Theisen Group LLC et al v. Inventive Consulting LLC et al

Filing 12

ORDER granting in part 4 Motion to Remand ; denied as moot 5 Motion to Dismiss. Signed by District Judge Linda V. Parker. (NAhm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TJ THEISEN and THE THEISEN GROUP,
LLC, a Michigan Limited Liability Company,
Plaintiffs,
Civil Case No. 18-11198
Honorable Linda V. Parker
v.
INVENTIVE CONSULTING, LLC, a
Michigan Limited Liability Company, d/b/a
INVENTIVE ENGINEERING, MOHAMAD
ZEIDAN, and SLOBODAN PAVLOVIC,
Defendants.
______________________________________/
OPINION AND ORDER GRANTING, IN PART, PLAINTIFFS’ MOTION
FOR REMAND AND FOR COST AND FEES PURSUANT TO
28 U.S.C. § 1447(C)
This lawsuit arises from a breach of two oral contracts in which Defendants
Inventive Consulting, LLC d/b/a Inventive Engineering (“IE”), Mohamad Zeidan
and Slobodan Pavlovic (collectively “Defendants”) orally agreed to enter into
written contracts to assign its patent rights. In a Complaint originally filed in the
Circuit Court for the County of Oakland on April 12, 2018, Plaintiffs TJ Theisen
and the Theisen Group, LLC (collectively “Plaintiffs”) allege various state law
claims against Defendants related to a business dispute. Specifically, Plaintiffs
claim: breach of two oral contracts, promissory estoppel, unjust enrichment,

fraudulent misrepresentation/bad faith, misappropriation of trade secrets, and
breach of fiduciary duty—joint venture.
On April 16, 2018, Defendants removed Plaintiffs’ Complaint to federal
court on the basis of a federal question with respect to the oral breach of contract
claims against it, 28 U.S.C. § 1331. Defendants assert that Plaintiffs’ Complaint
concerns the “validity of an alleged verbal contract assigning an interest in the
HP/HV Patent,” which implicates 28 U.S.C. § 1338(a)1 and 35 U.S.C. § 2612. (See
ECF No. 6 at Pg ID 281.)
Plaintiffs’ Complaint, on its face, alleges claims arising only under state law.
Under the “well-pleaded complaint” rule, then, this case could not have been
removed from state to federal court as involving claims “arising under” federal
law, see 28 U.S.C. § 1331, 1441(a), because federal question jurisdiction ordinarily
“exists only when a federal question is presented on the face of the plaintiff’s
properly pleaded complaint.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392
(1987). “The [well-pleaded complaint] rule makes the plaintiff the master of the
claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.”

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“The district courts shall have original jurisdiction of any civil action arising
under any Act of Congress relating to patents, plant variety protection, copyrights
and trademarks. No State court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents, plant variety protection, or
copyrights.”
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“Applications for patent, patents, or any interest therein, shall be assignable in
law by an instrument in writing.”
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Id. (footnote omitted). Moreover, as it relates to patents, “whether a claim ‘arises
under’ patent law must be determined from what necessarily appears in the
plaintiff’s statement of his own claim in the bill or declaration, unaided by
anything alleged in anticipation or avoidance of defenses which it is thought the
defendant may interpose.” Christianson v. Colt Indus. Operating Corp., 486 U.S.
800, 809 (1988).
Nevertheless, there is “‘an independent corollary’ to the well-pleaded
complaint rule, known as the ‘complete pre-emption’ doctrine.” Caterpillar, Inc,
482 U.S. at 393 (internal citation omitted). As the Supreme Court explained, this
doctrine applies where “the pre-emptive force of a statute is so extraordinary that it
converts an ordinary state common-law complaint into one stating a federal claim
for purposes of the well-pleaded complaint rule.” Id. (internal quotation marks and
citation omitted).
Defendants attempt to characterize Plaintiffs’ Complaint as one that
“concerns the validity of an alleged verbal contract assigning an interest in the
PH/HV Patent” is unconvincing. Plaintiffs argue that they do not claim any
interest in the patent, and, therefore, § 261 is not implicated. Plaintiff maintains,
and the Court agrees, that the issue is whether Defendants breached an oral
agreement to enter into an agreement, which involves a patent. Defendants’
argument that any such agreement is invalid is a defense to Plaintiffs’ claims, and
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an improper ground for federal jurisdiction. See Christianson, 486 U.S. at 809
(“[A] case raising a federal patent-law defense does not, for that reason alone,
‘arise under’ patent law, ‘even if the defense is anticipated in the plaintiff’s
complaint, and even if both parties admit that the defense is the only question truly
at issue in the case.”).
Further, the Sixth Circuit has instructed “where an action is brought to
enforce, set aside, or annul a contract, the action arises out of the contract, and not
under the patent laws, even though the contract concerns a patent right.” Combs v.
Plough, Inc., 681 F.2d 469, 470 (6th Cir. 1982); see also Boggild v. Kenner
Products, Div. of CPG Prods. Corp., 853 F.2d 465, 468 (6th Cir. 1988).
Specifically in Combs, the Sixth Circuit relied on the analysis in Lion Mfg. Co. v.
Chicago Flexible Shaft Co., 106 F.2d 930, 932 (7th Cir. 1939):
the complaint prayed that the court require the defendant to assign
title to the patent to plaintiff and account for the damages and lost
profits caused by the alleged infringement. The court held:
That the primary and controlling purpose of the bill was
to compel an assignment of the legal title to the patent,
by the defendants to the plaintiff, seems so certain as not
to admit of serious dispute. The other relief sought was
dependent thereon. The injunctive process of the court
could not be invoked nor the claim of infringement
maintained until and unless the plaintiff was entitled to
and acquired legal title. This being the situation, we think
it plain, under the authority of Luckett v. Delpark, 270
U.S. 496 (46 S. Ct. 397, 70 L. Ed. 703), that the bill of
complaint failed to state a cause of action arising under
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the patent laws, and that the district court was without
jurisdiction.
Combs, 681 F.2d at 471. Whether Defendants breached an oral agreement to enter
into an agreement to assign their patent interest is not a matter that arises under
patent law. See, e.g. Pandey v. Sharma, No. 1:07-cv-64, 2008 U.S. Dist. LEXIS
111436, at * 14 (S.D. Ohio Aug. 1, 2008) (“It is well settled that an action based
on a contract, which involves underlying patent rights, does not arise under the
patent law.”).
Finally, the Court declines Plaintiffs’ request for an award of costs and fees
as the Court finds Defendants’ basis for removal was objectively reasonable. See
28 U.S.C. § 1447(c) (“An order remanding the case may require payment of just
costs and any actual expenses, including attorney fees, incurred as a result of
removal.”); see also Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005).
Accordingly,
IT IS ORDERED, that Plaintiffs’ motion to remand (ECF No. 4) is
GRANTED IN PART.
IT IS FURTHER ORDERED that the Defendants’ motion to dismiss (ECF
No. 5) is DENIED AS MOOT; and
IT IS FURTHER ORDERED that Plaintiffs’ Complaint shall be

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REMANDED to the Circuit Court for the County of Oakland.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: May 30, 2018
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, May 30, 2018, by electronic and/or U.S.
First Class mail.
s/ R. Loury
Case Manager

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