We've previously written about Chandler v. Phoenix Services, L.L.C., an interesting case on the Federal Circuit's exclusive appellate jurisdiction in patent cases. Earlier this week, the Fifth Circuit issued a decision marking the latest entry in that saga.
A quick recap of the relevant background: a Walker Process claim is an antitrust claim alleging enforcement of a fraudulently obtained patent. In an earlier case, Xitronix Corporation v. KLA-Tencor Corporation, the Federal Circuit and the Fifth Circuit disagreed about which court had appellate jurisdiction over Walker Process claims. The Federal Circuit held that the Walker Process claim there arose under antitrust law rather than patent law, and thus transferred the appeal to the Fifth Circuit. But the Fifth Circuit sent the appeal back to the Federal Circuit, reasoning that the Federal Circuit had exclusive jurisdiction because the antitrust claim depended in part on a patent-law issue—whether the relevant patent was enforceable. After receiving the case back from the Fifth Circuit, the Federal Circuit reiterated its disagreement with the Fifth Circuit's reasoning. Nevertheless, the Federal Circuit accepted jurisdiction over the appeal, deeming the Fifth Circuit's conclusion "not implausible."
A similar jurisdictional question arose in Chandler. That case, like Xitronix, involved a Walker Process claim in a district court within the Fifth Circuit. The Chandler plaintiffs appealed to the Federal Circuit. But the Federal Circuit stuck to the position laid out in its first (and precedential) Xitronix decision, concluded that it lacked appellate jurisdiction, and transferred the appeal to the Fifth Circuit.
The Fifth Circuit has now issued its decision in Chandler, accepting the transfer from the Federal Circuit. The Fifth Circuit stressed that "[t]he Walker Process claim here differs from the one in Xitronix in an important respect": the patent at issue already had been declared unenforceable in another proceeding, leaving no live patent-law issues to be decided. The Fifth Circuit thus deemed the Federal Circuit's jurisdictional conclusion "plausible." But the Fifth Circuit continued: "That does not mean, we hasten to add, that it is correct." The Fifth Circuit read its Xitronix decision to mean that all standalone Walker Process claims belong in the Federal Circuit, even those that do not turn on any unresolved patent issues. Nonetheless, the Fifth Circuit accepted the case to avoid "a perpetual game of jurisdictional ping-pong." The Fifth Circuit went on to address the merits of the antitrust claim, affirming the judgment for the defendants.
The Chandler plaintiffs could seek further review of the jurisdictional issue in the Supreme Court. And ordinarily, an express circuit split like the Federal and Fifth Circuits' disagreement here might make a good candidate for Supreme Court intervention. But the Supreme Court denied certiorari in Xitronix, which raised much the same issue as Chandler. That said, the Court's composition has changed since it denied review in Xitronix in October 2019—Justices Barrett and Jackson have replaced Justices Ginsburg and Breyer. If the Chandler plaintiffs do file a cert petition, it will be interesting to see whether the two new Justices lead to a different outcome.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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