Last week, the Patent Trial and Appeal Board (“PTAB”) dismissed three related inter partes review (“IPR”) petitions (IPR2016-001274, 75, 76) on the basis of sovereign immunity. The University of Florida Research Foundation Incorporated (“UFRF”) filed suit in Florida state court, alleging a breach of contract against Covidien LP, the Petitioner. Covidien responded with a counterclaim seeking a declaratory judgment of non-infringement and successfully removed the suit to U.S. District Court. The District Court dismissed the DJ action on the basis of sovereign immunity and remanded the case back to state court. Covidien also filed three petitions for IPR, which the Board dismissed for sovereign immunity.
Prior to filing its preliminary response, UFRF sought, and was granted, permission to file a motion to dismiss the IPR petitions on the basis of sovereign immunity. The 11th amendment states that the “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.” U.S. CONST. amend. XI. “The Supreme Court has interpreted this amendment to encompass a broad principle of sovereign immunity, whereby the Eleventh Amendment limits not only the judicial authority of the federal courts to subject a state to an unconsented suit, but also precludes certain adjudicative administrative proceedings … filed by a private party against a nonconsenting State.” IPR2016-01274, Paper 21. Covidien argued that IPR proceedings are not similar to civil litigation but instead merely allow the PTAB to take a second look at the original patent grant. UFRF responded that an IPR meets all the requirements for sovereign immunity to apply. The PTAB agreed with UFRF, and dismissed all three IPR proceedings.
This decision is significant for public universities, many of which have large patent portfolios. This decision will also likely test the extent to which the PTAB’s decision to institute is final and non-appealable. While the Supreme Court held last June in Cuozzo Speed Technologies LLC v. Lee that typical institution decisions are not subject to review, the Supreme Court left open the possibility for review of constitutional questions surrounding such decisions. This decision may be just the sort of exercise of authority by the PTAB that the Supreme Court had in mind.