davis went live with her IP-Exchange website in 2005.  On January 20, 2006, she filed two provisional applications pro se.  The one-year deadline to file utility and PCT applications with priority to these provisional applications fell on Monday, January 22, 2007.  On January 17, 2007, Davis asked Thomson to prepare and file the utility and PCT applications, and he agreed.  On the next day, Thomson left for a planned vacation and did not return until January 22.  During his absence, no other Brouse McDowell attorney worked on Davis’s applications. 

Upon his return, Thomson rushed to file three utility applications but no PCT application.  Responding to Davis’s inquiry, Thomson explained that he did not file any PCT application because he did not think it was worth spending the money, since she would not be able to obtain patent protection in Europe.  After further discussion, however, Thomson filed the requested PCT applications.  Thomson later withdrew his representation of Davis before the PTO.  Ultimately, Davis abandoned the applications. 

Davis sued Thomson and Brouse McDowell, alleging that they committed malpractice by failing to timely file the PCT applications and by “other omissions.”  In her deposition, she testified that the “other omissions” included Thomson’s alleged negligence in preparing and filing the utility applications.  Arguing that adjudicating Davis’s malpractice claims would necessarily involve a resolution of the patentability of her inventions, the defendants removed the action to the federal court.  After discovery, the district court granted the defendants’ motion for SJ seeking dismissal of Davis’s claims.

On appeal, the Federal Circuit first determined that the district court had jurisdiction over Davis’s malpractice claim under 28 U.S.C. § 1338(a).  In analyzing this issue, the Court explained that federal jurisdiction exists where “a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff’s right to relief necessarily depends 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.”  Slip op. at 5-6 (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09 (1988)).  Because Davis’s cause of action for legal malpractice arose under Ohio state law, the Court looked to Ohio law to determine whether patent law was a “necessary element” of a claim presented in Davis’s complaint.

The Court acknowledged that Davis’s allegations relating to the PCT applications did not raise any U.S. patent law issue.  The Court also noted that “a claim supported by alternative theories in the complaint may not form the basis for § 1338(a) jurisdiction unless patent law is essential to each of those theories.”  Id. at 7 (quoting Christianson, 486 U.S. at 810).  It thus set out to decide whether Davis’s complaint presented alternative theories.  According to the Federal Circuit, Davis’s allegations of attorney malpractice arose out of different sets of operative facts:  (1) the failure to file the PCT applications before the one-year deadline, and (2) the negligent preparation and filing of the U.S. applications.  Therefore, the Court determined that Davis’s complaint presented two distinct claims, not alternative theories of a single claim.

The Court also concluded that Ohio’s case-within-a-case doctrine applied to Davis’s legal malpractice claim.  This doctrine requires the plaintiff in certain malpractice cases to prove that she would have been successful in the underlying matter but for the alleged malpractice.  According to Davis, Thomson’s negligence in preparing and filing the U.S. applications precluded her from securing patents on her inventions, which in turn caused her investors to withdraw their funding, leaving her unable to operate The IP-Exchange as a business.  The Court observed that, however, unless her inventions were patentable, Thomson’s negligence could not have caused her to suffer any damages.  Because U.S. patent law controlled the determination of patentability, the Court concluded that patent law was a necessary element of one of the malpractice claims and the district court properly exercised jurisdiction pursuant to 28 U.S.C. § 1338(a).

Next, the Court addressed Davis’s argument that the district court abused its discretion in striking certain portions of the affidavit of her patent law expert.  The expert testified during his deposition that he did not perform any patentability analysis of Davis’s inventions.  But after the defendants relied on this statement, he filed a contrary affidavit stating that he did perform such a patentability analysis and that Davis’s invention was patentable.  Because of this inconsistency and also because the expert failed to disclose certain opinions in his expert report, the Federal Circuit held that the district court did not abuse its discretion in striking portions of the affidavit.

Finally, on the merits, the Federal Circuit stated that to succeed in her claim for malpractice based on negligent representation, Davis must establish duty, breach, damages, and causation.  It frowned on Thomson’s actions in representing Davis, noting that he “went on vacation, missed filing dates, and, by his own admission, filed an application which he realized contained a poorly drafted specification and claims which he intended to repair at a later time.”  Id. at 12-13.  But, even if Davis could establish Thomson’s breach of his duty to her, the Court stated, she still must prove causation under the case-within-a-case doctrine.  In other words, Davis must prove, by a preponderance of the evidence, that she would have obtained patents but for this breach. 

On patentability, the critical issue for causation, Davis’s patent expert opined that but for the defendants’ legal malpractice, Davis would have received patents on her inventions.  Yet his expert report contained no affirmative analysis supporting this opinion, the Federal Circuit observed.  Thus, it held that this opinion, unsupported by facts, was merely conclusory and did not create a genuine issue of material fact as to the patentability of Davis’s inventions.  The Court explained that Davis did not have to identify claims and perform a patentability analysis similar to one in an invalidity trial.  Instead, she only needed to establish the “likelihood” that her inventions would have been held patentable according to the criteria of patentability applied during examination.  But Davis did not even satisfy this lower standard.

The Federal Circuit thus concluded that Davis could not prevail on the causation element of her malpractice claim as a matter of law and affirmed the district court’s grant of SJ.


Summary authored by Zhenyu Yang, Ph.D., Esq.