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IP Alert: PTAB Holds a State University Waives Its Sovereign Immunity by Initiating District Court Litigation

January 9, 2018

On December 19, in Ericsson, Inc. v. Regents of the University of Minnesota, an expanded panel of the Patent Trial and Appeal Board (PTAB) agreed that the Regents of the University of Minnesota may assert Eleventh Amendment immunity, but ruled that the university waived that immunity by filing a patent infringement action in federal court. This decision is significant to state-affiliated entities that rely on sovereign immunity under the Eleventh Amendment. In particular, this case has notable significance to universities that are considering filing patent infringement suits.

The PTAB relied heavily on an analogy to Regents of the University of New Mexico v. Knight, where the Federal Circuit held that “because a state as plaintiff can surely anticipate that a defendant will have to file any compulsory counterclaims or be forever barred from doing so, it is not unreasonable to view the state as having consented to such counterclaims” (emphasis added). The PTAB inferred in its reasoning that the same consent arises because of the one-year statutory bar set forth in 35 U.S.C. § 315(b). The PTAB contended that “a party served with a patent infringement complaint in federal court must request an inter partes review of the asserted patent within one year of service of that complaint or be forever barred from doing so.” From this, the PTAB found that the patent owner consented to being subject to an inter partes review when the patent infringement action was filed in federal court.

Indeed, the PTAB was unpersuaded by the University of Minnesota’s insistence that any waiver is limited to the forum in which the state entity brought suit. Instead, the PTAB cites a Federal Circuit case that interprets an earlier Supreme Court precedent explaining that “a state should not reap litigation advantages through its selection of a forum and subsequent assertion of sovereign immunity as a defense.” In addition to filing suit, the University of Minnesota previously went back to the USPTO to file reissue patents on two of the six patents at issue. In effect, the University of Minnesota availed itself of the government’s ability to correct the university’s mistakes post grant, but argued that the government is not permitted to correct the USPTO’s mistakes.

An appeal to the Federal Circuit is expected. Fitch Even is monitoring the progress of this case and will report on any future developments. If you have questions regarding this decision, please contact Fitch Even partner Joseph H. Herron, author of this alert.

--Cowritten by Fitch Even patent agent Thomas A. James

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