## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 08

- 4164 B OARD O F R EG EN T SOF T HE U NIVER S ITY OF W I S CONS I N S YS TEM, P la intif f-A pp ellee, v. P HO EN IX I NTERNATI ONA L S O FTW ARE , I NC ., D ef endant-Appellant. Appeal from the United States District Court fo r the Western Di stricto f Wisc onsin
. No . 07 C665

—Barb ara B. C rab b , Judge .
A RG UE D J UNE 4, 2009

— D ECI DE D D ECE MBE R 28, 2010

Befo re F LA UM, W OO D , a nd T INDER, C ircu it Judges. T INDER, C ircu it Judge. P hoe nix Int erna tional Softw are c r e a t e d s o ft wa r e tha ti tc a l l e d C o nd o r a nd r e g i s t er ed the CON DO R m ar k with the Patent and Tradem ar k Offi ce ( PTO) f o r “ co m put ers o ftwa r e f o r o n- l i ne pr o g r amm i ng devel opm ent, l ibra rym anage m ent a nd sy ste m uti l i ti es fu n c tio n in g on m ain fra m e s ys te m s.” P h oe n ix u se d th is m ar k s i nce J une 197 8 a nd r egistered i t in J anuary19 97.2 N o. 08

- 4164 The del ay i n re gi str ati on w as d ue to a pri or, se parat e registered CO N D O R m ark not at i ssu e here. ( W e are ca pi ta l i zingCON D O R whenwe r efert o the mar k, a s th e p ar tie s h av e in th eir br iefs .) T h e B oa rd of R eg en ts of th e U n ive rs ity of W isc on sin S y st em ( to who m we wi l lrefer si m pl y a s W i sc o ns i n, b e c a u s e i t i s a n a r m o fth e s t a t e ) r e g i s t e r e d i t s o wnC O ND O Rm ark w ith th e PT O i n 20 01 for “com p ut er netw ork oper ating sys tem softw ar e, dow nl oadabl e fro m a global co m put erne two r k, tha t del i ve r s l ar g e a m o unt s o fc o m putat i onalpow er byuti l i zi ng i dle co m pu ti ng r eso urces ina n et w or k of in d ivid u al c om p u te r w or ks ta tio n s . . . . ” T he qu est ion i n th is case is w he th er W iscons in’s CO N DO R m ar k i s l i kel y t o be c onfused w i th Phoeni x’s
. Pho en i x fil ed a pet i ti o n b efo r e th e Tr ade m ar kTr i ala nd A pp ealB oa rd ( TTA B) t o cancelW i sco nsi n’s r egi str ati on on the gr ounds that W i sco nsi n’s re gi str ati on w oul d cre ate c on fu sio n in t ra d e. See 15 U
. S. C. § 1064 ( “A peti ti on t o can c el a r egi str ati on o fa m ar k .

. . m ay . . . be fi l ed .

. . by a n y p e r s o n w h o b e l i e v e s th a th e i s o r w i l lb e d a mage d .

. . bythe re gi str ati on o fa m ar k o n the pri nci pal register .
. . . ”). Th e con fusion in t r a d e all egation refers to 15 U
. S. C. § 1 052(d ), w hi ch f orbi ds the re gi str ati on o f a t ra dem ar k that “ [ c] onsi sts o fo r com pri ses a m ar k which so re sem bl es a m ar k r egi ste re d i n the [ PTO ]
. . . as to be l i kel y, wh e n us e d o n o r i n c o nn e c t i o n wi th the g o o ds ofthe appli cant, to cause con fu sio n, o r to cause m i sta ke, orto decei ve . . . . ” The TTA B gra nted t he peti ti on a nd cance l l ed W i sconsin’s r egi str ati on, fi nd i ng tha tN o. 08

- 4164 3 the m ar ks ar e i denti cal i n eve ry aspect. I n such c a s e s , e v e n w h e n g o o ds o r s e r v i c e s a r e n o tc o mpet i ti ve o r i nt r i ns i ca l l y r el at ed, the us e of i den

tical m arks can l ead to a n ass um p tion th at th ere i s a co m m on s ourc e . . . . In ad d itio n , the par ti es’ softw ar e per f or m s s im il arfuncti ons and, ther efor e, w e c an n otfind th at t h ey are u se d in un related fiel d s. E ven sop histicate d pu rch a s ers woul d l i k ely be l i ev e th atthe r e i s so m e r el at i o nsh i p o r a ss o ci ation be twe enthe s o ur ce s o fthe goo ds und erthes e ci rcum sta nces. P ho enix So

ftw a re Int’l v. B d. o

f R egen ts o

f the U niv . of Wis. Sy s. , Cancel l ati on N o. 92 0428 81, a t 19 ( T. T. A
. B. Se pt. 26 , 2007 ) (qu otations and citations om itted ). W i sco nsi n br ought a ci vi lact i on in federa ldi str i ct co ur t pur su an t to 1 5 U. S
. C. § 1 07 1(b) c ha l l en g i ngthe T T AB ’ s d e c i s i o n . P ho e n i x c o u n t e r c l a i me d , s e e k i n gd a mag es fr o m W i sc o ns i n fo r t rad em ar ki nfr i ng ementa nd f al se d es ignati on o fo ri gi n und erthe Lanh am A ct ( 15 U. S
. C
. § § 1 1 1 4 , 1 1 2 5 ( a ) ) ; i ta l s o r a i s e d s t a t e l a w c l a i ms th ati t l at erv o l un tar i l y di smi ss ed wi thpr ej udi ce . The d i s t r i c tc o u r td i s mi s s e d P h o e n i x ’ s fe d e r a lc o u n t e r c l a i ms on sov ereign im m un ity grou nd s an d gran ted W iscons in’s m otion for su m m ary ju d g m en t, reversing th e TT A B ’s d et er m in at ion . Ph oe n ix ap p ea ls.

I . St and ar d ofRevie w The sta nd ar d ofr evi ew i n thi s ca se i s co m pli cate d by i ts i ni ti als ta tu s as a matt erb efo r e th e TTA B
. A fter l o sing4 N o. 08

- 4164 th er e, W isc on sin h ad tw o op tio n s: ta ke an ap p ea l d ire c tly to the C ou rt o fA pp eal s forthe Feder alCi rcui t o r in st itu te an ac tio n in a d ist ric t c ou rt
. See 15 U
. S. C. § 1 071. The p r o c e d u r e f o r a p p e a l t o th e F e d e r a l C i r c u i tc o nf or m s to the fa m i l i arstandard f orad m i ni str ati ve appeal s. The parti es prese nt the i r c as e based o n the cl ose d re c or d d ev elo p ed be for e t h e T T A B an d th e c irc u it cou rt de term ines w he th er sub stan tial evid en ce before th e T T A B su p p or te d t h e d ec isio n . CA E , Inc. v. Clean Air E ng’g, Inc. , 267 F.3d 660 , 673, 675 & n.9 ( 7th Cir. 2001). T h e c h o ice to ins titute an ac tion in the d istri ct cou rt all ow s W iscons in the ben efi t of ex p an d ing th e record b y off er in g n ew ev id en c e t o fe n d off P h oe n ix ’s c an c ell ati on cl aim
. W e hav e desc ribed the dist ri ct c ourto pti on as “ bo tha n a ppea la nd a ne w ac ti o n, whi cha l l o ws the parti es to re quest add i ti onalr el i efand to subm i t new evi dence. ” Id. at 67 3; see a lso A k tieselska bet A F 2 1. N o vem ber 2001 v. Fam e Je ans Inc. , 52 5 F
. 3d 8, 12

- 13 ( D.C. Ci r. 20 08) ( “[ T]he cour t m ay consi der b oth new i ssues and new evid en ce th at w ere not be fo r e th e TT A B
. ”). Bu t a cou rt’s p os tu re w h e n co n sid er in g a n ap p ea l an d n ew iss u es is differ ent, part i cular l y in ter m s o fi ssues o ff act, wh i ch w e w ill s e e a re th e k ey iss u es in t h is c as e. T h er e is tensi on be tw een the l eve lo fdefer ence an ap p ellate cour t pays to the f act- fi nd er( i n th is c ase , an a dm i ni str ati ve body) and th e p arti es’ o pp or tuni ty to prese nt new ev id en c e. S e eCAE , 26 7 F
. 3d at 674 (“[T ]h e d istrict cou rt i s a n ap p e l l a t e r e v i e we r o ff a c t s f o u n d b y th e T T AB a nd i s a l so a f act- fi nd erbas ed o n new evi dence i ntro du ced to the cou rt. ”).N o. 08

- 4164 5 The di st r i ctc o ur t, r ely ing o n CAE , ad op ted a deferen ti als ubs ta nt i ale vi den ce s ta nda r d t o r ev i ew the T T A B ’s fin d in gs . S ee id. at 676. The co urt described i ts ro l e a s o ne that“a ff or ds defe re nce t o the fi nd i ngs o f fac t m ad e b y t h e b oa rd bu t c on sid er s t h e b oa rd ’s d ec isio n d e n ov o t o th e e x te n t t h e p ar tie s p re se n t n ew ev idence. The bo ar d’s fi nd ings off act ar e pr oper l y r evi ew ed und erthe sta nd ar d set f or th i n [ the Ad m i ni strat i ve Pro

c e du r e Ac t( APA) ] whi ch re qu i r e s the c o ur tt o s e ta s i de fi nd i ngs a nd co ncl usi ons ‘ unsup port ed by sub sta nti al evi dence. ’ ” Bd. of Rege nts of theU ni v. of Wi s . Sy s . v. P hoenix Softwa reInt’l, Inc. , N o. 07C 6 6 5 , 20 08 W L 49 50 01 6, at *8 ( W
. D. W i s. N ov. 18 , 20 08) ( ci ti ng CA E, 267 F. 3d at 674, 675- 76)
. The di str i ct c ourt ’ s for m ula ti on o f the i nter pla y between bo th se ts ofev i dence m atches ours. “Altho ugh th e di st r i ctc o ur t’ s r ev i ew of t he TTAB’ s dec i si o n i s co nsi dered de nov o w hen the parti es pre sent new ev i dence an d asse rtaddit i onalcl ai m s, the dist ri ct c ourtal so m u st affo rd d ef e r e n c e t o th e fa c t fin d in gs of th e T T A B .” CAE , 267 F. 3 d a t6 74
. ( W e n o t e , h o we v e r, tha tthe D. C. Cir cui t has r ecent l y hel d t h at because the Lanh am A ct, 1 5 U. S
. C
. § 1 0 7 1 ( b ) , p r o v i d es f o r j u d i c i a lr e v i e w o fT T AB d ec isio n s, th e A P A is n otd ire c tly ap p lica b le. See A k tieselska bet, 5 2 5 F
. 3 d a t 1 4
. Th e D. C. Ci r c ui t did not addr es s ho w thi s woul d a ffec t i ts de fer en ce t o the TTA B’s f act- fi nd i ng, exce pt to not e that co urts have i nt e r pr e t e d D i ck i ns on v. Zurko , 52 7 U.S
. 15 0 (19 99 ), a s re q u irin g t h e a p p lica tio n of th e A P A ’s s u b st an tia l ev id en c e s ta n d ar d to T T A B d ec isio n s. A k tieselska bet, 52 5 F.3 d at1 4 & n .2. W e a re on e s u c h co u rt, CA E, 26 7 F
. 3d at6 75 , a nd ne i th erpar tyha s m ade a n i ss ue o fo ur st an d ar d of re vie w .)6 N o. 08

- 4164 So an i m port ant part ofthi s ca se shoul d be t o del i neate the speci fi c f actualfi nd i ngs o fthe T T A B to w hi ch w e o w e defer ence and the new evid ence, wh i ch w e view i n f avo r ofthe nonm oving par ty on a m oti on f orsum m ar y j ud gm ent, and ass ess the i m pact o fea ch on th e su m m ar y j u d gm en t sta n d ar d

. G ive n th at P h oe n ix w as the pr evai l i ng par ty be for e the TTA B and that i t was the no nm oving par ty on the sum m ary j ud gm ent m oti on th atwas g r an te d, we m us t sa y a t th e o ut se t th atthe state o fthe f ac ts pr es en ts a r ea lo bs ta cl e to s um m ary j ud gm ent in W i sco nsi n’s f avo r. A party i s en tit l ed to su m m ar y j udg m en t o nl y i fthe r e exists “ no g enui ne i ssu e o fma t e r i a lf a c t ” a nd the mo v i ngp a r t y “ i s e nt i tl ed to j ud gm en t as a m atter of law

. ” Fed

. R
. C iv. P. 5 6 (c )(2). The enti re i ssue i n thi s ca se

— th e l i k el i ho o d o fco nfusi on

— is a n iss u e o f fac t. A utoZ one, Inc. v . Str ick, 54 3 F.3 d 92 3, 9 2 9 (7 th C ir. 20 08 ); CA E , 267 F. 3d at 677; B arbe cue M arx, Inc. v. 5 5 1 O g den, Inc. , 23 5 F
. 3d 1041 , 10 44 (7t h C ir. 20 00 ); R ee d-U nion Co rp. v. Turt leWax, Inc. , 77 F.3 d 90 9, 91 2 (7 th C ir. 19 96 ); M cG r aw-Edi s on C o. v. Walt D isney P rod s. , 787 F.2d 116 3, 1167( 7th Cir. 1986). To ov er tu r n the TTAB’ s dec i si o n, the r efo r e, the dist ri ct c ourt( and thi s co urt, o n de novo r evi ew ) m ust fi nd that s ub st an ti ale vi den ce di d no t su ppo r t th e TTAB’ s de t e r mi na t i o n, o r tha t a l e g a l e r r o r c l o ud e d i ts u n d er st an d in g of t h e likelih oo d of co n fu sio n iss u e. If the TTA B ’ s dete rm i nati on i s s up port ed by substa nti al evi den c e and ther e i s no underm i ni ng l ega ler ro r, W i sconsin m ust s how t h at ther e i s a ki l l erse t o ff acts , that W i sc o ns i n neg l ec te d t o b r i ngt o the TTAB’ s at te nt i o n, th at r es o l ve s th e ca se i n i ts f av o r e ve n i fwe cr edi t al ltheN o. 08

- 4164 7 f acts the TTA B fo und durin g i ts proce edi ngs. To win on su m m ar y j ud gm ent, W i sc o ns i n musts ho w tha t th e TTA B w as not m er el y wrong, bu t wrong as a m att ero f l aw , and that the e vi dence w as not onl y no t s ubstanti al enough t o supp or t it s deci si on but that the e vi dence co m pel l ed, wi th o uta new he ar i ngb y a f ac t- fi nde r, the c o n c l u s i o n o p p o s i t e t o th e T T AB ’ s d e t e r mi n a t i o n . ( We or d in ar ily d o n o t allow a p ar ty to h old ev id en c e in re ser ve f orappeal, but our stan d ar d ofr evi ew i s pre sc r ibe d b y the La nha m Act, 1 5 U. S
. C. § 1 07 1(b) ( 1)
. As the D
. C
. Circu it noted , the L an ha m A ct “d oes not requ ire ex ha us ti o n o fthe a dm i ni st r at i ve pr o ce dur es i ts el f ” an d ther ef or e d oes noti m pose the t ra dit i onalwaive r rul es on par ti es appeal i n g TTA B decis i ons to the di str i ct c ou rt
. A k tieselska bet, 525 F.3d at14 .) W e no w pro ceed to t he anal ysi s. Onlyi fthe re cor d, as cre dit ed b y the TTA B and sup ple m ented bythe parti es i n the dist ri ct c ourt, r eve al s no ge nuine iss ue o fm ate
r i alf ac t m aywe affi r m the di st r i ctc o ur t’ s dec i si o n.

I I . Rele vantFi nd i ngs A . T rad em ark T rial a n d A p p ea l Bo ard The TTA B fo und thatW i sco nsi n’s so ftw ar e “ i nv olv e[s] usi ng i nd i vi du alw or kstati ons i n a ne tw or k t o bett er uti l i ze i dle co m pu ti ng r eso urces , ” whil e Phoe ni x’s so ftw ar e “ functi ons on a m ai nfr am e s yst em and

. . . pro vi des o nl i ne pr o g r amm i ngde ve l o pm en t, l ibrarymana g ement and syst em s deve l opm ent. ” P hoenix So ft w a reInt’l, Ca nc ella tio nN o. 92 04 28 81 , at 1 0. B e f o r e th e T T A B w as te st i-8 N o. 08

- 4164

m ony fro m W i sco nsi n’s m ai nfr am e co or dinat orthat“a n or gani zati on that did not have a m ai nfr am e or i s not i nv o l ve d i n dev el o pi ngs o ftwa r e appl i ca ti o n[ s] f o r mai nfram e com p ut ers” w ou ld h ave n o use f or Ph oen ix ’s softw are an d testim ony from W isc ons in’s softw are cre ato r that es tabli shed that i ts softw ar e was notused o n mai nfr ame c o m put er s. ( “[ N ] o ne of the [ W i sc o ns i n] Cond oruser s that ca m e back t o us and ask ed any questi on t ol d us that i t’ s instal l ed on a m ai nfr am e. ”) Bu t Phoe ni x pres ented e vi dence thati ts softw ar e, at l eas t, w as usabl e beyo nd the m ai nfr am e en vi ro nm ent. I t s s o l e s ha r e ho l de r, F r e d Ho s c he t t, t e s t i fi e d i n a de po si ti o n tha t “e ffec ti ve l y we ca n r un o urs o ftwa r e, unchan g ed, una l te r ed o n a wor k st at i o n, o n s o m eo ne’s deskto p, as i fi t w er e o n a m ai nfr am e” and that the so ftw ar e “ often” oper ate s on a networko fworks tat i ons, whi c h he de fi ne d a s a “ LAN, W AN o r s o me o ther netw or k that a l l ows the int er c on necti on o fthes e work

sta ti ons. ” (LA N i s a n acr onym f orLocalA re a N etwork; W A N i s a n acr onym f orW i de A re a N etwo rk .) H e a l so tes ti fi ed that he has “m any c ustom er s that use Condor th at d o n oth av e m ain fra m es .” I n hi s deposi ti on, H osc hett al so re ad W i sco nsin ’ s descr i pti on o fi ts softw ar e fro m the U ni ver si ty’ s web si te: Cond ori s a speci al i zed w orkl oad m anage m ent s yst em f orco m pu te r- i ntensi ve j obs

. Li ke o the rful l

- fe atur ed batc h sys tem s, Condor provi des a j ob queuing m echani sm , sche du l i ng pol i cy, pri or i ty s c he me, r e s o ur c e m oni tor i ng, and re sour ce m an ag ement
. Use r s su bmi t th ei r s er i ala ndN o. 08

- 4164 9 paral l elj obs to Con d or . Condor pla ces them i nto a que ue , c ho o se s when an d wher e to r un the j ob s b a s ed u p on a p olic y, ca re fu lly m on ito rs th eir prog re ss, and ul ti m ately i nfo rm s the userupon co m pl et i o n. H o sc he ttt es ti fi ed th atthi s l an g ua g e “v ery much” c o ncer ned hi m be c a us e wh e n he fi r s tr e a d Wi s c o ns i n’ s de

scr i pti on o fi ts softw ar e he initi al l y thought i t was descr ibi ng hi s pro du ct. Bef or e the TTA B, Phoeni x descr ibed i ts softw ar e a s “ a t oo lbox o ffuncti onal i ty to b e use d ess enti al l y b y a nyone w ho use s a co m pu terto as si st th em i n do i ngthei r j o bs , whethe r i t be pr o g r amm i ng softw ar e, subm i tte d batch j obs and queuing batch j obs , or m an ag in g th e en vir on m en t or m an ag in g t h e re so u rc es .” Based on thi s e vi denc e, th e TT A B fo und thatther e was “at l eas t s om e e vi dence i n the r ec or d that the par ti es’ r es pec ti ve s o ftwa r e per f o r m s th e sa m e g en er alfun cti o ns an d the evid en ce d oes n o t d e m ons trate th e good s are us ed i n distinc tly di ffer en t fi el ds, ” an d tha t “the r e i s no c lea r d ivis ion b et w ee n th e pa rt ies ’ so ftw ar e th at w ou ld cause u s t o c o nc l ud e tha tthe s e p r o du c t s a r e n o tr el at ed. ” The b i g g es t di ffer en ce b etw ee n the pr o duct s th e TTAB f o und was tha t Pho en i x’ s so ftwa r e was “ us ed i n a m ainfram e env ironm en t w hile [ W iscons in’s] good s are u se d in a n et w or k of in d ivid u al c om p u t e r w or ks ta tio n s.” That dis ti ncti on was “notnece ssa ri l y” si gni fi cant, becau se as on e of W iscons in ’s w itness es con ced ed , “the re m ightb e so m e i nc en ti ve ” to o per at e “in b o the nv i r o nm en ts .” T h e T T A B furt he r f ou nd that both program s w ere “dow nl oadabl e” and no thi ng i n Phoeni x’s regi str ati on10 N o. 08

