Linear Technology Corp. v. Applied Materials, Inc.
152 Cal. App. 4th 115 | California Court of Appeal | 2007
What This Case Means for Subcontractors
Linear Technology sued equipment manufacturers after a third party claimed patent infringement on equipment Linear had purchased. The trial court dismissed the case, saying state courts lacked jurisdiction over patent-related disputes. California's Court of Appeal reversed, ruling that state courts can hear breach of contract and indemnity claims even when patent issues are involved, as long as the core dispute is about contractual obligations rather than patent law itself.
Key Takeaways
- •If you buy equipment or materials and later face a third-party IP claim, you can sue your supplier in state court for breach of contract or indemnification—don't assume federal court is required.
- •Indemnity clauses in equipment and material purchase agreements are enforceable in state court; make sure your contracts clearly state the supplier will cover losses from IP infringement claims.
- •A contract dispute doesn't lose state court jurisdiction just because patent law questions might come up during interpretation; the key is whether the main issue is contractual, not patent-related.
A case does not arise under patent laws merely because questions of patent law may arise in interpreting a contract.
Frequently Asked Question
If I buy equipment and get sued for patent infringement, can I sue my supplier in state court or do I have to go to federal court?
You can sue in state court. Even though a patent infringement claim triggered the dispute, state courts have jurisdiction over your breach of contract and indemnification claims against the supplier. The fact that patent law questions might come up doesn't change this—what matters is that your core claim is about the supplier's contractual obligations, not about patent law itself.
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