VAS-CATH, INCORPORATED, Plaintiff-Appellant, v. CURATORS OF THE UNIVERSITY OF MISSOURI, Don Walsworth, Cheryl D.S. Walker, Anne C. Ream, M. Sean McGinnis, Marion H. Cairns, Angela M. Bennett, Thomas E. Atkins, Vicki M. Eller, Mary L. James and Connie Hager Silverstein, Defendants-Appellees.
No. 06-1100.
United States Court of Appeals, Federal Circuit.
Jan. 23, 2007.
473 F.3d 1376
Barbara C. McCurdy, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, argued for defendants-appellees. With her on the brief was Lara C. Kelley.
Before NEWMAN, LOURIE, and RADER, Circuit Judges.
NEWMAN, Circuit Judge.
Vas-Cath, Inc. appeals the dismissal of its appeal of the decision of the United States Patent and Trademark Office
BACKGROUND
A patent interference proceeding,
Occasionally the examiner does not act with respect to interfering applications, and a patent is issued to one applicant while another application on the same invention is still pending. In such event the applicant can request that an interference be conducted between the pending application and the issued patent. See
That is the situation at bar. The Vas-Cath patent had issued while the University‘s application, although filed before the Vas-Cath application, was still pending. The University invoked the procedures to institute an interference between the University‘s pending application and Vas-Cath‘s issued patent; the University amended its application by copying into the application all nineteen claims from the Vas-Cath patent, as the practice permits. During the ensuing six-year interference proceeding both sides vigorously contested the issues, producing records, examining and cross-examining witnesses, filing motions and briefs, and arguing their positions. The PTO awarded priority to the University, granted the nineteen Vas-Cath claims to the University, and held that Vas-Cath is not entitled to the patent that had been issued to Vas-Cath. The Board ruled: “Accordingly, senior party Twardowski is entitled to a patent including its application claims which correspond to the count (namely, claims 1 and 19-38) and junior party Martin is not entitled to a patent including any of its patent claims which correspond to the count (namely, claims 1-19).” Martin v. Twardowski, Patent Interference No. 103,988 (Bd. Pat. App. & Int. 2003). These were all of the claims in the Vas-Cath (Martin) patent.
Vas-Cath appealed, as authorized by
DISCUSSION
The Eleventh Amendment limits the judicial authority of the federal courts and bars unconsented suit against a state.4 See Idaho v. Coeur d‘Alene Tribe of Idaho, 521 U.S. 261, 268 (1997) (a state cannot be sued in federal court without its consent); Seminole Tribe of Florida v. Florida, 517 U.S. 44, 54 (1996) (stating that “federal jurisdiction over suits against unconsenting States ‘was not contemplated by the Constitution when establishing the judicial power of the United States.‘“) (quoting Hans v. Louisiana, 134 U.S. 1, 15 (1890)). The entitlement of the University of Missouri to the constitutional immunity of the state is not disputed.
A
The district court held that since there was not a waiver of immunity by the University, Vas-Cath‘s suit must be dismissed on Eleventh Amendment grounds. The court relied on Quileute Indian Tribe v. Babbitt, 18 F.3d 1456 (9th Cir.1994), wherein the court addressed the question of whether participation in contested proceedings before the Interior Board of Indian Appeals constituted a waiver by the winning tribe of tribal immunity as to the ensuing appeal by the losing tribe. The court held that the prevailing tribe had not waived its immunity as to the subsequent court action, stating that the Quinault Tribe‘s participation in the administrative proceeding, which it had not initiated, was not “the express and unequivocal waiver of tribal immunity that we require in this circuit.” Id. at 1460. By analogy, the Missouri district court held that the University had not waived its immunity as to the subsequent appeal by Vas-Cath of the PTO decision.
Vas-Cath points to factual differences from the Quileute case and argues that Supreme Court precedent, applied to the facts of this case, indeed supports waiver. Vas-Cath stresses that the interference contest in the PTO was conducted at the University‘s request, that the University fully participated in the PTO proceeding and voluntarily produced state witnesses and documents, that the result was to deprive Vas-Cath of its property, and that no Eleventh Amendment immunity was asserted by the University at any stage of that proceeding. Vas-Cath argues that any immunity was clearly and unequivocally waived when the University provoked and successfully litigated the interference contest, and that such waiver includes appeal by the party that lost its patent to the University; Vas-Cath states that its § 146 action was not a new claim against the University, but simply the statutory path of review of the agency ruling.