- 4164 i nd i cate d other w i se, that co nsum er s o fei therpro gr am w er e no t or dinar y c onsum er s a nd had “so m e l eve lo f ski l land so phist ica ti on t o the e xtent that they a re pro g r a mmin gma i n fr a me c o mp u t e r s o r n e t wo r k i n gc o mp u te r w or ks ta tio n s t o in c re as e c om p u ta tio n al re so u rc es ,” a n d th a t th e i r “ p u r c h a s e s wo u l d b e ma d e wi t h s o me c a r e . ” ( T h e T T AB c l a s s i fi e d c o n s u me r s o fb o t h p r o g r a ms as pu rchas er s, ev en tho ugh W i sco nsi n dis tribu tes i ts softw are un d er an op en sou rce, free li cen se. T his d if ference i s i rr el evant to our analysi s. ) The T T A B al so f ound that there wa s n o evi dence thatany consum er w a s a c t ua l l y c o nfus e d a s t o the s o ur c e o fe i the r p r o duct despit e e vid ence that Phoeni x offer ed to support i ts cl ai m to the contr ar y ( i ncl u ding I nter net s ear ches f or
“ C o n d o r S o ft wa r e ” th a t r e t u r n e d r e s u l t s f o r b o th p r o ducts a nd a W i ki pedia en tr y forW i sco nsi n’s pro du ct, w ith no en try for Ph oen ix’s). The TTA B fo und thatbo th p ar ties ’ m ar ket i ng pra cti c es w er e “ re l ati vel y l i m i ted. ” A W i sco nsi n w i tness testifi ed that “ [w ]e d on’t d o a ny a d vertising w ith C ond or” an d Ph o en i x’ s co nt r o l l ere st i m at ed th atPh o en i x s pen t approxi m ate l y $ 65, 00 0 in m ar ket i ng, f ocuse d on att e nd i ngt r a de s ho ws a nd p r i nt i ngb r o c hu r e s a nd o ther m ar ket i ng m ate ri al s. B u t W i sco nsi n to l d the TTA B that i tw a s e x p a n d i n gi t s o p e r a t i o n s , wh i c h th e T T AB f ound m ade the chances ofco nfusi on m or e l i kel y. Based on these f actualfi nd i ngs a nd i nfe re nces d r a wnth e r e fr o m, a nd a p p l y i n gr e l e v a n tl a w, th e T T AB f o und tha t Pho en i x h ad m eti ts b ur deno fpro vingthe l i kel i hood o fco nfusi on a nd gr anted Phoeni x’s peti ti on t oN o. 08

- 4164 11

c an c el W isc on sin ’s re gis t ra tio n of th e C O N D O Rm ar k. It no te d tha t “the mar k s ar e i den ti ca li n e ve r y a spe ct ” a nd th a tb o th p r o duc t s p e r f o r m s i mi l a r fu n c t i o n s . T h e T T AB c oncl ud ed that “w e cannot fi nd that they ar e u se d in un related fiel d s” an d that “[e] ven sop histicate d pu rch ase r s woul d l i k ely b el i ev e th atthe r e i s so m e r el at i o ns hi p o r a s s o c i a t i on betwe e n the s o ur c e s o fthe g o o ds u n d er th es e c irc u m st an c es .”

B. D istrict C ou rt A t the di str i ct c ourt, Phoeni x att em p te d to further supp l em ent the r eco rd with evid en ce that bo l ste re d i ts case th at th e C ond or softw are p rod uc ts p erform ed overlapp ing fun ctions
. W iscons in, acc ord ing to Ph oen ix’s sol e s hare hol der Fre d H osc hett, had struck deal s with IB M to m ak e W isc on s i n ’ s v er sio n of C on d or av aila b le on PC

-base d m ai nfr am es. H osc hett al so prov i ded a l i st of c us t o mer s o pe r a t i ngP ho e ni x’ s v e r s i o n o fCo nd or o n PC

ba se d m ainfr ames . Butthe di st r i ctc o ur t r ej ec te d the proffere d ev i dence on the g ro und s that i t was fi l ed w i th Phoeni x’s r epl y b ri ef in st ead o fi n i ts i ni ti alpro posed f i nd i ngs o ff a c t, i n v i o l a t i o n o fa l o c a lr ul e . P ho e ni x do es not ar gue that i t di d, i n f act, co m plywith the l oca lr ule

. Based on the ev i dence i t di d c on sider, the dist ri ct cour t found that i t was u n disputed thatPhoeni x’s so ftw ar e ca nnot r un on a network of w or kst ati ons that ar e no t co nne ct ed to a mainfra m e sy st em, b uttha t th e softw are m ay be ru n on non -m ainfram e com p ut ers th rough the us e o fe m ul at i o n s o ftwa r e. The c o ur t f o und th at th e P h oe n ix so ftw ar e a llow s “ its u se r s t o s u b m it12 N o. 08

- 4164 ba tc h j o bs t o l o ca la nd r emote com p ut er s th r o ug h a ne two r k o f co m put er s to m o r e effec ti ve l y ut i l i ze and bal ance the a vai l abl e co m puting cycl es, ” that Phoe ni x had 100 orfew eract i ve l i censee s o fi ts softw ar e, but that lice n ses co st anywh er e fro m $3 0, 000 to $300 , 000 a y ear ( so that 100 lice nses can be ve rypro fi tabl e) , and that Pho en i x a dve r ti se s att r ade s ho ws , o n the Int erne t, a nd thro ugh br ochure s. P h oe n ix ’s c u st om er s, th e c o u r t fou n d , m u stbe sp ec iali ze d b ec au se mai nfr am e c om put ers y st ems “ ar e g en er ally ex p en siv e c om p u tin g s ys te m s t h a t a re ex tr em ely r el i ab l e an d s ec ur e an d c apabl e o fenormous thr o ug hput, ” th eya r e “c en tr al l y mana g ed an d m aint aine d, ” an d a choi ce o fso ftw ar e foruse on a m ai nfr am e “ re quir es carefu l con side ration.” In oth er w ord s, cu stom ers d on’t bu y m ainfram e softw are on a lark. Th e end -users o fs o ft wa r e l i k e P ho e ni x’ s a r e “ mai nfr a me s y s t e ms a dm in ist ra to rs an d m ain fra m e s ys te m s a p p lic at ion d ev elop ers.” T he com m un ity ofm ainfram e ad m inistrators an d d evel o per s i s a ti g ht

- k ni t o ne ( i n the wor ds o fthe dist ri ct c ourt, a “ni che”) thatl earns abo ut pro du cts thr o ugh wo r d- o f

- mou th a dv e r t i s i ng, ma i nfr a me t r a de sh o ws an d co nfer en ce s, a nd the a dvi ce o fc o ns ul ting fi rm s. Ph oen ix sp en t ap p roxim ately $65,000 on m arket i ng in 2 00 0; thatnum berwas vi rtual l y unchanged i n 200 3. Phoeni x’s co m peti tor s a re IB M and Com pu ter A sso ci ate s. A s fordi str ibuti on a nd custo m ero ver l ap, the dis tr i ct cou rt found th a t W iscons in d istribu tes its softw are und eran o pen softw ar e l i cense and l i nks t oge ther“aN o. 08

- 4164 13 network ofi nd i vi du al l y o w ned com pu te r re sour ces” to create a sys tem w he rein thos e com p ut ers trad e op erating ca paci ties. The co urt deter m i ned that W i sco ns i n’ s so ftwa r e do es no t r un in mai nfr ame e nv i r o nm en ts , bu t d id n otr e s o l ve w h et h er a m ain fra m e c ou ld be p art of th e g r id on w hich W iscons in’s softw are op erates. Th e cou rt found tha t u s e rs of W iscons in’s softw are ar e g ener ally syste m s o perat or s o fsci enti fi c r ese ar ch gr ou p s, b u t s i nce the so ftw ar e i s fre e a nd ava i l abl e for d ow nl o ad o th er s m ayus e i t. Be ca us e o fthi s, the c o urt f ound that use rs o fW i sco nsi n’s so ftw ar e a re tough to i denti fy; W i sco nsi n’s es ti m ate s pl ace th e tot alnum ber ofusers in the tens oftho usands. They g ener al l y m ust h av e a “s ys te m s-le ve l un d er st an d in g” o f co m p u te rs in ord er to m a k e W iscons in’s Con d or program w ork. U sers i nc l ud e the “ hi g h e ne rg y p hy s i c s c o mm un i t y, the DO E [ D e p a r t me n to fE n e r g y ] N a t i o n a ll ab s , bi o l o g y a n d c o mpu ter s ci ence departm ents, and i nd ustr i algr oups. ” Accord ing to the d istri ct cou r t, 3738 cop ies ofW iscons in’s softw ar e were dow nl oaded i n 200 0; by 200 4, the num ber ofdow n loa d s g re w to 15 , 155, an incre ase o fm or e than 40 0 p er c en t. A p ro m ot ion al p ro gr am o ffer ed by th e U n iver si ty ofW i sco nsi n, “Condor W eek, ” s how ed si m i l ar gr owth fr om a one- day event a ttr acting twenty par ti ci pants ( presum abl y i t was the n cal l ed “Condor Day” ) to a four- day ev ent with m or e than 150 part i ci pants.

I I I . Li keli hood ofConfusi on The questi on her e i s whether consum er s were l i kel y t o be co nfus ed by W i sc o ns i n’ s an d Pho en i x’ s con cur r en t14 N o. 08

- 4164

use o fthe CO N DO R m ar ks. A s the di str i ct c ourtfra m ed i t, “the o n ly questi on i s whether the i denti calm ar ks used i n the gener al field o fco m pu ti ng cr eat e a l i kel i hood o f confusi on f orco nsum er s . . . o r w h et her the di ffer ences i n the c o mput e r pr o du c t s f o r whi c h the s o ft wa r e i s s ol d, i n the tr ade channel s, i n the condi ti ons und er wh i ch sal es of products ar e m ade and o ther f acto rs eli m i nate the pos sibi l i ty ofco nfusion

. . . . ” Bd. of Rege nts of

the U niv . of Wis. Sys., 2008 W L 49500 16, at* 1. The di str i ct co ur t f o und tha t th e TTAB “e r r ed when it con si der ed th e ac tu alna tu r e o fthe part i es ’ g o o ds an d m i sa ppl i ed th e burden ofpro ofto i ts deter m i nati on o fa l i kel i hood o f confusi on. ” Id. B e c a u s e i td e t e r min e d th a tth e T T AB op inion w as errone ou s, an d Ph oen ix’s evide n ce before th e d ist ric t c o u r t w a s re lev an t o n ly to th e a n aly sis adopted by the TTA B, th e d i str i ct c ourtf ound fo r W i sco ns i n. W e agr ee that the keyiss ue in thi s case i s the l i kel i hood o fc o nfusio n b etwee n the pr o duct s des cr ibe d b y the two mar k s. W e ar e no t co ns i der i ngwhethe r the pr o duct s them se l ve s per f o r m the s ame func ti o ns , b ut whethe r co ns um er s, a nd s pec i fi ca l l y c o ns um er s who w ou ld use ei therpro du ct, would be l i kel y t o att ribute them to a si ngl e s ourc e. A uto Z o ne, 543 F.3d a t 931. “[ D] i s s i mi l a r i t y i s no t di s po s i t i v e o f the l i k e l i ho o d of confusi on inqu i ry . A l i kel i hood o fco nfusi on m ay exi st ev en if th e p ar tie s a re n otin d ire c t c om p e t i t i o n or th eir products a nd se rv i ces ar e no t i denti cal

. Rather, bec ause th e r i g ht s o fa n ow nero fa r eg i st er ed tr ade m ar ke xt en d to an y g o o ds th atmightb e, i n the min ds o fc o nsu m er s, ‘ r el at ed, ’ i
. e. , puto utb y a singl e pr o duce r, theN o. 08

- 4164 15

m or e a ccurat e inquir y i s whether th e publ i c i s l i kel y t o att ribute the pro du cts to a s i ngl e s ourc e. ” CA E , 267 F. 3d at 679 ( ci tat i ons om i tte d). Th is, a s w e s hal lse e, i s a ke y poi nt o fdi ver gence betw een o ur a nal ysi s a nd thato f the di str i ct c ourt
. There ar e a se ri es ofm ult i ple

- f acto r tes ts that ar e use d ac r o ss the c i rcui ts t o de te r m i ne the l i k el i ho o d o fc o nfusi on. W e use thi s o ne: 1. Si m i l ari ty between the m ar ks i n appearance an d s ug g es ti o n. 2. Si m i l ar i ty ofthe products. 3. The ar ea and m anner ofco ncurr ent use
. 4. The degre e o fcar e l i kel y t o be e xerci sed by consum er s. 5. The str ength ofthe pla i nti ff’ s m ar k. 6. W hetheractual co nfusi on e xi sts
. 7. W he th er th e d efend an t inten d ed to “pa lm off” his p rod uc t as tha t of th e plaintiff

. See A uto Z o ne, 543 F. 3d at 929. The Fe deralCi rcui t use s a di ffer ent s et off acto rs ( re fer re d to by the TTA B i n i ts op in ion ). Se eIn reE. I
. D uPontD e Ne m o urs & Co. , 47 6 F. 2d 1357, 13 61 ( C.C. P. A
. 19 73)
. They e sse nti al l y c ove r the s am e g ro und as o ur f acto rs , and nei therparty sugge sts thatthe differ ences between the f acto rs affect the o utcom e of t h e c ase . A s no ted abo ve, l i kel i hood o f confusi on i s a questi on o f factf orthe j ury to deter m i ne. A uto Z o ne, 543 F. 3d at 929. “The quest i on o ff ac t m ay be re so lve d on s u m m ar y jud gm en t o n ly if th e e vid en c e is16 N o. 08

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so o ne - si ded th atthe r e canb e no do ubtabo utho w the questi on s houl d be a nsw er ed. ” Id. (qu otations om itted ). The dis tr i ct c ourto ve rrul ed the TTA B i n two keyr espe ct s. F i r st, i t f o und tha t th e TTAB er r ed when i t co nsi dered the “a ctualnatur e o fthe parti es’ g oods” r ather than the go ods as the y w er e desc ribed i n thei r re specti ve re gi str atio n s. Thi s e rr or, the cour t found, com bi ned w ith th e lack ofeviden ce th at th e prod uc ts w ere su ffi ci entl y r el ate d to cause confusi on , re m ove d a ke y r ati onal e that s up ported t he TTA B’s deci si on. The di str i ct co ur t al so f o und tha t th e TTAB er r ed i n placing the b ur de n o n W i s c o ns i n t o p r o v e tha tthe p a r t i e s ’ g o o ds ar e di stinc t w h en i t co nsi dered the way the products wer e us ed o r s o l d. The di st r i ctc o urt fou nd tha t th e bur dens ho ul d ha ve b ee n pl ace d o n P ho en i x, who s o ug ht to c an ce la pr es um pti ve l y v al i d r egist er ed m ar k, a nd f ound that Phoe ni x did notpre sent suffi ci ent e vi dence to m eetthi s bur den (b ecause the dist ri c t cour t r ej ecte d all th e TT A B’s fi nd i ngs o n the products’ si m i l ar i ti es as irr elevan t). T he district cou r t ’s analysis ad d ressed several f acto rs outl i ned i n ourte st, b u t focuse d m ai nl y o n the si m i l ar i ty of the products and the ar ea and m anner of thei r use. W i sco nsi n does n ot (and cannot) di spute thatthe m ar ks ar e i de nt i c a la nd P ho e ni x ha s n o tb e e n ab l e t o p re ss th e ar g um en t th ata ctua lc o nfus i o n e xi st ed be twe enthe tw o m ar ks

— the TTA B fo und o ther w i se an d evi dence to the c ontr ar y was excl ud ed by the di str ict c ou rt
. Fundam en ta l l y, the n, the di st r i ct cour t’ s r ej ec ti o n o fthe TTA B’s d ec isi on r est ed on a di sag re em ent with i tsN o. 08

- 4164 17 anal ysi s o fthe products’ si m i l ar i ty a n d thei r m anner of use. The dis tr i ct c ourtexam i ned the m an ner i n w hi ch both products w er e desc ribed i n thei r re gi stra tio ns, di sr eg ar ded m o ste vi den ce o fthe i r a ctua lus e, a nd f ocuse d on wh ethera sophi sti cate d consum er w ou l d be l i kel y t o confu se the product descr ibed as “co m pu ter softw are for on-li ne p r o gram m ing d evelop m en t, library m an ag ementa nd sys te m ut i l i ti es func ti o ni ngo n mai nfra m e s yst em s” w i th a product descr ibed as “co m pu ter network oper at i ng sy ste m so ftw ar e, dow nl oadabl e fro m a g l obalco m pu ternetwork, thatdel iver s l ar ge am ounts o fc o m put at i o na lpo werb y utili zingi dl e co m put i ng re sour ces i n a ne tw or k ofi nd i vi du alco m pu terworkst at ion s.” It ap p ea rs th at th e d ist ric t cou r t m ist ak en ly as su m ed th atthe s i m i l ar i tyo fthe pr o duct s’ func ti o ns was the di spo si ti ve i ssu e in the c as e; thi s m i sa ppr eh en sio n w as m ag n ified by th e d ist ric t c ou rt ’s e rro r in con fi nin g i ts ex am ina t io n to the registration of the p arties ’ pr o duct s. Ins te ad o fa f o cus o n the de sc r i pti o n o fthe goo ds i n th e t ra dem ar k r egi str y, the properanal yti cal fram ew ork, accord ing to our cas es, is “ w h e th er the p artie s’ p ro d u c ts are th e k in d th e p u b lic m igh t v er y w ell att ribute t o a s i ngl e s ourc e. ” Aut oZone, 54 3 F
. 3d at 931 (c ita tio n s o m itt ed ); M cGraw-Edi s on Co. , 78 7 F
. 2d at 1169
. “T he ri gh ts of an ow ne r ofa reg is tered trad em ark extend to any goo ds orse rv i ces that, in th e m i nd s o f consum er s, m i ght b e put o ut bya si ngl e pr oduc er. Thus, a l i kel i hoo d of confusi on m ay exi st eve n i fthe parti es ar e no t i n di r ec t co m pet i ti o n, o r the i r pr o duct s an d ser vi ces ar e n ot i denti cal

. ” Aut oZone, 54 3 F
. 3d at 931 (qu otation an d citation om itted ).18 N o. 08

- 4164 Thi s i s a pr o po si ti o n we ha ve r epe atedl y l ai d o uti n the m an y c ase s in w hi ch w e’ ve consi dered the l i kel i hood ofco nfusi on be tw een g oo ds descr ibed b y si m i l aro r id en tic al m ar ks

. See id
. at 93 1; CA E , 2 6 7 F.3d at67 9; E li L il ly & Co
. v. Natural A nswers, Inc. , 2 3 3 F
. 3 d 4 5 6 , 4 63 ( 7th Ci r. 20 00); M cG r aw-Edi s on Co. , 787F.2d at11 69 . I t w as also recogn ized by the TT A B
. “[I ]t is n o t nec essary that the goo ds and/or ser vi ces be si m i l ar or com peti ti ve, o r e v e n tha tthe y mo ve i n the s a me c ha nn e l s o ft r a de to su p p or t a h old in g of li k e l i h oo d of co n fu sio n .” P hoenix Software Int’ l, Cancel l ati on N o. 92 0428 81, at9 ( ci ti ng H il son Rese arch Inc. v. Soc’y f or H um an R es . Mgm t. , 27 U. S
. P. Q. 2d 14 23 , 14 32 ( T. T. A. B. 19 93 ) )
. “I t is s uffi ci en t th at th e re sp ec tiv e g oo d s a n d /or se rv ice s a r e re lat ed in som e m anner, and/o r that the c ondit i ons and acti vi ti es surr ounding the m ar ket i ng o f t he go ods and/o r ser vi ces ar e s uch that theywould orco uld be enco untere d by the s a me pe r s o ns u nd e r c i r c ums t a nc e s thatc o ul d, be ca us e o fthe sim i l ar i ti es o fthe mar k s us ed th er ewi th, gi ve r i s e t o the mi s t a k e n b e l i e f tha t the y o r i g i na t e f ro m or are in s om e w ay as so c iat ed w ith th e s am e p ro d u c er .” H il son Rese arch Inc. , 27U
. S. P. Q. 2d at 1432
. Once we a c c e pt thi s pr o po s i t i o n, we s e e tha t W i sconsin’s f ocus on the descr i pti ons i n the reg i str y, adopted by the di str i ct c ourt, i s a bi t o fa re d h erring. Our ca ses m ak e cl ea r tha t pr o duct s do n’ t ev enha ve t o pe r form si m i l arfuncti ons, m uch l ess be described i dent ica ll y, f or a li keli ho o d o fc o nfus i o n t o e xi st
. In M cGraw-Edi s on we f ound that a l ike lih ood ofco nfusi on co uld e xi st between a m ark for electrical fuses and t h e m a rk on D isney’s m er chandise f or the m ovi e Tron
. M cGraw-Edi s on Co. , 78 7N o. 08

