Amity Rubberized Pen Co. v. Market Quest Group Inc. ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMITY RUBBERIZED PEN COMPANY, No. 13-55796
a California corporation,
Plaintiff-Appellant, DC No.
2:13 CV 00069-
v. GW-CW
MARKET QUEST GROUP
INCORPORATED, a California OPINION
Corporation, DBA All in One
Manufacturing; ALLINONELINE.COM,
an entity of unknown status; HARRIS
COHEN, an individual; KAREN
COHEN, an individual,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Submitted May 6, 2015*
Pasadena, California
Filed July 13, 2015
*
The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2)(C).
2 AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP.
Before: A. Wallace Tashima, Richard C. Tallman,
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Tashima
SUMMARY**
Patent Law
The panel transferred a patent case to the Court of
Appeals for the Federal Circuit.
The panel concluded that the case unmistakably arose
under the patent laws where the plaintiff’s first two claims
asserted patent infringement and inducement of patent
infringement. Accordingly, they fell within the exclusive
appellate jurisdiction of the Federal Circuit, and the panel
lacked jurisdiction to resolve the merits of the appeal. Rather
than dismissing the appeal, the panel held that because the
appeal was neither frivolous nor filed in bad faith, the interest
of justice would be served by allowing the appeal to be heard
by the Federal Circuit, which would have had jurisdiction at
the time the notice of appeal was filed. The panel therefore
transferred the misfiled appeal to the Federal Circuit pursuant
to 28 U.S.C. § 1631.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP. 3
COUNSEL
Sarah R. Wolk and Zachary Levine, Wolk & Levine LLP,
Glendale, California, for Plaintiff-Appellant.
Julie S. Turner, Turner Boyd LLP, Redwood City, California,
for Defendants-Appellees.
OPINION
TASHIMA, Circuit Judge:
This is a patent case. Congress has directed that appeals
of patent cases shall be heard by the Court of Appeals for the
Federal Circuit, and that other circuit courts, including this
court, do not have jurisdiction to decide such cases. See
28 U.S.C. § 1295(a)(1). Thus, this appeal should have been
filed with the Federal Circuit. Because, however, it was filed
with us, we must decide what to do with it. We hold that the
interest of justice would be served by allowing this case to be
heard by the Federal Circuit, and so order that it be
transferred to that court.
I.
This appeal is the latest chapter in an ongoing patent
dispute. For our purposes, the relevant facts are brief.
Plaintiff Amity Rubberized Pen Company (“Amity”) holds
U.S. Patent No. 7,004,350 (the “’350 Patent”) for a device
that dispenses both toothpicks and tablets, such as mints. On
September 26, 2006, Amity sued Defendant Market Quest
Group, Inc., (“Market Quest”) alleging infringement of the
’350 Patent, inducement of patent infringement, and various
4 AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP.
related federal and state law claims. Amity’s counsel
withdrew during the trial, and the district court declared a
mistrial. The district court instructed Amity to retain new
counsel and to pay Market Quest’s costs and fees incurred in
connection with the aborted trial, and warned Amity that
failure to comply would result in dismissal. Amity refused to
pay Market Quest’s fees, and on July 12, 2010, the district
court dismissed the case with prejudice.
On January 4, 2013, Amity filed the present action,
alleging similar claims as in its previous action, including
patent infringement, induced infringement, false advertising
under the Lanham Act, intentional tortious interference, and
unfair competition. The patent claims were based on the ’350
Patent, just as the claims in the prior 2006 action had been.
Market Quest moved to dismiss Amity’s later action, arguing
that the entire case was precluded by the 2010 dismissal of
the prior action under the doctrine of res judicata. The
district court agreed, concluding that Amity’s claims were
identical to those in its earlier complaint, except that they
concerned a different time frame, and dismissed the action.
Amity timely appealed to this court, arguing that the defense
of res judicata does not apply to acts of patent infringement
that occurred after the previous dismissal.
II.
“We have jurisdiction to consider whether appellate
jurisdiction exists” and an obligation to ensure that we do not
act beyond the limits of our own jurisdiction. United States v.
