Sovereign Immunity Can Shield State University Research Foundations In PTAB Proceedings

Author:Mr Matthew McCloskey
Profession:McDermott Will & Emery

Addressing the application of the sovereign immunity defense under the 11th Amendment in the inter partes review (IPR) context, the Patent Trial and Appeal Board (PTAB) dismissed three IPR petitions, finding that the sovereign immunity defense is applicable to a research foundation of a state university, and that the foundation had not waived its sovereign immunity because it had not asserted the challenged patent in district court or sought a declaratory judgment of validity. Covidien LP v. University of Florida Research Foundation, Inc., Case No. IPR2016-01274; -01275; -01276 (PTAB, Jan. 25, 2017) (Ippolito, APJ).

University of Florida Research Foundation (UFRF), the patent owner, filed a breach of contract action in Florida state court against petitioner concerning a patent license. In response, the petitioner filed a counterclaim seeking declaratory judgment that it did not infringe the licensed patent, and successfully removed the suit to federal district court. The petitioner then filed three IPR petitions against the patent at issue. Following removal, UFRF argued that it was an arm of the State of Florida through the University of Florida and, as such, was entitled to 11th Amendment immunity from petitioner's declaratory judgment counterclaim. The district court agreed with UFRF, remanding the action back to state court. The petitioner appealed to the US Court of Appeals for the Federal Circuit. UFRF was also granted permission to file a motion to dismiss the IPR petitions based on its sovereign immunity under the 11th Amendment.

Examining the language of the 11th Amendment—"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"—the PTAB noted that the Supreme Court of the United States has interpreted the amendment broadly to limit not only the judicial authority of the federal courts, but also to preclude certain administrative bodies from adjudicating complaints filed by a private party against a non-consenting state. In granting dismissal, the PTAB looked to the Supreme Court's 2002 analysis in Federal Maritime Commission v. South Carolina State Ports Authority.

In Federal Maritime Commission, a cruise ship company filed a complaint against the South...

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