- 4164 19 F
. 2d at1 16 9. In CA E , we f o und tha t a li keli ho o d o fc o nfusi on co uld e xi st b etw een a m ar k r egi ste re d by a com pany thatdesi gned an d m anufa cture d sophi sti cate d m eas uri ng equi pm ent a nd a m ar k r egi ste re d by a c om pany thatte ste d fa ci l i ti es f orco m pli ance with p ollu tio n law s. CA E , 26 7 F
. 3d at 679. In Aut oZone, we f ound t h at a l i kel i hood o fco nfusi on co uld e xi st b e tw een an au to-pa rts retail er’s m ark an d the m ark of a oil ch an ge an d ca rw as h op er at or . A uto Z o n e, 543 F. 3d at 9 3 1
. Al l o f the s e c a s e s fe a t ur e d pr o du c t s wi th a f ar mo r e t e n u o u s s i mi l a r i t y th a n th a ta ti s s u e h e r e . We note thati n thes e ca ses , the products had i denti cal m arks (w ith th e exc ep tion of Aut oZone, wh ich featured tw o m ar ks w ith id e n t i c al “ zo n e” su ffix es ). I t is p os sib le that w e, as a ci rcui t, have hi sto rica l l y a ssi gned to o m u c h w eig h t t o th e f a c t t h a t m ar ks are id en tic al. C f
. M2 Softwa re, Inc. v. M 2 Com m c’ ns , Inc. 45 0 F
. 3d 1378 , 13 85 (Fed. Ci r . 2 00 6)
. But, pe r ha ps th ati s be ca us e th e i ss ue is fa c t-b ou n d an d id en tic al m ar ks oft e n c re at e t ria b le iss u es of fac t re ga rd in g t h e v ar iou s w ay s a p ro d u c t is m ar ket ed. Rega rdl ess , neith er party a tta cks our tr adem ar k s tandard as i nconsi ste nt with the Lanham A ct. Furtherm or e, the i denti calnatur e o fthe m ar ks w ei ghed h ea vily in t h e T T A B ’s a n aly sis
. P hoenix So ft w are Int’ l , Cancel l ati on N o. 92 0428 81, at19 ( ci ti ng In re Shell O il Co. , 99 2 F
. 2d 1204 ( Fed. Ci r. 19 93) ) . Th e TTA B al so ci ted A m cor, Inc. v. Am cor Indus. , Inc. , 210 U
. S. P. Q. 70, 78 ( T. T. A. B. 19 81 ) , f o r the pr o po si ti o n tha t when co nsi der i ngi den ti ca lmar k s, “ th e rel at i o ns hi p b etwee n the goo ds on wh i ch the parti es use thei r m ar ks need not be as great oras cl ose as i n the si tuati on wh er e the m ar ks ar e n otid en tic al or st rik in gly sim ilar .”20 N o. 08

- 4164 The a ppr o ac h a do pte d b y the di st r i ctc o ur t l i m i ting i ts consi derat i on t o the pr oducts a s they a re de sc ribed i s to o f o r m ali sti c an d i g no r es the r equi r ementtha t th e pr o duct s ar e to b e ex ami ne d a s th ey ap pea r t o the c o nsum er . “[ O]ur i nquir y in com paring the tw o products i s no t whether they ar e inter changeabl e, but w hether the par ti es’ pro du cts ar e th e ki nd the publi c m ight very w el l att ribute to a si ngl e sourc e. ” EliLi l l y & Co. , 23 3 F
. 3d a t 4 63 (em p h as is a d d ed ) (qu ot at ion om itt ed ); see also Aut oZone, 54 3 F
. 3d at 931; M cGraw-Edi s on , 78 7 F
. 2d at 1169 ( “I n fi nd i ng the part i es’ pro du ct l i nes t o be

‘ enti re l y unre l ate d’ the di strict court apparentl y i gnor ed th e que st i o n o fwhethe r the pur ch as i ngpub l i c m i g ht believe a si ng le source cou ld p rod uc e both [ p rod uc ts]. ”). O ctocom Syst em s, Inc. v. Houston Co m puterSe rvic es, Inc. , 918 F. 2d 937, 94 2 ( Fed. Ci r. 19 90), the Feder alCi rcui t ca se th at th e d ist ric t c ou rt r elie d on, i s n otto th e c on tr ar y. In that case , the re gi str ant whose m ar k w as chal l enged tr i ed to su p p l ementthe r eg i st r at i o n b y s ho wi ngtha t th e re gi str ant re al l y i ntended i ts m ar k to cover a n ar ro w cl ass o fgo ods, r atherthan th e un l i m i ted co ver age that the a ctualm ar k s ought. The Fe deralCi rcui t found that the s ubseq u en t atte m pt to l i m i t the r egi str ati on was i m pr o perand the co ur t was r equi r ed to c o ns i dero nl y the goo ds a s de s c r ib e d i n the r e g i s t r a t i o n. Th e c o ur t t hen f ound that there w as a l i kel i hood o fco nfusi on be tw een the pr oducts be cause the r egi str an t’s or i gi nalappli cati o n “e nc o m pas se d m o dems and co m put erpr o g r ams” a nd th us confli cted w it h the p etitioner’s regi stration of a si m i l armar kf o r c o m put erpr o g r ams. F ur th er m o r e, “ th e re cor d su p p or ts no o therf actualfi nd i ngs b ut thatN o. 08

- 4164 21

m odem s a nd co m pu ter p rogr am s a re co m m onl y use d to ge th er in n et w or kin g, co u ld co m e fro m a sin gle sour ce, and be i denti fi ed w ith t h e sam e m ar k. Thus, [ the a tte m pted re gi str ant’ s] el i m i nati on o f‘ com pu ter prog ra m s’ fro m i ts ap p li cati on l eaving o nl y ‘ m odem s’ w as poi ntl ess m aneuver i ng. ” O cto co m Sy s., 918 F. 2d at 943. The l i keli ho o d o fc o nfus i o n in Oc t o c o m ste m m ed not fr o m the f ac t th atthe r eg i st r at i o ns were ide nt i ca l, b ut f r o m t h e re gis tr at ion s’ c ov er ag e o f sim ilar p ro d u c ts . In f ac t, i n O ct oc om , the F ede r alCi r cui t r ec o g ni ze d tha t th e si m i l ar i ty ofthe products desc ribed in the r egi str ati on m ay be “e x p re ss ly or inh er en tly ” re flec te d

. Id. at 942. The F e d e r a lC i r c u i tn o t e d th a t“ [ e ] v i d e n c e th a tthe g o o ds o fthe a ppl i ca nta nd o ppo se r, a s ident i fi ed i n the re specti ve appli cati on a nd r egi str ati on, ar e the ty pes o f g o o ds th atwoul d b e e xpect ed to move i n di ffer en t trad e ch an ne ls orbe sold to d ifferent cl a s s e s of p urchaser s m ay be m ate ri aland re l evant
. ” Id. at 94 3. S o , the r el ev an t que st i o n fo r us i s whethe r a pr o ducttha t r uns on a m ainfram e an d a p rod uc t th at run s on a netw ork ofco m pu ters ar e the ty pes o fgo ods that a re si m i l ar en ou gh to be attribut ed to a si ng le source by co n s u m ers l i k ely t o use on e oftho se pr o duct s. W hi l e we mustc o nsi der the m ar ks as they ar e desc ribed , i t would be a m i sta ke to barany ev id en ce o fthei r actualuse as i rr el evant. A fteral l, o ne o fthe f acto rs i n the tes t i s the “a re a and m anner ofco ncurr ent use
. ” See A uto Z o ne, 543 F. 3d at 9 29
. A nd , as not ed, the actualuse ofthe product is r el ev an t to exp lai n the mean i ngo fthe t er m s us ed i n the re gis tr at ion
. Se eO ct oc om Sy s. , 91 8 F .2d at94 3; see also C A E , 26 7 F .3d at68 1-8 2; F o r u m C o rp . o f N
. A m . v . F o r u m,22 N o. 08

- 4164 Lt d. , 9 03 F
. 2d 43 4, 4 42 ( 7th C ir. 1 99 0)
. Inde ed, the TTAB expl i ci tly de cl ar ed th ati t was c o ns i der i ngthe nature o fthe p ar ti es’ go ods “[ t] o the e xtent that these f ac ts p rovi de so m e i nf o r m at i o n abo utthe mar k eta nd pu rchas er s o fthes e g oo ds. ” P hoenix Software Int’ l , Ca ncel l ati on N o. 92 0428 81, at9. Rej ecting the di str i ct c ourt ’ s a pp ro ach, how eve r, does not dispos e o fthe case . “Because co nfusi on i s a f actual m at te r, the pl aint i ffmustpr o duce pr o o f; a the o r y abo ut how co nsum er s mig htb e co nfuse d w i l lnotdo, unl ess evi dence supports the theo ry . ” Ree d- U nion Corp. , 77F. 3d at 912. Even as w e consi der the pro du cts’ actual uses to deter m i ne the m eani ng o fthe m ar ks’ r egi str ati ons, orm or e s peci fi cal l y t o deter m i ne wh etherther e i s a possibi l i ty ofc onfusi on be tw een the two pro du cts as d es c rib ed in t h eir reg ist ra tio n s, W isc on sin w ou ld st ill preva i li fther e i s no ev i den ce t o supp or t the i dea thata supp l i er o fso ftw ar e t o a m ai nfr am e s yst em ( the m anner o fus e spe ci fi ed i n P ho en i x’ s r eg i st r at i o n) c an b e co nfu se d w i t h a s u p p lier o f so ftw ar e t o a n et w or k of in d ivi du alco m pu te r w or kst ati ons ( the m anner ofuse sp ecifi ed i n W iscons in’s regi stration). The T T A B r el i ed on three ke y f acto rs i n i ts or der t o can cel W iscons in’s regi stration. Fi rst, an d m ost im p orta n tly , i t re lied on th e fac t t h at th e m ar ks are id en tic al. W i s c o ns i n do e s n o tc ha l l e ng e thi s fi nd i ng( a nd a s n o t e d, th is seem s to be a com p ell ing factor i n o u r cir cu it)
. S ec o nd, the TTAB f o und tha t th e par ti es ’ s o ftwa r e perf or m s s i m ilar functi ons, wh i ch prec l ud ed a fi nd i ng tha t they w er e use d i n un re late d fi el ds. Thi rd, i t found thatN o. 08

- 4164 23 “sop histicate d pu rch asers w ou ld li kely belie v e that there i s s om e r el ati onshi p oras soc i ati on be tw een the so urces ofthe goo ds und erthes e ci rcum sta nces. ” P ho enix So ftw a re Int’ l , Ca nc el l at i o n No. 9 20 42 88 1, a t 1 9. Ul ti m at ely, the T T A B concl ud ed that sophi sti cate d pu rchas er s would ass oci ate the tw o products. M apping the TTA B’s fi nd i ngs ont o ou r f a c t ors, w e see th at th e TT A B ’s find ing of a l i kel i hood o fco nfusi on was bas ed on th e identi cal nature o fthe m ar ks, the m anner i n w h i ch both part i es’ products a re used, and the si m i l ar i ty ofthe products. The di st r i ctc o ur t di sm issed the se fi ndi ng s o n the basi s that a l lanalysi s o fthe products s houl d have been con fi ned to the t er m s in the re gi str i es. A s we’v e ex pl aine d, thi s was a n error . M o r eo ve r, b ec au se the TTA B w as usi ng the corr ect f acto r-base d bal anci ng te st, th e d istri ct cou r t w as incorrec t to dism iss the T T A B ’s fin d in gs on the ar ea and m anner ofuse f acto r by declar ing that the TTA B had m i sal l oca ted the burden o f proo f

. B ecause the TTA B fo und thatthe si m i l ar i ty of th e m ar k s an d pr o duct s wei g he d i n P ho en i x’ s f avor, the ar ea an d m anner ofuse ti pp ed the bal ance in f avo r of Pho e ni x. T he T TAB no t e d s pe c i fi c a l l y i n i t s h o l di ngthat

“ a p r e su m p tion of validity attac he s to a service m ark re gi str ati on, and the partyse eking ca ncel l ati on m ust re b u t th is pr es u m p tio n b y a p re p on d er an c e ofe v i d en c e.” Id. at18 . “ W e h o ld th at p et itio n er h as m et its bu rd en .” Id. at 19. Once w e r ei nstat e th e T T A B ’ s fi nd i ngs, we see that P h o e n i x h a s o ffe r e d s u ffi c i e n te v i d e n c e t o s u r v i v e s u mma r y j u d g me n t o n th e i s s u e o fc o n fu s i o n . T h e T T AB24 N o. 08

- 4164

cre dit ed Phoeni x’s ev i d en c e that i ts m ai nfr am e s oftw ar e ca n oper ate unal ter ed on a networko fworks tat i ons. Th e T TAB f o un d tha tb o th pr o g r a ms pe r f o r m s i mi l ar functi ons to the extent that Phoeni x’s repres entat i ve w as him sel fco nfuse d by W i sco nsi n’s publi c descr i pti on o f i ts pr o duct; he th o ug ht i t was Pho en i x’ s ow n. Th e T T A B furt he r f ou nd that, as con ced ed by W iscons in’s w i tness , th er e w as “so m e incenti ve” to oper ate i n both th e ma i n fr a me a n d ne t wo r ke n v i r o n me n t s . T h e T T AB al so f o und tha t b o thpr o duct s wer e del i ve r ed i n the sa m e m an n er , an d th at th e sam e cu st om er s a r e lik ely to encounterbo th p roducts, part i cul ar l y s i nce W i scons in i nd i cate d that i t had be en and w oul d be expand i ng i ts m ar ket i ng eff or ts. Fo r the TTA B, these fi nd i ngs j usti fi ed the cancel l ati on o fW i sco nsi n’s m ar k. W i sco nsi n do es o ffernew evi dence to r ebut these fi nd i ngs a nd ar gues th at t he f acts sho uld be i nter prete d di ffer en tly . M o sts i g ni fi ca nt l y, W isc o ns i n a r g ue s th atthe s o p h i s t i c a t i o n o fc o ns um e r s c u t s i n th e s t a t e ’ s f a v o r . We no te tha t th i s f ac to r was c o ns i der ed atl en g thb y the TTA B, w ho fou nd i n Phoeni x’s f avo r. But as w e di scussed ab ove , the questi on i s no t whet h er p urchase rs o f Phoen i x’ s Co nd o r p r o du c two ul d a c c i de nt a l l y b uyWi sc on sin ’s p ro d u c t b u t w h et h er th os e c on su m er s w ou ld like ly a tt r i b u t e t h em to a sin gle so u rc e. In re Total Q uality G roup Inc. , 51 U .S.P. Q. 2d 1474, 14 77 ( T. T. A
. B. 1999 ) ( “[ E]ve n car eful pu rchas er s a re n ot i m m une fro m so urce con fus i o n. W e fi nd thi s to b e es pec i al l y the c as e here wher e th e m ar k s ar e s ubs ta nt i al l y i den ti ca la nd the go od s a re rela te d .”). M u c h of th e e vid en c e W isc on sin offers is d esigned to show that m ainfram e pu rch a s ersN o. 08

- 4164 25 ta ke ca re w h en ch oo sin g t o p u r c h as e a p ro d u c t; th is is r el ev an t to , b utno t di spo si ti ve o fthe l i k el i ho o d o fc o nfu si on i ssue. 4 M cCarthyo n Tradem ar ks and U nfa ir Com peti ti on § 23 : 103 ( “W hen the re i s a st ro ng l i kel i hood of confusi on cre ate d b y othe r f acto rs , eve n a h igh lev el ofcar e e xerci sed bya profess i onalbuye r m ay not be su ffi ci en t to tip the s ca l es i n the di r ec ti o n o fno c o nfusi on. ”) The TTAB cr edi te d Pho en i x’ s so l e sh ar eholder, who t e s t i fi e d tha th e wa s c o nfus e d b y Wi s c o ns i n’ s de scr i pti o n o fi ts pr od uc t; we ar e bo und t o g i ve thi s fi ndi ng defer en ce. T hi s i s a k eypi ec e o fe vi den ce s uppo r ting the fi nd i ng. The TTA B’s consi dera tio n o fo therf acto rs , na m el y the f ac t th atthe mar k s ar e i den ti ca la nd tha t th e products a re si m i l ar( as d et er m i ned by the TTA B) b oth re i nfo rce d the TTA B’s j ud gm ent. There was al so evi dence adm i tte d at the di str i ct c ou rtthatthe l i nes b e t we e n ma i n fr a me o p e r a t i o n s a nd n e t wo r ks y s t e ms are d i sa ppea r i nga nd tha t W i sc o ns i n was b r o ade ni ng the s cope o fi ts op er ati ons. W i sco nsi n’s ev i dence ofso phist i cati on, m uch of i t co nsi dered bythe TTA B, i s no t so com pel l i ng tha t we bel i eve no i ssue off act exi sts
. W i sc o ns i n r uns throu g h the o th erf ac to r s, f o cus i ng m ai nl y o n the Du Pon t a n al ysi s, and m ake s g oo d poi nts. There w as no a ctualco nfusi on; the “dow nl oadabi l ity” o fbo th pr o g r a ms i s n o tdi s po s i t i v e o fwh e the r the p r o ducts were so l d i n si m i l artr ade cha nnel s; Phoeni x m ay no t hav e b ee n di l i g en t ab o utpr o te ct i ngi ts mar k ; a nd an y c o nfus i o n i s l i k ely to b e qui ck l y r ec ti fi ed. Co ns i der i ng thi s e vi dence i s a pp ropri ate , but none o fthi s e vi dence26 N o. 08

- 4164 i s s u ffi c i e n tt o r e n d e r th e f a c t s f o u n d b y th e T T AB i mm at er ial a n d co m p el s u m m ar y jud gm en t. W eig h in g a ll o fthe pa r ti es ’ e vi den ce i s a t askf o r a fi nde r o ff ac t an d w e a re r equi re d to defe r to the TTA B’s deter m in ati on on the i ssues i t co nsi dered. A ccor dingl y, we m ust r ev er se the di st r i ctc o ur t an d r emand f o r a t r i alo n the l i kel i hood o fco nfusi on i ssue.

