whether a public university may use the principle of sovereign immunity invited in the eleventh commandment to create what this court has called seriously unfair results by effectively eliminat exception in cases where a public university brings a patent infringement action that they use it all the time they use it all the time your honor but the as this court held in and i think there are limits to how far they can use it  obviously a public university cannot use sovereign immunity once it has sued defendants and as this court held in regents of the university of new mexico against night when i public university sousa group names defendants it also waives sorry munity with respect to any of their compulsory counterclaims not limited to claims for recruitment doesn't seem to go doesn't the issue here come down not so much to whether the university waive the district court has prevented us from doing this trick work below rule the eleventh amendment is an absolute bar to a manufacturer protecting its customers when they have been sued for using the manufacturer's pro texas your honor we think there is a question raised by the district court we would argue yes we should be able to intervene but the district we're below expressed on page six of the opinion serious doubts whether the eleventh amendment m bar us from bringing any claim against the university of texas unless and until the university of texas sues ask so it's not clear that we can intervene in texas because we would intervene in texas and file declaratory judgment counterclaims raising the very same arguments we raised in the washington suit which are that the university of texas won twelve patent is invalid on a forcible and not infringed by nine hundred nine software customers using latino and software so we submitted and then i'm out this court means to reverse the implication on page six of the opinion that even if we intervened and filed counterclaims in texas the eleventh amendment would bar us because the university of texas didn't sue us we intervened and sued them but you also did not equitable balancing of all the factors about which venue washington or texas would be better we happen to think that washington is a much superior venue that's where the product was invented that's where the overwhelming majority of the witnesses are that's where the overwhelming majority of the documents are is one single very narrow question and that is did the district of washington have subject matter jurisdiction or did the eleventh amendment deprive it of subject benefit to subject matter jurisdiction over the university of texas because we formally and nominally sued the university of texas rather than the university of texas suing us we said maybe you should reverse that ruling the ruling that the eleventh a minute bar is subject matter jurisdiction here and then here are the district court in washington  mant can get to the issue of personal jurisdiction which it hasn't yet found any facts it can get to the issue of proper venue in the balance of hardships balance of equities involved in whether or not to transfer from washington to texas but you can't even get to those issues which haven't been decided by the district court until you resolve the question that the district court did decide and all that the district court said was the eleventh amendment kicks us out of court on subject matter jurisdiction in washington now your honor just to return to judge newman's question we think that this case as in knight is a case in which subject matter jurisdiction is entirely proper let's remember that in knight you halleck that a compulsory counterclaim brought by a defendant in a suit brought by a public university is permissible under the eleven amendment even though in isolation a counterclaim is one in which the manufacture is a plaintiff in the suit suing in the counterclaim of the public university but as you said a night it would create seriously unfair results if the unit public university could have bail itself of the federal for comment to federal court suing has to correct and or inventors as in that case and then say but i'm sorry you can't sue us back perhaps opportunities we don't know what to make of that dictum by the judge in terms of what might or might not have been available in a texas court that really has not before said gratuitous and i imagine that it was n a customer's suit or anything else but that it's in the state of washington rather than the state of texas your honor with respect that's not the issue that's before you the district court had an opportunity to grant subject matter jurisdiction and then transferred to texas he expressed we declined to do that rather what the district court held was that there is no subject matter jurisdiction because the eleventh amendment is a bar we think that that judgment must be reversed it may be that remit the district court looks at the equities and decides to transfer to texas but if subject matter jurisdiction is denied us in washington because we're suing texas rather than texas suing us it's also the case that we would face a bar an eleventh amendment bar initiate suit in a federal form sheds itself sovereign immunity it has waived us to the federal system it's there by banta there after by the transfer rules and other rules pertaining to the federal judicial system as a whole it doesn't get to pick a forum university of texas doesn't get to pick austin the capital and home of its flagship university as its form and hang out of that once it's waived us to the federal court in texas it is way interest of the federal system now the customer sued exception is just like the transfer rules just like compulsory counterclaims in night the customer sued exception is a venerable rule of an unbroken line of cases upheld by this court that says that the manufacturer is the true defendant the manufacture here is the true defendant in the university of texas his suit against our customers the overwhelming majority of the cellular phone defendants in the texas litigation user to nine techs and put software to enable people quickly to input text on a reduced keypad and air software is what is fundamentally and issue in the texas suit we are the true defendant to this judgment of the court in the cat's case we are the manufacturer is the true defendant in the customer suit it is a simple fact of life that a manufacturer must protect its customers either as a matter of contract or good business or in order to avoid the damaging impact of an adverse ruling against our products and since we're on the hook to indemnify or customers if they're found liable the state of washington your honor if it if university of texas were not a state actor we'd have a absolutely clear case in the state of washington