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April 28, 2008

Sleep Lite

LiteCubes sued Canada-based GlowProducts for infringing 6,416,198, as well as copyright infringement. '198 claims a light that looks like an ice cube. After found infringing, GlowProducts filed a motion to dismiss for lack of subject matter jurisdiction. On appeal, the CAFC unleashed a gratuitous stem-winder on jurisdiction. Simply, an allegation of patent infringement "creates a federal cause of action."

LiteCubes and Carl R. Vanderschuit v. Northern Light Products, dba GlowProducts (CAFC 2006-1646)

Vanderschuit is Mr. LightCube, inventor and owner of '198.

GlowProducts is a Canadian corporation operating from its offices in Victoria, British Columbia, which acquires novelty items from Chinese manufacturers and then sells the items primarily in North America. GlowProducts does not have offices, facilities, or assets in the United States. Evidence at trial, however, established that GlowProducts sold the accused products directly to customers located in the United States and that GlowProducts would ship the products, f.o.b., from its Canadian offices to its customers in the United States.

GlowProducts filed a motion to dismiss the case for lack of subject matter jurisdiction on the grounds that it did not sell the allegedly infringing products within the United States, nor import the products into the United States. The district court denied the motion on the grounds that GlowProducts did import the goods into the United States.

GlowProducts appeals the denial of its motion to dismiss for lack of subject matter jurisdiction. We affirm the district court's denial of the motion to dismiss, but do so on different grounds. The district court erred in treating the issue of whether the goods had been imported into the United States as an issue impacting its subject matter jurisdiction. A plaintiff must prove that allegedly infringing activity took place in the United States to prevail on claims of patent or copyright infringement, but as with any other element of the claims, failure to do so does not divest the federal courts of subject matter jurisdiction over the action.

Litecubes alleged in its complaint that GlowProducts violated 35 U.S.C. § 271(a), which provides that "[e]xcept as otherwise provided . . . whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes the patent." It is beyond dispute that this statute creates a federal cause of action for patent infringement over which the district courts have subject matter jurisdiction under § 1338(a).

Foregoing reference to § 1338 refers to 28 U.S.C. § 1338, not 16 U.S.C. § 1338, which proscribes removing or harming free-roaming horses or burros from public lands without permission. Both however relate to asses, one literal, the other figurative.

Jurisdictional mavens will call this ruling a keeper. Others will call it a sleeper, as in, snoozingly boring.

Posted by Patent Hawk at April 28, 2008 2:26 PM | Case Law

Comments

Boring, maybe, but there is a serious litigation lesson here: unlike personal jurisdiction, subject matter jurisdiction is not waivable. It can be raised at any time, even for the first time on appeal. So the D can sit on the issue until the judgment is in and then start screaming "No SMJ!" as GlowProducts did here.

I once had a case where the P was a US citizen but a resident of New Zealand. D removed the purely state action to USDC on diversity grounds. Even though P was living in the US at the time of the suit, there was no diversity jurisdiction (i.e., SMJ) because he was not a resident of any district of the US. The point was never raised in the trial court, but the 4th CA remanded to the state court for lack of SMJ. That was one pi$$ed off defendant's lawyer.

Federal SMJ can be raised for the first time even after judgment is entered. It's spooky stuff, Dude.

Posted by: Babel Boy at April 29, 2008 8:22 AM

Hmmm. Interesting implications here.

Posted by: Glow Sticks at November 9, 2010 2:11 PM