I V. P h o e n i x ’ s C o u n t e r c l a i ms P h oe n ix als o a sk s u s t o re in st at e t h e c o u n t e r c laim s it bro ught u n d er 15 U
. S. C. §§ 1114 and 112 5 fori nfr i ngem ent a nd f al se de si g na ti o n o fo r i g i n; b o ths ec ti o ns a nno unc e Con g r es s’ s i nt en t to make s ta te s li able i n a ci vi lact i on to an yone dam age d by the st ate ’ s a cts. But, Phoeni x’s co unterc l ai m s were dism i sse d on so verei gn i m m un ityg r o unds

. W e r ev i ew the di st r i ctc o ur t’ s g r an t ofa m oti on t o dism i ss de n ov o. Th om pson v. Ill
. D ep’t of Pr of ’ l Regul at i on , 300 F.3d 750 , 753 (7th C ir. 2002). The Ele venth Am endm ent b ar s s uit s a gainst s tat es and res tor es “the sov er ei gn im m unity that the S tat es posse sse d bef or e e nter i ng the U ni on. ” Coll
. Sa v. Bank v. Fl a. Pr epai d Pos t s e co ndary Educ
. Expe ns eBd. , 52 7 U
. S. 66 6, 6 69 ( 19 99 )
. The r e ar e two r el ev an t ex ce pti o ns t o the so ve re ign im m u n i t y gu ar an te e. See id
. at 670. The fi rs t oc curs w hen Congre ss acts pursuant to the F ourt eenth A m en d m en t t o re gu lat e s ta te be h av ior. Id. ( ci ting Fitz pa trickv. B itz er, 4 27 U
. S
. 4 45 ( 19 76 ) )
. The s ec o nd occur s w h en a sta te w ai ves i ts sov er ei gn i m m unity b y c on se n tin g t o s u it. Id. ( ci ti ng C la rk v . B a rna rd, 1 08N o. 08

- 4164 27 U. S
. 4 3 6 ( 1 8 8 3 ) )
. P h o e n i x a r g u e s th a ti t s c o u n t e r c l a i ms shoul d be r ei nstat ed und erei thertheo ry .
A . W as th e T ra d e m ark R em ed y Clarif ication A ct a v a l i d e x e r c i s e ofC o ng r e s s ’ s F o urt e e nt h Ame ndme nt p ow er? The Tradem ar k Rem edy Cl ar i fi cation A ct ( TRC A ) , Pub. L. 1 0 2

- 5 4 2 , 1 0 6 S t a t
. 3 5 6 7, e s t ab l i s he d s t a t e l i ab i l i t y f or tr adem ar k v i ol ati ons. A por ti on o fthe TRC A has a l r e a d y b e e n d e e me d u n c o n s t i t u t i o n a lb y th e S u p r e me C ou rt
. Coll
. Sa v. Bank, 52 7 U.S
. at69 1. Thi s p or tio n provid ed for s ta te lia b i l i ty for fa lse ad ve rt isin g, w h ich is one f or m a 15 U
. S. C. § 1 125( a) cl ai m can tak e; the f al se d esigna tion of origin claim at i ssu e here is anoth er. W e’ l l assum e f o r pur po se s o fo urdi sc us si o n tha t th e cl ai m we are co nsi deri ng i s di ffer ent fro m the provi si on at issue in Coll egeSa vi ngs Bank; i n a n y e v e n t, the S upr eme Co urt h as no t spo k enc l ea r l y o n the o th erc o unter cl ai m : tr adem ar k infr i ngem ent under 15 U
. S. C. § 1 114. The TRC A ’ s s i ste r sta tute, the Patent and Pla nt Var i ety Pr o t e c t i o n Re med y Cl a r i fi c a t i o n Act( Pa t e ntR e med y Act) , e st ab l i sh ed st at e l i ab i l i tyf o r pa te nti nfringement an d w as sim ilar ly fou n d u n c on st itu tio n al. SeeFla. Prepaid Posts e co ndary E du c. Expe ns eBd. v. Col l
. Sa v. Bank, 52 7 U .S. 62 7, 64 7- 4 8 (1 99 9). P h oe n ix ’s a rg u m en t t h at it sh o ul d b e ab l e to pur su e a tr ade m ar ki nfri ng ement re m edy ag ai nst W isc onsin depends l ar gel y o n i ts abi l i ty to c o nv i nc e us tha t i ts c l ai m s a re di ffer en t fr o m pa te nt e n f o r c e me n ta n d f a l s e a d v e r t i s i n gc l a i ms . T h e S u p r e me Court f ound that s tat es w er e pr ote cted bythe Ele venth28 N o. 08

- 4164 A m endm ent aga i nst cl ai m s f or m oney dam age s un der eit h er of th os e ca u s e s o fa c tio n . Id. ; Coll
. Sa v. Bank, 52 7 U
. S. at69 1. To p r e s e r v e i t s c l a i ms a g a i ns tWi s c o ns i n, P ho e ni x ne e ds to show that Congr es s e xpressly intended to abr oga te st ate s o ve r ei g n i m m uni ty, tha t i t di d s o unde r S ec ti o n 5 of th e F o u rt ee n th A m en d m en t, th at th e t ra d em ar k in que st i o n was a pr o per tyint er es t co g ni zabl e unde r the Four tee nth A m endm ent, an d that the abr oga ti on o f state i m m un ity w as an ap p rop riate exercise of Con gress’s Se c tio n 5 p ow er . See F la . P repaid, 527U .S. at 6 35 . I t is und i sputed that P h oe n ix can cl earthe fi rs t tw o hurdle s ( Congre ss exp re ssl y intended to abr oga te sta te sov er ei gn i m m uni tya nd i t ac te d unde r Sec ti o n 5 )
. W i sc o ns i n c o ntends thatthe Fo urte enth Am endm ent doe s no t pr ote ct tr ade m ar k s, b utS upr eme Co ur t di ctum indi ca te s th e o ppo si te
. “ The La nha m Actmay wel lc o nt ain pr o vi si o ns th at p rotect con stitut ionall y cogn izable p r op erty interest s

— no tabl y, i ts pr o vi si o ns de al i ngwi thi nfr i ng ement oftr adem ar ks, wh i ch ar e the ‘ proper ty’ o fthe own er because h e ca n excl ud e o ther s fro m usi ng the m . ” C oll. Sav . Bank, 52 7 U.S
. at67 3. W i sco nsi n gi ves us no re aso n to do ubttha t th i s woul d b e th e Cou r t’ s cur r en t po si ti o n. So the questi on i s whet h er t h e TRCA i s a n “appropr i at e” l aw a s th e te r m i s us ed i n S ec ti o n 5 o fthe F o urtee nth A m endm ent. ( “The Congr ess shal lhave pow er to enf or ce, byappropr i ate legis l ati on, the provi si ons of th is arti cl e. ”)
. In C ityof B o erne v. Flo res , 52 1 U.S
. 50 7, 5 1 9 ( 1997 ), the Su p rem e C ou rt held that Con gress’s S ec ti on 5 p o weri s i nhe r en tly l i m i te d t o r emedi ala ndN o. 08

- 4164 29 pr ev en ti ve l aws . W he n l eg i sl ating unde r S ec ti o n 5 , Co ng r es s m us t a ch i ev e “a c o ng r ue nc e be twe enthe mean s used and the en d s to be achi eve d.” Id. at 530. Furth erm o r e , th e l a w mu s t b e a p r o p o r t i o n a l r e s p o n s e t o t he probl em Congr ess se eks to so l ve thro ugh l egi sl ati on. Id. at 53 2; see a ls o Fla. P repaid, 5 27U. S
. a t 63 9 ( di sc us sing Boer ne )
. Thus, f orCongr ess to i n voke S ecti on 5 , i t m ust i de nt i fy c o nd uc tt r a ns g r e s s i ngthe F o ur t e e nth Am e nd

m ent’ s s ubstanti ve provi si ons, and m ust t ailor i ts l egi sl ati ve schem e t o re m edyi ng o r preve nti ng such c onduct. As we ’ v e n o t e d , th e S u p r e me C o u r tf o u n d th a tthe Pa t e ntR e med y Ac t, wh i c h i s t o p a t e nt s wh a tthe TR CA i s to t r ade m ar k s, was no t a pr o po r ti o nal or c o ng r ue nt exer ci se ofCongr ess ’ s S ecti on 5 pow er s. That a ct was desi gned to r em edy paten t i nfr i ngem ent b y a st ate , j ust as th e TRC A i s desi gned to r em edy tr adem ar k infr i ngem ent, bypro vi ding f orm oney dam age s a gainst a st ate
. I n Flori da P repaid, the Suprem e Cour t fou n d that Congre ss i denti fi ed l i ttl e e vi d en c e ofper vasi ve sta te i nfr i ngem ent o fpatent s. Instea d, the harm Congr ess id en tifie d w as sp ec u lat ive
. Id. at 641. Col l eg e Sa vi ngs’ al ternati ve ar gum ent, j oi ned by the U ni ted S tates, was that w he n a state i nfr i nges a pate nt witho ut payi ng a f e e , the s t a t e h a s de ni e d the p a t e nt
- ho l de r o fa p ro perty i n t e r e s tw i th o u td u e p r o c e s s o fl a w. B u t, th e S u p r e me C ou rtrejec te d th is a rg u m en t b ec au se C on gr es s “ b ar ely co ns i der ed th e av ai l ab i l i tyo fs ta te r emedi es f o r pa te nt i nfr i ngem ent” and thus did notsu ffi ci entl y c onsi der whe the r e xi s t i ngs t a t e r e med i e s mi g hta l r e a dyp r o v i de const i tuti onal l y s uffi ci ent due pro cess forp ate nt i nfr i ngem en t. Id. at 643. The Courtal so note d that st at es a re not30 N o. 08

- 4164 liab le for co n st itu tio n al v iola tio n s w h en th ey n eg lig e n tly cause i nj uri es an d t h at Congre ss m ade no dist i ncti on be tw een ne gl i gent in fringem ent ( w hi ch w oul d not be a pr o pers ubj ec t o fCo ng r es s’ s Sectio n 5 po wer ) a nd re c kle ss an d int en tio n al in frin ge m en t w h ich w ou ld tr igg er th e Fou rt ee n th A m en d m en t’s p r o te c tio n . Id. at 64 5. F o r a l lthe se rea son s, the Co ur t f o und tha t th e Patent Rem edy Act did notabr oga te a s tat e’ s El eve nth A m endm ent i m m unity. W i sco nsi n ar gues, and the dist ri ct c ourt fo u nd , that the s am e r eas ons supp or t a deci si on t o p re ser ve sta te i m m unity a gainst dam age s under the TR CA
. W e a gr ee th atthe TRCA i s no t m at er i al ly d i ffer en t fr o m the Pa te ntRe m edyActf o und unco ns ti tu ti o na li n Fl or i da P repaid

. Both a cts, for in sta nce, shar e the sa m e S enate Re po r t ( S
. Re p. No. 1 02

- 28 0) whi chi den ti fi es o nl y o ne case o fst ate tr adem ar k infr i ngem ent where the s tat e was pr o te ct ed fr o m fede r al su i t, an d su ffer s fr o m all the i nfi r m i ti es i den ti fi ed bythe Su p r eme Co ur t i n Fl or i da P repaid, 5 27U. S
. a t 64 3- 45 ( r ej ec tingthe i dea tha t th e l egi sl ati ve hi sto ry of the Pat ent Rem edy Act sat i sfi es re quir em ents f orCongr ess ’ s a cti on un d er Secti on 5 o f th e Fourte en th A m en d m en t). A s forwh ethertr adem ar ks ar e d i ffer ent than patents , Phoeni x ar gues that tr adem ar ks ar e o fper m anent du rati o n a nd tha t th e creat i o n o ft r ade m ar k s pr o te ct s th e pu b l i c fro m co nfusi on a nd thus they m ust be anal yze d und era s e pa r a t e r ub r i c tha n pa t e nt s . We a g r e e that th e t w o rig h ts are d i f f er en t, bu t t h e Su p re m e C ou rtin Fl or i da P r epai d tr eat ed patents as a ser i ous pr oper tyN o. 08

- 4164 31

r i g hta nd i ts ho l di ngi n thatc as e di d no t tu r n o n the n at u re of th e p ro p er ty righ t, bu t o n th e in su ffi c ien tly n ar ro w ta ilorin g o fC on gr es s’s rem ed y t o th e h ar m s it soughtto r em edy and the i nsuffi ci ent fi nd i ngs that a nati onalr em edy was neces sar y. G ive n the si m i l ar i ty between the l aw s her e, we are co m pel l ed to fi nd that Fl or i da Prepai d c on tr ol s the o utcom e o fthi s i ssue. U nl ess W i sco nsi n w ai ved i ts i m m unity fro m sui t, i t i s pro tect ed fro m Phoeni x’s co unterc l ai m s.
B. D id W iscon sin w aive it s im m u n ity f rom su it ? One pr o bl em Con g r es s i den ti fi ed when enac tingthe TRC A ( and i ts si ste r patent sta tute) w as th e u neven pl ay i ngfi el d c r eated b y a t r ade m ar kr eg i m e wi th o ut r emedi es a g ains t st at es . In the pa te ntc o nt ex t, i t ex pla i ned: “A pu bl i c s choolsuch a s UC LA can sue a pri vate scho olf orpatentinfringem ent, ye t USC cannot su e UC L A f o r th e s a me a c t
. T h e s t a t u s o fa n i n fr i ng i ng partysho uld hav e n o rel ati on t o the a m ount o fi nvest
m en t m ad e in a p ro d u c t. St at e un ive rs itie s s h o u ld not have a n unj usti fi ed advantag e in the com m er ci al ar ena o verpri vate uni vers iti es f orfund i ng be cause of th e pote nt i alf o r i m m uni tyfr o m pa te nti nfr i ng ement action s.” S
. Rep
. N o . 1 0 2 -280, at 9 (1992) r epr i nt e d i n 1992 U. S
. C. C. A. N
. 3 56 8, 3 09 4. The l ev el -pl ay i ng - fi el d i ss ue is p ar tic u lar ly p er tin en t in th e c on te x t o f sc ien tific re s e a r c h a nd pa t e nt s , b ut thi s c a s e e xe mpl i fi e s t hat si m i l arco ncer ns ar i se i n the tr adem ar k a re na. Phoeni x conte nd s th at we can fi x thi s probl em by fi nd i ng tha t W i sc on si n w ai ved i ts sov er ei gn i m m unity32 N o. 08

- 4164 by choos i ng to part i ci p at e in the federa l l y r egul ate d tr adem ar k pr oce ss. A fteral l, W i sco nsi n coul d have ch o s e n t o u s e th e C O ND O Rma r kwi th o u tr e g i s t e r i ng it, and w ithou t con cern f or da m ages be cau se of i ts soverei gn i m m u n ity guar antee
. W i sco nsi n, however, chos e t o r eg i st er th e m ar k, a nd a ct i ve l y pa r ti ci pat ed i n the sy st em bywhi chi t g aine d b en efi ts ( i
. e. , cleari ng the fi el d of ot her CO N DO R m ar ks)

. W i sco nsi n’s ga i n of b e n e fi t s fr o m i t s p a r t i c i p a t i o n i n th e s y s t e m s ho ul d, Phoeni x ar gues, subj ect i t t o re sponsibi l i ti es ar isi ng fro m i ts part i ci pati on

— n am ely a su it for d am ag es if it in frin ge s o n oth er m ar ks in t h e s ys te m . U nfo rtunatel y forPhoeni x, the Su p re m e Cour t r ej ecte d a s i m i l arar gum ent in the TRC A cas e, C o llegeSa vi ngs Bank, w h er e i t found that a st ate ’ s deci si on t o engag e “ in the inter sta te m ar ket i ng and adm i ni strati on o fi ts program , ” 5 27 U
. S. at67 1, i s no t a co nstr ucti ve w ai vero f im m u n ity , id. at 687. W i sco nsi n i s in a b i t o fa differ ent s itu ati on than w as th e stat e o fFl or i da: i t for m al l y r egi ste re d i ts m ar k with the PTO. I t e nter ed th e federa ltr adem ar k s yst em notby s i mp l y p o s s e s s i n ga t r a d e ma r ktha ti tma r k e t e d i n c o mm er ce, as Fl or i da did, b u t b y acti vel y a vai l i ng i tse l fo f th e be ne fi ts o ffede r alt r ade m ar kr eg istra ti o n. But CollegeSa vi ngs Banksw ee p s m or e b ro ad ly th an m er ely r ej ec tinga “ m ar k et
- en try ” w aiv ero fs o ve r ei g n i m m un ity
. Coll egeSa vi ngs Bankrej ecte d the e nti re not i on o f a c on st ru c tiv e w aiv er of so ve re ign im m u n ity , i d. at 680, an d l im ited th e i nq uiry of w aiver to w he th er “ the State ma d e a n a l t o g e th e r v o l u n t a r y d e c i s i o n t o wa i v e i t s i m-N o. 08

- 4164 33

m unity, ” id. at 681 ( quotati on o m i tte d). A l aw that m er ely a l er ts the s ta te t o the fede r alg o ve r nm en t’ s i nt en ti on t o abr oga te t h e sta te’ s i m m unity i s insuffi ci ent t o cre ate a w ai ver i f the sta te i s engag i ng in other w i se l a w fu l ac tiv ity
. Id. a t6 8 7
. T he s t a t e ’ s c ho i c e t o r e gi ste r its m ar k w a s o th er w ise law fu l ac tiv ity , an d P h oe n ix does not and c annot sugge st that the re cei pt of t ra dem ar k r egi str ati on i s s peci fi cal l y c ondit i oned on a waiv er ofi m m unity. In f act , Phoe ni x’s co unterc l ai m s do not depend atal lo n w hether W isco nsi n re gi ste re d i ts m ar k; the sta tutory infringem ent a nd f al se desi gnati on o fo r i g i n c l ai m s ar e o r di na r i l y a va i l ab l e ag ains t an y acto r w ho infr i nges a r egi ste re d m ar k. A fter Coll egeSa vi ngs Bank, the doctr i ne o fco nstr ucti ve w ai veri s no l onge r av ail abl e. W i sco nsi n i s e nti tl ed to as se r t i ts i m m uni tyfr o m s ui t no twi th st an di ngi ts v o l untar y par ti ci pati on in the fed er altr adem ar k r egi str ati on s y s t e m. Bu t W i sco nsi n ’s p ar ti ci pati on in the tr adem ar k s yst em i s no t the o nl y c on d uct that Phoe ni x i denti fi es as tr i gg er i nga wai ve r o fW i sc o nsin’ s El ev en thAm en dm en t pri vi l ege s. Phoeni x al so ar gues that W i sco nsi n w ai ved i ts sov er ei gn i m m unity the m om ent i t invoke d the j uri sd iction of th e d istri ct cou rt pu rsu an t to 15 U
. S. C
. § 1071(b). Phoeni x ci tes Lapides v. B o a rd of R ege nts of the U niversi ty Syste m of Georgi a , 53 5 U .S. 6 13, 61 9 ( 2002 ) , i n supp or t o f thi s pro posi ti on. There , the st ate ofGeor gi a was subj ect to sta te l aw cl ai m s aga i nst i t i n sta te cour t. It rem ove d th e ca se t o fede r alc o urt, a nd the n a r g ue d tha t th e Ele vent h A m endm ent b ar re d the federa lco urt fro m34 N o. 08

- 4164 he arin g t h e state law clai m s against i t. I n rej ectin g G eorg i a ’ s i mm un i t y a r g ume nt, the S up r e me Co ur t“ f oc us [ e d] on the l i ti gat i on a ct” Georg i a per f or m ed and concl ud ed th at rem ov al w as an ins u fficie n tly “ s p ec ial” ac t, La pid es , 535 U
. S. at62 0, to w arrantdepartur e fro m the l ongsta nd i ng g ener alpri nci ple that“where a S tat e vol unt ar i l y beco m es a par ty to a ca u se a nd subm i ts i ts ri ghts f o r j udi ci al det er m i na ti o n, i t wi l l be bo und th ereby and cannot esca pe the re sul t o fi ts own vo l untaryactby in vo kin g t h e p ro h ibit ion s of th e E lev en th A m en d m en t.” Id. at 619 ( quoti ng Gu n t e rv . At l
. Co as tL i n eR. R. , 20 0 U
. S. 27 3, 28 4 ( 1906 ) )
. I t a l so neces sar i l y i m pli ed that by re m oving the cas e to fed er alco urt, Geor gi a a ffi rm ati ve l y c ha ng ed th e ch ar ac te r o fi ts pa r ti ci pat i o n in the litig at ion, for th e Su p re m e C ou rt r ec og n ize d th at G eo rg ia ha d be en “b r o ug ht i nv o l unt ar i l y i nt o th e ca se as a de fen dant i n the or i gi nalst ate co urt proce edi ngs. ” Id. at 620. Pho en i x c o nt en ds th atW i sc o ns i n’ s l i ti g at i o n s ta tu s w as si m i l ar l y c hanged

— and its so ver ei gn i m m unity si m i l ar l y wai ved

— w hen i t m ade the deci si on t o fil e a n acti on in dis tr i ct c ourtpursuant to 15 U
. S.C . § 10 71(b) r athe r tha n a ppea l i ngthe TTA B ’s de ci si o n t o the Feder al C i rcui t pursuant to § 1 071( a)
. In choo si ng to p ro c ee d u n d er § 10 71 (b ) rat h e r th an § 10 71 (a), P h oe n ix assert s, W i sco nsi n gained the be nefi t o faddit i onalev idence and so shou ld face the cos t o fPhoeni x’s i nfr i ngem ent a nd f al se desi gnati on o fo ri gi n counter cl ai m s. Bu t the si m ple co st-benefi t a nal ysi s Phoe ni x propos es ove rl oo ks th e tr ue natur e o fthe proce edi ngs he re . W i sco ns i n, l i k e Geo r g i a i n La pid es , was or i gi nal l y hal ed i ntoN o. 08

- 4164 35 l i ti gat i on w i th Phoeni x i nvol untari l y. I ts sta tus w as th at of a d efe n d an t. Se e 37 C
. F. R. § 2. 116(b)
. W i sco nsi n’s el ecti on t o pu rs ue an a pp eal in the dist ri ct c ourtr atherthan th e ap p ell ate cou rt

