Case: 15-10121 Document: 00513666766 Page: 1 Date Filed: 09/07/2016
`
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
`
`United States Court of Appeals
`Fifth Circuit
`
`FILED
`September 7, 2016
`
`Lyle W. Cayce
`Clerk
`
`
`
`
`
`No. 15-10121
`
`GLOBERANGER CORPORATION,
`
`
`
` Plaintiff - Appellee
`
`v.
`
`SOFTWARE AG UNITED STATES OF AMERICA, INCORPORATED;
`SOFTWARE AG, INCORPORATED,
`
`
`
`
`
`
`
` Defendants - Appellants
`
`Appeals from the United States District Court
`for the Northern District of Texas
`
`
`
`
`
`Before ELROD, GRAVES, and COSTA, Circuit Judges.
`GREGG COSTA, Circuit Judge:
`Software maker GlobeRanger obtained a $15 million judgment in a trade
`secret misappropriation trial against competitor Software AG. Software AG
`challenges that result on a number of grounds, but its principal argument is
`that GlobeRanger finds itself in a jurisdictional Catch-22. It argues that
`GlobeRanger’s trade secret claim is preempted by federal copyright law, but if
`not, then the result is no federal claim to support jurisdiction. Because we find
`that the trade secret claim is not preempted but that a dismissed conversion
`claim was preempted and supports federal jurisdiction, we also consider
`
`

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`No. 15-10121
`challenges to the sufficiency of the evidence, the damages award, and jury
`instructions. Finding no reversible error on those grounds, we AFFIRM.
`I.
`A.
`GlobeRanger specializes in radio frequency identification (RFID)
`
`technology, a type of wireless technology used to identify and track items and
`information. Those who drive on toll roads are likely grateful for the
`technology, even if they don’t recognize the term RFID. It is what allows
`drivers to speed through tollbooths while an electronic reader gathers
`information from a tag inside the car that is connected to the driver’s account.
`GlobeRanger’s software incorporates RFID for a different purpose:
`inventory management. Its RFID solutions filter, process, and store
`information from incoming inventory items in real time to help the user keep
`track of the items. The core of its RFID solution is its proprietary “iMotion
`platform”, which is used in all of its inventory tracking software. This platform
`connects with RFID readers to quickly process transactions and implement
`complex workflows in real-time. For particular markets or companies with
`unique needs, the platform is then supplemented with add-ons, known as
`“solution accelerators,” that customize the product to satisfy those particular
`demands. For example, GlobeRanger may combine the iMotion platform with
`a certain solution accelerator that helps make the RFID tracking system
`integrate or work well with other systems that are already used by clients in a
`particular industry.
`GlobeRanger has subcontracted on several projects creating RFID
`programs for Department of Defense agencies and their suppliers. This case
`arises from one such contract. In 2007, GlobeRanger entered into a
`subcontract with Science Applications International Corporation (SAIC) to
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`No. 15-10121
`build and implement a bundle of RFID technology for the Navy. The parties
`refer to this as the “Navy Solution.” GlobeRanger installed “instances,” which
`are fully-functioning versions of the Navy Solution, at three Navy bases. But
`the Navy then decided it wanted an enterprise-wide RFID system that could
`be run from a single location, rather than GlobeRanger’s system that required
`servers at each location. After considering competing proposals from
`GlobeRanger and Software AG (a larger, more general software company), the
`Navy went with Software AG’s proposal rooted in its “webMethods” software
`platform. The Navy ordered GlobeRanger to stop its subcontracting work and
`said it would convert the three existing instances to the enterprise-wide
`system.
`
`Prior to receiving this Navy contract—termed RAVE (RFID Asset
`Visibility Enterprise)—Software AG had not implemented RFID for a client.
`While working on the Navy contract, Software AG accessed some of
`GlobeRanger’s data, manuals, and software. GlobeRanger asserts that in
`doing so Software AG misappropriated trade secrets in its Navy Solution.
`Software AG maintains that any access and use were permissible, particularly
`in light of federal regulations that applied to GlobeRanger’s work for the Navy.
