   United States Court of Appeals
       for the Federal Circuit
                        ______________________

FIRST DATA CORPORATION, FRANK BISIGNANO,
             Plaintiffs-Appellants

                                       v.

  ERIC INSELBERG, INSELBERG INTERACTIVE,
                     LLC,
              Defendants-Appellees

---------------------------------------------------------------------------------

  ERIC INSELBERG, INSELBERG INTERACTIVE,
                     LLC,
              Plaintiffs-Appellees

                                       v.

                        FRANK BISIGNANO,
                            Defendant

                FIRST DATA CORPORATION,
                     Defendant-Appellant
                    ______________________

                         2016-2677, 2016-2696
                        ______________________

    Appeals 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.
                ______________________
2                      FIRST DATA CORPORATION   v. INSELBERG



               Decided: September 15, 2017
                 ______________________

   WILLIAM ADAMS, Quinn Emanuel Urquhart & Sulli-
van, 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.

   BRIAN CHRISTOPHER BROOK, Clinton Brook & Peed,
New York, NY, argued for defendants-appellees in No.
2016-2677 and plaintiffs-appellees in No. 2016-2696.
                ______________________

    Before NEWMAN, O’MALLEY, and STOLL, Circuit Judges.
O’MALLEY, Circuit Judge.
    First Data Corporation (“First Data”) and Frank Bisi-
gnano (“Bisignano”) appeal from the district court’s dis-
missal 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.
                      I. BACKGROUND
    Eric 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.
FIRST DATA CORPORATION   v. INSELBERG                    3



     The 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 inter-
est in the portfolio of patents it owned at the time. Id.
    In 2011, federal authorities brought criminal charges
against Inselberg that allegedly impaired his ability to
transact business, and Inselberg and Interactive default-
ed 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 Data.
    In October 2014, Inselberg met with Bisignano re-
garding 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 pur-
chase 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 *7.
    In December 2014, Inselberg, through counsel, main-
tained 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
4                     FIRST DATA CORPORATION   v. 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.
    In 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.
    On 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
settlement. Id.
    Two 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 seek-
ing 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, a declaratory judgment of noninfringement by First
Data. Id. at *14. Bisignano and First Data brought the
action under the Declaratory Judgment Act, 28 U.S.C.
§§ 2201 and 2202.
FIRST DATA CORPORATION   v. INSELBERG                     5



     Shortly thereafter, Inselberg and Interactive filed a
complaint in New Jersey Superior Court. District Court
Opinion, 2016 U.S. Dist. LEXIS 113563, at *2–3. Insel-
berg and Interactive only asserted state law claims in the
complaint filed with the state court; they did not assert
any patent claims. Id. at *3. Along with various business
tort and contract claims, Inselberg and Interactive sought
declarations that the assignment agreement was invalid
and that the patents were owned by them, not Bisignano.
Bisignano and First Data filed an answer that included
four counterclaims asserted by First Data. Id. at *9. The
counterclaims requested, inter alia, a declaratory judg-
ment of noninfringement of the patents and a declaratory
judgment of invalidity for one of the patents in the portfo-
lio. Id. After filing their answer and counterclaims,
Bisignano and First Data removed the state court action
to the District of New Jersey. Id. The Notice of Removal
invoked the federal court’s jurisdiction over patent cases,
citing 28 U.S.C. §§ 1338, 1441(a), 1446, and 1454(a). Id.
    Inselberg and Interactive filed a motion to dismiss the
declaratory judgment complaint, a motion to dismiss the
counterclaims in the case originally filed in state court,
and a motion to remand the state-law claims back to state
court. Id. at *15.
    The district court found that Inselberg and Interac-
tive’s claims were all state law claims involving property
rights created by state statute or common law. The court
concluded that the state law questions regarding the
validity of the assignment did not depend on the outcome
of any federal law issue or the interpretation of a federal
statute. Id. at *20–21. “Indeed, it is the other way
around; unless Inselberg prevails on his state law claims
and regains ownership of the patents, he cannot possess a
federal claim of infringement.” Id. at *21. The district
court found that the alleged patent law issues were “inci-
dental and contingent” because neither Inselberg nor
Interactive was the current owner of the patents and
6                       FIRST DATA CORPORATION   v. INSELBERG



