Palantir Technologies Inc. v. Abramowitz et al

Filing 42

ORDER by Judge Hamilton granting 20 Motion to Remand and denying Request for Fees and Costs. (pjhlc1, COURT STAFF) (Filed on 3/9/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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PALANTIR TECHNOLOGIES INC.,

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Plaintiff,

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v.

ORDER GRANTING MOTION TO
REMAND

MARC L. ABRAMOWITZ, et al.,
Defendants.

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United States District Court
Northern District of California

Case No. 16-cv-5857-PJH

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The motion of plaintiff Palantir Technologies, Inc. (“Palantir”) to remand the above-

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entitled action to the Superior Court of California, County of Santa Clara, came on for

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hearing before this court on February 15, 2017. Palantir appeared by its counsel John

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Zach, David Zifkin, Fiona Tang, and Adam Eltoukhy. Defendants Marc L. Abramowitz

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(“Abramowitz”), Marc Abramowitz Charitable Trust No. 2, and KT4 Partners LLC (“KT4”)

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appeared by their counsel Jonathan Pitt. Having read the parties’ papers and carefully

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considered their arguments and the relevant legal authority, the court hereby GRANTS

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the motion.

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BACKGROUND

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Palantir, which is based in Palo Alto, California, is a "software and services

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company that specializes in data analytics." First Amended Complaint (“FAC”) ¶¶ 8, 13.

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Founded in 2004, it is "a leader in its industry." FAC ¶ 13. Palantir's products are used

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by government, and by commercial and non-profit institutions "to solve problems the

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company's founders had not even dreamed of back in 2004." Id. Palantir focuses on

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developing and building "platforms for integrating, managing, and securing data, on top of

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which it layers applications for fully interactive, human-driven machine-assisted analysis."

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FAC ¶ 14. Palantir is also involved in research and development, and it spends millions

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of dollars each year to "expand its business and seek out new opportunities." FAC ¶ 17.

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According to Palantir, this litigation relates to defendants' misappropriation of

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Palantir's proprietary trade secret and business information, concerning technologies for

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(i) interpreting and analyzing data in the healthcare space for
clinical drug trials and for health insurance risk assessments
(the “Healthcare Technology”); (ii) cyber insurance technology
and related cybersecurity technology for use of customer
consortia to improve cybersecurity (the “Cyber Insurance and
Cybersecurity Technology”); and (iii) interpreting and
analyzing data in connection with natural resources
exploration and management (the “Natural Resources
Exploration Technology”).

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United States District Court
Northern District of California

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FAC ¶ 18. It also relates to defendants’ “misappropriation of Palantir’s trade secret

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business plans and customer lists related to these technologies.” Id.

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Palantir’s initial funding came from a variety of sources, including the company's

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founders. FAC ¶ 23. Abramowitz was an early investor in Palantir, through KT4 and

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"other entities he controls." Id. Allegedly, "[t]hrough the years, Abramowitz was involved

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with the business of Palantir." FAC ¶ 24. However, "[r]ather than acting as a passive

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investor, he became a regular fixture[,]" visiting Palantir more than 30 times between

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2010-2015. Id. Indeed, "Abramowitz spent so much time at Palantir that in 2014 he

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requested an office at the company." Id.

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Abramowitz developed relationships with the company's founders, officers, and

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employees, and was allegedly “viewed as a trusted investor and advisor" by the founders

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and senior employees. FAC ¶ 25. According to Palantir, Abramowitz "often inquired

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about specific Palantir projects" and on several occasions, the company provided him –

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in his capacity as a shareholder and advisor – with information about technology

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including the Healthcare Technology, the Cyber Insurance and Cybersecurity

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Technology, and the Natural Resources Exploration Technology. FAC ¶ 26. Palantir

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asserts that it also provided Abramowitz – at his request – with information about

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proprietary business plans and customer lists for these technologies. Id.
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Palantir and Abramowitz entered into confidentiality agreements. FAC ¶ 27.