The University responds that it has absolute immunity from any action in federal
B
It is established that a state‘s participation in the federal patent system does not of itself waive immunity in federal court with respect to patent infringement by the state, and that such waiver cannot occur unless the conditions are such that there is violation of the Fourteenth Amendment‘s guarantee of due process. In Florida Prepaid Postsecondary Education Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999) the Court held that Congress does not have authority to abrogate Eleventh Amendment immunity with respect to patent infringement by the states, for “Congress identified no pattern of patent infringement by the States, let alone a pattern of constitutional violations,” id. at 640, and that the provisions of the Patent Remedy Act are unconstitutional as out of proportion to the supposed remedial object. In the companion case, College Savings Bank v. Florida Prepaid Postsecondary Education Expense Bd., 527 U.S. 666 (1999) the Court considered state immunity in the context of trademark infringement and explained:
Nor do we think that the constitutionally grounded principle of state sovereign immunity is any less robust where, as here, the asserted basis for constructive waiver is conduct that the State realistically could choose to abandon, that is undertaken for profit, that is traditionally performed by private citizens and corporations, and that otherwise resembles the behavior of “market participants.”
Id. at 684. This court, applying these principles in Xechem, 382 F.3d at 1332, held that absent a sufficient showing of lack of remedy under state law, suit against a state university in federal court to obtain correction of inventorship was correctly dismissed on Eleventh Amendment grounds.
On this background, we turn to the question of whether the Eleventh Amendment immunizes the University from appeal of the decision in the PTO proceeding in which the University prevailed. Vas-Cath argues that precedent does not authorize the University to bar an appeal by the losing party, while retaining the benefits of the PTO decision. In Lapides v. Board of Regents of Univ. System of Georgia, 535 U.S. 613 (2002), the Court guided the Eleventh Amendment inquiry to “focus on the litigation act the State takes that creates the waiver.” Id. at 620. In Lapides the state defendant was held to have waived its Eleventh Amendment immunity by voluntarily removing the case from state to federal court. Id. In College Savings Bank, 527 U.S. at 675-76, the Court had reaffirmed that the state waives its immunity when it voluntarily invokes federal jurisdiction or makes a clear declaration of its intention to submit itself to federal jurisdiction. And when a state voluntarily invokes federal jurisdiction, it is deemed to have waived its objection not only to the cause of action but also to any relevant defenses and counterclaims. See Regents of the Univ. of New Mexico v. Knight, 321 F.3d 1111, 1126 (Fed. Cir.2003) (the University waived its Eleventh Amendment immunity to the counterclaims by filing suit for a
Vas-Cath argues that when the University requested the PTO to conduct an interference proceeding without raising any Eleventh Amendment issue, a waiver was created that extends not only to the initial agency litigation but also to the subsequent judicial review. Judicial review of PTO adjudications is established by statute, and when such procedure is invoked by the losing party in an interference proceeding, the result of that proceeding is stayed. See
In Federal Maritime Comm‘n v. South Carolina State Ports Authority, 535 U.S. 743, 757-59 (2002) the Court drew analogy between some agency proceedings and civil litigation, in that case to preserve the immunity of the non-consenting state in the agency proceeding. Like proceedings in the Federal Maritime Commission, contested interference proceedings in the PTO bear “strong similarities” to civil litigation, id. at 760, and the administrative proceeding can indeed be characterized as a lawsuit. PTO interferences involve adverse parties, examination and cross-examination by deposition of witnesses, production of documentary evidence, findings by an impartial federal adjudicator, and power to implement the decision. See, e.g.,
It has long been recognized that a state‘s voluntary entry into federal court serves to waive state immunity from federal adjudication of that claim. Clark v. Barnard, 108 U.S. 436, 447 (1883). The Lapides Court observed that inferred waiver of the Eleventh Amendment “in the litigation context rests upon the Amendment‘s presumed recognition of the judicial need to avoid inconsistency, anomaly, and unfairness, and not upon a State‘s actual preference or desire.” 535 U.S. at 620. The University here invoked the statutory system of agency adjudication of a contested claim to patent property. Unlike the situation in College Savings Bank, 527 U.S. at 685, this is not “a suit by an individual against an unconsenting State,” but review of an agency adjudication to which the state consented in full adversary proceedings including testimony of state employees and evidence of state documents. In New Hampshire v. Ramsey, 366 F.3d 1 (1st Cir.2004) the court held that when the state voluntarily participated in a federal administrative forum whose action would be reviewed in federal court, the state waived its immunity from that federal court review. In Ramsey the court found waiver because the state gained advantage from its voluntary participation in the federal administrative forum. Id. at 16. We agree that this result, applied to the factual situation now presented, is within constitutional principles.