`
`
`
`
`
`
`B.
`This litigation has a lengthy and messy history with both parties
`changing their view on whether this case should be in state or federal court.
`GlobeRanger initially brought suit in federal court. After Software AG objected
`that there was no subject matter jurisdiction, GlobeRanger voluntarily
`dismissed the case and refiled it in state court.
`In its state court filing, GlobeRanger alleged misappropriation of trade
`secrets, conversion, unfair competition, civil conspiracy, and tortious
`interference. Software AG now thought the dispute belonged in federal court.
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`No. 15-10121
`It removed the case, arguing that the Copyright Act completely preempted all
`of the state law claims except conspiracy.
`Back in federal court, Software AG filed a Rule 12(b)(6) motion to dismiss
`on preemption grounds. GlobeRanger sought remand to state court, arguing
`that none of its claims were completely preempted and thus the court lacked
`jurisdiction. The district court denied the motion to remand, finding that the
`misappropriation of trade secrets and unfair competition claims were
`preempted. Soon thereafter it ruled that the tortious interference and
`conversion claims were also preempted. As that left no remaining tort to
`support the derivative conspiracy claim, the court granted Software AG’s
`motion to dismiss in full.
`That dismissal was appealed, resulting in a ruling from this court the
`meaning of which is perhaps the most contentious issue in this second appeal.
`There will be more to say about that decision later, but for now we can
`summarize GlobeRanger I as follows. A different panel of this court overturned
`the dismissal, holding that at least some of the factual allegations in the trade
`secret misappropriation claim were outside the subject matter of the Copyright
`Act and therefore not preempted. GlobeRanger Corp. v. Software AG, 691 F.3d
`702, 709 (5th Cir. 2012) (“GlobeRanger I”). We also affirmed the denial of
`GlobeRanger’s motion to remand based on actual (or possible—this is the
`source of the intense debate) preemption of the conversion claim. Id. at 709–
`10.
`
`Although language in GlobeRanger I suggested that the district court
`could have found on remand with a more developed record that the conversion
`claim was not preempted because it involved subject matter outside the scope
`of copyright, id., that issue was never reconsidered. Instead, less than a year
`after the remand, GlobeRanger dropped the conversion claim.
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`No. 15-10121
` At the conclusion of discovery, Software AG moved for summary
`judgment on the merits of the remaining claims, without invoking its
`preemption defense. The district court granted summary judgment on the
`tortious interference claim and denied it on the trade secret misappropriation,
`unfair competition, and conspiracy claims. At a pretrial conference,
`GlobeRanger narrowed the case even more by dismissing its unfair competition
`claim. That left only the trade secret misappropriation and derivative
`conspiracy claim for trial.
`The district court denied Software AG’s motions for judgment as a
`matter of law.
` The jury found that Software AG misappropriated
`GlobeRanger’s trade secrets and awarded $15 million in compensatory
`damages. It found that GlobeRanger did not prove malice, and so was not
`entitled to punitive damages, nor did it prove conspiracy. The district court
`denied post-trial motions for judgment as a matter of law, a new trial, and
`remittitur.
`Software AG appeals on the following grounds: (1) the trade secret
`misappropriation claim is preempted by copyright law; (2) if this claim is not
`preempted, then the district court lacked jurisdiction; (3) if the court did have
`jurisdiction, GlobeRanger failed to prove its claim or its damages; (4) the trial
`court’s damages award was erroneously calculated and excessive; and (5) the
`district court abused its discretion in formulating the jury charge.
`II.
`jurisdictional
`We turn first to the preemption and alternative
`
`arguments, both of which are subject to de novo review. See Franks Inv. Co. v.
`Union Pac. R.R. Co., 593 F.3d 404, 407 (5th Cir. 2010) (preemption by federal
`
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`No. 15-10121
`statute is reviewed de novo); Gilbert v. Donahoe, 751 F.3d 303, 306–07 (5th Cir.
`2014) (subject matter jurisdiction is reviewed de novo).
`A.