Dunn, 728 F.3d 1151, 1155 (9th Cir. 2013). In general, our
appellate jurisdiction extends to most appeals from the United
States District Courts within the geographical boundaries of
this circuit. 28 U.S.C. § 1294. That jurisdiction is not
AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP. 5
without its limits, however, and there are certain subject areas
to which our jurisdiction does not extend. Relevant here,
Congress has granted the Federal Circuit “exclusive
jurisdiction . . . of an appeal from a final decision of a district
court of the United States . . . in any civil action arising under
. . . any Act of Congress relating to patents.” 28 U.S.C.
§ 1295(a)(1). The grant to the Federal Circuit of exclusive
jurisdiction of cases arising under federal patent law means,
by obvious and necessary implication, that we do not have
jurisdiction to hear appeals in such cases. See Breed v.
Hughes Aircraft Co., 253 F.3d 1173, 1179–80 (9th Cir. 2001).
“[A] case arises under the patent laws where ‘a
well-pleaded complaint establishes . . . that federal patent law
creates the cause of action.’” Id. at 1177 (quoting
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800,
809 (1988) (second alteration in original)). The existence of
a single claim created by federal patent law is sufficient to
trigger the Federal Circuit’s exclusive appellate jurisdiction
over the entire case; the fact that a complaint also asserts non-
patent claims, or that non-patent issues will predominate, is
immaterial. Id. at 1178.
This case unmistakably arises under the patent laws.
Amity’s first two claims assert patent infringement and
inducement of patent infringement. These claims rely on the
federal patent infringement statute, 35 U.S.C. § 271, and
therefore arise under federal patent law. Id. at 1177; see Dorf
& Stanton Commc’ns, Inc. v. Molson Breweries, 56 F.3d 13,
15 (2d Cir. 1995) (transferring consolidated cases to Federal
Circuit because one case included a claim of patent
infringement). As a result, this case falls within the exclusive
appellate jurisdiction of the Federal Circuit, and we lack
jurisdiction to resolve the merits of this appeal.
6 AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP.
III.
Although we lack jurisdiction to reach the merits, we need
not necessarily dismiss this appeal, which would deprive
Amity of any review of the district court’s decision.1 To
address situations where jurisdiction is lacking simply
because a case was filed with the wrong court, Congress has
granted federal courts the authority to transfer an action or
appeal to a federal court of competent jurisdiction. The
relevant statute provides:
Whenever a civil action is filed in a court as
defined in section 610 of this title or an
appeal, including a petition for review of
administrative action, is noticed for or filed
with such a court and that court finds that
there is a want of jurisdiction, the court shall,
if it is in the interest of justice, transfer such
action or appeal to any other such court in
which the action or appeal could have been
brought at the time it was filed or noticed, and
the action or appeal shall proceed as if it had
been filed in or noticed for the court to which
it is transferred on the date upon which it was
actually filed in or noticed for the court from
which it is transferred.
28 U.S.C. § 1631.
By its mandatory language, the statute directs us to
transfer a misfiled appeal as long as two requirements are
1
Amity cannot simply re-file its appeal with the Federal Circuit because
such a late appeal would be time-barred. See Fed. R. App. P. 4.
AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP. 7
met: (1) the court to which the appeal is to be transferred
would have had jurisdiction at the time the appeal was filed;
and (2) transfer is “in the interest of justice.” Id.; Munns v.
Kerry, 782 F.3d 402, 414 (9th Cir. 2015). The obligation to
address whether a case is transferrable lies with the court: “A
motion to transfer is unnecessary because of the mandatory
cast of section 1631’s instructions.” Harris v. McCauley (In
re McCauley), 814 F.2d 1350, 1352 (9th Cir. 1987). Having
determined that we lack jurisdiction, we must thus decide
whether this “appeal could have been brought at the time it
was filed” in the Federal Circuit and whether transfer would
be “in the interest of justice.” 28 U.S.C. § 1631.
A.
We have little difficulty in concluding that the Federal
Circuit would have had jurisdiction over this appeal had
Amity filed its appeal there instead of with this court. As
discussed above, 28 U.S.C. § 1295 gives the Federal Circuit
exclusive appellate jurisdiction over final decisions of district
courts in cases arising under federal patent law. “A ‘final
decision’ is ‘one which ends the litigation on the merits and
leaves nothing for the court to do but execute the judgment.’”
