SOVEREIGN IMMUNITY AND IPR'S: AND NOW, THE REST OF THE STORY
(TO PARAPHRASE A LINE FROM PAUL HARVEY)
Radio great Paul Harvey would always leave listeners hanging during his broadcast, then return from a commercial with “the rest of the story”. Previously, I wrote on the Federal Circuit ruling with respect to Tribal Immunity (https://www.oblon.com/publications/tribal-immunity-in-ipr-is-dealt-a-death-blow-by-the-federal-circuit). At the end of that article I stated:
“I note, however, that in the final sentence of their analysis, the Federal Circuit explicitly stated that this decision did NOT address whether there is any reason to treat state sovereign immunity differently with respect to IPR proceedings. That will remain to be seen…”
Now, for the rest of the story:
On June 14, 2019, the Federal Circuit issued its ruling in REGENTS OF THE UNIVERSITY OF MINNESOTA, Appellant v. LSI CORPORATION, AVAGO TECHNOLOGIES U.S. INC., Appellees GILEAD SCIENCES, INC. Intervenor, Appeal 2018-1559 (see link to Federal Circuit decision), an appeal from multiple inter-partes review (IPR) proceedings filed by LSI and AVAGO. In each of the IPR proceedings, prior to institution of the IPR, the University of Minnesota (UMN) filed a motion to dismiss asserting that under the doctrine of state sovereign immunity, its patents (US Patent Nos. 5,859,601 (’601 patent), 7,251,768 (’768 pa-tent), 7,292,647 (RE45,230 patent), 8,588,317 (’317 patent), 8,718,185 (’185 patent), and 8,774,309 (’309 patent)) were immune from such IPR challenge. The Patent Trial and Appeal Board (PTAB) ruled in each case that state sovereign immunity applied to IPR proceedings but that UMN waived its immunity by filing suit against petitioners in district court. UMN appealed each of the PTAB decisions and the cases were consolidated on appeal at the Federal Circuit.
In their appeal to the Federal Circuit, UMN argued that state sovereign immunity applies to IPR proceedings where the state owns the patent at issue, because they are more akin to a dispute between a private party and the state in court, precisely the situation to which state sovereign immunity applies. UMN further attempted to distinguish state sovereign immunity from the tribal immunity asserted by the Saint Regis Mohawk Tribe in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), cert. denied, 139 S. Ct. 1547 (2019). However, the Federal Circuit did not agree with UMN and ruled:
“We conclude that state and tribal sovereign immunity do not differ in a way that is material to the question of whether IPR proceedings are subject to state sovereign immunity. Thus, under the reasoning of the majority and concurrence in Saint Regis, we conclude that state sovereign immunity does not apply to IPR proceedings.” (pp. 25-26)
The Federal Circuit did not, however, address the issue of whether the state had waived sovereign immunity by filing suit in US District Court against the petitioning parties prior to their filing the requests for IPRs.
Circuit Judges Dyk, Wallach, and Hughes issues additional views stating that in their views, 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.
Accordingly, neither tribal immunity nor state sovereign immunity are applicable in IPR proceedings before the PTAB.