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These agreements included provisions in Preferred Stock Transfer Agreements in 2012

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and 2015, and a Nondisclosure Agreement in 2014. FAC ¶¶ 28-30. Palantir asserts,

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however, by 2014, Abramowitz had embarked on a scheme to discover Palantir trade

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secrets and convert them for his own use and profit – in particular, trade secrets related

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to the Healthcare, Cyber Insurance and Cybersecurity, and Natural Resources

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Exploration Technologies. FAC ¶ 31; see also FAC ¶¶ 32-40 (Healthcare Technology),

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¶¶ 41-40 (Cyber Insurance and Cybersecurity Technology); ¶¶ 50-57 (Natural Resources

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Exploration Technology).

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For example, Palantir alleges, in October and December 2014, Abramowitz filed

United States District Court
Northern District of California

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patent applications (“the Patent Applications”) with the U.S. Patent and Trademark Office

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(“USPTO”), seeking to patent “systems, methods, and concepts” concerning Palantir’s

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Healthcare Technology, Cyber Insurance and Cybersecurity Technology, and Natural

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Resources Exploration Technology, for which he falsely claimed to be the sole owner and

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inventor. FAC ¶¶ 38, 46-47, 51.

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Palantir asserts that "[i]n furtherance of [Abramowitz’s] scheme," KT4 sent Palantir

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a letter through counsel on August 16, 2016, demanding information pertaining to the

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Investors' Rights Agreement ("IRA"). FAC ¶ 58. Under the February 15, 2008 version of

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the IRA (the version invoked in the letter) and the July 8, 2015 version (the version in

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effect at the time Abramowitz sent the letter), the agreement granted certain rights to

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receive information from Palantir to anyone who was a "Major Investor" in Palantir

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(defined in the IRA as anyone with at least 5 million shares of certain types of Palantir

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stock). Id. In the August 16, 2016, KT4 stated that it was a Major Investor of Palantir,

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and demanded that Palantir produce documents and provide information to its counsel

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pursuant to the February 2008 IRA. FAC ¶ 59.

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Palantir asserts, however, that the IRA provides for Major Investors to receive

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such information, but does not allow for counsel or anyone other than a Major Investor to

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receive the information. Id. Palantir adds that even were KT4 a Major Investor (which
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Palantir disputes), and even had the IRA not been again amended effective September 1,

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2016, Abramowitz's breaches of confidentiality and misappropriation of trade secrets

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would preclude him from obtaining confidential and proprietary information through the

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IRA. FAC ¶¶ 60-64.

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Palantir filed the original complaint on September 1, 2016, in Santa Clara Superior

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Court, and filed the FAC on September 23, 2016, alleging five state-law causes of action

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– (1) breach of contract (breach of confidentiality agreements); (2) breach of the implied

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covenant of good faith and fair dealing; (3) unfair competition, in violation of California

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Business & Professions Code § 17200 (“UCL”); (4) misappropriation of trade secrets in
violation of California Civil Code § 3426, et seq.; and (5) declaratory relief (seeking a

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United States District Court
Northern District of California

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judicial declaration that KT4 is not entitled to Palantir's financial information pursuant to

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the IRA).

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Defendants removed the case on October 11, 2016, asserting federal question

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jurisdiction. Defendants allege that the FAC is "artfully pled as a series of putative state-

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law claims[.]" Notice of Removal ¶ 2. They contend that Palantir seeks to have itself

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declared the sole inventor of three technologies that were in fact invented and developed

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by Abramowitz as the sole or joint inventor, and that involve no inventive contribution by

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Palantir or anyone working on Palantir’s behalf; that it seeks an order enjoining

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Abramowitz from continuing to pursue the three Patent Applications filed with the

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USPTO; and that it premises such relief, and the purported state-law causes of action,

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upon the assertion that it was Palantir, not Abramowitz, who invented the technologies at

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issue, and that Abramowitz’s alleged contrary representations to the USPTO were false.