neither was suing as the patentee. Id. The rights at issue
in the case, therefore, were ownership rights turning on
questions of state law. Id. The district court also con-
cluded that this did not become a patent case merely
because some of the damages might be measured based on
“forgone royalties.” Id. at *21–22.
     In its analysis, the district court relied on our decision
in Jim Arnold Corp. v. Hydrotech Systems, Inc., 109 F.3d
1567 (Fed. Cir. 1997). There, the plaintiff attempted to
assert an infringement claim, but that claim was contin-
gent on the success of the plaintiff’s state law claim that
its prior assignment of the patents was void. We conclud-
ed that the district court did not have jurisdiction over the
infringement claim because:
    Until ownership is restored in the assignor, there
    can be no act of infringement by the assignee.
    Federal question jurisdiction must exist at the
    time the complaint is filed for a federal court to
    exercise authority over the case, and without first
    receiving equitable relief that restores to the as-
    signor title to the patent, any claim of ownership
    by the assignor will be unfounded. Further, be-
    cause an action to rescind or cancel an assignment
    is a state-law based claim, absent diversity juris-
    diction it is to a state court that plaintiffs must
    look in seeking a forfeiture of the license.
Id. at 1577 (citations omitted).
    The district court here found that, by virtue of their
action seeking to invalidate the assignment agreement,
Inselberg and Interactive had conceded that Bisignano
currently owns the patents in question. District Court
Opinion, 2016 U.S. Dist. LEXIS 113563, at *25–26.
Inselberg and Interactive understood that they could not
invoke the federal court’s patent jurisdiction without first
obtaining relief in state court. Id. at *26. The district
court pointed out that, if Inselberg eventually wins a state
FIRST DATA CORPORATION   v. INSELBERG                    7



court action, he “might pursue patent law claims” at that
time. Id. at *25–26. But the court found that “such a
contingent patent claim” would not give rise to federal
jurisdiction now. Id. at *26.
    The district court explained that only “a patent owner
or an exclusive licensee can have constitutional standing
to bring an infringement suit.” Id. (quoting Spine Sols.,
Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d
1305, 1317 (Fed. Cir. 2010), abrogated on other grounds
by Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923
(2016)). Because the parties agreed that Bisignano re-
mained the owner of the patent portfolio unless and until
a state court invalidated the assignment agreement, the
federal court did not have jurisdiction to consider the
matter. Id. at *27–29.
    Bisignano and First Data argued that the court did
have the authority to act because Inselberg and Interac-
tive had threatened an infringement action. Id. at *30–
31. The district court pointed out that, while such a
threat is a necessary prerequisite to a valid declaratory
judgment claim, it was not sufficient in this case because
a court can only consider “concrete controversies, not
threats and perceptions.” Id. at *31. A district court has
to look at “the nature of the action that the declaratory
judgment defendant . . . could have brought in the absence
of a declaratory judgment.” Id. (quoting Medtronic, Inc. v.
Mirowski Family Ventures, LLC, 134 S. Ct. 843, 848
(2014)). The district court concluded that “[i]t would be a
mistake[] . . . to rely too heavily on anticipated claims,
when the threatened lawsuit has materialized and does
not in fact include those claims. But it is not just that
Inselberg and Interactive did not file patent claims; they
admit that they could not.” Id. On this basis, the court
dismissed the federal claims and remanded the state law
claims to state court.
8                      FIRST DATA CORPORATION   v. INSELBERG