it's precisely in order to sue in the form of its choice for a declaratory judgment concerning its patent that the customer su exception created declaratory judgment subject matter jurisdiction for manufacturers in the first place but we submit is that the fact that university of texas is a public entity does not change the subject matter jurisdiction that's involved in the washington s that the subject matter jurisdiction in the washington suit i'm sorry your honor it's my time it you presume two minutes then i think you know you have another two minutes of your principal argument if you wish to use it otherwise we'll add it to the rebuttal all right your honor so let me just try to stress the key point here you need to reverse the decision below in order for us to even see get subject matter jurisdiction to intervene in counterclaim the university of texas has not yet stipulated that we can intervene in texas to intervene in texas and assert a counter claim against texas we believe requires a reversal of the judgment allowed but we believe that we should be entitled in the first instance to assert ordinary customers who jurisdiction and that in our home form and let the district we're not rematch decide the issue of venue transfer or whether what the sequence of the lawsuits should be whether the texas litigation should be enjoined while the streamlined discussion of the bar last texas souza so we think that the district court has done has deprived us of not deprived us in incorrectly of an opportunity to bring a customer suit a suit on behalf of our customers they've deprived us of subject matter  honor that's how the floor anything if there is not to be jurisdiction texas we believe we have subject matter jurisdiction in texas or washington and it's the plaintiff's choice in a customers counterclaim in the original action if u t it sued us in the first place there'd be no question they waved us to us they studiously avoided suing us suing our customers instead the customer sued exception exists to enable the manufacturer who is the true defendant to come forward a basically held is that the customers who exception does not apply when the public patente sues for pat infringement against their customers and that's exactly the kind of seriously unfair result that the supreme court cautioned against in the not our customers are still liable to be sued by t j in fact this court has said in arrowhead that we have subject matter jurisdiction as long as we have reasonable apprehension that either we or us cameras will be sued here we not only have reasonable apprehension that our customers will be sued or customers are being sued and there's no settlement with them so the subject matter jurisdiction arises notwithstanding the covenant not to sue us because our customers can be sued and they have come after us for indemnification that gives us economic injury  sue us does not protect us at all from our customers suing us and as long as we have a legal obligation to reimburse our customers to indemnify our customers we still have a live issue with you t even if it if it decides not to sue us if  agreed to a broader covenant not to sue not to sue on the ground that team nine software ever infringes or contributes to infringement that would be a different matter because that would immunize us from a customer and then with a teacher it may be a street teacher be terminated from the shoe in the state rest on the fact that we went to washington nothing here is in this decision blows about venue or transfer correct venue or which is the better forum with the district court said is a letter the member has waived only to name to defend this and compulsory counter cla and we submit that this is an issue of first impression which you should acknowledge that there is one more thing the u t did the u t did it with not only as to the name defendants but it waived as to than the unnamed true defendant in this case when you d su customers it in effect sued us as the true defendant as this court held and cast manufacturers the true defend it when its own software is what is fundamentally at issue in the texas suit there would be a terrible unfairness if we can't either bring a in washington or a declaratory judgment action in texas were intervene in texas and then counterclaim but that's what the district court has barred us from so the eleventh amendment doesn't allow us to come at the university of texas when we're in the plaintiff's capacity in any form and we'd like you to reverse that we squeeze expressed no opinion on this appeal whether washington or texas is the better form that's a venue question for the district court result on remount all that we ask is that you reverse this eleventh amendment ruling which knocks us out of subject matter jurisdiction in washington and w the district courts suggest would even like a set of subject matter jurisdiction in texas if you have any concern that washington is the wrong place we would be happy for you to say that we have subject her jurisdiction in texas and we can intervene in texas but without that ruling right now the eleventh amendment stands in our way and we might please court what you just heard is that they are claiming that they sued by the university of texas board of regents of the university of texas system which is not a public university it's nine minutes where they appointed by the governor to operations of fifteen universities and medical schools within the u t system it's not in and of itself a public university it is not the university of texas this patent actually the inventor of this patent was at the university of texas at personal jurisdiction argument is that the university of texas is the is the actuality so offices for recruiting students in washington would be part of the border regions it's just to completely  brought that up and because any confusion that it's not disputed by the parties it's in there is a state statute that creates the border regions as an arm of the state of texas but getting back to the actual core issues of the case the argument that was just may was that this again they keep saying that this is a customer suit exception case as if by saying that repeatedly that that makes it true if that if you could say something repeatedly and make it true i'd be six foot four that go in my room and say i'm six foot four all day long until it was true  all what the trial court understood and what is very clear in the case law in the in the cases are feeney and the county hurst state school hospital two u s supreme court cases sovereign immunity has two components one component is whether or it's undisputed that the immunity stands in the eleventh minute for the board of regents the second question is after they decide are they going to waive