State universities urge Fed Circ to restore IPR immunity


Muireann Bolger

State universities urge Fed Circ to restore IPR immunity

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The US Court of Appeals for the Federal Circuit has been urged to reverse a panel decision that held that sovereign immunity should not protect university patents from an inter partes reviews (IPRs).

The Association of Public and Land-grant Universities (AIPLU) filed an amicus curiae brief on Friday, January 29, asking the Federal Circuit to grant a petition for an en banc rehearing of the ruling.

The dispute arose when the Baylor College of Medicine petitioned for an IPR of two patents,  US numbers 8,728,806 and 9,333,248 owned by the Board of Regents of the University of Texas System (UT). UT moved to dismiss the petitions on state sovereign immunity grounds, claiming that it is a sovereign state entity under Texas law and that, under the 11th Amendment, it should not be subject to IPRs.

However, Patent Trial and Appeal Board (PTAB) denied the motion, citing the case precedent set by Regents of the University of Minnesota v LSI Corp in June last year.

In that ruling, the Federal Circuit held that state sovereign immunity did not apply to IPR proceedings.

By doing so, the court dismissed an appeal from the Regents of the University of Minnesota in its dispute against semiconductor manufacturer LSI Corporation and telecoms company Ericsson.

The Federal Circuit said that an “IPR is viewed as an agency’s reconsideration of a previous patent grant that is aided by information supplied by a third party, and state sovereign immunity does not bar these proceedings”.

When the UT appealed the PTAB’s decision upholding Baylor’s request, the Federal Circuit affirmed the PTAB’s decision in December 2020, reiterating that “[s]overeign immunity does not apply to IPR proceedings when the patent owner is a state”.

‘Significant impact’

Earlier this month, the UT filed a petition requesting an en banc rehearing of the decision arguing that University of Minnesota v LSI Corp conflicts with US Supreme Court case precedent, “upsets the balance of our federal system”, and was “wrongly decided”.

In its brief filed on Friday, the Association backed UT, arguing that it had an interest in the outcome of this petition as it will significantly impact its member schools. “If the panel’s decision to eliminate sovereign immunity in IPR stands...member schools will face costly litigation forcing them to divert already limited funds from education, research, and community engagement,” it stated.

It further argued that the court’s decision to subject state institutions to IPRs poses a risk to educational institutions across the country.

“This court has a long history of upholding sovereign immunity for state universities in the context of patent disputes. As a result, public universities are generally immune from suit for patent infringement and cannot be compelled to defend against actions for declaratory judgment of invalidity or non-infringement,” said the association.

“The panel’s decision in this case drastically departs from this precedent, holding that sovereign immunity does not apply in IPRs,” it stated.

‘Affront to sovereignty’

The filing held that compelling public universities to participate in IPRs would saddle public universities with substantial litigation costs, divert resources (including the time of research faculty) away from the core mission of these state institutions. The ruling would also impede the ability of state universities to disseminate technology due to the cloud of uncertainty that envelops a patent subject to an IPR, added the association.

The filing contended that if the decision is allowed to stand, states would be required to defend themselves in trials brought by private litigants. This, stated the association, would be a direct affront to the well-established sovereignty principles grounded in the US Constitution.

It further argued that unlike large, for-profit corporations, universities do not have vast reserves set aside to defend litigation against the IP that arises from their research.

“Not only does the panel’s decision undermine the sovereignty of the states and state institutions, it has far-reaching practical effects. Public universities, when deciding whether to protect their inventions, will now have to weigh the costs of a trial to defend a patent in IPRs,” said the Association.

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Fed Circuit, state immunity, state universities, PTAB, IPR, Board of Regents of the University of Texas System, Baylor College of Medicine, LSI