The Mere Presence of Patent Issues in a Contract Dispute Does Not Create Federal Jurisdiction

ANTENNASYS, INC. v. AQYR TECHNOLOGIES, INC.

Before, O’Malley, Bryson, and Reyna. Appeal from the U.S. District Court for the District of New Hampshire

Summary: The Federal Circuit held that claim construction issues in a contract dispute did not meet the “substantiality” prong of the Supreme Court’s Gunn v. Minton test for independent federal jurisdiction. 

AntennaSys co-owns the patent-in-suit with a company named Windmill.  AQYR is a wholly owned subsidiary of Windmill.  AntennaSys sued AQYR for patent infringement and Windmill for breach of a license agreement.  The district court granted summary judgment for Defendants and AntennaSys appealed.

On appeal, Defendants argued for the first time that (1) AntennaSys lacks “standing” to bring a patent infringement claim absent joinder of Windmill as a co-plaintiff and (2) AQYR was authorized to practice the patent by Windmill.  The Federal Circuit noted that joinder is not a “standing” issue, but remanded both issues to the district court to consider in the first instance.  The Federal Circuit then addressed whether the district court would have jurisdiction over the breach of contract claim if it dismisses the patent infringement claim.  The Federal Circuit held that the claim construction issues required to resolve the contract claim failed to meet the “substantiality” prong of Gunn v. Minton.  Thus, if the district court dismisses the patent infringement claim, it would have no independent basis to exercise jurisdiction over the state law contract claim.

Editor: Paul Stewart

Written by: Victoria E. Ellis & Adam Powell