`The different spheres of intellectual property protection can sometimes
`
`overlap. As the software code in this case illustrates, the same intellectual
`property can be protectable under the copyright laws or subject to trade secret
`protection. If the creator seeks the protection of the copyright laws, it obtains
`the exclusive right to make copies of the work for decades but must publicly
`register the work before enforcing that right through a lawsuit. 17 U.S.C. §
`411(a). The creator might prefer to not publicly disclose the creation, in which
`case it can maintain the material as a trade secret if it takes reasonable
`measures to preserve secrecy. See generally, Stephen M. Dorvee, Protecting
`Trade Secrets Through Copyright, 1981 DUKE L.J. 981, 982 (1981) (describing
`how copyright protection is limited compared to trade secret protection in that
`it only covers expression and not underlying ideas, and requires disclosure of
`the trade secret). Depending on the business situation, one of these tradeoffs
`will be preferable to the other.
`The supremacy of federal law in the area of copyright means, however,
`that state protection of copyrightable subject matter must sometimes give way
`to its federal counterpart. Not surprisingly given the increasing importance of
`intellectual property to our economy, we have confronted this question of
`“copyright preemption” numerous times in recent years. See, e.g., GlobeRanger
`I, 691 F.3d 702; Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586 (5th
`Cir. 2015); Carson v. Dynegy, Inc., 344 F.3d 446 (5th Cir. 2003); Computer
`Mgmt. Assistance Co. v. Robert DeCastro, Inc., 220 F.3d 396 (5th Cir. 2000);
`Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772 (5th Cir. 1999) (all
`addressing copyright preemption of state law claims). Although the Supreme
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`No. 15-10121
`Court has not addressed the question, in GlobeRanger I we joined other circuits
`in holding that the Copyright Act is one of the uncommon statutes (ERISA is
`another) that “completely preempts the substantive field” and thus
`“transforms a state-law complaint asserting claims that are preempted . . .
`into . . . a federal claim for purposes of the well-pleaded complaint rule.” 691
`F.3d at 706.
`The Copyright Act preempts a state law claim when two conditions are
`met. We have already referred to this first requirement: the “work in which
`the right is asserted must come within the subject matter of copyright.” Alcatel,
`166 F.3d at 785. If the intellectual property at issue is not subject to copyright
`protection, then obviously the Copyright Act would not preempt a state law
`cause of action protecting that uncopyrightable property. But even when the
`work is within the scope of copyright protection, state law is preempted only if
`“the right that the author seeks to protect . . . [is] equivalent to any of the
`exclusive rights within the general scope of copyright.” Id. at 786. In other
`words, is state law protecting the same rights that the Copyright Act seeks to
`vindicate, or is it protecting against different types of interference? If state
`law offers the same protection, then the state law claim is preempted and must
`be dismissed. Copyright grants creators the exclusive right to copy their work,
`so this second requirement is met when the conduct for which the plaintiff is
`seeking protection under state law amounts to the copying that copyright law
`also proscribes. Spear Mktg., 791 F.3d at 598 (“Copying, communicating, and
`transmitting are equivalent acts to reproducing and distributing.”). In that
`situation, allowing a state law to provide the same protection as copyright law
`would undermine the federal copyright system, which also requires public
`registration of the work before a lawsuit can be brought. As a result, the
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`No. 15-10121
`Copyright Act preempts state claims that seek to provide copyrightable subject
`matter with the same protections that federal law provides.
`In GlobeRanger I, the first inquiry concerning copyrightable subject
`matter was the most hotly contested. If the allegations just targeted conduct
`relating to GlobeRanger’s software code, the “falling within the subject matter
`of copyright” requirement for preemption was satisfied. But it was not then
`clear whether the allegations also included misappropriation of GlobeRanger’s
`“procedures, processes, systems, and methods of operations,” such as how
`GlobeRanger “actually deploy[ed] [the RFID program] on site,” “incorporated
`business process into its design of the warehouse,” and “trained sailors,” 691
`F.3d at 708, 709. Given the pleading stage, we deferred to GlobeRanger’s
`assertions that the allegations did extend not just to theft of software but also
`to misappropriation of business methods beyond the scope of copyright
`protection. Id. at 709.