— w hi ch i t, l i ke pri vate p ar ti es to cancel l ati on p ro ceedi ngs, was sta tutor i l y e nti tl ed to do

— gave it t h e offi ci alti tl e o fpl ai nti ff, but ti tl e i s no t whatmatt er s f o r s over ei g n i m m uni typur po se s. I fthe c h ar ac te r of th e litig at ion ac t t u rn ed on ti t l e , G eo rg ia w o ul d h a v e b e e n ab l e t o a s s e r ti t s s o v e r e i g n i mm uni ty cl ai m s i n La pid es . The techni cal l y v olun tary nature o fW i sco nsi n’s appeal i s no t det er m inati ve e i th er . Ourdi ss en tingc o l l ea g ue m ak es a thought fulpr es en ta ti o n o n thi s fr o nt, b utthe m er e fa c t t h at W isc on sin ex e r c i se d its op tio n to ch allen ge an ad ve rs e d ec is ion ag ain st it d oe s n otn ec es sa rily r es ul t i n a wai ve r o fi ts s o ve r ei g n i m m uni ty
. Inde ed, o ur col l eague co ncedes th at W i sco nsi n coul d have a pp eal ed inth e F ed er al C irc u it

— anothe r fed er alf or um r eached w h olly v o l u n ta rily

— and sti l lr eta i ned i ts abi l i ty to mo u n ta s o v e r e i g n i mmu n i t y d e fe n s e t o th e v e r y c l a i ms P h oe n ix br in gs h er e. See Diss ent a t 5 8. W hat i s cruci al i s the nature of W i sco n sin ’s li ti gat i on act
. Unl i k e Geo r g i a’ s r emov ali n La pid es , W iscons in’s pu rs uito fj ud i ci alr eview in the wake o fthe advers e age ncy deci si on i t di d not ini ti ate i s “ speci al

. ” Despite i ts f o r m alc ha ra ct er i za ti o n a s a st an dal o ne c i vi la ct i o n, see 15 U
. S. C. § 1 071(b); 3 7 C
. F. R. § 2. 145, ati ts hear t W i sc on sin ’s p u rs u it of re d re ss i n t h e d ist ric t c ou rtis si m ply a conti nuati on o fPhoeni x’s o ri gi nalcance l l ati on ac ti o n. Cf

. Vas

- C a th, Inc
. v. Curat ors of theU ni v. of

M o. , 47 336 N o. 08

- 4164 F. 3d 1376 , 13 82 ( Fed. Ci r. 20 07) ( st ating that an appeal bro ught in the dis tr i ct c ourtpursuant to 35 U
. S. C. § 1 46, w hi ch i s r oughl y a nalog ou s to 15 U
. S. C. § 1 071(b) , “i s no t a new cl ai m , but an autho ri zed p h as e ofthe i nter fer ence p ro c eedi ng tha t i s co nd ucted by the PTO and i s s ubj ect to j ud i ci alr evi ew ”)
. “[ T]he m ere se ekingo fj ud i ci al re vi ew o fan a gencydeci sio n . . . bya sta te that w as a defe nd ant b efor e the ag ency [ i s] i nsuffi ci ent a l one to i nfe r a w ai ver of i m m unity, ” Taylo rv. U
. S. D ep’ tof Lab or, 440 F.3d 1, 5 (1st C ir. 2004) (qu otation om itted ), and Phoeni x has no t i denti fi ed f oro ur co nsi derat i on any o therr el evantaffi rm ati ve l i ti gat i on a cts und er tak en byW i sc o ns i n. W e a re m i nd ful ofthe co n cer ns abo ut unfa i r l i ti gatio n ga m ep lay th at an im at ed th e C ou rt ’s h old in g in La pid es , 535 U .S. at 6 20 -22 ; w e re c og n i z e th at w h ile t he El e v e n th A me n d me n tg i v e s s t a t e s a n u p p e r h a n d, i t ca nno t be mass ag ed to c r ea te unf ai r l i ti gation adv an tag es. A ttem pts to as ser t s ove re i gn i m m unity under ci r cumst an ce s th atc r ea te “ i nc o ns i st en cy, a no m aly, a nd u n fair n es s” in t h e l i t i ga tio n co n te x t, id. at 620, i m pli cate tho s e c o nc e r ns a nd c a nn o tb e p e r mitt ed t o g o fo r wa r d. Bu t there i s no i nd i cati on that W i sc on sin used

— o r e ve n c o ul d us e, f o r the po te nt i al ex p lo i ta ti o n o fthe sovereign i m m un ity privil ege is an im p erative con side rat ion as w ell, see La pid es , 535 U
. S. at62 1

— its district cou rt acti on a s a n opportunity t o gain any sor t o funfa i r or inconsi ste nt l i ti gat i on a dvantage o verPhoeni x here

. See Taylo r, 44 0 F
. 3d at 8 ( “The L a p ides- [ Ne w Ham ps hi r ev. ] R a m sey [ , 36 6 F
. 3d 1 ( 1stCi r. 20 04) ] l i ne o f c as es does not p re vent a l i ti gant fro m o btaini ng anyso rto fN o. 08

- 4164 37 advantage r el ating to im m u ni ty i n pursui ng hi s ca se. T he y only cond em n th ose li tigation ad van tages that are
‘ i nconsi ste nt’ or ‘ unfai r. ’ ” (qu oti ng La pid es , 53 5 U.S
. at 62 2) )
. To the c o nt r ar y, W i sc o ns i n di d no t empl o y the h yb rid ap p ella te ve h i c l e t o ra ise an y n ew cla im s; it sim p ly ap p ea led th e ad ve rs e TT A B ru lin g. H a d it bro u gh t new cl ai m s a gainst Phoe ni x, the nature o fi ts litig at ion a c t, an d th e o u tc om e o f ou r an aly sis , w ou ld pla i nl y b e di ffer ent; the ass er ti on o fpre vi ousl y unl i ti gat ed cl ai m s in a federa lf or um i s undoubtedl y “ a for m o f vol untaryi nvocat i on o f a federa lco urt’ s j uri sdic ti on suffi ci ent t o w ai ve the S tat e’ s o ther w i se val i d obj ecti on to l i ti gat i on o fa m att er. . . i n a federa lf or um . ” La pid es , 535 U
. S. at62 4. W i sco nsi n m ade a choi ce to proce ed i n th e d istr i ct co ur t, a nd the r e wer e unde ni ab l y s o m e li ti g at i o n a dva ntages to be had a s a r esul t o fthatdeci si on. But thes e ad va n ta ge s a re eq u all y a va ilab le t o a ll p ar tic ip an ts in tr adem ar k c ancel l ati on procee dings ; theysi m plycannot be c onsi dered “unf ai r” o r “i nconsi sten t. ” I t would be b ot h u n fair an d u n r e a l i s t ic t o re q u ire st at es to p as siv ely a c c e pt

— or ev en p re -em p t, see Diss ent a t 6 1

— advers e T T AB d e c i s i o ns s o a s t o k e e p th e i r s o v e r e i g n i mm unity pr i vi l ege i ntact. I t was at P h oenix’ s be hest that W i sco nsi n w as “br ought i nvol untari l y into the c ase as a de fe nd a nt, ” L a pid es , 535 U
. S. at 620, and W iscons in’s election to p roceed i n d istri ct c o u r t rathe r than before th e F e de r a l Ci r c ui t do e s no thing t o fun da men t a l l y al ter th e n a t u r e o fth e p r o c e e d i n g s o r i t s p a r t i c i p a t i o n i n th e m. W i sco nsi n’s as ser ti on o fso ver ei gn i m m unity in re spo ns e to cl ai m s di st i nc t fr o m tho se r ai se d i n the38 N o. 08

- 4164

o r i g i na la dm i ni st r at i ve ac ti o n do es no t i m pl i ca te the f ai rnes s co ncer ns i denti fed by the S up re m e Cour t. W i sc o ns i n i mm e di a t e l y a nd u n f a l t e r i ng l y a s s e r t e d a sovereign i m m un ity defen se w he n th e federa l co un terc laim s w er e filed

. Cont r a Johns on v. Ranc ho S ant ia go Cm ty. C oll. D is t. , 62 3 F
. 3d 1011 , 10 21- 22 ( 9th Ci r. 20 10)
. I t was g e n e r a l l y e n t i t l e d t o d e fe n d a g a i n s tP h o e n i x ’ s c l a i ms insu c h a m an n er , see Di ss en t at5 8, a nd di d no t u se an y l i t i g a t i on sl ei g hto fh a nd t o i nv o k e the El e v e nth Am e nd

m en t, see, e.g., La pid es , 53 5 U.S
. at62 1; I n d
. P rot. & Ad v o c a cyS e r v s . v . In d
. F a mi l y& S o c . S e r v s . A dm i n. , 60 3 F.3 d 36 5, 37 3 (7 th C i r . 2 0 10 ) (en ba n c ), peti ti on for ce rt
. filed, 79 U .S .L .W
. 3063 (July 21, 2010) (N o. 10-131); New Ham ps hi r ev. Ram sey, 3 6 6 F. 3d 1, 16-17 (1st Cir. 2004). W e there f or e co ncl ud e tha t W isco nsi n has no t thro ugh i ts appeal fro m the TTA B’s deci si on waiv ed i ts sov er ei gn i m m unity defense to Phoeni x’s co unterc l ai m s.

V . Concl usio n The di st r i ctc o ur t m i sa ppl i ed th e l i k el i ho o d o fc o nfusi on t estand im proper l y r ej ecte d the TTA B’s f actual fi nd i ngs. Fo r th at r eas on, Phoeni x i s e nti tl ed to a tr i alo n th e like lih oo d o fco n fu sio n iss u e. H ow ev er , W isc on sin is p rotecte d by t h e E levent h A m en d m en t from Ph oen ix’s counter cl ai m s. A ccor dingly, we re ver se the di str i ct c o u r t ’ s d e c i s i o n o n l y w i th r e s p e c tt o i t s g r a n to fs u mm ar y j udg m en t to W i sc o ns i n o n the l ikel i ho o d o fc o nfusi on i ssue and rem and fo r a t ri alo n that i ssue onl y.N o. 08

- 4164 39 W OO D , C ircu it Judge, di ssenting i n pa r t. Be hi nd the detai l s o fthe tr adem ar k dispute between appel l ant Phoe

ni x I nter nati onalSoftw ar e ( “Phoeni x”) and the U ni ver si ty ofW i sco nsi n ( “W i sco nsi n”) i s a di ffi cul t q uesti on o f con stitut ion al l aw : are Ph oen ix’s com p ulsory cou nt erc l a i ms a g a i n s tWi s c o n s i n b a r r e d b y th e s o v e r e i g n i mm unity doct rine that the S up re m e Cour t has f ound ref l ec te d i n th e E l e v e n th Ame n d me n tt o th e U. S
. C o n s t i t uti on? M y c ol l eagu es c onclude thatthe answ erto that que st i o n i s y es , b as ed pr i m ar i l y o n the i r unde r st an di ng o fthe de ci si o ns i n Fl or i da Prepai d Pos t se co ndary Educ at i on Expe ns eBoar d v
. Col l egeSa vi ngs Bank, 52 7 U.S
. 62 7 (199 9 ) (“ Fl or i da Prepai d”) , a nd C ityof B o erne v. Flo res, 52 1 U. S
. 5 0 7( 1 9 9 7 )
. Wi th r e s p e c t, Id o n o ta g r e e w i th th e m. Iam wil l i ng to as su m e forthe sak e o far gum ent that W i sco nsi n w oul d have be en enti tl ed to as ser t s ove re i gn i m m unit y if Ph oeni x had sued i t di re ctl y in federa l c ou rt, alth ou gh ev en th at p ro p os itio n is co n te st ab le gi ven m or e r ecentdevel opm ents i n the l aw o fso ver ei gn im m u n ity . B u t t h at i s n oth ow th is c as e a ro se . In st ea d , i t was W i sc o ns i n tha t ch o se unr es tr icte d l i ti g at i o n in the federa lforum , wh en i t deci ded to chal l enge the deci si on of th e T ra d em ar k T ria l an d A p p ea l B oa rd (“T T A B ”) in th e fe de r a l di s t r i c t c o ur t i ns t e a d o f t a k i ng a n a pp e a l to th e F ede r alCi r cui t. S ee 1 5 U. S
. C. § 1 07 1(b) ( pr o vi di ng th ata pa r ty“ di ss at i sfi ed wi ththe de ci si o n o fthe [ TTAB ]” may “h av e r emedy b y a c i vi la ct i o n” )
. Hav i ng e l e c t e d th e d i s t r i c tc o u r t, wh i c h wa s n o tl i mi t e d t o t he re cor d cre ate d i n th e adm i ni str ati ve proce edi ng, i t has effecti vel y wai ved i ts sov er ei gn i m m unity forall m atte r s th atmighta r i se i n tha t par ti cul arc as e, i nc l udi ng40 N o. 08

- 4164 counter cl ai m s that a ri se out of the sa m e t ra nsacti on o r occur re nce. S ee Lapides v. B oard of Regents of the U niversi ty Sy stem of G eorg ia, 53 5 U .S. 61 3 ( 2 0 02 ). Th u s, w h ile Iag re e with the m aj ori ty that the c ase m ust be rem anded f or a tr i al on the questi on w hether ther e i s a l i k e l i ho o d o fc o nfus i o n b e t we e n Ph o e ni x’ s CO NDOR m ar k a nd W i sco nsi n’s CON DO R m ar k, Iwould al so re i nstat e Phoen i x’s co unterc l ai m s fordam age s ba sed o n tr ade m ar ki nfr i ng ementa nd f al se de si g na ti o n o fo r i g i n.

I Phoeni x’s r i ght t o pu rs ue i ts counterclai m s turns o n w hetherW i sco nsi n w ai ved i ts sov er ei gn i m m unity when i t dec i ded to pur su e a ch al l en g e to the de ci sion of the TT AB i n f ede r a ldi s t r i c tc o ur t, r a the r tha n t o t a k e a dva n ta ge of an ap p ea l to t h e F ed er al C irc u it. A nte, at31

- 38
. The maj o r i t y c o n c l u d e s th a twe s h o u l d n o tfi nd w ai ver, but Ido notag re e w ith them

. Even i fthe dist ri ct cour t were the o nl y for um ava i l abl e t o the s tat e

— w hi ch i t was not, as Iexpl ai n l ate r

— no th i ngrequ ir es a ny o ne to p urs ue an ap p eal from an ad m inistrative agen cy’s rul i ng. To the co ntra ry, so m et i m es Congre ss provi des that no a pp eali s pos sibl e, and cour ts have re gular ly u p h eld su c h j u ris d ict ion -st rip p in g p ro vis ion s. Se e, e . g. , K uc a na v. Ho lder, 1 30 S
. Ct
. 8 27, 8 31 ( 20 10 ) ( r ea ff irmi ng tha tthe j ur i s di ct i o n- s t r i pp i ngp r o v i s i o n i n 8 U. S
. C. § 1 252( a) ( 2) ( b) pre vents r evi ew o fr em ova ldeci si ons of the A tt or ney Gener ali n the i m m i gr ati on a re a when th ose d ecisions are m ad e d iscretionary by sta tu te);N o. 08

- 4164 41 Czerki e s v. U
. S. D ep’ tof La b or, 73 F .3d 1 435, 14 37- 39 ( 1996 ) ( e n b anc ) ( re cogni zi ng tha t a federa lco urt m ay not r ev i ew a c ha l l en g e to a be ne fi ts de te r m i na ti o n o fthe Offi ce ofW or ker s’ Com pensati on Pr ogr am s in the Dep ar tm en t o f L ab or ); M a roz san v. U nited Sta tes , 85 2 F
. 2d 1469 , 1473 n
. 10 (7th C ir. 1988) ( e n b anc ) ( di sc us sing how vet er ans m ay not obt ai n federa l

- cour t re vi ew of a n i nd i v i du a lc l a i ms det e r mi na t i o n b y the V e t e r a ns Adm i nist r at i o n)
. W i sc o ns i n’ s ch o i ce he r e to c o nt es t th e deci si on of the TTA B b y fi l i ng an acti on i n th e fe d er al di st r i ctc o ur t i s thus l i ti g at i o n c o nduc t th at is i nc o nsis te n t w ith an as s e r t ion of so ve re ign im m u n ity . Th is i s especi al l y the case because W i sco nsi n w ants to enj oy the l i ti gat i on a dvantage s o fthe federa l fo rum , i n w hi ch it is s ee ki n g ju d icia l ac tio n to ov er tu rn th e T T A B ’s d ec isi on, wh i l e a t the s am e tim e i t i s m aneuver i ng to bl ockPhoeni x’s eff or t t o l i ti gat e cl ai m s in that c ou rt that ar i se out ofthe sam e tr ansact i on. ( The m aj or i ty sugge sts othe rwis e, see ante, at36

- 37, butthe r e i s no th i ngi n the re cor d to supp or t i ts ass um pti on that W i sco nsi n has deci ded to foreg o the e xtra l i ti gat i on a dvantage s o ffer ed i n the federa ldi str i ct c ou rt .) The wai verdoctr i nes that th e S upr eme C o ur t ha s en do r se d do no t per m i t th i s k i nd o fs el ec ti ve l i ti g at i o n s tr at egy, pa r ti cul ar ly g i ve n the f ac t th atthe t r ade m ar kl aws o ffer ed W i sc o ns i n a differ ent o pti on

— ap p ea l to t h e F ed er al C irc u it

— that w oul d have a l l owed i t t o chal l enge the a gency ’ s a cti on base d on the re cor d cre ate d bef or e the ag ency i n a way that did notper m i t co unterc l ai m s.42 N o. 08

- 4164 A The Suprem e Cou rt has i nter prete d the El eve nth A m endm ent t o guar antee that“a n uncon se n ti ng S tat e i s i m m une fro m sui ts bro ught i n fede ra l c ou rt s byher ow n cit ize n s a s w ell as by cit ize n s o f an ot h er Sta t e .” Edel m an v. Jor dan , 41 5 U.S
. 65 1, 66 2- 63 ( 1974 )
. The Courthas l ong re cogni zed, h owever, that a sta te w ai ves i ts sov er ei gn im m u n ity w h en it co n se n t s to su it. E.g
. , C la rk v . B a rna rd, 108 U
. S. 43 6 ( 1883 )
. “Gener al l y, w e wil lfi nd a w ai ver ei theri fthe St ate vo l untari l y in vo kes ourj uri sdic ti on, o r e l s e i f the S t a t e mak e s a c l e a r de c l a r a t i o n tha t i ti ntends to sub m it itse l fto o ur j uri sdic ti on. ” Coll egeSa vi ngs Bank v. Flo rida P repa id P o stseco nd a ry E du ca tio n E xp ense B o a rd, 527 U
. S. 666, 675-76 (1999 ) (“ Coll egeSa vi ngs ”) ( i nter nal qu ot ation m arks an d citations om itted ). Th e state’s wa i v e r mus tb e “ un e qu i v oca l[ a nd ] s pe c i fi c a l l y a pplica b l e t o federa l

- cour t j uri sdic ti on. ” A tasc adero St ate Hos p. v. Sc anl on , 473 U
. S. 234, 241 (1985 ). Form or e than a c entu ry , t h e Suprem e Cour t has r eco gni zed that a sta te m ay vol untari l y w ai ve i ts im m unity thro ugh conduct duri ng l i ti gat i on. In 1883 , i t hel d that w hen a sta te m ake s a “vo l untaryappeara n c e” i n federa l cour t a s a n in te rv enor, thatpart i ci pati on a m ounts to a w av ier o f t h e s ta te ’s s ov er eig n im m u n ity
. C la rk, 10 8 U.S
. at 44 7. T o th e s am e e ffec t, it h eld inG un ter v. A tla nti c C o a st Li neR. R. Co. , 20 0 U.S
. 27 3, 28 4 ( 1906 ) , that“where a s tat e volun tari l y b eco m e a party t o a ca use, and subm i ts i ts r i g ht s f o r j udi ci alde te r m i na ti o n, i t wi l lb e bo und th e r e b y, a n d c a n n o te s c a p e th e re s u l to fi t s o wn vol un t a r y a c tb y i nv o k i ngthe p r o hib i t i o ns o fthe 1 1th Am en dm en t. ” L ate r, i t wro te i n G a rdn er v. New JerseyN o. 08

