Brief Summary: Petitions for IPR dismissed based on Eleventh Amendment sovereign immunity of UFRF (“an arm of the State of Florida”, an “unconsenting state that has not waived” immunity).
Summary: This decision finds that Patent Owner UFRF is entitled to Eleventh Amendment sovereign immunity defense to institution of the IPRs, and dimissed the same. The Eleventh Amendment provides that the “Judicial power of the [US] 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” (limiting “not only the judicial authority of the federal courts to subject a state to an unconsented suit, but also preclude[ing] certain adjudicative administrative proceedings…from adjudicating complaints filed by a private party against a nonconsenting State” (FMC, US 2002; Vas Cath, FC 2007 (applying FMC to interference proceedings)). This dispute began as a breach of contract case in a Florida DC which was then removed to USDC following Covidien’s counterclaim seeking a DJ that it does not infringe the ‘251 patent. The three petitions for IPR considered here were filed separately. The US DC, however, agreed with UFRF that it is entitled to Eleventh Amendment immunity “as an arm of the State of Florida through the University of Florida” and remanded the action back to state court (pending as Fed. Cir. Appeal No. 16-2422). This PTO decision highlights FMC (US 2002) as being “[o]f particular relevance”. In that case, the Federal Maritime Commision sought damages and injunctive relief relating to its requests for permission to park a cruise ship in the port facilities of Charleston, SC. The Fourth Cir. CA concluded Eleventh Amendment immunity was available to SC as a defense since “the Commission’s proceeding walks, talks, and squawks very much like a lawsuit…the proceeding is truly an adjudication” (affirmed by SCOTUS (e.g., “in an administrative tribunal as [in] an Article III court…a State is required to defend itself…against a private party before an impartial federal officer”)). In contrast, in Vas-Cath (FC 2007), the FC found that the Univ. Missouri could not invoke Eleventh Amendment immunity because it requested the interference and participated in the proceeding. Here, the PTO disagreed with Covidien that, e.g., this is a public rights issue or that an IPRs “are not suits or adjudications of a private claim against the state by another party” since “sovereign immunity applies regardless of whether a private plaintiff’s suit is for monetary damages or some other type of relief” (e.g., patent invalidation (the PTO citing FMC at 765)). The PTO also disagreed that an IPR “is an in rem action directed only to the patent and not against the patent owner” since, e.g., “‘inter partes’ means between the parties” and IPR “is not a proceeding ‘against the world,’ but directed to evaluating the validity of the patent owner’s patent.” The PTO also concluded that an IPR is not “an action brought by the federal government against a state” as it may be brought by “any ‘person other than the owner of the patent’” (St. Jude Med., FC 2014). And it found the differences between civil litigation and an IPR do not “effectively distinguish” the two “for the purposes of apply sovereign immunity” (citing, e.g., Vas-Cath and FMC). The PTO acknowledged that applying Eleventh Amendment immunity to IPR “precludes the institution of [IPR] against a state entity entitled to” such immunity (“unconsenting state that has not waived” it) but noted that “Congress may abrogate sovereign immunity” if it desires to do so and was “not persuaded that” its application to IPR “will do violence to the patent system.” It also concluded after a lengthy analysis that UFRF is “an arm of the State of Florida” (citing UFRF v. Medtronic, 2016 WL 3869877, at 2-4). Thus, the Petitions were dismissed.