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Id. Based on this, defendants claim that Palantir’s claims necessarily raise substantial

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questions of federal patent law that can be resolved only by a federal court. Id.

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On November 11, 2016, Palantir filed the present motion to remand, asserting that

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the FAC does not allege any federal claims, that its claims do not arise under federal law

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or raise a "substantial" issue of federal law, and that no issue of federal law is "actually

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disputed." Palantir also seeks attorney’s fees and costs pursuant to 28 U.S.C. § 1447(c).
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DISCUSSION

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A.

Legal Standard
A defendant may remove a civil action filed in state court if the action could have

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originally been filed in federal court. 28 U.S.C. § 1441. Federal courts are courts of

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limited jurisdiction, possessing only that power authorized by the Constitution and statute.

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Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994). A plaintiff may

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seek to have a case remanded to the state court from which it was removed if the district

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court lacks jurisdiction or if there is a defect in the removal procedure. 28 U.S.C.

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§ 1447(c). The district court must remand the case if it appears before final judgment

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that the court lacks subject matter jurisdiction. Id.
The removal statutes are construed restrictively, so as to limit removal jurisdiction.

United States District Court
Northern District of California

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See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). There is a

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“strong presumption” against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566

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(9th Cir. 1992). This means that the burden of establishing federal jurisdiction for

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purposes of removal is on the party seeking removal. Hunter v. Philip Morris USA, 582

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F.3d 1039, 1042 (9th Cir. 2009). Doubts as to removability are resolved in favor of

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remanding the case to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d

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1089, 1090 (9th Cir. 2003).

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B.

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Plaintiff's Motion
Palantir contends that the FAC does not assert any federal claims, and that the

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five state-law claims arise from the misappropriation of its trade secrets by Abramowitz

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and KT4, which occurred prior to the filing of the Patent Applications. Palantir asserts

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that removal was improper, as the court lacks federal question jurisdiction over the state-

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law claims.

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Defendants oppose the motion, arguing that the case was properly removed.

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They assert that, while the “artfully pled complaint . . . carefully avoids calling any of its

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causes of action or demanded relief ‘federal’ in nature,” Palantir is seeking to have itself

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declared to be the sole inventor of three technologies actually invented by Abramowitz as
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sole or joint inventor. Specifically, defendants point to the request for injunctive relief in

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the prayer for relief, and to the UCL claim. Defendants assert that Palantir is attempting

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to use the state courts to enjoin Abramowitz from pursuing protection in the USPTO for

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technologies he developed.
In the prayer for relief, Palantir requests a preliminary and permanent injunction

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restraining defendants from (among other things) “continuing to pursue [d]efendants’

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patent applications[.]” Defendants refer to this as “the PTO injunction.” In their

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opposition to Palantir’s motion, defendants contend that only federal patent law can

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supply the substantive rules and procedures governing patent applications. They argue
that because Palantir seeks this relief on the basis that it is the true inventor of the

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United States District Court
Northern District of California

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technologies in the Patent Applications,1 any court deciding whether to grant the "PTO

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Injunction" must therefore resolve the issue of inventorship.
In the UCL claim, Palantir alleges that defendants’ business acts and practices

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were fraudulent “because a reasonable person would likely be deceived by [d]efendant’s

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[sic] false statements and claims, including that they invented and own Palantir’s

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inventions.” FAC ¶ 38. Defendants argue that the FAC provides only one basis on which

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defendants could be found liable under the “fraudulent” prong of the UCL claim –

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Abramowitz's alleged false statements to the USPTO regarding his inventorship of the

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technologies listed in the Patent Applications. In addition, although they have not moved

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to dismiss any of the claims asserted in the FAC, defendants also contend in their

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opposition to Palantir’s motion that allegations of trade secret misappropriation cannot

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support an unfair competition claim under Business & Professions Code § 17200.
The court finds that the motion to remand must be GRANTED. Federal courts