`That uncertainty about whether all of the creations for which
`GlobeRanger sought protection fall within the scope of copyright law is now
`gone. By the time of trial, GlobeRanger had whittled its case down to
`misappropriation of software that it concedes is copyrightable.
`That leaves equivalency of rights as the only disputed question for
`preemption. The test to determine equivalency is the “extra element test”:
`[I]f the act or acts of [the defendant] about which [the plaintiff]
`complains would violate both misappropriation law and copyright
`law, then the state right is deemed “equivalent to copyright.” If,
`however, one or more qualitatively different elements are required
`to constitute the state-created cause of action being asserted, then
`the right granted under state law does not lie “within the general
`scope of copyright,” and preemption does not occur.
`Alcatel, 166 F.3d at 787 (internal footnotes omitted). Whether a claim is
`equivalent requires looking to the actual alleged misconduct and not merely
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`No. 15-10121
`the elements of the state cause of action. Id. at 788 (equivalency is based on
`“the discrete facts of [a] case”); Daboub v. Gibbons, 42 F.3d 285, 289–90 (5th
`Cir. 1995) (distinguishing case in which plaintiffs’ state-law claims were not
`preempted based on the specific acts complained of along with the elements of
`the state law).
`
`GlobeRanger argues that the right it seeks to vindicate under Texas
`trade secret law is not equivalent to the anti-copying principle of federal
`copyright law because the state law prevents acquisition “through a breach of
`a confidential relationship or . . . improper means.” Tewari De-Ox Sys., Inc. v.
`Mountain States/Rosen, L.L.C., 637 F.3d 604, 610 (5th Cir. 2011) (quoting
`Phillips v. Frey, 20 F.3d 623, 627 (5th Cir. 1994)) (interpreting Texas
`misappropriation of trade secret law); see also, e.g., Twister B.V. v. Newton
`Research Partners, LP, 364 S.W.3d 428, 437 (Tex. App.—Dallas 2012, no pet.);
`Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 463 (Tex.
`App.—Austin 2004, pet. denied). The evidence that Software AG accessed its
`Navy Solution through persons and entities that were in a confidential
`relationship with GlobeRanger means, according to GlobeRanger, that the
`trade secret claim involves an extra element not found in copyright law.1
`
`We have never applied the extra element test to a common law
`misappropriation of trade secret claim. Our use of this test in cases involving
`
`
`1 The district court also found—as GlobeRanger’s brief mentions in a footnote without
`argument—that “secrecy” is an additional element. This is arguably foreclosed by the holding
`in Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586 (5th Cir. 2015), discussed further
`below, in which the Court held that both a trade secret conversion claim and a Texas Theft
`Liability claim rooted in theft of a trade secret were preempted. But see 1 MELVILLE B.
`NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT § 1.01 [B][2][h] (noting that the required
`“status of secrecy” is what makes “actions for disclosure and exploitation of trade secrets” not
`preempted). If the secrecy requirement did not constitute an additional necessary element
`in either of those causes of actions, it is hard to see why it would here. However, we need not
`decide this issue, as GlobeRanger has forfeited this argument by failing to fully brief it.
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`No. 15-10121
`other business torts provides guidance. In Alcatel, we held that a claim for
`misappropriation under the Texas common law of unfair competition was
`preempted because
`“the acts
`that
`form
`the basis of
`[Plaintiff’s]
`misappropriation claim touch on interests clearly protected by the Copyright
`Act,” such as “reproduction” and “use” of the plaintiff’s firmware, software, and
`manuals, and “distribution” of works derived from those materials. 166 F.3d
`at 789. The state law’s requirement that works be produced through “extensive
`time, labor, skill and money” was not an “extra element” sufficient to satisfy
`the equivalency test. Id. at 787–88. Because copyright protects work “in which
`independent creation and creativity converge,” the creator’s time, labor, and
`skill “are fundamental to the independent creation of a work” and thus “are
`necessarily contemplated in [a granted] copyright.” Id. at 789.