Spread Spectrum Screening LLC v. Eastman Kodak Co.,
657 F.3d 1349, 1354 (Fed. Cir. 2011) (quoting Catlin v.
United States, 324 U.S. 229, 233 (1945)). The district court’s
dismissal of all of Amity’s claims constitutes a “final
decision” for purposes of § 1295. See Silicon Image, Inc. v.
Genesis Microchip Inc., 395 F.3d 1358, 1363 (Fed. Cir.
2005). The case also arises under patent law because Amity’s
complaint includes infringement claims for which “federal
patent law creates the cause of action.” Christianson,
486 U.S. at 809. The fact that the district court decided the
case on generally applicable res judicata grounds, rather than
8 AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP.
principles specific to patent law, is immaterial. See Cummins,
Inc. v. TAS Distrib. Co., 700 F.3d 1329, 1335 (Fed. Cir. 2012)
(exercising jurisdiction in patent suit where only issue on
appeal was application of state res judicata law).
Appellate jurisdiction also depends on the appellant filing
a timely notice of appeal. Bowles v. Russell, 551 U.S. 205,
214 (2007). The district court entered judgment on April 8,
2013, and Amity appealed on May 8, 2013, which was within
the 30-day limit for filing an appeal. See Fed. R. App. P. 4.
Had Amity filed its appeal with the Federal Circuit at the time
it filed with this court, the appeal would have been timely.
Thus, the Federal Circuit would have had jurisdiction at the
time Amity filed its notice of appeal.
B.
The next question we must answer is whether transfer
would be “in the interest of justice.” 28 U.S.C. § 1631. This
is a more complex question, and this circuit’s precedents do
not squarely define that term, although they do provide
significant guidance. Based on these precedents, we conclude
that transfer to the Federal Circuit would serve the interest of
justice.
1.
In general, this circuit has taken a broad view of when
transfer is appropriate, recognizing that “[n]ormally transfer
will be in the interest of justice because normally dismissal of
an action that could be brought elsewhere is ‘time-consuming
and justice-defeating.’” Miller v. Hambrick, 905 F.2d 259,
262 (9th Cir. 1990) (quoting Goldlawr, Inc. v. Heiman,
369 U.S. 463, 467 (1962)). At the same time, we have
AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP. 9
emphasized that transfer will often serve as a means to
prevent the injustice of penalizing a party for an honest
procedural mistake. Thus, we will “ordinarily find transfer to
be in the interest of justice where . . . the plaintiffs appear to
have been ‘unaware of or confused about the proper forum in
which to file [their] action.’” Munns, 782 F.3d at 415
(quoting Puri v. Gonzales, 464 F.3d 1038, 1043 (9th
Cir.2006)) (alteration in original). Similarly, we have
indicated that it is in the interest of justice to transfer a case
when the time period has elapsed to file in the appropriate
court. See Kennecott Corp. v. U.S. Dist. Ct. for S. Dist. of
Cal., 873 F.2d 1292, 1293 (9th Cir. 1989). More often,
however, we have simply found that, absent contravening
considerations, another court’s exclusive jurisdiction makes
transfer appropriate. See, e.g., McGuire v. United States,
550 F.3d 903, 914 (9th Cir. 2008) (“Given the uncontested
district court jurisdiction over the bankruptcy, coupled with
authority from the Federal Circuit Court of Appeals
indicating that the district court had jurisdiction over the
Tucker Act claim, we conclude it would be in the interest of
justice to transfer the action to the Court of Federal Claims,
rather than dismissing it.”); Breed, 253 F.3d at 1179-80 (“We
lack jurisdiction because the Court of Appeals for the Federal
Circuit has exclusive jurisdiction. 28 U.S.C. § 1295(a). We
therefore transfer the entire case to the Federal Circuit.”).
Conversely, we have rarely found that transfer would not
serve the interest of justice. For instance, we have stated that
transfer is not in the interest of justice if the appellant “was
aware of the proper procedure for review” but filed with a
different court for a bad-faith purpose, such as to circumvent
an earlier order of dismissal. See Puri, 464 F.3d at 1043. We
have also stated that transfer may not be in the interest of
justice if “the petition or appeal is frivolous,”
10 AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP.
Rodriguez-Roman v. INS, 98 F.3d 416, 424 (9th Cir. 1996),
as “[w]here no colorable claim for relief has been shown,”
Clark v. Busey, 959 F.2d 808, 814 (9th Cir. 1992). So long as
an appellant has made a colorable claim, however, even if its
support is “quite spare,” we have found it best to transfer and
“leave such issues to the court with jurisdiction over the
claims.” Munns, 782 F.3d at 415 n.9.