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Defendants point to FAC ¶ 38 (alleging that the Patent Applications “falsely identif[y]
Abramowitz as the “sole inventor”); FAC ¶ 3 (alleging that Abramowitz “made false claims
to the [PTO]”); FAC ¶ 46 (asserting that the Patent Application based on the Cyber
Insurance and Cybersecurity Technologies “fails to mention Palantir and does not include
a single Palantir employee as an inventor”); FAC ¶ 51 (alleging that the Patent
Application based on the Natural Resources Exploration Technology “falsely claim[ed]
that he was the “sole owner and inventor”)).
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have original and exclusive jurisdiction in “any civil action arising under any Act of

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Congress relating to patents.” 28 U.S.C. § 1338(a). "Under the well-pleaded complaint

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rule, . . . whether a claim arises under patent law must be determined from what

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necessarily appears in the plaintiff's statement of his own claim . . . , unaided by anything

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alleged in anticipation or avoidance of defenses which it is thought the defendant may

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interpose.” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809 (1988).

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A case can “arise under federal law” in two ways. Gunn v. Minton, 133 S.Ct. 1059,

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1064 (2013). First, “a case arises under federal law when federal law creates the cause

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of action asserted.” Id. This “creation test” accounts for “the vast bulk of suits that arise
under federal law[.]” Id. (citation omitted). Second, even when a claim “finds its origins in

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United States District Court
Northern District of California

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state rather than federal law,” the claim nevertheless arises under federal law where it

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“necessarily raise[s] a stated federal issue, actually disputed and substantial, which a

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federal forum may entertain without disturbing any congressionally approved balance of

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federal and state judicial responsibilities.” Id. at 1064-65; see also Christianson v. Colt

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Indus. Operating Corp., 486 U.S. 800, 809 (1988).

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Here, Palantir asserts claims of breach of contract, breach of the implied covenant,

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misappropriation of trade secrets under California law, declaratory relief, and unfair

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competition under California law. Federal law does not create any of these causes of

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action. Thus, the first means of determining federal subject matter jurisdiction does not

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apply, and only the second means is at issue in the present motion. As explained in

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Gunn, a state law claim provides a basis for federal jurisdiction where a federal issue is

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“(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution

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in federal court without disrupting the federal-state balance approved by Congress.” Id.,

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133 S.Ct. at 1065. All four of these requirements must be met. Id.

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To begin, the court considers the first factor – whether resolution of a federal issue

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is “necessary” to Palantir’s case. The only federal issue identified by defendants is the

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“patent law issue” of inventorship – whether Abramowitz is or is not the inventor and

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owner of the technology that is the subject of the pending patent applications, and
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whether in filing the Patent Applications, he has falsely claimed to be the inventor.
Defendants do not claim that any federal issue is implicated in the causes of action

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for breach of contract, breach of the implied covenant, misappropriation of trade secrets,

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or declaratory relief. They assert only that the “patent law issue” of inventorship is placed

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at issue by the request in the Prayer for Relief that the court enjoin defendants from

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“continuing to pursue [d]efendants’ patent applications,” and by the allegation in the UCL

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cause of action that “[d]efendants’ business acts and practices were fraudulent because

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a reasonable person would likely be deceived by [d]efendants’ false statements and

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claims, including that they invented and owned Palantir’s inventions.”

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A prayer for relief, standing alone, is not sufficient to create federal question

United States District Court
Northern District of California

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jurisdiction. See Carter v. Health Net of Cal., Inc., 374 F.3d 830, 834 (9th Cir. 2004)

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(“[t]he valid exercise of federal question jurisdiction . . . depend[s] upon the substantive

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claims raised[,]” not on any remedy requested). Moreover, the Prayer for Relief is

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broader than defendants suggest. For example, Palantir also seeks an order restraining

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defendants from “perpetuating the wrongful acts and conduct as set forth [in the FAC]”,

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and from “directly or indirectly retaining, using or disclosing Palantir's trade secret[s],

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confidential and/or proprietary information, and derivatives thereof."