    First Data and Bisignano appealed the district court’s
orders to this court.
                      II. DISCUSSION
                  1. Standard of Review
    This court reviews de novo a district court’s order
dismissing claims for lack of subject matter jurisdiction.
Powertech Tech. Inc. v. Tessera, Inc., 660 F.3d 1301, 1306
(Fed. Cir. 2011). The party claiming declaratory judg-
ment jurisdiction has the burden to establish that juris-
diction existed at the time the claim was filed. Id.
     This court applies the law of the regional circuit when
reviewing a district court’s grant of a motion to dismiss
for failure to state a claim upon which relief can be grant-
ed. K-Tech Telecomms., Inc. v. Time Warner Cable, Inc.,
714 F.3d 1277, 1282 (Fed. Cir. 2013). The Third Circuit
reviews de novo a district court’s dismissal for failure to
state a claim under Federal Rule of Civil Procedure
12(b)(6). Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d
153, 154 n.1 (3d Cir. 2014).
    When 28 U.S.C. § 1447(d) “facially controls” a remand
order, this court is precluded from reviewing the district
court’s determination regarding subject matter jurisdic-
tion “no matter how plain the legal error in ordering the
remand.” Preston v. Nagel, 857 F.3d 1382, 1384 (Fed. Cir.
2017) (quoting Briscoe v. Bell, 432 U.S. 404, 413 n.13
(1977)). This court reviews a district court’s decision to
remand claims under 28 U.S.C. §§ 1367(c) and 1454(d) for
abuse of discretion. Carlsbad Tech., Inc. v. HIF Bio, Inc.,
556 U.S. 635, 640 (2009).
2. Jurisdiction Over the Counterclaims and the Declara-
                 tory Judgment Claims
    First Data and Bisignano argue that the district court
erred in dismissing First Data’s counterclaims and de-
claratory judgment claims because, they assert, owner-
FIRST DATA CORPORATION   v. INSELBERG                     9



ship is a merits question the court should consider when
addressing invalidity and noninfringement claims, rather
than a jurisdictional prerequisite for a claim. First Data
and Bisignano support their argument by citing Arbaugh
v. Y&H Corp., 546 U.S. 500 (2006), and Reed Elsevier, Inc.
v. Muchnick, 559 U.S. 154 (2010), in which the Supreme
Court addressed the distinction between merits issues
and jurisdictional issues when considering statutory
prerequisites to recovery on federal causes of action.
According to First Data and Bisignano, the district court
erred because it treated ownership as a jurisdictional
question rather than a merits question. First Data and
Bisignano also argue that our decision in Jim Arnold, on
which the district court based its decision, conflicts with
the Supreme Court’s decisions in Arbaugh and Reed
Elsevier and “should be accorded ‘no precedential effect’
on the question whether the federal court had authority to
adjudicate the claim in suit.” Appellants’ Br. 22–23
(quoting Arbaugh, 546 U.S. at 511).
    First Data and Bisignano are correct that in recent
years the Supreme Court has clarified the difference
between merits issues and jurisdictional issues arising
from federal statutory requirements. For example, in
Arbaugh, the Court explained that courts should deter-
mine whether Congress “clearly states” that a threshold
limitation on a statute’s scope is jurisdictional; if Con-
gress does not frame a statutory limitation as jurisdic-
tional, “courts should treat the restriction as
nonjurisdictional in character.” Arbaugh, 546 U.S. at
515–16. But the Supreme Court also acknowledged an
exception: if a claim invoking federal question jurisdiction
under 28 U.S.C. § 1331 is “immaterial and made solely for
the purpose of obtaining jurisdiction” or is “wholly insub-
stantial and frivolous,” then the court can dismiss the
claim for lack of jurisdiction. Id. at 513 n.10 (internal
quotation marks omitted). This exception was carried
over from earlier Supreme Court cases, such as Bell v.
10                      FIRST DATA CORPORATION   v. INSELBERG



Hood, 327 U.S. 678 (1946). There, the Court explained
that the failure to state a proper cause of action requires a
judgment on the merits rather than a dismissal for juris-
diction, but that “previously carved out exceptions are
that a suit may sometimes be dismissed for want of
jurisdiction where the alleged claim under the Constitu-
tion or federal statutes clearly appears to be immaterial
and made solely for the purpose of obtaining jurisdiction
or where such a claim is wholly insubstantial and frivo-
lous.” Id. at 682–83; see also The Fair v. Kohler Die &
Specialty Co., 228 U.S. 22, 25 (1913) (“No doubt if it
should appear that the plaintiff was not really relying
upon the patent law for his alleged rights, or if the claim
of right were frivolous, the case might be dismissed.”).
    Jim Arnold is not to the contrary. Indeed, our deci-
sion in Jim Arnold seems to fit squarely within the excep-
tions reaffirmed by the Supreme Court in Arbaugh:
     To invoke the jurisdiction of a federal court under
     § 1338, it is necessary that plaintiff allege facts
     that demonstrate that he, and not the defendant,
     owns the patent rights on which the infringement
     suit is premised. Furthermore, this allegation of
     ownership must have a plausible foundation.
     Federal jurisdiction cannot lie based on allega-
     tions that are frivolous or insubstantial. Thus, if
     plaintiff cannot in good faith allege such facts be-
     cause, absent judicial intervention to change the
     situation, under the terms of a contract or deed of
     assignment the rights at issue are held by the de-
     fendant, federal court is not the place to seek that
     initial judicial intervention.
Jim Arnold, 109 F.3d at 1571–72 (emphasis added) (cita-
tions omitted). We also noted that “the complaint leaves
no doubt that plaintiff’s suit is premised on a state-law
based set of claims arising out of an alleged breach of an
assignment and royalty agreement.” Id. at 1574. We
FIRST DATA CORPORATION   v. INSELBERG                      11