- 4164 43 that, i n the conte xt of a bankr up tcy dispute, a sta te that vo lu n ta rily files in fe d er al c ou rt“w aiv es a n y im m u n ity
. . . re specting the a d j ud i cati on o fthe cl ai m . ” 3 29 U
. S. 56 5, 57 4 (1 94 7). M os t re c en tly , th e C o u rtco n firm ed in La p i d es tha t i ts r ec o g ni ti o n o fthi s pr i nc i pl e r emai ns unqu al i fi ed: “The Courthas l ong ac c ep ted thi s s tat em ent o fthe l aw as v alid , o ften c i ti ng with approval the c ase s e m bodyi ng tha t pr i nci ple

. ” 5 35 U
. S. at61 9 ( ci ti ng Coll egeSa vings , 527U .S. at 6 81 n .3; E m plo yees D ep’ tof Pub
. He al t h an d Welfa re of M o. v. D epar t m e ntof Pub. He al t h an d We l

f areof M o. , 41 1 U.S
. 27 9, 29 4 & n. 10 (19 73 ) (M ar sh all, J., co n c u rrin g); P etty v. Tenn essee-M issou ri B ri dge Co m m ’n , 359 U
. S. 275, 276 (1959 ))
. La pid es co nfi rm s that the Courtdi d not e l i m i nate th e n ot ion of w aiv er by co n d u c t in lit i g a t i o n w h en it iss ue d i ts o pi ni o n in For d M ot orCo. v. D epar t m e ntof Tr e asury of Indi ana , 323 U .S. 45 9 (1 94 5). Fo rd he l d tha t a sta te coul d asse rti ts sov er ei gn i m m u n ity f orthe fi rs t ti m e in the Suprem e Cour t, d es p ite the s tat e a tto rney ge n er al’s d efe n se on th e m er its in t h e l ow er co u rt s. Id. at 467- 69. Fo r a tim e, it s eem ed that Fo rdwas i n tens i on w i th the vi ew thatvo l untaryi n voca ti on o ffedera lj uri sd iction w aives an y i m m u nity d efense

. Bu t the Cou rt’s dec i si o n in Wi s co ns in D epar t m e ntof Cor r e ct i ons v. Sc hac ht, 5 24 U. S
. 3 81 ( 19 98 ) , s ho we d th at thi s was no t th e c a s e . T he r e , the Co ur twr o t e tha t “ [ t ] he El e v e nth Am e nd

m e nt
. . . do e s n o ta ut o mat i c a l l y de s t r o y o r i g i na lj uri sdi ct i o n. Ra th er, the El ev en thAm en dm ent gr an ts the St ate a l ega lpow erto as ser t a so ver ei gn i m m unity defe nse s h ou ld it choos e t o do so

. The S tat e ca n w ai ve th e de fe ns e . . . . No r n e e d a c o ur tr a i s e the de fe c to n i ts own . U nl ess the St ate r ai ses the m att er, a cour t ca n44 N o. 08

- 4164 i gnor e i t. ” Id. a t3 8 9 ( c i t a t i o ns o mi t t e d)

. T he y e a r a f ter Sc ha chtwas deci ded , the Court re affi rm ed “the unrem ar kabl e pr oposi tio n thata St ate waive s i ts sov er ei gn i m m unity by vol untari l y i nvoking the j uri sdic ti on o f the federa lco urts
. ” Coll egeSa vi ngs , 52 7 U.S
. at68 1 n. 3. The questi on o n w hi ch the Cour t gr an ted r evi ew i n La pi des was “wh ethera sta te w ai ve[ s] i ts Ele venth A m endm ent i m m unity b y i ts affi rm ati ve l i ti gat i on conduct w hen i t r em ove s a case to federa lco urt
. . . . ” 5 35 U
. S. at61 7 ( i nter nalq u otati on m ar ks om i tte d). Lapides, a pro fess orem plo yed by the Georg i a s tat e uni ver si ty sys tem , had sued t h e B oar d ofRege nts in sta te cour t, i n both thei r person al an d offi ci alcapaci ti es. H e a sse rt ed that they h ad vi ol ate d both s tat e l aw and hi s federa l c o ns t i t ut i o na lr i g ht s b y p l a c i nga l l e g a t i o ns o fs e xu al hara ssm ent in hi s per so n n elfi l e. The st ate defendants re m ov ed th e c as e t o fe d er al c ou rt, w h er e th ey p ro m p tly soughtdi sm i ssa lo fthe offic ial

- acti on cl ai m s o n sta te so ve r ei g n i m m uni tyg r o unds

. Al th o ug h the Co ur t f o und i t nec ess ar y t o l im it th e s tr i ct r each o fi ts rul i ng to st ate
law clai m s (noting th at a state is not a “p erson ” for p urposes o f42 U
. S. C. § 1 983 and thus that the federa l cl ai m s co uld notbe s ustained on thatgr ound al one) , i ts di s c us s i o n o f wa i v e r b y l i t i g a t i o n c o nd uc t w as a g en er alo ne . The Co ur t co nc l ude d tha t i t woul d a dh ere to the r ul e i n G un ter, quot ed abo ve, and str ess ed that a s tat e ca nnot use the Ele venth A m en dm ent a s a ge t- outof

- c o ur t
- fr e e c a r d whe n i t v o l un t a r i l y s ub mi t s t o a federa ltr ibunal f ora j ud i ci al d ete rm i nati on o fi ts ri ghts. Id. at61 9 ( quoti ng G un ter, 200 U
. S. a t2 8 4 )
. I to ffe r e d a num bero fr eas ons f ori ts endors em ent o fwaive r by l i ti gat i on co nd uct:N o. 08

- 4164 45 [ A]ni nt er pr et at i o n o fthe El ev en thAm en dm en t that fi nd s wai veri n the l i ti gat i on con te x t res ts up on the A m endm ent’ s pre sum ed re cogniti on o f the j ud i ci alneed t o avo i d i nconsi ste ncy, ano m al y, and un f a i r ne s s , a nd n o tu po n a S t a t e ’ s a c t ual prefer ence ordesi re , w h i ch m i ght, afteral l, f avo r s e l e c t i v e u s e o f“ i mm un i t y ” t o a c hi e v e l i t i g a ti on ad vantages.
. . . The r el evant“cl ar i ty” her e m ust f o c us o n the l i t i g a t i o n a c t the S t a t e t a k e s t hat cre ate s the waiv er . A nd t hat a ct

— re m ova l

— is clear. Id. a t 6 20
. Ce nt r alt o the ho l di ngi n Fo rd, the Co ur ts a i d, w as the f act that i t “ i nvol ved a St at e that a pri vate pl a i nt i ffh a d involuntari lym ade a defe nd ant in federa l cour t. ” Id

. at62 2. C on cl ud i ng “that C la rk, G un ter, a nd G a r d n err epr es en t th e so unde r l i ne o fa utho r i ty, ” th e C ou rt “[f ou nd ] Fo rdinc on sis te n t w ith th e b as ic ra tio n ale of that li ne of case s” an d “o v e r r u le[d ] Fo rdi nsof aras i t would o ther w i se apply. ” Id. at62 3. A s Ise e i t, the Court coul d not hav e e xpresse d i tself m or e p lain ly. For d has be en l i m i ted to i ts fac ts; st ate s can w aive t h eir sovereign i m m un ity by vol un tary conduct i n part i cul ar cas es; and the potenti also ver ei gn i m m unity o fa s tate does noti m pli cate the federa l cour t’ s s ubj ect- m att erj uri sdic ti on. The o nl y question rem ai ni ng i s ho w to applythes e br oad princi ple s t o the c ase befor e us.46 N o. 08

- 4164 B I t i s i m port ant, i n consi deri ng tha t pr obl em , to be p r e c i s e ab o u twh a ta s p e c to fW i sc o n s i n ’ s c o n d u c twe ar e t al ki ng ab out. One poss ibi l i ty i s W i sco nsi n’s deci si on to p ar ti ci pate in the federa ltr adem ar k s yst em atall. The m aj orityhol ds that thi s i s no t e nough to support a c on c lu sio n of w aiv er , ante, at31

- 33, and I agr ee w i th th em . Coll egeSa vi ngs , whi chr ej ec te d the s ame a r g um en t i n the patent conte xt, r ule s o ut any p os sib il i ty that W i sconsin const ructi vel y waived i ts i m m unity b y r egi ste ring i ts tr adem ar k. S ee 527 U
. S. at68 0- 84. N eve rtheless , the Co ur t to o kc ar e i n La pid es to r ecal lthat“ Coll ege Savin gs Bankdi s t i ngui s he d the k i nd o fc o ns t r uc t i ve w ai ver s r ep u d iat ed ther e fro m waive rs effecte d by l i ti gati on co nd uct. ” La pid es , 535 U
. S. at62 0. H er e, W i sco nsi n enga ged in li ti gat i on co nd uct that m us t be ev al uated. M y c ol l eagues be l i eve thatW i sconsin’s act i ons i n cour t were not enough t o supp or t a fi nd ing of w aiver. Th ey beg in b y com p aring W iscons in’s co nduct to th ata t i ss ue i n La pid es , hi ghl i ghti ng the f act th ati n Lapi des the s ta te o fGe o r g i a was s ue d i ni ti al l y i n a Georg i a co urt und era sta te l aw thatexpl i ci tl y wai ved G eo rg ia’s im m u n ity to d am ag es in st at e c ou rt
. Id. at61 7. A fterthatsui t was fi l ed, Geor gia rem ove d the ac ti on to federa lcourt and asse rt ed i ts sov er ei gn i m m unity fro m sui t. A ccord i ng to m y c ol l eagues, i t was the use of the r em ova lpow eri n thi s context that dem onst ra ted that G eo rgi a had vo l untari l y invoke d fe deralj uri sdic

tio n an d w aiv ed its so ve re ign im m u n ity
. A nte, at33

- 35.N o. 08

- 4164 47 The m aj or i ty does not say w h et h er i t r eads La pid es as l i m i ted to cas es i n w hi ch a sta te re m ove s a particu lar type ofst ate
- l aw cl ai m to federa lco urt, but i t s ugges ts that l i ti gat i on a cts com parabl e in “n at ure” to r em ova l m ay fa ll w ith in the gene ral rule of La pid es . S ee ante, at35
. Befo re m oving f or w ar d, how eve r, i t i s i m port ant t o c on sid er h ow br oa d ly th e Su p re m e C ou rt ’s d ec isio n in La pid es ou gh t t o a p p ly. In a d d itio n to a st at e-la w cla im b as ed on a st at u te th a t w aiv ed G eo rg ia’s im m u n ity in st at e co ur t, the pl aint i ffi n La pid es as se rt ed a c laim aga i nst Geo rg i a under § 19 83; the l att ercl aim c ou ld not go f or w ar d against t h e s tat e be cause a s tat e i s no t a “p er s o n ” fo r p u rp os es of § 1 98 3. La pid es , 53 5 U.S
. at61 7 ( ci ti ng Wil l v. M ichigan D ep’ t o f St ate P olice, 49 1 U.S
. 58 , 66 ( 1989 ) )
. A ccor dingl y, the Court w as c ar eful to sa y th ati ts c o nc l us i o n tha t t he s ta te ’ s ac t o fr emov i ngthe case to federa lco urt l ed to a w ai vero fi ts sov er ei gn i m m unity was r eached in “the conte xt o fst ate
- l aw c laim s, inres p ec t t o w h ich th e St at e h as ex p licit ly w ai ved i m m unity fro m st ate
- cour t pr oce edi ngs. ” Id. at 6 1 7
. Atthe s a me ti me, h o we v e r, the Co ur to ffe r e d a bro ader ra ti onal e fori ts rul i ng: I t w ou ld se e m anom alous or incon sisten t for a St ate bo th ( 1) to i nvoke federa lj uri s dict i on, ther eby co nt en di ngtha t th e “ J udi ci alpo wero fthe Uni te d S ta te s” e xt en ds to the c ase atha nd, a nd ( 2) to cl ai m El eve nth A m endm ent i m m unity, th er eb y d en yingtha t th e “Judi ci alpo wero fthe Uni t e d S tat es” e xt e nd s t o the c a s e a th a nd

. And a C o n s t itu tio n th at p er m itt ed Sta te s t o follo w th eir l i t i g a t i o n i n t e r e s t s b y fr e e l y a s s e r t i n gb o th c l a i ms48 N o. 08

- 4164 inth e s am e c as e c o u ld ge n er at e s er iou sly u n fair re sul ts. Id. at619 . T h e C ourtadded that “ [ a] beni gn m oti ve [ f or re m oving to federa lco urt] . . . cann ot m ake the cri ti cal d iffer en c e fo r w h ich G eo rg ia h op es . M ot iv es are d ifficu lt to e v a l u at e, w h ile j u ris d ict ion al ru les sh ou ld be cle ar . . . . To adopt the S tat e’ s El eve nth A m endm ent pos i ti on w oul d perm i t Stat es to achi eve unfa i r tact i caladvantag es, i f not i n thi s case , in ot h er s.” Id. at6 21 ( i nt erna lc i ta ti o ns o m it ted ). W e recen tly observed i n ou r e n b ancdeci si on i n U nited Sta tes v. Sk o ien that“[ t]h is i s the so rto fm ess age that, wh ethero r not tec h n i cal l y di ctum , a cour t o f appeal s m ust r esp ec t, gi ven the S up re m e Cour t’ s e nti tl em ent t o sp eak thr ough i ts opi ni ons as w el las thr ough i ts te c h n i calhol dings

. ” 6 14 F. 3d 638, 64 1 ( 7th Ci r. 20 10) ( e n b anc )
. Tha t m es sa g e appl i es wi the qua lf orce t o the l o g i c appl i ed bythe Co ur t i n La pid es . Refl ecting tha t s pir i t, m ostco urts o fappeal s hav e ap p li ed the ru le of La pid es to al l i nstance s of rem ova l i ni ti ate d b y a s ta te
. The F i fthCi r cui t’ s dec i si o n in M eyers ex re l
. Be nzi ng v. Te xas expl ai ns wh y thi s i s the pro per re sul t: [ I ] n f or m ula ti ng i ts ra ti onal e, the Court did not re str i ct i tse l fto f acts , r ule s, orr eas ons peculi arto the La pid es cas e. Rathe r, thr o ug ho uti ts o pi ni o n, the Co ur t ’ s r e a s o ning, r ul e - mak i ng, a nd c ho i c e o f p re c ep ts w er e d er ive d from ge n er ally ap p lica b le p rin c ip les se rv in g “ th e ju d icia l ne ed to av oid i nconsi ste ncy, ano m al y, and unfai rnes s” i n sta tes ’ cl ai m s o f i m m uni ty i n al l ty pes o ffede r all i ti g at i o n.N o. 08

- 4164 49 410 F. 3d 236, 24 4 ( 5th Ci r. 20 05 ) ( quoti ng La pid es , 53 5 U
. S. a t 62 0). W hi l e thi s co urt has had the o pp or tuni ty to apply La pid es only i n ci rcum sta nces functi onal l y e quiva

l en t to tho se a t i ss ue i n La pid es i tse l f, s ee O m os egb on v. Wells , 33 5 F
. 3d 668 ( 7th Ci r. 20 03) ( consi deri ng a cl aim base d on a sta te l aw waiving i m m u n ity that w as re m ove d t o federa l cour t by a defe nd ant sta te ), other co ur ts h ave g i ve n La pid es a b ro ad er rea d in g, se e, e . g. , L o m ba rdo v. P enn sylv a nia D ep’t o f P ubli c Welfa re, 5 4 0 F
. 3d 190, 19 8 ( 3d Cir
. 2008 ) ( “W e hol d that the [ St ate ] ’ s r em ova l of federa l

- l aw cl ai m s to federa l cour t effecte d a w aive r of im m u n ity from su it in fed er al c ou r t.” ); Em b ury v . Ki ng, 36 1 F. 3d 562, 56 4 ( 9th Ci r. 20 04) ( fi nd i ng tha t Lapi des ap p li es to action r e m o v e d by the state to fed eral court base d on ei therst ate o r federa ll aw ) ; E ste s v. W yom i ng D ep’ tof Tr ans p. , 302 F.3d 1200, 1206 ( 10th Cir. 2002) (sam e). On l y the F o ur th Ci r c ui th a s u nd e r s t o o d La pid es as l i m i ted to its fac ts
. St e wartv. Nor t h Carol i na , 393 F. 3d 484, 48 8- 90 ( 4th Ci r. 20 05)
. Iag re e with the Fi fth Ci rcui t’ s v i ew that the F ourth Cir cui t’ s Ste w art deci si on i s an outlier th at “m i sco nstr ues i m port ant pr i nci ple s a ni m ating La pid es .” M eyers , 41 0 F
. 3d at 249. A s t he La pid es C o u r te x p l a i n e d , “ I n l a r g e p a r tthe rul e g ove rni ng vo l untaryi nvocat i ons offedera lj u risdict i on has r est ed up on t he probl em s o fi nconsi ste ncy an d u n fair n es s t h at a c on tr ar y ru le of la w w ou ld cr ea te .” 53 5 U
. S. at6 22
. “ [ R] emov ali s a f o r m o fv o l unt ar y i nvoca ti on o fa fed er al c ourt ’ s j uri sdic ti on s uffi ci ent t o w ai ve the S tat e’ s o ther w i se val id o bj ecti on t o l i ti gat i on o fthe ma t t e r ( he r e o fs t a t e l a w) i n a fe de r a lf o rum . ” Id. at 6 24 . B u t i t i s, i n the end, j ust a m echani sm f or50 N o. 08

- 4164 i nv o k i ngthe fede r alc o urt’s j ur i sdi ct i o n. The r e i s no re aso n to thi nk tha t the st ate ’ s use o fany othe r m echani sm

— s uc h a s fi l i nga n o r i g i na la c t i o n i n fe de r al cou rt

— car ri es l ess f or ce, f orwaive r pu rpos es. T h e maj o r i t y s t r e s s e s th a twh a twa s c r i t i c a li n L a p i des w as that “Geor gi a a ffi rm ati vel y c h an ged the char acte r o fi ts pa r ti ci pat i o n in the l iti gat i o n” b y r emov i ngthe c as e to fed er al c o u rt
. A nte, at34 ( ci ti ng La pid es , 535 U
. S. at6 20 )
. Inde ed, the S upr eme Co ur t to o kc ar e to p oint o ut that “the St ate w as bro ught i nvol untari l y i nto the c as e as a defendant” but then “v ol untari l y a gr eed to r em ove the c ase to federa lco urt. ” La pid es , 53 5 U.S
. at62 0. Ihave no quar re lwith m y c ol l eagues’ vi ew tha t a st ate waive s i ts i m m u n ity onlywh en i t e xhibi ts a vo l untarychange i n behavi or that dem onst ra tes that i t i s no lo nger d efending the l aw sui t a nd i s instea d taking advanta ge of th e fe d er al for u m . Ials o a g r e e w ith th em th at“t itle is n otw h at m at te rs for s ov er eig n im m u n ity p u r p o s e s.” A nte, at 3 5. T h e w aiv er -b y-li t i g at ion -c on d u c t a n aly sis shoul d n ot turn on whether the s tat e i s a defendant, as i n La pid es , a n int er ve ni ng c la i m an t, a s i n C la rk, 108 U
. S. at 44 7, a p lain tiff, as W isc o n sin is h er e, or e ve n an ap p ell ant in thi s cou rt, se e Indiana P rote cti on and Adv ocacy Se r vi ces v. Indi ana Family an d Soci al Se r vi ci ng Adm i n. , 60 3 F.3d 365, 370 (7th C ir. 2010) ( e n b anc )
. Ins te ad, the cru ci alc o ns i der at i o ns a r e th e vo l unt ar i ne ss o fthe sta te’ s cho i ce o ff or um and the functi onalco nsequences ofthatchoi ce. The Feder alCi rcui t has had occ asi on t o consi der ho w th e vo l unt ar y i nv o ca ti o n pr i nc i pl es i n La pid es ap p lyN o. 08

- 4164 51 outsi de ofthe re m ova lcon te x t. I ts concl usi ons can be su m m ar i ze d a s f o l l o ws. F i r st, a s ta te tha t i ni ti at es an d preva i l s in a pate nt i nter fer ence proce edi ng ag ai nst a com peti ng appl i cant c annot bl ockan a pp ea lto federa l cour t o fthe age ncy’ s deci si on byas ser ti ng i ts so ver ei gn i m m unity, bec au se the sta tutory a pp eali s a l ate r phase ofo ne i ntegr ate d procee ding. S ee Vas

