(CN) – A sports memorabilia dealer cannot remand claims that the New York Football Giants misused his patented technology for wireless audience interaction, a federal judge ruled.
The dispute stems from an investigation of fraud in the sports memorabilia industry, led by the U.S. Attorney’s Office for the Northern District of Illinois and the FBI in 2006.
The government allegedly focused on plaintiff Eric Inselberg, a self-described inventor and sports memorabilia dealer, in 2008, after learning that he “may have sold game-issued or authentic jerseys to other memorabilia traders that were ultimately sold – fraudulently – as game-worn,” according to the 19-page Report and Recommendation, which cites the original complaint.
Inselberg claims that some employees of the New York Football Giants falsely downplayed his relationship with the team and the amount of memorabilia it gave him, both in statements to the FBI and during testimony before a grand jury in Illinois.
The dealer was eventually indicted in Illinois on mail fraud charges.
Inselberg later sued the Giants and their quarterback, Eli Manning; president, CEO and co-owner John Mara; the Giants’ general counsel, senior vice president, CFO and equipment managers; as well as Park Cleaners, a Rutherford, N.J. dry cleaner, and its owner-operator.
The 16-count state court complaint alleges the defendants’ false testimony and fraud ruined Inselberg personally and financially, though the indictment was dismissed in May 2013.
Inselberg asserts claims for civil racketeering, tortious interference, malicious prosecution, abuse of process, trade libel, emotional distress, quantum meruit, breach of contract, civil conspiracy, aiding and abetting, negligent supervision and retention, and respondeat superior.
He claims that the defendants “misappropriated” and “used” his patented technology for wireless audience interaction at live events, “integrated” them into the Giants’ wireless platforms, and that the indictment made him default on a bank loan and lose the patents.
The defendants removed the case to Federal Court on Feb. 27 this year, arguing that Inselberg’s claims for unjust enrichment, unfair competition and misappropriation are actually federal patent infringement claims.
U.S. Magistrate Judge Mark Falk on June 18 refused to remand the case to state court.
“An inventor alleging injury from unauthorized use of a patented invention is tantamount to a patent infringement claim, no matter how pleaded,” Falk wrote. “Plaintiff alleges that defendants ‘misappropriat[ed] Inselberg’s patented wireless concepts and integrat[ed] them into the Giants wireless platforms.’ ‘Artfully’ omitting words like ‘infringement’ and substituting a synonym like ‘misappropriate’ does not change the nature of the claim.”
The judge tossed Inselberg’s claim that he lacks standing to bring patent infringement claims.
“Litigants commonly plead claims they lack standing to bring,” Falk wrote. “That plaintiff’s patent claims may ultimately fail for lack of standing does not deprive the federal court of jurisdiction until they do. Moreover, if plaintiff owned the patents and thus had standing, is there really any doubt that he would have pleaded infringement more clearly?”
Inselberg’s claims are preempted by federal patent law, the ruling states.
“Plaintiff’s purported state-law ‘patented concepts’ claims are really patent claims, no matter what they are called,” Falk wrote. “Patent claims are quintessentially federal, creating model federal jurisdiction. But not only are patent claims federal, they are exclusively federal, and can only be brought in federal court. In patent matters, Congress has so completely preempted the field that any attempt to disguise them as state law claims cannot defeat federal jurisdiction. Thus, the motion to remand should be denied.”
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