Sovereign Immunity of State Universities: Can It Shield Them from AIA Patent Challenges?

In what appears to be a case of first impression, the PTAB is poised to rule on the question of whether state sovereign immunity prevents an IPR challenge from being maintained against a University of Florida (“UF”) patent (IPR2016-01274). Under the 11th Amendment to the Constitution, “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” State university patent owners who have availed themselves of the remedies offered by infringement litigation in federal courts, have still been able to use the sovereign immunity shield of the 11th Amendment to prevent other suits against them challenging validity of their patents (see “Critics Take Aim At Califorinia’s Patent Shield”). While the use of state sovereign immunity as a shield in patent litigation is not new, this appears to be the first instance of it being asserted as a defense in an IPR or AIA proceeding. Covidien was a licensee of the UF patent in question. When UF brought an action in state court seeking an accounting of royalties due under its license agreement with Covidien, Covidien try to remove the case to federal district court with a counterclaim of non-infringement of the patent under federal law. The federal district court decided that UF (more specifically UF Research Foundation, the entity holding the patent) was an instrument of the State of Florida entitled to sovereign immunity, so it dismissed the federal action.

Thereafter, Covidien filed IPR petitions against the UF patent. Prior to filing a preliminary response in the IPR proceedings, UF requested authorization to file a motion to dismiss the IPRs based on sovereign immunity. The Board granted this request, authorized an opposition by Covidien, and also extended the due date for UF’s preliminary response to accommodate the briefing on the sovereign immunity issue. The UF motion to dismiss argues that IPRs are adjudicatory proceedings (like federal district court litigation) and therefore, sovereign immunity prevents it from being subject to an IPR absent its consent, which it has not provided.

The opposition to UF’s motion to dismiss filed by Covidien argues that IPRs are not adjudicatory proceedings because the Patent Office itself is deciding whether to correct or retract a grant of the patent that it created. Covidien further argues they are not adjudicatory proceedings because the Patent Office may continue them even if the petitioner drops out, so they more closely resemble reexamination proceedings.

Stay tuned to see how the PTAB rules in this interesting case!

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.