“This is a bridge too far even for a Federal Circuit that has constantly been an apologist for an overreaching and horribly unfair Patent Trial and Appeal Board that has from day one had as its marching orders the destruction of patents that are supposed to be presumed valid.” – Gene Quinn
The Federal Circuit today ruled that The University of Minnesota (UMN)—an arm of the state of Minnesota—is not protected by state sovereign immunity from a number of inter partes review (IPR) petitions filed against UMN patents. Regents of the University of Minnesota v. LSI Corporation and Avago Technologies U.S. Inc (Fed. Circ., 2018-1559).
The Court, in an opinion authored by Judge Dyk, relied heavily on its 2018 decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), which found that “tribal sovereign immunity cannot be asserted in IPRs.” Despite UMN’s arguments to the contrary, the Federal Circuit answered a question left open in its decision in Saint Regis Mohawk by concluding today that “the differences between tribal and state sovereign immunity do not warrant a departure from the reasoning in Saint Regis.” The Court further concluded:
Saint Regis concluded that IPR was an agency reconsideration proceeding to which sovereign immunity does not apply in the first instance. This reasoning applies equally to states as it does to tribes…. As we held in Saint Regis, IPR is properly viewed as an agency’s reconsideration of a previous patent grant that is aided by information supplied by a third party, and state sovereign immunity does not bar these proceedings.
The Supreme Court denied Saint Regis Mohawk Tribe’s petition for certiorari in April 2019.
In their “additional views,” all three judges on the panel added that “state sovereign immunity also does not apply to IPR proceedings because they are in substance the type of in rem proceedings to which state sovereign immunity does not apply.”
The December 2017 PTAB decision had held that, while an “IPR is an adjudicatory proceeding of a federal agency from which state entities are immune…. Patent Owner has waived its Eleventh Amendment immunity by filing an action in federal court alleging infringement of the patent being challenged in this proceeding.”
Since the Federal Circuit found that state sovereign immunity does not in fact apply to IPR proceedings, it did not address the issue of whether immunity was waived by UMN’s district court filing.
In a final note, the Court weighed in on one of the key concerns of the parties and amici even though the issue was not implicated in the facts of this case:
If sovereign immunity barred IPR proceedings against patents obtained by a sovereign, nothing would prevent a state from lending its sovereign immunity to private parties, as the tribe attempted to do in Saint Regis. Such manipulation would undo Congress’ central quality control mechanism in creating post-grant administrative proceedings.
A Bridge Too Far
“Given the sacrosanct nature of state sovereign immunity, this ruling that a State does not enjoy sovereign immunity is astonishing,” said Gene Quinn, President and CEO of IPWatchdog, Inc. He continued:
This is a bridge too far even for a Federal Circuit that has constantly been an apologist for an overreaching and horribly unfair Patent Trial and Appeal Board that has from day one had as its marching orders the destruction of patents that are supposed to be presumed valid.
The good news is, this is precisely the type of political issue the Supreme Court normally cannot resist, so we can expect this case and sovereign immunity issues generally to be decided by the Supreme Court. And if the Supreme Court gets it wrong, we can be certain States will demand Congress step in.
The IPR cases involved are: IPR2017-01186 (re: Patent 8,774,309); IPR2017-01197 (re: Patent No. 7,252,768); IPR2017-01200 (re: Patent 8,718,185); IPR2017-01213 (re: Patent 8,588,317); IPR2017-01214 (re: Patent RE45,230) and IPR2017-01219 (re: Patent RE45,230).