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Carlsbad Technology Achieves 9-0 Supreme Court Ruling on Issue of Appellate Jurisdiction

Tuesday, May 05, 2009

Washington, DC -- Carlsbad Technology, Inc., achieved a 9-0 Supreme Court victory yesterday in a complex and unusual case, Carlsbad Technology, Inc. v. HIF Bio, Inc., involving appellate jurisdiction. The Supreme Court ruling reversed a Federal Circuit decision dismissing Carlsbad’s appeal of a district court’s remand to state court for lack of appellate jurisdiction.

Glenn Rhodes of the Howrey law firm’s Taipei and San Francisco offices argued the case before the Supreme Court. He has also led the firm’s team representing Carlsbad at every level of the litigation process. Richard Stanley of Howrey’s Houston office undertook the primary responsibility for preparing the written submissions to the Supreme Court.

"Although the case reached the Supreme Court from the Federal Circuit and involved disputed intellectual property rights in the biotechnology field," says Richard Stanley, "the underlying appellate jurisdictional issue before the court applies to all types of cases that are properly removed to federal court and then remanded, once all federal claims are dismissed. This case illustrates the fact that patent litigation often implicates jurisdictional and procedural issues applicable to all federal court litigation. Experienced patent litigators are thus well-situated to handle those issues, in addition to those involving the underlying technology and patent law."

The case began when HIF Bio, Inc., sued Carlsbad over rights to a chemical compound called YC-1 that inhibits blood flow to tumors. HIF Bio sued in California state court for violations of the federal racketeering statute (RICO), as well as alleging multiple unfair competition causes of action. Carlsbad had the case removed to federal district court. That court dismissed the federal RICO claim but then remanded the case back to the California state court, on grounds that the remaining unfair competition claims could be resolved as a matter of state law.

Carlsbad appealed to the Federal Circuit, asserting that the federal district court should not have declined to exercise supplemental jurisdiction because HIF Bio’s claims of inventorship that were central to the case were based on a substantial question of federal patent law, not state law. The Federal Circuit, without considering the merits of the appeal, held that it lacked jurisdiction to review the district court’s refusal to exercise supplemental jurisdiction. Nine other circuits had reached the opposite conclusion before an intervening 2007 Supreme Court decision left open the question of whether a federal district court’s discretionary decision to decline supplemental jurisdiction was "colorably" based on a lack of subject-matter jurisdiction.

Authored by Justice Thomas, the Supreme Court opinion in this case adheres to the 1976 Supreme Court ruling in Thermtron Products, Inc. v. Hermansdorfer, and expressly holds that a district court’s order remanding a case to state court, resulting from its discretionary decision to decline to exercise supplemental jurisdiction over state law claims is not a remand for lack of subject-matter jurisdiction—for which appellate review would otherwise be barred. The case is now remanded to the Federal Circuit for further proceedings based on the merits of Carlsbad’s appeal.

Founded in 1956, Howrey LLP is a global law firm with over 725 attorneys and more than 50 economic, financial and regulatory consultants. Howrey has offices in Washington DC; Northern Virginia; Houston, Texas; New York, New York; Los Angeles, Irvine, East Palo Alto and San Francisco, California; Salt Lake City, Utah; Chicago, Illinois; London, England; Brussels, Belgium; Paris, France; Amsterdam, The Netherlands; Munich, Germany; Madrid, Spain and Taipei, Taiwan. Howrey's affiliate, The CapAnalysis Group, LLC (economic, financial, and litigation consultants) teams with Howrey attorneys as a strategic business resource. A consistent American Lawyer "A-List" and PLC Which lawyer? "Global 50" firm, Howrey is one of the most frequently used law firms by the world’s leading companies. Howrey’s Intellectual Property practice was ranked as a top national IP practice and the Top IP Appellate practice by IP Law & Business and its Antitrust practice topped Global Competition Review’s "GCR 100." As the winner of the 2003 Thomas L. Sager Award from the Minority Corporate Counsel Association, Howrey is committed to the ideals of diversity and is equally committed to the tenets of pro bono and public service. Howrey's "Advantage of Focus" makes it the clear choice for antitrust, intellectual property and complex business dispute resolution. For more information, visit our Web site at

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