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PTAB Deals A Crippling Blow To Sovereign Immunity
By Desmond O'Sullivan
January 3, 2018, 4:37 PM EST
Patent Trial and Appeal Board Chief Judge David Ruschke recently dealt sovereign
immunity a crippling blow.[1] Although Judge Ruschke confirmed that Eleventh
Amendment immunity does apply to sovereign actors, he held that when a
sovereign actor files a patent infringement lawsuit, immunity is waived. [2] Given
that 80 percent of inter partes reviews involve patents in parallel litigation,[3]
Judge Ruschke’s order markedly blunts sovereign immunity strategies.
Judge Ruschke’s opinion was given in an order denying a motion to dismiss for
sovereign immunity. This article (1) describes the background of the parties and
their arguments for and against the motion to dismiss, (2) analyzes the order
denying the motion to dismiss, and (3) explores the future of sovereign immunity in
the Patent Trial and Appeal Board (PTAB).
Background
The Regents of the University of Minnesota (“Minnesota”) filed suit in November 2014 against four
Ericsson Inc. customers. Ericsson moved to intervene in that suit and Minnesota did not oppose. On
March 30, 2017, Ericsson filed petitions for inter partes review (IPR) challenging each of Minnesota’s
asserted patents.
In its petitions, Ericsson acknowledged that PTAB panels had found sovereign immunity shields state
actors from IPRs,[4] but argued that Minnesota waived that immunity by asserting the challenged
patents in district court.[5] Ericsson contended that filing patent litigation waives sovereign immunity
with regard to all compulsory counterclaims[6] and that inter partes review is a compulsory
counterclaim.[7] Finally, Ericsson quoted Minnesota in an unrelated case, Reactive Surfaces, where
Minnesota addressed PTAB concerns of “gamesmanship” when a sovereign actor first files a patent
lawsuit: “‘By voluntarily invoking federal jurisdiction in the infringement litigation, the state entity could
be deemed to have waived its sovereign immunity to the IPR process ... . ’”[8]
Minnesota’s motion to dismiss argued against waiver with two main points.[9] First, Minnesota
contended that waiver only applies to proceedings in the same forum and that the PTAB and district
court are not the same forum.[10] Second, IPRs are not compulsory counterclaims to a district court
Desmond
O'Sullivan