it is where are they get away that they have the ability under the feet a case u s supreme court case in the twenty first case you have to look at both have they waited and two where did they waive it and they decide the feni case in their brief by saying that the feeney case doesn't stand for whether or not you weigh sovereign immunity to a particular venue but to a particular system reading of the feet case such as absolutely grow on the feeding case that they only way sovereign immunity as a federal courts within the district of the port of new york and that is what the whole question was about it was a venue question and the finding that they weighed only was waiver as to federal courts within the venue to the port authority of new york similarly in the in the compulsory counselling context if you by your litigation conduct to suit someone you are every single case since the prepaid college case says that it's the compulsory counterclaims in the same for that's what the knight case which i believe in him in iran that and all hell that is what  every case is held since the college prepaid savings case is you only way of compulsory counterclaims in the same for what they're saying is first of all because first exception doesn't apply because we didn't customers we sued motorola this software is used by some of these people there's another company called as i corp ted is one of three in the customer suit exception generally i've never seen a case you may be familiar with one the only people who are sued are the customers of the person claiming the customer should exception there are no other defendants because you want why should that happen it isn't that of proof fruition whether they went to this manufacturer provides the entire system or simply a component particularly if and i think it wasn't disputed for the purposes of this case that it is the component provided by k g which is the subject of the happened for which infringements because it's very disputed i mean that this is a method claim that requires a signal generated keyboard which the signal generating keyboard has been already been construed into claims construction a certain way certain types of displays transmitting memory ram components all mixed together this is one component and whether they did a very bad job or contracting so they didn't invite people for something that they cannot possibly on their own friends that doesn't give them the right to hijack a case to washington and even if they were i don't recall the universities stating that the software there are other software is available out there that could be used actually substitute in it and in fact some of the defendants in the texas litigation are you missing other people software so and again if what they're saying is that really this is a suit against them which i not it is it was never intended to be a suit against any of the software manufacturers i guess what happens now is if this court says that a component manufacture has the right to sue a sovereign in any federal court in the system what are you i'm sorry if we or the boy were to determine that the system is essential to infringement that your position would have to be different in terms of the eleventh amendment absolutely not i would absolutely not be different we did not consent to be sued f file in federal court the waiver is strictly limited to compulsory counterclaims you can't even follow a counterclaim it's not compulsory and what they're asking this court to do just allow a third party which i'm sorry i don't think that's accurate i thought that what the case is said at  here is that the waiver can affect for instance such matters as set off which might not be a compulsory counterclaim and other aspects which arise from the same set of the state and set off is compulsory you can't you can't go file a separate lawsuit assault that has to be done in the same suit that's absolutely compulsory and knight says compulsory counterclaims that's what the knight opinion says that asking for is plainly a constructive waiver that we've constructively waived not only for the defendants in the case but we constructively wait for them to go sue in a different form on an affirmative claim and this eli lilly case that they cite is absolutely awful it says right there in the case this is not an eleventh amendment case because there were no counterclaims if we as university of texas file somewhere and it gets transferred somewhere else and there are no counter claims we can't complain of based upon eleventh the minute immunity because there are no claims against the state they have repeatedly mis sided that case as they've decided the genentech case what it comes down to is there is no constructive way what they've said is this is a constructive waiver that we have constructive so is a claim in response and there's no telling when we decide that it has the provider they have an interest then no longer a third party well you know that that's the other strange thing about this the what the college savings case also says is there has to be  judicial need for any expansion this law firm is the law firm defending the university of texas cases in austin they've raised the same invalidity defenses in austin they raise the same inequitable conduct and force ability defenses  often every single thing is in austin controlled by the lawyers for tactic hired by to educate under what they which is now an undisclosed we still never seen this indemnity obligation they refused repeatedly to produce it i heard today for the first time i guess it's a judicial admission waiver of sovereign immunity unless there's a judicial need what's the need they have identified three problems they say in their briefing they say are are licensees aren't as motivated as we would be to defend their defending the judicial need goes away if it ever was a legitimate judicially the second one is i'm sure licensees don't know our software as well as we do again ted is paying for the defense and paying for the lawyers in austin so that's obviously a illegitimate judicial need it's need all the reasons why they claim this is unfair or completely obviated by the fact that they are paying for the lawyers and they are putting on the defense in texas so what this is basically instead of if they really stand in the  they really believe this is a suit against them they should have filed the case in texas in the same form and said we have a right to to be here in this forum and we have a right to present these issues that's not what this is  court that even upheld the customer suit exception all are cases that were filed prior to the nine hundred eighty minutes the opinions came out in eighty nine hundred ninety but the cases originally filed prior to nine hundred eighty