The Business Court doesn’t often discuss its interpretation of the statutory bases for a designation to the Court, all of which are contained in G.S. sec. 7A-45.4. So its published Order this month in Southeastern Automotive, Inc. v. Genuine Parts Co. 2016 NCBC 61, is worth noting.
The issue in Southeastern Automotive was whether the Complaint qualified for designation to the Business Court under G.S. §7A-45.4(a)(5), which says that a party may designate as a complex business case:
Disputes involving the ownership, use, licensing, lease, installation, or performance of intellectual property, including computer software, software applications, information technology and systems, data and data security, pharmaceuticals, biotechnology products, and bioscience technologies.
The statute, before the amendments effective October 1, 2014, mentioned only "disputes involving ‘[i]ntellectual property law, including software licensing disputes." Op. ¶19 (referencing former version of G.S. §7A-45.4(a)(5)).
The Southeastern Complaint did not directly raise issues regarding the ownership of intellectual property. It centered around the Defendant’s acquisition of the Plaintiff, and Plaintiff’s claims that it had not been fully compensated in the sale. The shortfall, according to the Plaintiff, was caused by the inadequate operation of Defendant’s software programs with respect to the inventory which the Plaintiff had sold.
Judge Gale saw the 2014 amendment as expanding the Court’s role in intellectual property lawsuits. He held:
The Court concludes that the 2014 amendment to section 7A-45.4(a)(5) expanded the scope of disputes within the statute’s purview to include a dispute that involves a material issue regarding the use or performance of intellectual property, including computer software and data, without requiring a dispute regarding ownership of the intellectual property or another dispute that may require application of principles of the body of law known as intellectual property law.
In the end, this analysis by Judge Gale was unnecessary, as the amount in controversy, per the Southeastern Complaint, was in excess of five million dollars. That made this a case in which designation would be mandatory regardless of whether it was requested by one of the parties. Order ¶4 (referencing G.S. §7A-45.4b)(2)).
I frequently look at the Orders from the Chief Judge of the Business Court on challenges to designations (the Chief Judge handles all of the Oppositions to Designation) and don’t find much to write about as they usually say nothing more than something like "the allegations in the Complaint fall within the mandatory jurisdiction of the Business Court," I collected a number of those unpublished Orders in this 2008 post.
That said, every once in a while the Business Court says something significant about the scope of its mandatory jurisdiction. For example, in its unpublished Order in Sonic Automotive, Inc. v. Mercedes-Benz USA, LLC, the Court spoke about its broad approach to designations involving antitrust matters (per G.S. §7A-45.4(a)(3).