District Court’s Remand of Case Involving Patent Counterclaims to State Court Is Not Reviewable by Federal Circuit

In Preston v. Nagel, No. 16-1524 (Fed. Cir. Jun. 1, 2017), the Federal Circuit dismissed Plaintiffs’ appeal of a district court’s decision to remand a case involving patent counterclaims to state court because 28 U.S.C. § 1447(d) bars review of that decision. 

Plaintiffs originally filed a complaint alleging fifteen state-law claims in Massachusetts state court. Defendants answered the complaint, filed eleven counterclaims seeking declaratory judgment of noninfringement of certain patents held by one of the plaintiffs, and removed the case to district court based on those patent counterclaims. The district court determined that Defendants’ counterclaims did not present a justiciable case or controversy under Article III and, therefore, remanded the case back to the state court. Plaintiffs appealed.

The Federal Circuit dismissed the appeal based on 28 U.S.C. § 1447(d), which bars reviews of a district court’s order to remand a case to state court. The Defendants asked the Court to hold an exception to this rule, arguing that the America Invents Act (AIA) should override § 1447(d)’s bar because the AIA included several provisions strengthening federal court’s jurisdiction over patent claims. The Federal Circuit found these arguments unpersuasive, noting that the remand was “typical” and not “extraordinary” to warrant an exception to the well-established rule. The Court explained that Defendants could have their patent claims heard by filing a separate federal action and that any final decision in such an action would then be appealable to the Federal Circuit.

*Victor H. Feng is a Summer Associate at Finnegan.