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Likelihood of Patentability Needed to Avoid SJ in Suit-Within-a-Suit Prosecution Malpractice Case

May 04, 2012
Hendrix, Justin A.

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Last Month at the Federal Circuit - June 2012

Judges: Rader, O'Malley (concurring in the result), Reyna (author)

[Appealed from: D.N.J., Judge Martini]

In Minkin v. Gibbons, P.C., No. 11-1178 (Fed. Cir. May 4, 2012), the Federal Circuit affirmed the district court’s grant of SJ in favor of the law firm of Gibbons, P.C. (“Gibbons”), finding that Mr. Herman Minkin (“Minkin”) failed to raise a genuine dispute of material fact regarding causation, a necessary element in New Jersey legal malpractice cases.

Minkin is the sole inventor of U.S. Patent No. 6,012,363 (“the ’363 patent”), which is directed to a hand tool called “extended reach pliers” (“ERP”). Minkin, an airplane mechanic, devised the ERP in the 1960s in order to reach deep inside airplane engines without disassembling external components. To accomplish this, rather than use just one pivot like standard pliers do, the ERP uses two. In 1996, Minkin retained Gibbons to patent his invention.

The patent claims as originally drafted recited a tool having two handles joined by a first pivot and two jaw elements joined by a second pivot. The length of the long end of the handle was twice as long as the short end, and the length of the working end of the jaw was at least twice as long as the tail end. Following the 35 U.S.C. §§ 102(b) and 103 rejections based on an early 1900s prior art reference, Gibbons amended the claims to require a minimum 3:1 ratio between the lengths of the components connecting the ERP’s two pivots. The amendment, Minkin argued, provided for an increased mechanical advantage not previously available. The examiner again rejected the claims as obvious based on the same reference and three additional references. After filing a CIP application, submitting an inventor declaration, and conducting an examiner interview, the PTO allowed Minkin’s ’363 patent with the 3:1 pivot ratio limitation.

Following issuance of the ’363 patent, Minkin began manufacturing and marketing the patented ERP to major tool companies, including the Danaher Tool Company (“Danaher”). But after Danaher designed around the 3:1 pivot ratio limitation of the ’363 patent and began making its own version of the ERP, Minkin sued Gibbons for patent prosecution malpractice. According to Minkin, Gibbons negligently drafted the ’363 patent claims so narrowly as to offer virtually no protection against competitors, resulting in lost-sale damages.

The district court required Minkin to show that hypothetical alternate claims would have been patentable and concluded that Minkin’s expert did not provide evidence demonstrating that his sample alternative claims were nonobvious. Accordingly, the district court held that Minkin did not carry his burden to show causation, an essential element of a New Jersey malpractice claim, and entered SJ in favor of Gibbons.

On appeal, the Federal Circuit first considered whether it had jurisdiction. The Court noted that jurisdiction is proper in state law patent attorney malpractice cases where the plaintiff is required to establish that, but for attorney negligence, he would have obtained valid claims of sufficient scope that competitors could not easily avoid. Finding that this was just such a case, the Court concluded it had jurisdiction.

Turning to the merits of Minkin’s malpractice claim, the Federal Circuit explained that, under New Jersey law, to establish proximate causation, Minkin must show that alternate, broader claim language would have been patentable. The Court explained that one way to show proximate causation under New Jersey law is a “suit within a suit.” The suit-within-a-suit approach applies where recovery depends on success in the underlying matter and “aims to clarify what would have taken place but for the attorney’s malpractice.” Slip op. at 13 (citing Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 358 (2004)). This approach required Minkin to prove by a preponderance of the evidence that the PTO would have deemed the alternate claim language patentable and that it would have read on the Danaher tool. Minkin argued that (1) he did not have the burden of showing the nonobviousness of the alternate claims at the SJ stage of the district court proceeding; (2) even if he did have the burden, the nonobviousness was shown in Minkin’s expert’s supplemental report; and (3) the district court should have inferred the nonobviousness of the alternative claim language because the ’363 patent issued after an in-person interview. The Federal Circuit rejected all three arguments.

First, the Court observed that Minkin had the burden under Fed. R. Civ. P. 56 to introduce at the SJ stage evidence sufficient to establish an issue of material fact with regard to patentability. Because the Court found that Minkin’s claims had already drawn numerous obviousness rejections and that Gibbons’s SJ motion put § 103(a) squarely at issue, Minkin was obligated to raise any factual disputes concerning nonobviousness in his response to the SJ motion. The Court found that Minkin failed to raise a single material fact in dispute as to the nonobviousness of the proposed alternate claims.

Second, the Court rejected Minkin’s argument that he had met his burden by thoroughly analyzing sixteen prior art references and their relationship to the alternate claims. The Court, however, found that the supplemental report of Minkin’s expert was insufficient to satisfy the burden on causation because it was directed to anticipation under § 102, not obviousness under § 103. The Court explained that anticipation and obviousness are separate conditions of patentability, requiring different tests and different elements of proof. Thus, the Court found the supplemental report insufficient to demonstrate that the alternate claims would not have been obvious.

The Court was not persuaded as to Minkin’s third argument that because the examiner ultimately granted the ’363 patent after an office interview, it could be inferred that alternate claim language would also be nonobvious. An inference of nonobviousness does not attach to the alternate claims, the Court explained, because the alternate claim terms differed from the issued claim terms and removed the 3:1 pivot ratio limitation that the examiner ultimately found inventive. The Court therefore refused to conclude that an examiner would have allowed the alternate claims of greater scope just because the narrower claims issued after an in-person interview.

Accordingly, the Court affirmed the district court’s grant of SJ in favor of Gibbons because Minkin provided no evidence of nonobviousness and therefore failed to establish a genuine dispute of material fact as to the patentability of its alternate claims.

Judge O’Malley concurred in all aspects but disagreed that jurisdiction was proper. According to Judge O’Malley, for the reasons set forth in his dissent in Byrne v. Wood, Herron & Evans, LLP, No. 11-1012 (Fed. Cir. Mar. 22, 2012), the Federal Circuit’s exercise of jurisdiction over state law malpractice claims is incorrect and inconsistent with controlling Supreme Court law.

Summary authored by Justin A. Hendrix, Esq.