Warsaw Orthopedic, Inc., et al. v. Rick C. Sasso

Federal courts have exclusive jurisdiction over all cases arising under federal patent law, and state courts are explicitly divested of such jurisdiction. 28 U.S.C. §1338(a). Exclusive federal jurisdiction applies even to claims that invoke state law whenever an issue of federal patent law is “(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance.” Gunn v. Minton, 568 U.S. 251, 258 (2013). This case features a split over the same underlying patent dispute. Just last year, the Federal Circuit correctly held that the dispute arises under federal patent law and so is subject to exclusive federal jurisdiction. Two months later, in the decision below, the Indiana Court of Appeals explicitly rejected the Federal Circuit’s reasoning and held that the same dispute arises only under state law, not federal patent law. On that basis, the Indiana court affirmed the Indiana trial court’s $112 million damages verdict for a “native Hoosier”—a verdict predicated on a statecourt jury’s resolution of a dispute about the scope of patent claims. That decision is a striking illustration of the danger posed by state-court adjudication of patent disputes, and the pressing need for this Court to resolve this split in authority and clarify when a patent case falls within exclusive federal jurisdiction. The question presented is: Whether a dispute raises substantial issues of federal patent law when its resolution necessarily depends on patent-law determinations regarding claim scope and validity.