926 F.3d 1327
Fed. Cir.2019Background
- The Regents of the University of Minnesota (UMN), a state entity, owns multiple patents and sued LSI and Ericsson customers for patent infringement; LSI and Ericsson petitioned the USPTO for inter partes review (IPR) challenging patentability.
- UMN moved to dismiss the IPR petitions, invoking state sovereign immunity; the Patent Trial and Appeal Board (PTAB) convened an expanded panel and held that sovereign immunity applies but was waived by UMN’s district-court litigation; a concurrence argued IPR is an in rem review of the patent, not of the parties.
- UMN appealed; the Federal Circuit consolidated the appeals (with Gilead intervening) and certified jurisdiction under 28 U.S.C. §1295(a)(4)(A).
- The court analyzed IPR history and structure (AIA-created post-grant administrative review, Director discretion to institute, limited discovery/hearings, one-year target, Board final written decisions, no monetary relief, estoppel effects).
- The court considered whether state sovereign immunity bars IPR, relying on prior Federal Circuit reasoning in Saint Regis (tribal immunity does not bar IPR) and Supreme Court decisions treating IPR as an executive reexamination of a public franchise.
- Holding: state sovereign immunity does not bar IPR proceedings; the court affirmed the PTAB’s denial of UMN’s motions to dismiss (and did not decide waiver by suit in district court).
Issues
| Issue | Plaintiff's Argument (UMN) | Defendant's Argument (Petitioners/PTAB/Intervenors) | Held |
|---|---|---|---|
| Whether state sovereign immunity bars IPR against a state-owned patent | IPR is an adversarial proceeding brought by private parties against the state and is barred by Eleventh Amendment/state sovereign immunity | IPR is an agency reconsideration of a prior patent grant (a proceeding by the U.S. through the USPTO aided by third parties), so sovereign immunity does not apply | Held: State sovereign immunity does not apply to IPR |
| Whether IPR is more like private litigation or an agency enforcement/reconsideration action | Characterized as adversarial, like Article III litigation, so immunity should apply | Emphasized Director’s discretion, continuation without parties, limited remedies, and public-rights character of IPR | Held: IPR is akin to an agency reconsideration/enforcement action involving public rights; immunity inapplicable |
| Whether differences between tribal and state immunity require different result than Saint Regis Mohawk Tribe | UMN argued state immunity offers greater protection (Hans presumption, constitutional origins) and may bar IPR | Petitioners argued Saint Regis reasoning applies; Supreme Court precedents (FMC, Oil States) support agency authority to reconsider patents | Held: Differences are not material; Saint Regis reasoning controls; state immunity does not bar IPR |
| Alternatively, whether IPR is in rem (so immunity doesn't apply) | UMN contested characterization as in rem, arguing sovereign dignity concerns | Concurrence/alternative view: IPR targets the res (the patent), not the state personally, and thus is an in rem agency proceeding not barred by immunity | Held (as additional views): IPR may be treated as in rem and therefore not subject to sovereign immunity (court endorses agency-reconsideration rationale primarily) |
Key Cases Cited
- Saint Regis Mohawk Tribe v. Mylan Pharm., 896 F.3d 1322 (Fed. Cir. 2018) (held tribal sovereign immunity does not bar IPR; IPR is agency reconsideration aided by private parties)
- Oil States Energy Servs., LLC v. Green’s Energy Grp., LLC, 138 S. Ct. 1365 (2018) (IPR is a reexamination of a patent grant implicating public rights; can be adjudicated in non-Article III forum)
- Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743 (2002) (agency enforcement actions initiated upon information from private parties are not barred by state sovereign immunity)
- Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) (IPR offers a second look at an earlier administrative grant of a patent)
- Alden v. Maine, 527 U.S. 706 (1999) (overview of state sovereign immunity principles and its role in protecting state dignity)
- Tenn. Student Assistance Corp. v. Hood, 541 U.S. 440 (2004) (bankruptcy in rem proceedings can bind states; in rem character may limit sovereign-immunity protection)