Federal Circuit Decides State Sovereign Immunity Does Not Apply in IPR Proceedings
On June 14, 2019, in Regents of the University of Minnesota v. LSI Corp., the U.S. Court of Appeals for the Federal Circuit decided that state sovereign immunity does not apply to inter partes review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB).
The University of Minnesota asserted several telecommunications patents related to 4G networks against multiple defendants in federal district court. Some of the defendants filed petitions seeking an IPR with the PTAB. The University of Minnesota moved to dismiss the petitions based on sovereign immunity.
The PTAB denied the University of Minnesota’s motions to dismiss, agreeing with the university that sovereign immunity applied to IPR proceedings, but finding that the university waived that immunity by filing suit in federal court. The university appealed and the Federal Circuit affirmed the PTAB’s decision to deny the motion to dismiss, but on the grounds that state sovereign immunity does not apply to IPR proceedings. The Federal Circuit applied the same reasoning as it did in its decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), in which the court held that IPR proceedings are not barred by tribal sovereign immunity.
In sum, since IPR proceedings are agency reconsiderations, state sovereign immunity does not apply.
Of Note: The Federal Circuit’s in-depth discussion of "Post-Issuance Administrative Proceedings," provides analysis and language that is instructive and likely critical to future decisions about validity challenges in the PTAB vis-à-vis immunity, jurisdiction and related issues.
Bottom Line: Like other patentee plaintiffs asserting patents in federal district court, state entities risk validity challenges in the PTAB.