`We also found preemption in Spear Marketing, which considered claims
`for conversion of trade secrets as well as theft of trade secrets under the Texas
`Theft Liability Act (though notably no preemption defense was raised as to the
`misappropriation of trade secret claim). 791 F.3d at 598. As in Alcatel, the
`alleged misconduct involved only the “[c]opying, communicating, and
`transmitting” of works for which the Copyright Act also provides protection.
`Id.; 17 U.S.C. § 106(a)(1), (a)(2). That the Texas statute had a “knowingly”
`mens rea requirement did not constitute an extra element given the “well-
`established rule that elements of knowledge do not establish an element that
`is qualitatively different from a copyright infringement claim.” Spear Mktg,
`791 F.3d at 598 (internal quotations omitted). As for conversion, the Court
`held that, although claims of conversion of physical property would not be
`preempted, “to the extent [Plaintiff] allege[d] conversion of intangible
`‘confidential information’ and ‘certain trade secrets,’” it is preempted under
`
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`GlobeRanger I, Alcatel and several other cases in which this circuit has held
`conversion of intangible property preempted. Id. at 597–98.
`
`In the “no preemption” column is Computer Management Assistance Co.,
`220 F.3d 396, 405 (5th Cir. 2000), which involved a claim under the Louisiana
`Unfair Trade Practice Act. Similar to GlobeRanger’s allegations, a computer
`programming company alleged that the defendant accessed and unfairly
`misappropriated its materials, including trade secrets, through a shared
`customer. Id. at 399. In conducting the extra-element analysis, we held that
`because the Louisiana Unfair Trade Practices Act required that the plaintiff
`establish “fraud, misrepresentation or other unethical conduct,” the relief
`provided by the law is not equivalent to copyright and is not preempted. Id. at
`404–05.
`The extra element in that Louisiana statute is similar to the right Texas
`trade secret law provides against the taking of protected information “through
`a breach of a confidential relationship or . . . improper means.” Tewari De-Ox,
`637 F.3d at 610. Indeed, akin to the “fraud, misrepresentation or other
`unethical conduct” that Computer Management held to be an extra element is
`the following evidence in this case: Software AG’s inducement of a former
`GlobeRanger employee to break his nondisclosure agreement in order to obtain
`source code; Software AG’s knowledge from technical manuals it obtained that
`end user agreements prohibited disclosure; and its installment and exploration
`of the Navy Solution in a computer lab—given Software AG’s stated purpose
`of “replicat[ing] current GlobeRanger functionality” and GlobeRanger’s
`insistence that its software and license keys only be used for “direct support”
`of the existing Navy installments. Software AG’s actions go beyond the
`copying, communicating, and transmitting alleged in Alcatel and Spear
`Marketing.
`
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`No. 15-10121
`Because trade secret law protects against not just copying but also any
`taking that occurs through breach of a confidential relationship or other
`improper means, all ten circuits that have considered trade secret
`misappropriation claims have found them not preempted by the Copyright Act.
`See Seng-Tiong Ho v. Taflove, 648 F.3d 489, 503–04 (7th Cir. 2011); Stromback
`v. New Line Cinema, 384 F.3d 283, 302–05 (6th Cir. 2004); Dun & Bradstreet
`Software Servs., Inc. v. Grace Consulting, Inc., 307 F.3d 197, 217–18 (3d Cir.
`2002); DSC Commc’ns Corp. v. Pulse Commc’ns, Inc., 170 F.3d 1354, 1365 (Fed.
`Cir. 1999); Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1549–50 (11th Cir.
`1996); Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1164–
`65 (1st Cir. 1994) abrogated on other grounds by Reed Elsevier, Inc. v.
`Muchnick, 559 U.S. 154 (2010); Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d
`655, 658–60 (4th Cir. 1993); Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9
`F.3d 823, 846–48 (10th Cir. 1993); Computer Assocs. Int’l, Inc. v. Altai, Inc.,
`982 F.2d 693, 716–21 (2d Cir. 1992); S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081,
`1090 n.13 (9th Cir. 1989). This overwhelming case law may be the reason that
`the defendant in Spear Marketing did not raise a preemption defense against
`the common law trade secret misappropriation claim even though complete
`preemption of the Texas Theft Liability Act and conversion claims had been
`cited as the basis for federal jurisdiction. See 791 F.3d at 597–600 (finding the
`statutory and conversion claims preempted, but then proceeding to the merits
`of the trade secret claim).
