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McPherson's Ltd v. Never Dull Inc.

Decided: March 20, 1992.

MCPHERSON'S LTD, AND MCPHERSON'S AMERICA, INC., PLAINTIFF-APPELLANT,
v.
NEVER DULL, INC., JOHN B. MCEVILY AND HONORA MCEVILY, DEFENDANTS-APPELLEES.



Appeal from the denial of their motion for a preliminary injunction, No. 90-2070.

Before Nies, Chief Judge, Skelton, Senior Circuit Judge, and Lourie, Circuit Judge.

Nies

NIES, Chief Judge.

Appellants, McPherson's LTD and McPherson's America, Inc. (McPherson, collectively), appeal from the denial of their motion for a preliminary injunction, No. 90-2070 (D.N.J. Oct. 9, 1990). The preliminary injunction motion was requested upon McPherson's state law claims in the complaint. In addition to those claims, McPherson's complaint sought a declaratory judgment that United States Patent Nos. 4,866,845 and 4,869,027 (the '845 and '027 patents) owned by John McEvily are invalid and unenforceable. Sua sponte this court raised the issue of its jurisdiction over the appeal. Because of McPherson's failure to appropriately allege any basis for declaratory relief at the time the complaint was filed or to have any basis for such allegations, we dismiss the appeal.

Discussion

McPherson designs, manufactures, distributes, and annually sells millions of dollars worth of self-sharpening knives. Never Dull, founded by John McEvily, a former employee of McPherson, produces self-sharpening knives under the '845 and '027 patents, and takes in approximately $25,000 per year. The essence of the dispute is that McEvily obtained confidential information while employed at McPherson which he is allegedly using in his competing business. As near as can be discerned, the misappropriated information concerns the idea of putting out a cheaper knife to capture a particular market niche.

This litigation began with McPherson filing suit in district court seeking ownership of the '845 and '027 patents and damages based upon claims of breach of contract, breach of trust and unfair trade practices. The complaint also sought a declaratory judgment, pursuant to 28 U.S.C. § 2201 (1988), that McEvily's two patents are invalid and unenforceable. McPherson moved for a preliminary injunction to enjoin Never Dull's production and sale of its patented knives. The district court denied the injunction because McPherson failed to establish that it would suffer irreparable harm. We, however, do not have jurisdiction to reach the merits of the district court's order.

Pursuant to 28 U.S.C. §§ 1292 and 1295 (1988),*fn1 this court would have jurisdiction over McPherson's appeal from the district court's order denying a preliminary injunction of its state law claims, if the jurisdiction of the district court over the complaint were based, at least in part, on 28 U.S.C. § 1338 (1988). See Beghin-Say Int'l v. Ole-Bendt Rasmussen, 733 F.2d 1568, 1570, 221 USPQ 1121, 1123 (Fed. Cir. 1984). Section 1338(a) states that "district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents . . . ." Accordingly, for this appeal to be properly before us, the jurisdiction of the district court must have rested, at least in part, on a claim arising under the patent laws.

The only count in McPherson's complaint which could possibly provide such a basis for this court's jurisdiction is the count seeking a declaratory judgment that McEvily's patents are invalid and unenforceable. That count reads in its entirety:

COUNT IV

For a Declaration that Each Claim of Each of Patents 4,866,845 and 4,869,027 is Invalid and Unenforceable

46. Paragraphs 1 to 45 hereof are realleged.

47. Each of the claims of patents 4,866,845 and 4,869,027 is invalid because the defined inventions are not novel (35 U.S.C. § 102) or include subject matter which is "obvious" (35 U.S.C. § 103).

48. Each of patents 4,866,845 and 4,869,027 was inequitably procured from the PTO and is therefore unenforceable (35 U.S.C. ยง 282) because defendant J. McEvily knowingly and intentionally withheld from the Patent Office examiner information including but not limited to the ...


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