Drawing from these cases, we conclude that transfer will
generally be in the interest of justice, unless it is apparent that
the matter to be transferred is frivolous or was filed in bad
faith. This is a low bar and, as prior cases illustrate, it will
usually involve a very limited inquiry by the transferring
court. But this narrow scope is by design, as the interest of
justice will rarely be served by one court engaging in a
lengthy pre-transfer analysis, only ultimately to send the case
to a new court that must start afresh. Imposing such
unnecessary procedure and delay before the right court can
address the case on its merits is just the sort of
“time-consuming and justice-defeating” impediment transfer
is meant to avoid. Miller, 905 F.2d at 262 (quoting Goldlawr,
369 U.S. at 467). The sooner a case is transferred, the sooner
it can be resolved by the court Congress has designated to
hear it.
2.
We note that some of our sister circuits have adopted a
different formulation of the interest-of-justice inquiry. In
particular, in Phillips v. Seiter, the Seventh Circuit held that
in order to determine whether transfer would be in the interest
of justice, a court that lacks jurisdiction should “peek at the
merits” of the underlying action to determine whether a
particular case is meritorious enough to justify transfer.
AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP. 11
173 F.3d 609, 610 (7th Cir. 1999). Several of our sister
circuits have followed suit. See, e.g., Daniel v. Am. Bd. of
Emergency Med., 428 F.3d 408, 436 (2d Cir. 2005); Haugh
v. Booker, 210 F.3d 1147, 1150 (10th Cir. 2000). The
rationale for this approach is to avoid “rais[ing] false hopes
and wast[ing] judicial resources by transferring a case that is
clearly doomed.” Seiter, 173 F.3d at 610.
Seiter’s language – and the phrase “peek at the merits” in
particular – leaves substantial ambiguity about the scope of
a transferor court’s duty. Read narrowly, Seiter is not
necessarily inconsistent with our prior holdings that a court
need not transfer a frivolous appeal. See Britell v. United
States, 318 F.3d 70, 75 (1st Cir. 2003) (relying on Seiter for
the proposition that “if an action or appeal is fanciful or
frivolous, it is in the interest of justice to dismiss it rather than
to keep it on life support”). But some courts have read Seiter
and other “peek at the merits” cases to allow a substantially
wider scope of review. See, e.g., Daniel, 428 F.3d at 435
(citing Seiter for the proposition that “Courts enjoy
considerable discretion in deciding whether to transfer a case
in the interest of justice”). To the extent that a “peek at the
merits” inquiry would go beyond the narrow review outlined
by the above precedents, we reject it as inconsistent with our
case law. For purposes of this appeal, however, we need not
decide the precise extent to which our interest-of-justice
inquiry differs from those of our sister circuits.
3.
Applying these principles to the case before us, we
conclude that transfer would be in the interest of justice.
Amity had nothing to gain by filing its appeal with this court
rather than the Federal Circuit, and nothing before us
12 AMITY RUBBERIZED PEN CO. V. MKT. QUEST GRP.
indicates that its misfiling was anything other than an honest
mistake. Its complaint contains a colorable claim of patent
infringement, and this appeal raises a non-frivolous question:
whether the district court correctly concluded that Amity’s
patent infringement claims, which arose after judgment was
entered in the prior action, are barred by res judicata.
Accordingly, the interest of justice would be best served by
allowing a court of competent jurisdiction to address this case
on the merits.
IV.
We lack jurisdiction because this is a patent case, within
the exclusive jurisdiction of the Federal Circuit. 28 U.S.C.
§ 1295(a). Had this appeal been filed with the Federal Circuit
at the time it was filed with this court, the Federal Circuit
would have had jurisdiction. And because this appeal is
neither frivolous nor is there any indication that it was filed
in bad faith, we conclude that transfer is in the interest of
justice. We therefore order this matter transferred to the
Federal Circuit pursuant to 28 U.S.C. § 1631. The clerk shall
transmit all materials lodged with this court to the clerk of
that court. The award of costs shall abide the final resolution
of this appeal by the transferee court.
TRANSFERRED.