`Software AG tries to distinguish much of this authority on the ground
`that a “considerable number” of the cases “held that misappropriation of trade
`secrets claims are not preempted because they require proof of a confidential
`relationship, which provides the extra element required to survive
`preemption.” Stromback, 384 F.3d at 303. Citing a district court case from
`
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`No. 15-10121
`more than twenty years ago—ancient history in the world of intellectual
`property
`litigation
`involving software
`that often raises
`the
`trade
`secret/copyright conundrum—Software AG says
`that a confidential
`relationship must exist between the plaintiff and defendant, which is not the
`case here because it was a former GlobeRanger employee and subcontractors
`who allegedly breached duties of nondisclosure owed to the plaintiff. See Long
`v. Quality Computers & Applications, Inc., 860 F. Supp. 191, 197 (M.D. Pa.
`1994) (stating that courts have not found trade secret claims preempted when
`they are “based upon the disclosure of material that a defendant has a duty to
`keep confidential”). We reject this as either an accurate characterization of the
`current state of preemption law or, if viewed as an original matter, as
`something that should make a difference in the equivalency analysis. At least
`three of the circuit cases finding no preemption of trade secret claims involved
`defendants that obtained the trade secret from a third party knowing that
`party owed a duty of nondisclosure to the plaintiff. See Trandes, 996 F.2d at
`657, 660 (holding trade secret misappropriation not preempted in claim
`against defendant who “improperly acquired and used” trade secrets from a
`third party that had a contractual and fiduciary duty to the plaintiff); Gates
`Rubber Co., 9 F.3d at 830–31, 847–48 (holding trade secret misappropriation
`not preempted in case in which some of the defendants—former employees—
`had been in a confidential relationship, but at least one defendant—the
`corporation for which the other defendants now worked—had not); Computer
`Associates, 982 F.2d at 718–19 (explaining that a party that acquires a trade
`secret with notice that a third party stole it in violation of a duty of
`confidentiality can be guilty of misappropriation). Though a Second Circuit
`case, Computer Associates involved the same Texas trade secret cause of action
`at issue here. 982 F.2d at 718. It overturned a district court preemption
`
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`No. 15-10121
`holding that followed Software AG’s view that the defendant must owe the duty
`of nondisclosure to the plaintiff. Id. at 720. The court of appeals explained
`that Texas follows the Restatement approach, which makes a defendant liable
`for using a trade secret if it obtained the secret from a third party with actual
`or constructive notice that the third party’s disclosure violated a duty owed to
`the plaintiff. Id. at 718–19 (citing RESTATEMENT (FIRST) OF TORTS § 757(c)
`(1939)). In that situation, just as when a defendant breaches a duty it owes
`the plaintiff, there is additional wrongful conduct beyond mere reproduction.
`We thus conclude that GlobeRanger’s trade secret misappropriation
`claim requires establishing an additional element than what is required to
`make out a copyright violation: that the protected information was taken via
`improper means or breach of a confidential relationship. Because the state tort
`provides substantially different protection than copyright law, it is not
`preempted.
`
`B.
`Our holding that the trade secret misappropriation claim is not
`
`preempted requires us to consider Software AG’s alternative jurisdictional out:
`that no federal question jurisdiction exists, so the case should have been
`remanded to state court.2 In light of our holding that the trade secret claim is
`not preempted, subject matter jurisdiction depends on whether some of the
`other, now-dismissed state law claims were completely preempted by the
`Copyright Act.3 Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987) (“Once
`
`
`2 There is no diversity jurisdiction, so federal question jurisdiction is the only basis for
`subject matter jurisdiction.