eight there's a district court cases that do that but the whole basis of the customer suit exception was where when the manufacturer there was no venue venue could not be having it's the manufacturer where the case was filed so many factors forced to say i give up my rights to venue in order to appear and i don't want to give up my is a better this is a hijacking for venue purposes that's all this is if they really believe that they were had they were the party an interest in the reasons they gave in their brief for the reasons were the true reasons they would have gone to texas and said we are the real party in interest we have a better interest and we should be the party here and let judge sparks make that decision and if it comes up here and he says no eleventh the minute you have a different issue before you you have an issue of whether or not this would really apply and should they be allowed to intervene what they've tried to do is avoid that you know they grant their own fourteen zero four motion to washington and the idea that this is the most convenient for him is you know you don't have the whole record before you but it's laughable there are there are defendants in canada i mean there are witnesses in canada china taiwan korea texas california washington no carolina in their bid witnesses identified in at least thirteen or fourteen states and seven countries france sweden so the idea that washington is somehow clearly the place where this case belongs to again simply by saying it doesn't make it true this is an attempt to take away the university of texas choice of forum which is texas where there is personal jurisdiction where there is been you over everybody and clearly that's where they chose to be now getting back to i think just the core issue here is what happens if you say that the customer should exception first of all it doesn't apply but l originally started this campaign by threatening to disqualify him economically threatening the first of texas lawyers trying to get their lawyers to quit and then when the lawyers were going to quit supposedly run off and follow a case in washington that's totally off the record but that's not the record i think the entire issue is whether or not college savings is true even when skewed to the point where the issue comes to move service exception is not available except in the form where the state rightly or offer get to follow it and i believe that the eleventh amendment is quite clear if if you look at the feeney case and the pinehurst case there's two parts of it are we going to consent to suit and we get the right to say where and when you sue someone you have consented to where you're going to be so you're going to be sued and return in the same case on compulsory counter plans and if you ignore the bindy part of the eleventh amendment you're ignoring the theming case party in a different form on things against the state and if if it's not constructive it would have to be expressed and how it can be expressed when there's a company not to sue which which judge lasting to a very good job say obviously they're not consenting they're giving you a covenant not t this is not a constructive waiver case this is a case of that waiver by litigation conduct and judge thayer said it's not the case that florida pay prepaid eliminated the option for states to waive sovereign immunity by litigation conduct can it was it can say it was litigation kind of consenting to removal but the litigation kind of here is they suit our customers this is not constructive way this is waiver by litigation conduct and as your honor suggested before if the plaintiff in texas had been the texas manufacturing company rather than the university of texas or its board of regents we plainly would have jurisdiction to bring into clarity judgment action as a manufacturer to protect our customers who buy come after us and have come after us for liability and let me be clear i because that's not part of the work it's not your honor but movements and having to represent to you that teaching is involved contractual liability to our customers in the conduct of litigation in texas but we're in the unfair position of being in effect a party that's not allowed to be a party in the case under the district court's ruling the idea that we're somehow a third party that has little to do with this is simply not true because we've been hit with a massive discovery requests in seattle by the university of texas asking for all the information  in a way that leads to a seriously unfair result it may not be strategically used waved to go after customers and then strategically invoked to keep us out of the lawsuit that's the essence of the claim that it's unfair to waive sovereign immunity one day and sue our customers and so i really have to them and then suddenly invoke it again when we come along as the manufacturer of the true defendant in the case who as judge newman said it exactly accurately the teen and software is essential to this case it's as if somebody were suing about an ignition patent and they came along they said well the engine that you know you need if a gas pedal to to start the engine and so you're not the engine isn't really the fundamental thing that teen and software is at the core of this case it's at the heart of the infringement action u t is bringing against them from customers of the overwhelming majority of them we believe twenty seven out of the remaining thirty defendants in the case used the nine software if texas manufacturing company can bring a manufacturer suit on behalf of this company we think the eleventh amendment does not stand in the way of the manufacture whose customers have been sued by a public university to come in and defend those customers if you want to say that we're guaranteed the right to come into the texas action and they will be able to waive the eleven the moment as you know you know what would happen if we came into the texas action and we tried to intervene as a right because we'll be prejudiced if we're not in the texas action then you would suddenly say oh eleventh amendment applies to us in it with respect to your your counterclaims because we didn't sue you but we want this court to do is reverse the district were allowed to say that the eleventh amendment does not eliminate the customer so the exception when a public university goes after the customers and the manufacturer tries to suicide commit areas unfairness would result with respect or honors we don't think night came up with some rules of mechanical rule that only customer only compulsory counterclaims or waived we think that the principle of night as this court wrote was that seriously unfair results must be avoided and we believe that seriously unfair results will occur if it is a