IP litigators usually do not rely exclusively on diversity jurisdiction, since most claims involve federal questions claims under the Patent, Trademark or Copyright Act. Nevertheless, some claims - contract disputes, right of publicity, trade secret - may arise without joined federal questions. Thus, IP litigators can be faced with the need to satisfy the jurisdictional amount requirement of $75,000 diversity jurisdiction.
What can defendants seeking removal to federal court do if there is no monetary amount demanded or the amount demanded is insufficient?
A recent case from the Seventh Circuit provides a clever strategy option: Rising Moore v. Red Roof Inns, 2006 WL 224063 (Jan. 31, 2006).
The plaintiff wanted to litigate in state court. The defendant, however, was allowed to establish diversity jurisdiction based on the plaintiff's settlement demand of $160,000. The Court rejected the argument that Rule 408 prohibited use of the settlement offer to establish the jurisdictional amount. Further, subsequent lowering of the demand to $60,000 did not defeat diversity jurisdiction.
