Summary: Declaratory judgment action dismissed because complaint failed to allege any claims giving rise to federal jurisdiction

Case: StoneEagle Services, Inc. v. Gillman, No. 2013-1248 (Fed. Cir. Mar. 26, 2014) (precedential). On appeal from N.D. Tex. Before Rader, Moore, and Reyna.

Procedural Posture: Gillman appealed the district court’s order of a preliminary injunction on the grounds that the court lacked subject matter jurisdiction to hear the declaratory judgment action. The Federal Circuit vacated the district court’s order and remanded with instructions to dismiss the case.

  • Declaratory Judgment Jurisdiction/Subject Matter Jurisdiction: Appellee StoneEagle’s owner, Robert Allen, collaborated with appellant Gillman to adapt an electronic payment system to process health care claims. This collaboration eventually resulted in a patent that listed Allen as the sole inventor. After the parties’ relationship soured, StoneEagle filed a declaratory judgment action asserting that Allen was the sole inventor and owner of the patent. The district court granted a preliminary injunction barring Gillman’s competing venture from using any of StoneEagle’s confidential information. On appeal, Gillman argued that the court lacked subject matter jurisdiction to hear the case, while conceding that he was not an inventor. The Federal Circuit reaffirmed that the Declaratory Judgment Act itself does not confer subject matter jurisdiction. Rather, the declaratory judgment plaintiff must show that the hypothetical action of the declaratory judgment defendant would be proper in federal court. The party defending jurisdiction must also show that the action satisfies the Supreme Court’s “actual case or controversy” requirement. In this case, the Federal Circuit noted that StoneEagle’s declaratory judgment claims alleged only issues of ownership and inventorship. Thus, the Federal Circuit found that StoneEagle’s complaint failed to allege any controversy as to inventorship, because merely assisting in drafting a patent application (as Gillman claimed to have done) does not confer status as a co-inventor. Noting that ownership is a question for state law, the Federal Circuit also found that StoneEagle’s pleadings regarding ownership failed to allege any actual controversy that would give rise to an action properly before a federal court.