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Further, in the fourth cause of action for violation of California’s Trade Secrets Act,

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Cal. Civ. Code § 3426, et seq., Palantir requests that the court "take affirmative acts to

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protect Palantir's trade secrets," which includes "ordering an inspection of [d]efendants'

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[document and data depositories] to determine the extent to which Palantir's trade

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secrets were wrongfully taken and/or disseminated[;]" "ordering the return of Palantir's

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confidential information[;]" and "prohibiting [d]efendants from continuing [their] unlawful

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actions." FAC ¶ 99.

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Palantir is plainly not seeking to compel any action by the USPTO, and does not

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request any declaration regarding inventorship. Rather, it seeks injunctive relief

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preventing defendants from using and disclosing its trade secrets in violation of California

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law. Palantir’s prayer for relief in this case is similar to the relief requested in Altavion,
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Inc., v. Konica-Minolta Sys. Lab., Inc., 2008 WL 2020593 (N.D. Cal. May 8, 2008). In

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that case, the plaintiff filed suit in state court, alleging that the defendants had

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misappropriated its trade secrets, and had caused patent applications to be filed with the

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PTO, which were related to the plaintiff's trade secrets. The defendants removed the

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case, alleging that substantial questions of patent law existed. The plaintiff moved to

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remand.

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The claims asserted were all created by state statutes and common law. The

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court found that if there was federal jurisdiction over the case, it could be found – if at all

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– only if the plaintiff's right to relief “necessarily depend[ed] on resolution of a substantial
question of federal patent law, in that patent law is a necessary element of the well-

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United States District Court
Northern District of California

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pleaded claims." Id. 2008 WL 2020593 at *2-3. The court rejected the plaintiff's theory

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that its request for injunctive relief "necessarily depends on a resolution of 'inventorship'"

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noting that "each of plaintiff's claims may be a adjudicated and appropriate monetary and

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injunctive relief may be awarded without resolution of 'inventorship' in the technical sense

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used in patent law." Id. at *7. Similarly, in this case, Abramowitz’s conduct before the

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USPTO may simply provide evidence supporting the state-law claims asserted in this

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case, but such evidence does not convert this action into a case “arising under” federal

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patent laws.

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Nor does the UCL claim necessarily raise a federal issue sufficient to confer

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federal question jurisdiction. Defendants assert that the “only” basis for the UCL claim is

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Abramowitz's alleged false statements to the USPTO. The court notes, however, that the

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FAC alleges that defendants' conduct violated the "unlawful" prong of § 17200 because it

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resulted in violations of state common law, including breach of contract and breach of the

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implied covenant, as part of an improper effort to deceive and mislead third parties by

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marketing Palantir's non-trade secret confidential information as their own, see FAC

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¶¶ 49, 86, 88; that defendants misled Palantir when they promised not to use or disclose

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such information "except for the benefit of the company[,]" see FAC ¶¶ 28-30, 71; and

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that Abramowitz sought to fraudulently associate himself with Palantir by filing a
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trademark on "Shire," a term from the same fictional universe as "Palantir," in an attempt

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to suggest a connection with a company where none existed, see FAC ¶ 56.

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These allegations are independent of the trade secret misappropriation claims,

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have nothing to do with the Patent Applications, and are unrelated to Abramowitz's

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alleged false statements to the USPTO. The mere fact that the FAC alleges that

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defendants improperly used and disclosed Palantir's trade secrets in the Patent

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Applications is not sufficient to create federal jurisdiction over the UCL claim. This is

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because resolution of the issue of inventorship is not necessary to resolution of the

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entirety of the UCL claim, which alleges that defendants’ business acts and practices
were “unlawful” under the UCL because they resulted in “violations of state common law

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United States District Court
Northern District of California

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. . . including breach of contract and breach of the implied covenant of good faith and fair

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dealing[,]” FAC ¶ 86, and were “fraudulent” because “a reasonable person would likely be

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deceived by [d]efendants’ false statements and claims,” FAC ¶ 87, which included false

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representations that they would maintain Palantir’s confidentiality and would not pass

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Palantir’s trade secrets off as their own, FAC ¶¶ 18, 28-30, 45, 48, 52, 55.