`3 So long as one of the state law claims originally asserted was actually a federal claim
`due to complete preemption, then supplemental jurisdiction existed over other claims, like
`the trade secret claim that went to trial. See 28 U.S.C. § 1367(a); Spear Mktg., Inc., 791 F.3d
`at 594 (finding one claim preempted by copyright, and considering the district court’s merits
`ruling on remaining state law claims).
`
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`No. 15-10121
`an area of state law has been completely pre-empted, any claim purportedly
`based on that pre-empted state law is considered, from its inception, a federal
`claim, and therefore arises under federal law.”). And the answer to that turns
`in large part on the meaning of GlobeRanger I. Software AG contends that
`decision did not hold any of the claims preempted nor did the district court
`make such a finding on remand.
`
`Before delving into GlobeRanger I, we begin with some basic principles
`of federal jurisdiction that inform our reading of it. First is the “fundamental
`principle” that jurisdiction is determined based on the time of removal.
`Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939); Barney v. Latham, 103 U.S.
`205, 215–16 (1880) (“The right of removal . . . depends upon the case disclosed
`by the pleadings as they stand when the petition for removal is filed.”).
`Louisiana v. Am. Nat’l Prop. & Cas. Co., 746 F.3d 633, 635 (5th Cir. 2014).
`This removal rule is a corollary of the “time-of-filing rule” that governs
`jurisdictional determinations for cases originally filed in federal court. A rule
`of “hornbook law,” the time-of-filing rule traces at least as far back as an 1824
`Supreme Court case holding that jurisdiction “‘depends upon the state of things
`at the time of the action brought.’” Grupo Dataflux v. Atlas Glob. Grp., L.P.,
`541 U.S. 567, 570–71 (2004) (quoting Mollan v. Torrance, 22 U.S. (9 Wheat.)
`537, 539 (1824)). Both the time-of-filing and time-of-removal rule make sense.
`It would be inefficient for the court, as well as for litigants, if the power of the
`court to decide a case could exist at the outset, but later disappear based on
`changed circumstances. See Grupo Dataflux, 541 U.S. at 580 (“The time-of-
`filing rule is what it is precisely because the facts determining jurisdiction are
`subject to change, and because constant litigation in response to that change
`would be wasteful.”).
`
`15
`
`

`
` Case: 15-10121 Document: 00513666766 Page: 16 Date Filed: 09/07/2016
`
`No. 15-10121
`One of the changed circumstances that does not undo an initial
`
`determination of jurisdiction is the dismissal of claims. We have applied this
`principle before when the original jurisdiction in a removed case flowed from
`complete preemption. Hook v. Morrison Milling Co., 38 F.3d 776, 779–80 (5th
`Cir. 1994). In Hook, we explained that the plaintiff’s post-removal dismissal
`of a wrongful discharge claim that the district court had found to be preempted
`by ERISA “does not divest the district court of its properly triggered subject
`matter jurisdiction.” Id. at 780; see also Spear Marketing, 791 F.3d at 592–93
`(holding that the court must look to an original complaint, not an amended
`one, when determining preemption). What such a dismissal does is create a
`question of whether the remaining state law claims should be retained as a
`discretionary exercise of the district court’s supplemental jurisdiction. Hook,
`38 F.3d at 780; 28 U.S.C. § 1367(c)(3). Yet Software AG never asked the
`district court to exercise that discretion after the dismissal of the potentially
`preempted claims, so it is foreclosed from raising that possibility now. Powers
`v. United States, 783 F.3d 570, 576–77 (5th Cir. 2015) (“‘While Article III
`jurisdiction must be considered sua sponte, review of the discretionary aspect
`to supplemental jurisdiction under § 1367(c) is waived unless raised in the
`district court.’” (quoting Acri v. Varian Assoc., Inc., 114 F.3d 999, 1000–01 (9th
`Cir. 1997) (en banc))) (alteration omitted). The sole jurisdictional question is
`thus whether the Copyright Act preempted any of the claims pending at the
`time of the removal.
`Software AG’s argument is that this Court departed from the time-of-
`removal principle in GlobeRanger I and left open the question of jurisdiction
`for a later determination that was never made. Its position hinges on the
`opinion’s following l