- Cath, Inc . v. C u r a t o rs of U niv ersity o f M issou ri, 47 3 F
. 3d 1376 , 13 85 ( Fed. Ci r. 20 07) ( “[T ]he [ sta te] U ni ver si ty cannot both re tain the frui ts of[ th e adm i ni str ati ve acti on] and bar th e losing pa rty from i ts s t a t ut ory ri gh t of review [. ]”). Sec ond ( and ofpart i cul ari nter esther e) , a sta te that fi l es sui t in federa lco u rtto enf or ce a patentcl ai m co nsents to a l lc o m pul so r y c o unt er cl ai m s th ata r i se fr o m the sa m e t ra n sa c tio n or oc c u rre n c e. R ege nts of the U niversi ty of Ne w M exi co v. Knight, 3 2 1 F .3d 1111, 1125-26 (Fed

. Cir. 20 03 )
. The F ede r alCi r cui t ha s r efus ed, ho wev er, t o fi nd a w ai ver of sta te sov er ei gn i m m unity w he n an i ni ti al proce edi ng br ought by a s tat e i s di sm i sse d fo r i m p ro p er venue a nd the defendant i n the i ni ti alpro ceedi ng l ate r re fi l es el sewhere, se e B iom edi ca l Patent M gm t. v. Ca li forni a D ep’t o f Heal th S ervs. , 505 F .3 d 1328, 1334-41 (Fed

. Cir. 2007 ) , o r w he n a s ta te that fi l es sui t in one dist ri ct cour t f aces r el ate d l aw sui ts i n another dist ri ct c ourt, at l eas t if th e partythatfi l es sui t in the othe r dist ri ct cour t co uld have i nter vened i n the i ni ti al a c tio n fi l ed by th e st ate , se e Teg i cC o mmun i c a t i o n s C o rp . v . Un i v e rs i tyof Texas B oard of Regents , 45 8 F
. 3d 1335 (Fe d. Cir
. 20 06)
. Lastl y, the F edera l C i rcui t has f ound no w ai verwh en a sta te si m plydefends aga i nst a Lanham A ct c laim in federa l c ourt, se e St at eCont r ac t i ng & Eng’g Corp. v. Fl or i da , 25 8 F.3d 132 9, 1336 ( Fed

. Cir. 2001).52 N o. 08

- 4164 Phoeni x’s cas e pr ese nts a n ad dit i onalwri nkl e that m ust be add re sse d: W i sco nsi n did not i ni ti ate th e p roc ee d in g b efo re th e a d m i n ist ra tiv e a ge n c y, bu t itd id ch o o s e t o g o t o c o u r t a ft e r P h o e n i x p r e v a i l e d i n t he T TA B. Se ver al deci si ons of our si ste r ci rcui ts m ay h elp to unr av elthi s l as t co m p li ca ti o n. In Ne w Ham ps hi r ev. R a m sey, 366 F.3d 1 , 16 -17(1s t C ir. 20 04 ), th e F irs t C irc u it hel d that when a st ate vo l untari l y par ti ci pates i n proce eding s be f o r e a fede r ala rbi tr at i o n pa ne lwi th o ut raisin g a so ver ei gn i m m unity defense, the sta te cannot att em pt to chal l en ge the panel ’ s deci si on in federa l dist ri ct c ourtbycl ai m i ng i t was ent i tl ed to i m m unity fro m sui t. The co urt re ached this co ncl usi on “ eve n th o ug h [ th e st at e] was no t f o r m al l y the pl aint i ffi n the adm i ni str ati ve proce edi ng. ” Id. a t 16
. Any o th erde ci si o n, i tr e a s o ne d, wo uld a l l o w the s t a t e t o g a i n a n un f a i r a dva n ta g e . Id. at 16-17. E arli er, the sam e cou rt had de term in ed th at t h e st at e’s p ar tic ip at ion as a d efe n d an t in a dmi ni s t r a t i v e p ro c e e di ng s di d notwaive a sov er ei gn i m m unity defense i n federa lco urt w hen th e stat e had “c on sis te n tly as se rt ed its so ve re i g n im m u n ity , bot h [in federa lco urt ] and i n the adm i ni str ati ve proce edi ng. ” Rhode Isla nd D ep’t o

f E nv t’l Mgm t . v. U nited Sta tes , 30 4 F
. 3d 31, 49 ( 1stCi r. 20 02)
. M y c ol l eagues r el y o n the Fir st Cir cui t’ s m ostr ecentdeci si on invol vi ng st ate so ver ei gn im m u n ity an d ad m in is t ra tiv e p ro c ee d in gs , Taylo rv. U
. S. D epa rtm e ntof

La b or, 44 0 F
. 3d 1 ( 1stCi r. 20 05)
. That ca se i nv o lve d a s i tu at i o n “ sl i g ht l y di ffer en t” fr o m the Fir st C irc u it’s ea rlier d ec isio n s, i d. a t 5 , a nd i ts uni que c i r c u ms t a n c e s p r o v i d e l i t t l e h e l p i n e v a l u a t i n gWi sc o nsin’ s l i ti g at i o n c o nd uc t her e. The s ta te i n Taylo rN o. 08

- 4164 53

re quested adj ud i cati ve p ro ceedi ngs b ef or e a n A LJ for the v e r y p ur po s e o fa s s e r t i ngi t s s o v e r e i g n i mm unit y fro m su it. Id. at7

- 8. The st ate ’ s r equest f oran AL J was n eces sary b ecause the sov er ei gn i m m unity defense
“ wa s n o t a v a i l ab l e a t th e i n v e s t i g a t o r y s t a g e o ft he a dm i ni str ati ve proce edi ngs. ” Id. at8. Th e di s t i nc t i o n tha tthe s e c o ur t s h a v e r e c o g ni z e d, between a vol untary, act i ve deci si on bythe st ate to entr ust a m att er to federa lco urt and i nvol untary, d efensive m easu res, is r efl ecte d i n th e Sup rem e C ou rt deci si ons Ihave disc u ss ed abo ve. W hen a sta te choos es to i nter vene i n a federa lcas e, i t wai ves i ts i m m unity f orpurposes o ftho se proce edi ngs. C l a rk, 10 8 U.S
. at44 7- 48. I f a sta te vol untari l y fi l es a cl ai m i n fed er al c ou rt, w aiv er on c e a ga inoc c u rs . G a rdn er, 329 U
. S. at574. M or eo ve r, a wai ve r o fi m m uni tyi n an i ni ti alpr o ce eding e x t en d s t o a ll an c illary p ro c ee d in gs th at follow

. G un ter, 20 0 U. S
. at 28 1- 82 , 28 9- 90
. I co nc l ude , bo th fr o m the Suprem e Cour t’ s m any deci si ons i n thi s a re a a nd fro m the deci si ons i n oursi ste r ci rcui ts, that La p i d e s re quir es a fi nd i ng ofw ai verin the pre sent case . W i sco nsi n’s deci si on to c hal l enge the TTA B’s unfav or abl e deci si on by i ni ti ating a sui t in federa lco urt i s p re ci sel y the affi rm at i v e c h o i c e t o mo v e t o fe d e r a ldi s t r i c tc o u r tth a tmy coll ea gu es saythat La pid es req u ire s. A st at e’s d ec isi o n t o i ni ti at e an a ct i o n in fede r alc o ur t ch al l en g i ng an ag ency d ec i si on s houl d bar a fi nd i ng o fso ver ei gn i m m unity a s a defen se to co unterc l ai m s a ri si ng o ut o f th e sa m e tr an sa ct i o n o r o cc ur r en ce th at the defen dan t w i shes to ra i se. ( So ver ei gn i m m unity t o one s i de, tho se counter cl ai m s a re r ega rded as com pu l sor y b y F edera l R u le of C ivil P ro c ed u re 13 (a).)54 N o. 08

- 4164 C W i sco nsi n has r ai sed, o r coul d r ai se, a num bero fo bj ecti ons to m y pos i ti on, but none o fthem withst ands cl ose exam i nati on. Fi rs t, i t m ay com p l ai n that i t was f or ced t o b r i n gth i s l a ws u i ti n th e d i s t r i c tc o u r to n c e th e T T AB r ul ed adv er se l y t o i t. M y c o ll ea g ue s des cr ibe W i sc o nsi n’s d ec isio n as “te chnic al l y v ol untary, ” ante, a t 35 , b ut they re gar d i t a s pra c tic allyf or ced. Ido notse e i t that wa y, f o r th e s i mp l e r e a s o n tha t W i s c o n s i n w a s n o tc o mpel l ed to do a ny th ing. Jus t as Ge o r g i a i n La pid es had the o pti on o fl i ti ga ting i n i ts hom e co urt ra therthan r e mov i ngt o fe de r a l cour t, Wi s c o ns i n he r e e nj o y e d a numbero fo pti o ns , a nd e ac h o pti o n c ar r i ed a di ffer en t im p lica t i on for s ov er eig n im m u n ity . I t is u se fu l, inth is c o n n e c t i o n, t o r e c a l lh o w th e p r e s e n tl a ws ui tc a me ab o ut
. Ph o en i x fi l ed a pet i ti o n wi ththe TTAB se ek i ng to cancel W i sco nsi n’s CO N DO R m ar k, se e 1 5 U.S
. C. § 1 064, ar gui ng tha t the U ni ver si ty’ s m ar k w oul d be co nfuse d wi th Ph o e ni x’ s o wn CONDO R m ar k, s e e 1 5 U. S
. C. § 1 052( d). The TTA B agr eed with Phoen ix and cancel l ed W isc on s i n ’ s m ar k. Phoe nix S of t wareInt ’ l v. Boar d of R egen ts of the U niv . of Wis. Sys. , Cancel l ati on N o. 92 0428 81 ( T. T. A
. B. Se pt. 26 , 20 07) , app. at46
. A t that point, W i sconsin had thre e cho i ces: ( 1) i t co uld do no thin g and l et th e TTAB dec i si o n s ta nd; ( 2) i t co ul d a ppea lthe T T A B de cision to the Fed eral C ir c u it , 15 U
. S. C
. § 1071(a); or (3) it c ou ld for eg o an ap p ea l an d in itia t e a c i vil acti on chal l engi ng the cance l l ati on in federa ldi st ric t cour t, 15 U
. S. C . § 10 71(b)

. A s we know, W i sco nsi n chose th e th i r d o fth e s e p a th s . I ti s h e l p fu lt o b e g i n b y c o mpari ng cho i ce # 3 t o the o thertwo.N o. 08

- 4164 55 1
. D o No thi ng . Fi rs t, W i sco n si n coul d have a cquie sced i n the TT AB’ s c a nc e l l a t i o n o f i t s mar k a nd f o un d a new t r a de mar kf o r i t s s o ft wa r e . No thingf o r c e d i tt o s pe nd a m in u te in fe d er al c ou rt . Th e s ta t e m a y ob j ec t t h at it is u n f a i r t o f o r c e i tt o c h o o s e b e t we e n ma i n t a i n i n gi t s i mm uni tya nd c ha l l en g i nga n ad ver se a g en cyde ci si o n, but that i s no m or e unfai r than the prese nt law , w h i ch p erm its the stat e to enj oy the ben efi ts of the trad em ark sys tem wh i l e e xem pti ng i tse l ffro m cer ta in for m s o f ac c ou n ta b ility to ot h e r s w h o u se th e s am e s ys te m . A lth o ug h C o llege S a vin gs f or ecl ose s a theo ryo fco nstr ucti ve w ai verba se d s ol el y o n the f act ofthe sta te’ s par ti ci pati on in the tr adem ar k s yst em , ther e i s no r eas on to expand thi s princi ple to i ts outerl i m i ts. ( I nd eed, as I w i l le xp l a i n s ho r t l y, the e v o l ut i o n o fthe s o v e r e i gn i m m unity doct rine i l l ustr ate s that there i s e ver y r eas on to be c au ti o us abo ute xpa ns i o ns whenwe ar e dea l i ng w i th co m m er ci alact i vi ti es. ) A dm i ni strat i ve age nci es r es o l ve the r i g ht s o fpa r ti es b efo r e th em ev ery da y, a nd Congre ss does not al w ays se e fi t t o provi de f orr eco urse to the c o ur ts
. Inde ed, Ia m no t f ami l i arwith a ny a dm i nistrative sche m e in w hich the p a r t y w h o l oses before the a gencyi s co m pelled t o a ppea lthe a dve r se de ci si o n. A n appeal o r a new l aw sui t is a pri vi l ege thati s o ften ex te n d ed, but that pri vi l ege so m eti m es com es at a c er ta inp ric e. P er h ap s, as h er e, th e n ew la w s u i t in d istri ct cou rt w il l offer d en ovo re vi ew o n an e xpand ed record

— som ethi ng the age ncy w i nner ( i n thi s ca se, Phoen ix ) w ill d i s like , bu t t h e los er (W isc on sin ) w ill ap p re c iate
. S up pl e men t a lc l a i ms a nd c o un t e r c l a i ms mi g htbe add ed once the c ase r eaches the cour t. See , e. g. , Ci ty of56 N o. 08

- 4164 Chic ago v. Inte r nat i onal Col l
. of Su rgeons , 522 U
. S. 15 6 (19 9 7 ). O n ly if a c h alle n ge to th e T T A B d ec isio n in fede ral d istri ct cou rt i s a n eces sary facet of any p arty’s pa r t i c i pat i o n i n the t r a de mar ks y s t e m wo ul d Coll ege Savi ngs di ctat e the co ncl usi on that the st ate ’ s invocati on offedera lj urisd i cti on i s invol untaryand thus does not su p p ort a fi nd ing of w aiver of sovereign im m un ity. If, as Ib el i ev e, a di st r i ctc o ur t a ction i s o pti o na l, the n the deci si on t o enterfedera lco urt i s prop er l y unders too d a s a v o l un t a r y i nv o c a t i o n o ffe de r a lj ur i sdic ti o n a nd a w ai vero fso ver ei gn i m m unity. A not he r w ay to ask th e q u e s tion w he th er the sta te’s ap p eal ofa dec isi on to th e d istri ct cou rt i s a volun tary m o ve t o a ne w tr ibun ali s to ask w he the r r equi r i ngthe sta te to accept the TT A B ’s deci si on without furtherr ecour se w oul d be o ffensi ve som ehow. N ot that Ican see . O th e r r egim es th at p ass con stitut ional m us ter w he re federa l cour t re vi ew of age ncy adj ud i cati on is curt ai l ed c on c er n ri ghts at l eas t as preci ous as a party ’ s i nter est in a t ra dem ar k. J ust thi s pastTer m , the Court re affi rm ed that j ud i ci alr evi ew o fth e A ttorne y Gener al ’ s i m m i gr at i o n r e mov a lde t e r mi na t i o ns ma y b e l i mi t e d, s ee K ucana , 1 3 0 S
. C t
. a t8 3 1 , a n d we h a v e r ec o g n i z e d i n a tl e a s tt wo e n b ancde ci si o ns tha t r ev i ew o fa n a gen cy ’ s en ti tl ement d et er m i nati ons m ay be for ecl ose d, see C z erkies , 7 3 F. 3d 14 37 -39 ; M arozs an , 8 5 2 F .3 d at 1473 n
. 10. In m an y circum sta nces, Congr ess has see n fi t t o l i m it th e r ol e o f fede r alc o ur ts i n dis put es abo uti m po r ta ntr i g ht s an d cour ts do not re gar d t h e li m i tat i on a s i m perm i ssibl e o r offe n siv e. Se e, e . g. , the j ur i sdic ti o n- l i m i tingpr o vi si o ns i n the Pri son Lit i gat i on Ref or m A ct of 1996 , Pub. L . N o.N o. 08

- 4164 57 10 4- 13 4, 1 10 S ta t. 1 32 1-66, an d the Anti te r r o r i sm an d E ffecti ve Death Penal ty A ct o f19 96, Pub. L. N o. 10 4- 132, 11 0 S ta t. 1 21 4. I fthe re i s no th i ngwro ngwi thf o r ec l o sing re vie w of th e T T A B ’s d ec isio n a l t o g e th er , th en th er e is nothi ng unf air abo ut co m pel l i ng a sta te to choos e between it s sover ei gn i m m unity a nd a seco nd bi te at th e appl e afte r the a g en cyha s spo k en . The Feder alCi rcui t has co nsi dere d a nd r ej ecte d an ar gum en t qui te si m i l ar to th e o ne W i sc o ns i n is m ak i ng he r e. In Va s- C at h, Inc. , wh i c h Ih a v e a l r e a dyme nt i o ne d, the Fe d er al Ci rcui t r ej ecte d a st ate ’ s a tte m pt to avo i d on so ve r ei g n i m m uni tyg r o unds an appe alo fa Pa te nt an d Tr ade m ark Offi ce ( “P TO”) pr i o r i tyde te r m i na ti o n. 473 F .3 d a t 1 383-84. Th e cou rt held that the sta te’s pa rt i c i p a t i o n i n th e a g e n c y p r o c e e d i n g s w a i v e d i t s i mm unity c l ai m i n federa lco urt. The st ate had ar gued “th at it had no ch oice but to requ est th e [pate nt ] interfer ence a n d part i ci pate in an adver sar i alpro ceedi ng, f or i fi t had notta ken this ac ti on i t would have l osti ts ri ghtful patent
. . . . ” Id. at13 84. Th e c ou rt r esponded as follow s: [ T] he que st i o n in thi s ca se is no t whethe r the Uni ve r si tyv o l unt ar i l y pa r ti ci pat ed i n the PTO i nter fer ence, but w hetherthe U ni ver si ty can now bar t h e appeal o fthe PTO ’ s deci si on in f avo r of the Unive rs i ty. Thi s a rgu m en t r ai ses i ssues not of fe d er alis m , bu t o f litiga tio n ta c tic s . . . . Id. at 1384
. W hi l e our case concerns tr adem ar ks rather th an p at en ts , th e u n d er lyin g iss u e is th e s am e. W i s c o n s in sh ou l d no t be perm i tte d t o w ai t and s ee w hether i t is58 N o. 08

- 4164

su cce ssful i n th e agen cy, and then cha ll en g e the agen cy’s deci si on with a s tack ed deck, pro tect ed by sov ereign i m m unity fro m co unterc l ai m s fi l ed by i ts advers ar y. 2 . Ap pea l to th e Federa l C ircu it. W hi l e th e m aj o r i tye xpress es l i ttl e co ncer n abo ut unfa i r l i ti gati on t acti cs o n th e s t a t e’s part, Isee m atters d ifferently. W iscons in’s sov erei gn i m m unity c l ai m l ose s a ny r em ai ni ng f or ce w h en on e r e aliz es th at th e s ta te free ly c h os e t o c h allenge the T T A B d ecision in th e fede ral d istri ct c o urt ra the r tha n the F e de r a l Ci r c ui t
. Ha d the Uni v e r s i ty of W i sco nsi n opted i nstea d fo r the F edera lC irc u i t, Ph oen ix w ou ld n ot ha ve bee n ab le to in t r o d u ce cou nt ercl ai m s into th e l i ti gat i on. ( Lik e a l lo fthe federa lco urts o fa ppeal s, the F ede r alCi r cui t o per at es unde r the Feder alRule s o fA pp el l ate P ro cedure, notthe Feder al R u les of C ivil P r o c e d u re , an d th er e is n o p ro vis ion in the Ap pe l l a t e R ul e s tha two ul d a l l o w a n a pp e l l e e to i n tr od u ce a new counter cl ai m . ) The Fe deralCi rcui t was thus a n avai l abl e for um thatwould have been abl e t o f o cus e xc l us i ve l y o n the TTAB’ s dec i si o n, wi th o uta ny thre at to W i sco nsi n’s so ver ei gn i m m unity. Final l y, had P h oe n ix res p on d ed to an ap p e al t o th e F ed er al C irc u it w i th an or i gi nalact i on a gainst W i sco nsi n i n dis tr ict cour t, the sta te w oul d natural l y hav e be en fu ll y e nti tl ed to ass er t i ts sov er ei gn i m m unity. The m aj or i ty re cogni zes that thi s i s the cas e. S ee ante, a t 35
. The que st i o n the m aj or i ty brushes o veri s why W i sco nsi n chose to att ack the age ncy deci si on i n the dist ri ct cour t ra th er th anthe F ede r alCi r cui t, g i ve n th at th e l at te r f o r um provi ded the sta te all the r el i efi t s ought w i th co m ple te i nsul ati on fro m Phoeni x’s co unterc l ai m s.N o. 08