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As in the Altavion case, "[d]efendants' allegedly fraudulent conduct before the

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USPTO will no doubt be a large part of the proceedings in this action," but the

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defendants’ conduct before the USPTO does not form the exclusive theory upon which

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Palantir’s claims are based. See id., 2008 WL 2020593 at *6. In general, if a cause of

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action asserted in a well-pleaded complaint can succeed on any theory that does not

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implicate or require a resolution of an issue of federal patent law, that cause of action

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does not arise under the patent laws for purposes of § 1338(a), even if other theories of

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recovery are directly dependent on patent law. See Christianson, 486 U.S. at 810 (citing

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Franchise Tax Bd. of State of Cal. v. Construction Laborers Vacation Trust for So. Cal.,

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463 U.S. 1, 26 (1983)).

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As for defendants’ contention that a claim under § 17200 cannot be premised on

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an allegation of misappropriation of trade secrets, and their argument at the hearing that

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Palantir’s UCL claim is therefore “dismissible” and “needs to be dismissed by a federal
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court on that basis,” see Hearing Transcript, Feb. 15, 2017 (Doc. 39) at 14, the court

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notes that defendants have not filed a motion to dismiss. The same is true with regard to

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defendants’ contention that the UCL is not pled with sufficient particularity, as required by

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Federal Rule of Civil Procedure 9(b). The question whether the UCL cause of action

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states a claim is not before the court in the present motion for remand, and the court

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declines to base its ruling on a legal theory that has not been properly presented.

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Turning to the second factor, the court finds that the FAC does not create an

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"actually disputed" issue of federal law. See Gunn, 133 S.Ct. at 1065-66. There is no

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"actually disputed" issue of federal law because the issue of inventorship under federal
patent law cannot be decided in this action. As discussed below, the appropriate vehicle

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United States District Court
Northern District of California

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for resolving issues of inventorship is a "derivation proceeding" before the USPTO, where

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Palantir claims it has already initiated a proceeding as to one of the Patent Applications.

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Accordingly, inventorship – the only federal patent issue raised by defendants in their

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papers – is not "actually disputed" in this case.

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Turning to the third factor, the court finds that the FAC does not raise any federal

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issue that is “substantial.” See Gunn, 133 S.Ct. at 1065-66. Federal question jurisdiction

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“demands not only a contested federal issue, but a substantial one, indicating a serious

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federal interest in claiming the advantages thought to be inherent in a federal forum.”

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Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 313 (2005). This

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inquiry looks to "the importance of the issue to the federal system as a whole," rather

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than "the importance of the issue to the plaintiff's case." Gunn, 133 S.Ct. at 1066.

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Here, defendants contend that the FAC raises claims related to the legal question

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of "inventorship" under federal law. The Federal Circuit has articulated three

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nonexclusive factors that "may help to inform the substantiality inquiry" under the Gunn

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test – (1) whether a "pure issue of federal law" is "dispositive of the case;" (2) whether

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"the court's resolution of the issue will control 'numerous other cases;'" and (3) "whether

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'the Government has a direct interest in the availability of a federal forum to vindicate its

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own administrative action.'" See NeuroRepair, Inc. v. The Nath Law Grp., 781 F.3d 1340,
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1345 (Fed. Cir. 2015). Because defendants bear the burden of showing that removal

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was proper, it is also defendants' burden to show that these factors support jurisdiction in

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this case. However, they have failed to do so.