concluded that the court did not have federal jurisdiction
over the case because the plaintiff’s assertion that the
assignment agreement was null and void “fails to present
a nonfrivolous allegation of ownership of the patents,” and
“[f]ederal subject matter jurisdiction cannot attach based
on frivolous allegations.” Id. at 1577. The court’s reason-
ing and conclusion align with the exceptions addressed by
Arbaugh and Bell.
     Because our reasoning and conclusion in Jim Arnold
fit within the Supreme Court’s acknowledged exception
regarding federal claims that are not colorable, we see no
reason to question the continuing vitality of the holding in
Jim Arnold. We note, however, that the holding in Jim
Arnold is limited to cases, like this one, where the former
owner of a patent has assigned away his interest to an-
other party and therefore cannot bring suit under the
patent. In Jim Arnold, we explained that we were only
addressing assignment agreements, which “pass title to
the patentee’s rights, with all the accompanying rights of
ownership, from the patentee to the assignee.” Id. In
such a situation, “an assignor suing for infringement must
first affirmatively seek equitable relief from a court to
rescind or cancel the assignment” because, “without first
receiving equitable relief that restores to the assignor title
to the patent, any claim of ownership by the assignor will
be unfounded.” Id.
    First Data and Bisignano attack the district court’s
reliance on Jim Arnold by pointing to a sentence in that
opinion where we explained that the reasoning employed
would not apply to cases in which “the assignment may be
declared null and void by operation of law—either
through a forfeiture provision present in the agreement or
under a provision of applicable state law.” Id. According
to First Data and Bisignano, this sentence means that
Jim Arnold does not control the result here because
Inselberg and Interactive have asserted that the assign-
ment is void under state law. But First Data’s and Bisi-
12                    FIRST DATA CORPORATION   v. INSELBERG



gnano’s reading of this single sentence would mean that
we created an exception in Jim Arnold that swallows its
own rule. Indeed, the unique situation we were address-
ing in Jim Arnold would only arise when an assignor
attempts to have an assignment agreement rescinded or
declared invalid.
    First Data’s and Bisignano’s argument ignores the ac-
tual context we addressed in Jim Arnold. The assignor in
Jim Arnold stated in its complaint that the assignment
was “null and void” and that the assignee was infringing
the patent. But we did not include this allegation as an
example by which an assignment would be declared null
and void “by operation of law.” See id. at 1576–77. To the
contrary, we explained that the gravamen of the com-
plaint was founded in state contract law. Similarly, here,
the claims focus on state law contract remedies, and
Inselberg and Interactive admit that they cannot pursue a
patent claim unless a state court grants rescission of the
assignment agreement. See, e.g., Appellees’ Br. 2 (“Eric
Inselberg and Inselberg Interactive, LLC do not own any
patents. They used to own 21 patents, and they have filed
state-law claims to try to get those patents back. But at
the time the cases below were filed, they owned zero (0)
patents.”); id. at 3 (“Inselberg and his company lack title
to the patents, and thus lack standing to bring a patent
claim.”); Oral Arg. at 13:59–14:05, http://oralarguments.
cafc.uscourts.gov/default.aspx?fl=2016-2677.mp3 (explain-
ing that there is no threat of an infringement claim by
Inselberg against First Data because Inselberg has “no
present ownership of any patents”).
    First Data’s and Bisignano’s remaining arguments to
the contrary ignore the admissions by Inselberg and
Interactive that they do not hold any title to the patents
at this time and will not hold title to the patents unless
and until a court determines that the assignment agree-
ment is invalid.
FIRST DATA CORPORATION   v. INSELBERG                    13



