11th Amendment Sovereignty Reach to be Tested

The availability of state sovereign immunity shields against IPR petition challenges to patent claims of state-chartered universities and their affiliates is a hot topic within TTO circles. Where available PTAB immunity increases patent value and royalties. Issues still under consideration, however, include:

  • How broad is the immunity’s reach from state capitals beyond state-chartered university affiliates?
  • When must non-waiver status be asserted?
  • When is it legally presumed to have been abandoned?
  • Does it apply to other PTO proceedings like reexaminations?
  • Are there any district court patent proceedings to which it does not apply?
  • If you assert a patent in a district court enforcement proceeding is it then considered waived at PTAB?
  • Can its protective shield be shared with non-state chartered universities or other co-owners?

The extent of state sovereign immunity’s availability under the 11th amendment has been considered again at PTAB. A petition against a state-chartered university was rejected when the university in question was found not to have waived its immunity despite its initial engagement in the preceding. This post highlights some of these issues and also links to an IPWatchdog post that does so in more depth. PTAB is an expensive and deadly procedure for all university patent holders. Yet only same have 11th Amendment immunity. CAFC will have to clarify some of these issues. One open question is how its eventual clarification will bear on the formation of friendly “ownership alliances” with state agencies or with state-chartered universities.

Before this sovereignty exception “swallows” the rule by eliminating PTAB consideration of any patent where the ownership is shared or associated with another entity, normally universities would  await CAFC’s rulings before testing the extent of sovereignty’s reach at PTAB but since any failed efforts only leave the patent holder where it otherwise would have been, testing the extent of state-associated alliances is expected to continue. The post linked below opines on some of the many questions raised by these matters. We fully expect non-state chartered research universities to explore enhancing their patents’ value through joint ownership arrangements with state-chartered universities.

Sovereign Immunity of Patents: While a Strong Benefit to Patent Owners, These Patents Remain Subject to Traditional Challenges by Stephen Gardner, Joel Austin, and Nikia Gray

“The United States Patent Trial and Appeal Board (“PTAB”) recently dismissed another inter partes review (“IPR”) based on an assertion of 11th Amendment sovereign immunity. This decision demonstrates the willingness of the PTAB to permit State agencies (such as public universities, medical schools, and research centers) to shield their patents from the threat of post-grant proceedings at the PTAB. While this is certainly a benefit to entities that can take advantage of sovereign immunity, it does not completely insulate government-held patents from any validity challenge, as more traditional approaches of invalidating patents remain viable avenues for those accused of infringement.”