State University's Filing of Patent Infringement Action Waives Sovereign Immunity to IPR Proceedings

January 11, 2018

The PTAB (Patent Trial and Appeal Board) of the USPTO recently issued a decision that a filing of a patent infringement action by a public university waives sovereign immunity to inter partes review (IPR) proceedings in the USPTO.

In Ericsson Inc. v. Regents of the University of Minnesota, the Regents of the University of Minnesota (the patent owner), argued that it was entitled to avoid IPR proceedings entirely because of its sovereign immunity under the Eleventh Amendment of the U.S. Constitution. However, the PTAB disagreed.

The PTAB noted that IPRs are similar to court proceedings, as adjudicatory proceedings of a federal agency from which state entities may be immune; and thus, Eleventh Amendment immunity may be asserted in an IPR proceeding. However, in this case, the University had "waived its Eleventh Amendment immunity by filing a patent infringement action in federal court, alleging infringement of the patent being challenged in this [IPR] proceeding." The PTAB reasoned that when a state entity such as a university files a patent infringement suit, it is reasonable for a defendant to "view the state as having consented to ... [invalidity] counterclaims. Similarly, 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. Thus, it is reasonable to view a State that files a patent infringement action as having consented to an inter partes review of the asserted patent."

The University of Minnesota has the option of appealing this ruling to the U.S. Court of Appeals for the Federal Circuit.

The Bottom Line: When assessing whether to file a patent infringement suit, a public university or research institution should carefully consider the consequences of having to waive its sovereign immunity in such a suit.

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