    Even if we thought the reasoning in Jim Arnold did
not survive the Supreme Court’s subsequent decision in
Arbaugh, First Data and Bisignano would face other
jurisdictional hurdles. For example, the exception in
Arbaugh and Bell for frivolous claims would remain.
Even if Jim Arnold were no longer binding, First Data’s
claims seeking declaratory judgment of noninfringement
would be frivolous because Inselberg and Interactive do
not own any patents for which First Data could seek such
judgment.
    First Data and Bisignano also would have to establish
that they have standing and that their claim is ripe for
adjudication. The relatively unique facts of this case
show that, at the very least, the counterclaims and the
declaratory judgment claims are not ripe at this time. “A
claim is not ripe for adjudication if it rests upon ‘contin-
gent future events that may not occur as anticipated, or
indeed may not occur at all.’” Texas v. United States, 523
U.S. 296, 300 (1998) (quoting Thomas v. Union Carbide
Agric. Prods. Co., 473 U.S. 568, 580-81 (1985)). Because
all parties agree that Inselberg and Interactive do not
currently have an ownership interest in the patents at
issue and cannot obtain such an ownership interest
absent relief from a court, any potential infringement
claim by Inselberg and Interactive in this case relies on
the “contingent future event[]” of recovering title to the
patents by having a court invalidate the assignment
agreement and order that the patents be returned to
Inselberg and Interactive. If Inselberg and Interactive
are successful in recovering the patents, then First Data’s
and Bisignano’s claims would no longer be contingent on a
future event that “may not occur at all.” Id. Until that
14                     FIRST DATA CORPORATION   v. INSELBERG



time, however, an infringement dispute between these
parties is not ripe. 1
           3. Remand of the State Law Claims
    First Data and Bisignano also challenge the district
court’s remand of the state law claims to state court.
Whether we can review the district court’s remand of the
state law claims depends on whether the district court
remanded the claims under 28 U.S.C. § 1447. If it did,
the order remanding the case “is not reviewable on appeal
or otherwise.” 28 U.S.C. § 1447(d). If the district court
remanded the case after declining to exercise supple-
mental jurisdiction under 28 U.S.C. § 1367(c), however,
then “the remand order is not based on a lack of subject-
matter jurisdiction for purposes of §§ 1447(c) and (d).”
Carlsbad Tech., 556 U.S. at 641.
    First Data and Bisignano argue that the district court
remanded the state law claims to state court because it
declined to exercise supplemental jurisdiction over the
claims pursuant to 28 U.S.C. § 1367(c). First Data and
Bisignano point to a footnote in which the district court
mentions supplemental jurisdiction and cites § 1367(c).
But the district court’s analysis throughout its opinion is
based on a lack of subject matter jurisdiction. The district
court’s opinion also concludes by stating that it grants the
motion “to remand the case under 28 U.S.C. § 1447(c),”
District Court Opinion, 2016 U.S. Dist. LEXIS 113563, at
*33, and the district court’s order explains that it was




     1  It is also unclear that First Data and Bisignano
could establish that there is an actual, imminent threat of
an infringement claim that could give rise to a declaratory
judgment action. Because the district court declined to
address the issue, see District Court Opinion, 2016 U.S.
Dist. LEXIS 113563, at *28 n.10, we do not do so either.
FIRST DATA CORPORATION   v. INSELBERG                   15



granting the motion “to remand this action to state court,
pursuant to 28 U.S.C. § 1447(c),” J.A. 1–2.
    We conclude that the district court’s decision was
based on a lack of subject matter jurisdiction, and that
the district court remanded the case to state court under
28 U.S.C. § 1447(c). Section 1447(d) therefore precludes
us from reviewing the district court’s remand order. See
28 U.S.C. § 1447(d); see also Preston, 857 F.3d at 1384
(explaining that, because § 1447(d) controlled, the court
was precluded from reviewing the district court’s decision
ordering remand).
                     III. CONCLUSION
    We have considered First Data’s and Bisignano’s re-
maining arguments and find them unpersuasive. For the
foregoing reasons, we affirm the district court’s judgment.
                      AFFIRMED