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Palantir’s state-law causes of action for misappropriation of trade secrets and

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breach of contract do not raise any “substantial” issue related to the federal system of

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patent law. There is no "pure issue of federal law" which is dispositive of any of Palantir’s

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claims, because all the claims are state statutory or common-law claims, which can be

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resolved without reaching the issue of inventorship. Further, the outcome of the state-law

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issues at stake here will have little or no impact on another case, particularly a case

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United States District Court
Northern District of California

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brought in federal court, and there is no question of governmental interest here.
Turning to the fourth factor, the court finds that allowing Palantir's case to remain

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in federal court would disrupt the federal-state balance of power. See Gunn, 133 S.Ct. at

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1068; see also Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308,

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313-14 (2005). “Arising under” jurisdiction exists only “where the vindication of a right

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under state law necessarily turn[s] some construction of federal law[,]” Merrell Dow

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Pharms. Inc. v. Thompson, 478 U.S. 804, 808 (1986), and it is not enough that the court

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may have to interpret federal laws or regulations. Improper disclosure of trade secrets

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constitutes an independent violation of California's Uniform Trade Secrets Act, and

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California courts may enjoin such actual or threatened trade secret misappropriation. As

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previously noted, the Patent Applications may provide evidence of defendants'

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misappropriations of trade secrets, but that that does not transform the state-law claims

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into the small category of cases in which "arising under" jurisdiction lies. See Gunn, 133

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S.Ct. at 1064.

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Finally, and in the court’s view, most importantly, defendants have not explained

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how this case could be maintained in federal court under the court's exclusive jurisdiction

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over patent claims when no patent has issued on the applications filed by Abramowitz.

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Defendants accuse Palantir of having "artfully pled" the complaint to include only state

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law claims, see Notice of Removal ¶ 2, but they do not specify a federal cause of action
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that Palantir should or could have pled. While it is true that "issues of inventorship,

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infringement, validity, and enforceability present sufficient substantial questions of federal

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patent law to support jurisdiction under section 1338(a)," see Bd. of Regents, Univ. of

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Tex. Sys. v. Nippon Tel. & Tel., 414 F.3d 1358, 1363 (Fed. Cir. 2005), a dispute involving

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a request for equitable relief relating to a claim of inventorship in connection with a

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pending patent application can only be resolved by the Director of the USPTO. See HIF

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Bio, Inc. v. Yung Shin Pharms. Indus. Co., Ltd., 600 F.3d 1347, 1353 (Fed. Cir. 2010).
Palantir could not have asserted a claim of correction of inventorship, as no patent

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has issued. 35 U.S.C. § 116. There is no private right of action to challenge inventorship

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of pending patent applications. See HIF Bio, 600 F.3d at 1354. Under 35 U.S.C. § 116,

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United States District Court
Northern District of California

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"[w]henever through error a person is named in an application for patent as the inventor,

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or through error an inventor is not named in an application, the Director may permit the

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application to be amended accordingly, under such terms as he prescribes." The text of

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§ 116 grants the Director of the USPTO the authority to take certain actions, but plainly

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does not create a cause of action in the district courts to modify inventorship on pending

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patent applications. See Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1357 n.1 (Fed.

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Cir. 2004). On the other hand, once the patent issues, the statute that allows the Director

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of the USPTO to correct the named inventor on a patent, 35 U.S.C. § 116, also provides

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a private right of action to challenge inventorship, within the original jurisdiction of the

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federal district court. See HIF Bio, 600 F.3d at 1354.

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There can thus be no "inventorship" challenge under the procedural facts of this

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case. And, in any event, the state-law claims must necessarily be resolved without

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reliance on patent law because patent law is not a necessary element of any of the

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claims as pled. See Christianson, 486 U.S. at 809. The fact that Palantir's proposed

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remedy may tangentially involve issues touching on patent ownership does not convert

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the state law claims into federal law claims – particularly where no patents have issued.

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Moreover, this court lacks the authority to determine inventorship of patent applications.

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Removal was improper, and the case must be remanded.
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CONCLUSION

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In accordance with the foregoing, the motion to remand is GRANTED. The motion
for fees and costs is DENIED.

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IT IS SO ORDERED.

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Dated: March 9, 2017

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__________________________________
PHYLLIS J. HAMILTON
United States District Judge

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United States District Court
Northern District of California

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