The University argues that Xechem supports its position. In Xechem a private party filed suit against a state university in federal court to change the inventorship of university-owned patents that resulted from a joint research project; the university did not consent to the suit and the Federal Circuit affirmed that the Eleventh Amendment bars the suit. 382 F.3d at 1332. However, the university in Xechem did not request the adjudication, did not initiate and participate in a PTO adversarial proceeding, did not engage in litigation-like conduct, and there was no contested proceeding in which the university waived immunity and obtained the property of the losing party. We conclude that Xechem does not support the University‘s position herein.
The University‘s recourse to the PTO tribunal for adjudication of its claim of
C
The University also argues that because a § 146 appeal can involve live testimony and witnesses in the courtroom, it is not simply a continuation of an administrative proceeding. However, the University‘s full participation in the PTO proceeding negates its argument that the Eleventh Amendment shields its employees from testifying, for University witnesses testified in the PTO without raising any objection on Eleventh Amendment grounds.
The University argues that it had no choice but to request the interference and participate in an adversarial proceeding, for if it had not taken this action it would have lost its rightful patent to Vas-Cath. The University points out that although the PTO could have and should have initiated this interference while the applications of both parties were pending, the PTO did not do so. Thus the University argues that its initiation of the interference was not a voluntary act, but an act of necessity compelled by the PTO‘s grant of a patent to the junior applicant. The University states that its position is supported by the Court‘s holding in College Savings Bank that “where the constitutionally guaranteed protection of the State‘s sovereign immunity is involved, the point of coercion is automatically passed-and the voluntariness of waiver destroyed-when what is attached to the refusal to waive is the exclusion of the State from otherwise lawful activity.” 527 U.S. at 687. However, the question in this case is not whether the University voluntarily participated in the PTO interference, but whether the University can now bar the appeal of the PTO‘s decision in favor of the University. This argument raises issues not of federalism, but of litigation tactics, for it is undisputed that the PTO decision cannot be reviewed in state court. And it is undisputed that no recourse was made to the Eleventh Amendment during the PTO proceeding. As the Ramsey court pointed out:
The state voluntarily put itself in the position of being a party in a federal administrative forum whose actions would be reviewed in federal court. The state‘s actions expressed a clear choice to submit its rights for adjudication in the federal courts. To permit the state to reverse course would contravene the reasons for the doctrine of waiver by litigation conduct recognized by Lapides . . . .
366 F.3d at 16-17. We need not consider whether the University intended to gain an unfair tactical advantage, for “[m]otives are difficult to evaluate, while jurisdictional rules should be clear.” 535 U.S. at 621. We have concluded that when the University initiated and participated in the interference, its participation included the ensuing statutory review procedures; the University cannot invoke Eleventh Amendment immunity, after it prevailed, to shield the agency decision from review.
D
We agree with the district court that Vas-Cath‘s naming the individual Curators of the University of Missouri as defendants does not invoke Ex parte Young, 209 U.S. 123 (1908). In Young the Court explained that there must be “some connection with the enforcement of the act, or else [the suit] is merely making him a
E
The University also argued that Vas-Cath chose the wrong appellate route in proceeding under
Summary
The University initiated and participated in the contested PTO interference against Vas-Cath; we conclude that the University cannot both retain the fruits of that action and bar the losing party from its statutory right of review, even if that review is conducted in federal court. In the circumstances that here exist, the state‘s actions with respect to the interference include waiver with respect to the ensuing civil action. Having waived any potential immunity as to the interference contest in the PTO, we conclude that the University waived any Constitution-based objection to Vas-Cath‘s statutory right of judicial review. The dismissal of the § 146 action is reversed; we remand to the district court for further proceedings.
REVERSED AND REMANDED.