from the United States District Court for the District of New
Jersey in Nos. 2:15-cv-08301-KM-JBC, 2:16-cv-00317-KM-JBC,
Judge Kevin McNulty.
William Adams, Quinn Emanuel Urquhart & Sullivan, LLP,
New York, NY, argued for plaintiffs-appellants in No.
2016-2677 and defendant-appellant in No. 2016-2696. Also
represented by Michael Barry Carlinsky, Ellyde R. Thompson,
Matthew A. Traupman.
Christopher Brook, Clinton Brook & Peed, New York, NY,
argued for defendants-appellees in No. 2016-2677 and
plaintiffs-appellees in No. 2016-2696.
Newman, O'Malley, and Stoll, Circuit Judges.
O'Malley, Circuit Judge.
Data Corporation ("First Data") and Frank
Bisi-gnano ("Bisignano") appeal from the district
court's dismissal of their counterclaims and their
declaratory judgment action under Federal Rule of Civil
Procedure 12(b)(1). See Bisignano v. Inselberg, Nos.
15-8301 (KM) (JBC), 16-317 (KM) (JBC), 2016 U.S. Dist. LEXIS
113563 (D.N.J. Aug. 25, 2016) (District Court
Opinion). They also object to the district court's
order remanding their state law claims to state court.
Because the district court correctly dismissed the federal
claims for lack of subject matter jurisdiction and we cannot
review the remand order, we affirm.
Inselberg ("Inselberg") is the inventor of various
systems by which audiences interact with live events, such as
concerts and football games. Id. at *4. The patents
he received for his inventions were formerly held by
Inselberg Interactive ("Interactive"), which also
is a party in this appeal. Id.
ownership dispute regarding Inselberg's patent portfolio
at the heart of this case stems from a $500, 000 loan that
Interactive received from Bisignano in August 2010.
Id. at *5. Inselberg personally guaranteed the loan,
and Interactive granted Bisignano a security interest in the
portfolio of patents it owned at the time. Id.
2011, federal authorities brought criminal charges against
Inselberg that allegedly impaired his ability to transact
business, and Inselberg and Interactive defaulted on the loan
from Bisignano. Id. Inselberg and Bisi-gnano entered
into an agreement that purported to convey Interactive's
patent portfolio to Bisignano. Id. The assignment
agreement specified that Interactive transferred "all
right, title and interest" in the patent portfolio. J.A.
351. Shortly thereafter, Bisignano became the CEO of First
October 2014, Inselberg met with Bisignano regarding the
potential value of the patents. Inselberg noted that First
Data was using the patented technology without a license, and
he proposed that First Data purchase or license the patents.
District Court Opinion, 2016 U.S. Dist. LEXIS
113563, at *7. Around this time, Insel-berg also began
claiming that the assignment to Bisi-gnano was invalid.
Id. at *11. In November 2014, Inselberg sent First
Data a claim chart laying out First Data's alleged
infringement of the patents. Shortly thereafter, Bisignano
granted First Data a royalty-free license. Id. at
December 2014, Inselberg, through counsel, maintained that
the assignment agreement was invalid. Id. at *11.
Inselberg's counsel wrote to First Data in September 2015
stating that the assignment had "severe problems"
that likely made it void under New Jersey state law.
Id. at *12. In these communications, Inselberg took
issue with Bisignano's failure to monetize the patents
and the royalty-free license given to First Data. See
id. Inselberg asserted that First Data was infringing
the patents and Bisignano was liable for damages
"amounting to at least 1/3 of the fair market value of
the license." Id.
October 2015, Inselberg's counsel sent Bisignano and
First Data a draft state court complaint. Id. The
draft complaint asserted a number of state law claims and
sought a declaration that Inselberg and Interactive were the
true owners of the patents and were entitled to sue for
infringement. Id. The draft complaint also included
one federal law claim of infringement against a First Data
subsidiary with respect to one of the patents. Id.
at *12- 13.
November 19, 2015, Inselberg's counsel sent Bisi-gnano
and First Data a second draft of the state court complaint.
Id. at *13. The second draft did not contain any
claims for patent infringement. Id. Inselberg's
counsel stated that it intended to file the draft complaint
on November 30, 2015, unless the parties reached a
cases were filed based on this dispute. First, Bisignano and
First Data filed a complaint in the United States District
Court for the District of New Jersey seeking declaratory
judgment regarding the validity of the license agreement and
Bisignano's ownership of the patent portfolio.
Id. at *2. According to Bisignano and First Data,
they filed their case to preempt what they believed was an
inevitable infringement action by Insel-berg and Interactive.
Id. First Data asserted that it would win any
infringement action brought by Inselberg and Interactive
because Bisignano, not Interactive, owns the patents and
licensed them to First Data. Id. The amended
complaint contained four counts seeking, inter alia,