- 4164 59 A n an im ating p rinciple of La pid es i s t hat a st ate shou l d n o tr e a p l i t i g a t i o n a dv a nt a g e s thr o ugh i t s s e l ecti on o fa f or um and s u b sequent a sse rt i on o fso ver ei gn i m m unity a s a defense. By cho osing to i ns titute a new acti on in the federa ldi str i ct c ourt, W i sco nsi n p ro vi ded i tse l f bet tero dd s o fr eve rs i ng the ag ency’ s ca ncel l ati on ofi ts m ar k. A s Ihave al re ady not ed, the sta nd ar d of r ev iew w he n a TTAB dec i si o n i s ex ami ne d b y the dist ri ct c ourti s deno vo , and i n t h e d ist ri ct c ourtthe sta te i s a l l owed to pre sent new ev i dence that w as not part of the agency r eco rd. In com pari son, r evi ew i n the Feder al C i r c u i tf o l l o ws ty p i c a lr u l e s o fa d mi n i s t r at i v e l a w, wi thde fer en ce t o the a g en cy ’ s f ac tu ala nd l eg alc o nc l usi ons and l i m i tat i on t o the r eco rd th at h as al re ady be en co mpi l e d. Al o ngwi th the a dv a nt a g e s t o the s t a t e o f f i l i nga n a c t i o n i n the di s t r i c tc o ur tc a me the p o s s ib i l i ty th at th e d efend ing p arty (Ph oen ix ) w ou ld asse rt cou nt ercl ai m s i n tha t f o r um

— co unt er cl ai m s th ati t r i sk ed l o sing i fi t f ai l ed to r ai se th em . S ee F ED . R. C IV . P. 13 ( a)
. Nothi ng i n La pid es s u p p or ts th e c on c lu sio n th at W isc on sin co u ld tak e a dvantage o fth e benefi ts ofthe federa ldi str i ct co ur t w hi l e av o i di nga spe ct s o ftha t f o r um tha t i t f o und l ess desi rabl e. As m y c o l l ea g ue s no te , the Co ur t i n La pid es r em ar ked that ther e was nothi ng “s peci al ” about re m ova lthat w ar ra nted abandoni ng t h e g ener all ega lpri nci ple that a s tat e m ay w ai ve i ts i m m unity thro ugh i ts l i ti gati o n co nduc t. 53 5 U. S
. at 62 0. Ad dr es sing th i s po int, th e m ajorit y m ain ta in s t h at W isc on sin ’s d ec isio n to file su it i n the di st r i ctc o ur t he r e w as “s pec i al ” ( unl i k e th e st at e’ s dec i si o n in La pid es ) and thus the gene ra l waiv er60 N o. 08

- 4164 p rin c ip les d o n otap p ly a n d W isc on sin ’s im m u n ity is l eft intact. S ee an te, at34

- 36. They e xplain that they see W i sco nsi n’s l aw su i t a s “ speci al ” be cause i t i s m er el y a n appeal o fan a gencydeci si on

— a co nti nuati on o fa proc e e di ngi n whi c h W i s c o ns i n wa s the de fe nd a nt
. P e r ha ps th is w ou ld b e a d iffer en t ca se if th at w er e th e o n ly o pti o n a va i l ab l e to the s tate. B ut a s Iha ve a l r ea dy ex pla i ned, i t was not
. Fur ther m or e, to h an g the e nti re so vereign im m un ity an alysis on th e qu estion w he th er a p ar tic u la r lit iga tio n ac t is “s p ec ial” is to ad op t a ru le that w i l lbe near l y i m possibl e t o apply. A l lthe La pid es Court sai d was that re m ov al i s not“s p ec ial”

— i t di d not provi de any gui dance abo ut wh at litigati on co nd uct i t m i ght in the future con sid er“s peci al ” e nough to avo i d wa i v e r . S e e 5 3 5 U. S
. a t6 2 0
. T he maj o r i t y h e r e h as not supp l i ed the necess ar y guidance i n thi s r espect

— b ec au se , Ibe liev e, th e t a s k i s im p os sib le

— f orei ther st a t e s o r th e p a r t i e s wi th wh o m s t a t e s l i t i g a t e . F o r e xam ple , wh y is fi l i ng a l aw sui t chal l engi ng an age ncy d ecision in th e d istri ct court m ore “sp ecial” th a n in t e rve ni ngto p rot ec t ani nt er es t th ati s ats ta k e i n o ng o i ng l i ti gat i on in the dist ri ct c ourt ? Put ting to one si de the opti ons W i sco nsi n chose notto pu rs ue, i t i s a l so w or th not i ng tha t the sy ste m f or w hich W i sco nsi n i s a rguingcr eat es ser i ous ineffi ci enci es f orthe tr ad em ar k s yst em . I t wants the di str i ct c ourtto re ver se the a gencydeci si on but to sto p bef or e i t r eaches th e o the r l i t i g a nt ’ s c o mpe t i ngt r a de mar kc l a i m. In e ff ect, i t s eek s a n unnaturalbi furcat i on o fa si ngl e, i ntegr ate d probl em : W ho o w ns the m ar k CON DO R? H ow m u ch does that m ar k c ove r? A nd wh at pa ym en ts m i ght b eN o. 08

- 4164 61 du e i fo ne par ty has e ncro ach ed u pon the othe r’ s s pace? The onl y e ffi ci ent way

— p er h ap s e ve n th e o n ly p o s s ible w ay

— to re sol ve these q u est i ons i s in one proce edi ng, b efo re on e t rib u n al. Fin ally , W isc on sin ign or es th e fa c t t h at a t on e p oin t in th e hi st o r y o fthi s ca se i t ha d y eta no th era ve nue avai l abl e t o i t. Bef or e Phoe ni x in itiated TTA B proceedi ngs, W i sco nsi n coul d have fi l ed a s uitag ai nst Pho en i x in state c o ur t to r es o l ve who ha d r i g ht s to the CO N DO R m ar k. A l though the federa lco urts have j uri sdict i on overtradem ar k c l ai m s br ought und erthe Lanh am Act, tha tj ur i s di c t i o n i s n o te xc l us i ve. S e e 2 8 U. S
. C. § 1 33 8(a ); 15 U .S.C . § 11 21 ; Al ph ar ma, In c . v . Pe n n f i e l d Oil Co. , 4 11 F .3d 9 34 , 9 38 (8t h C ir. 20 05 ); A qua therm Ind ustries, Inc . v. Fl or i da Powe r& LightCo. , 84 F. 3d 1388 , 13 94 ( 11th C ir. 19 96 ). (N ot e, inco n tr as t, t h a t fed er al jur isd ict ion is e xc l us i v e i n pa t e nta nd c o py r i g htc a s e s. S e e 2 8 U. S
. C. § 13 38 ( a) ( “S uchj ur i sdictio n s ha l lb e ex cl us i ve o fthe cour ts o fthe sta tes i n patent, pl ant v ar i etypro tect i on an d cop yright case s.”)
. ) A p arty all egin g a trad em ark vio lat ion u n d er th e s ta tu te m ay litiga te in s ta te co u rtif i t s o choos es. A ccor dingl y, i fW i sco nsi n w as concerned ab o utPh o en i x’ s c om pet i ngCOND OR t r ade m ar ka nd wi sh ed to pr es er ve i ts s ove r ei g n i m m uni ty, i t ha d the o pti o n o f fi l i ng i ts o wn i nfr i ng ement ac ti o n in W isc o nsin st at e c ou rtatth e o u ts et
.
D I n s ummar y, a s I s e e i t, W i s c o ns i n’ s e ff o r t to bl ock Ph oen ix’s com p ulsory cou nt erclaim s in fed eral cou rt62 N o. 08

- 4164 wh i l e s e e k i n gr e l i e ffr o m t h a tc o u r ti n th e v e r y s a me l aw sui t i m pli cate s the ver y sam e f ai rnes s concerns that th e S upr eme Co ur t i den ti fi ed i n Lapi de s. W isc on sin w as no t f o r c e d t o l i t i g a t e i n the fe de r a l di s t r i c t c o ur t
. I ts ch oice to d o so w as every bi t as free as that of th e U nivers i t y o f Ge o r g i a i n La pid es to r em ove i ts case fro m st ate cou rt to f e d e ral cou rt. N either La pid es norany othe r deci s i o n o f the S up r e me Co ur t s up po r t s the i de a that w aiver ofi m m un ity th r o u g h li tigation con d uc t occu rs o n l y w h e n a s t a t e fi l e s s ui ta s s e r t i n gn e w c l a i ms aga i nst a defendant. S ee ante, a t 37( di sc us sing ho w the outco m e w oul d b e differ ent i f W i sco nsi n “[ h]a d

. . . b ro ught new cl ai m s a gainst Phoe ni x” i n the dist ri ct cour t)
. N ord oe s th at l i ne o fcas es hol d that a st ate m us t d efend a cl ai m o n the m er i ts, part i ci pate in dis

cove ry , a n d fi l e a m oti on t o dism i ss and a m oti on f or sum m ar y j ud gm ent in or der t o w ai ve i m m unity. S ee ante, at 38 ( re fer ring to the N i nth Circ uit ’ s r ecentdeci si on i n Joh n s on v. Ran c ho S an t i ag o Cmty
. Col l. D is t. , 62 3 F
. 3d 10 11 , 102 1-2 2 (9 th C ir
. 2 0 1 0 ) ) . Iw ou ld find th at th e U n iver si ty ofW i sco nsi n w ai ved i ts sov er ei gn i m m unity f o r p ur po s e s o fc l a i ms a s s o c i a t e d wi th the CO NDOR tr ad em ar k w h en it filed s u it in th e d ist ric t c ou rt . Ph oe n ix w as th us entitled to assert its com p ulsory cou n t e rcl ai m s, whi chb y de fi nition ha d t o a r i se o uto fthe sam e trans action or occu rrenc e. A s the Sup rem e C ou rt a c k no wl e dg e d: I t w ou ld seem anom alous o r i nc ons istent f or a S ta te b o th( 1) t o i nv o k e fede r alj ur i sdi ct ion, th er eb y c o nt en di ng th atthe “ J udi ci alpo wero fthe Uni te d S ta te s” e xt en ds to the c as e atha nd, a ndN o. 08

- 4164 63 ( 2) to cl ai m El eve nth A m endm ent i m m unity, th er eb y de ny i ngtha t the “ J udi ci alpo wero fthe Uni t e d S t a t e s ” e xt e nd s to the c a s e a th a nd

. And a C on st itu tio n th at p er m itt ed Sta te s t o follow th eir l i t i g a t i o n i n t e r e s t s b y fr e e l y as s e r t i n gb o th c l a i ms inth e s am e c as e c ou ld ge n er at e s er iou sl y u n fair re sul ts. La pid es, 5 35 U. S
. a t 6 19. Iwoul d r eins ta te Ph o en i x’ s co unter cl ai m s a nd r em and fo r furtherappropr i ate pro ceedi ngs.

II Br o ade r po l i cyc o ns i der at i o ns s ur r o undi ngthe do ct r i ne ofso ver ei gn i m m unit y als o ar gue s tr ongl y forfi nd i ng a w aiver i n th ese circu m stan ces, w hich i nv olve ord inary c om m er c ial a c tiv i t y b ein g c on d u c te d by th e s ta te . A lth ou gh the S up re m e Cour t has to uched on thi s a spect of sov ereign i m m unity l aw i n the past, a cl ose r l oo k a t i ts decisio n s r eve al s that there ar e s ti l lunres ol ved questi on s th at w oul d benefi t fro m a cl ose r l oo k. A nd ata m i ni m um , t h ese i ssues i nfo rm the questi on o fhow bro adlyo r narr owly w e sh ou ld co nstr ue the w ai ver doctr i nes Ihave j ust be en co nsi deri ng. Fr om the ti m e o fthe Decl ar ati on o fInd ependence un tilthe C ons titution of 1787took effect, the stat es w ere fu l l y s o v e r e i g n i n th e i nt e r n a t i o n a ls e n s e o fth e t e r m: they w er e S tat es, j ust a s m oder n-day Fr ance, Jap an, o r In d ia a re Sta te s t od ay . Th is fa c t is refl e c t e d in A rt icle s II an d II I of th e A rt icle s o f C on fed er at ion . A rt icle II affi rm s that “ [ e] ach S tat e r etain s it s s ove re i gnty, fre e-64 N o. 08

- 4164 dom and i nd ependence, and e very pow er, j uri sdic ti on an d righ t, w h ich is n otby th is c on fed er at ion ex p r es sly d ele ga te d to th e U n ite d Sta te s, inC on gr es s a ss em b led .” A RT ICLE SOF C ONF ED ERAT I ON of 1 7 8 1 , ar t. II. A rt icle II I re i nfo rce s the poi nt byspeci fyi ng, “The s ai d Sta tes he r e b y sev erallyente r i nto a fi rm le ague of f ri endship with e ac h other, ” forpurposes i ncl ud i ng co m m on defense an d ge n er al w elfa re . Id. ar t. I I I(em phasi s a dd ed). I t was aga i nst thi s ba ckdro p thatthe 1787Consti tuti on was w ri tte n. A l though that Cons ti tuti on g re atl y s tr engthe ned th e p o w e r s of th e c en tr al, or “ fed er al,” gov er n m en t, it did not change the fund am ental pri nci ple und er w hi ch the s tat es re m ai n so ver ei gn ent i ti es to the ex tent that the Const itu tio n does not ove rr i de thei r sov er ei gnty. I nd e e d, tha ti s p r e c i s e l y the po i nto fthe T e nth Am e nd

m en t, whi chs ay s, “ T he po wer s no t del eg at ed to the U n ite d St a t e s b y t h e C on st itu tio n, no r p ro h ibit ed by it to the S tat es, ar e r ese rv ed to the Sta te s re specti vel y, o r to th e pe op le. ” U
. S. C O NST . a m en d. X. Thi s as su r an ce , no l ess than the r em ai nd ero fthe Bil lo f R i ghts, was re gar ded as es senti alduri ng the r ati fi cati on debat es.

A O v e r t h e y ea rs , th e Su p re m e C ou rth as co n sis te n tly re cogni zed the sov er ei gn i m m unity o fthe st ates. Even i n C hish o lm v. G eorg ia, 2 U .S. (2 Dal l

. ) 41 9 ( 1793 ) , bet ter kn ow n for its h old in g t h at th e s ta te o fG eo rg ia c ou ld b e su ed th an for th e rea so n s offer ed b y Jus tic es B l air an d W i l so n ( o ve r J us ti ce I r ede l l ’ s di ss en t) , a l lmem bers o fthe Cour tu nd e r s t o o d tha tthe y h a d t o de c i deN o. 08

- 4164 65

w hetherthe sta te’ s s ove re ignty had bee n ove rr i dd en by the fe de r a l Co ns t i t ut i o n. J us t i c e Bl a i r tho ughtthat A rt i cl e I I Io f the Consti tuti on pro vi ded a cl earanswer i n the affi rm ati ve to that ques tio n ; he poi ntedl y no ted that he “thought i t be st to pass o veral lthe st ricture s wh i c h h a v e b e e n ma d e o n th e v a r i o u s E u r o p e an c o nfedera ti ons; . . . . The Consti tuti on o fthe U ni ted S tat es is th e o n l y fo u n ta infrom w h ich I sh all d ra w ; th e o n ly author i ty to w hi ch Ishal lappeal

. ” 2 U
. S. a t 4 50. J usti ce W i l son al l owed hi s g aze to cove r m or e g ro und ; he c hose to l o o ka tth e p r i n c i p l e s o fg e n e r a lj u r i s p r u d e n c e , the l aws a nd pr ac ti ce s o fo th erS ta te s an d K in g do m s, a nd fi nal l y the co nsti tu ti onalte xt. A ftera phil oso phicaldi scussi on o n the concept ofso ver eig n ty, he c oncl ud ed that pr ec ede nt s ex i st ed unde r whi chs ta te s co ul d b e brough t to acco unt bef or e t ribunal s a nd thatthe Consti tuti on p er m itt ed th is s u it. Id. at45 3- 66. J usti ce I re del l, wh ose vi ew was quick l y v in d icated by the passage o fthe Ele venth Am endm ent, would have fou n d im m u n ity for G eo rg ia. Id. a t4 4 9

- 5 0
. H e e mphasi zed the l ack offedera ll egi sl ati on that would have perm i tte d the l aw sui t be f or e th e C ou rt, but he added th ese wo r ds: “ S o much, ho wev er, ha s be ens ai d o n the Consti tuti on, thati t m ay n ot be i m properto i nti m ate th at m y pr ese nt o pini on i s s tr ongl y a gainst a ny co nstr ucti on o fi t, w hi ch w i l ladm i t, under anyci rcum sta nces, a com p ulsive su it agains t a State for th e recovery ofm oney . ” Id. at44 9. J usti ce I re del lto ok thi s abso l ute posi ti on b ec au se , as he ha d noted ea rl i er, “in eve ryS tat e i n the Uni o n, pr ev i o us t o the ad op ti o n o fthe Co ns ti tu
ti on, the o nly c o mm o n l a w pr i nc i pl e s i n r e g a r d t o sui ts66 N o. 08

- 4164 th a tw e r e i n a n y ma n n e r a d mi s s i b l e i n r e s p e c tt o c l a i ms aga i nst the S tat e, were thos e which in Engla nd applyto cl ai m s a gainst th e c ro w n . . . . ” Id. a t4 3 7
. He d r e w a d ire c t lin k b et w ee n th e s ta te s’ im m u n ity from su it bef or e the adopti on o fthe Constitu ti on

— i m m unity d e r i v e d fr o m p r i n c i p l e s o f s o v e r e i g n i m m u n i t y e mbodi ed i n publi c i nter nati onall aw

— an d the s ta te s’ c o nti nuing i m m unity a fter w ar ds: [ I ] t i s incum bent up on us to enquir e, wh ether previ ous t o the a doptio n o fthe Consti tuti on (w h ich p er iod , or th e p er iod of p as sin g t h e la w , in re sp ec t t o th e o bj ec t o f th is e n q u iry , i s p er fec tly equa l ) an a ct i o n o fthe na tu r e l i k e th i s be f o r e th e Cou r t co ul d hav e be enmai nt aine d a g ains t o ne oft h e St ate s in the U ni on upon the pri nci ple s o f the c om m on l aw , which Ihave sho w n to be al o ne a ppl i cabl e. I f i t co ul d, I th i nk i t i s no w m aintainabl e her e; I fi t co uld not, Ithi nk, a s the l aw sta nd s a t pr ese nt, i t i s no t m ai ntai nabl e; w hatev ero pi ni o n may b e enterta i ne d; upo n the c o nstr ucti on o fthe Consti tuti on, as to the p ower o f Congre ss to author i ze such a one. Id. T h r o u g h o u tth e n i n e t e e nt h c e n t u r y, th e C o u r tc o mm onl y turned to the sam e pr i nci ple s ofpubli c i nter nati on a ll a w tha ti twa s u s i ngf o r f o r e i g n r e l a t i o ns when i t had to deci de iss u es i nvol vi ng i nter sta te re l ati ons. Thus , f o r e xa m pl e, i n Bank of theU ni t e d S t at e s v. D onn al ly, 33 U
. S. 361 (1834), th e C ou r t h a d t o de cid e w he th er a prom i sso rynot e in the Bank’s f avo r that w as sig nedN o. 08

- 4164 67 in K en tu cky cou ld be en forced i n V irginia, o v er an ass ertion th atthe s ta tu te o fl i m i ta ti o ns i n Vi r g i ni a ha d r un. I n the cour se of up hol ding Vir gi ni a’ s r i ght t o apply i ts ow n li m itations p eriod (and thu s d efeat th e B an k’s actio n) , J us ti ce S to r y wro te tha t “wha te ve r may be the l egisl ati on o fa sta te, as to the obl i gat i on o r re m edy o n co nt r ac ts , i ts a ct s ca n have no b i ndi nga utho r i tyb ey o nd i ts own te rr i tor i alj uri sdic ti on. W h at eve r author i ty they ha ve in othe r states, dep en d s up on p rinciples of int ern at ional com i ty, and a s ense ofj usti ce. ” Id. at3 72
. M ore th a n f o r t y ye a r s l a t e r, J u s t i c e F i e l d u s e d a l mo s tth e s a me wor ds i n P enno y er v. Nef f, 95 U
. S. 71 4 ( 1877 ) , the deci si on ( now o ver rul ed) th at f orye ar s was the w el l spring o f th e co ns ti tu ti ona ll aw o fpe r so na lj ur i sdi ct i o n. The r e he w ro te th at “[t ]h e s ev er al St a t e s o f th e U n ion are n ot, i t i s true , i n e ve r y r es pec t i nde pen den t, many o fthe r i g ht an d p o we r s wh i c h o r i g i n a l l y b e l o n g e d t o th e m b ei ng no w ve st ed i n the g o ve r nm en t cr ea te d b y the Co ns ti tu
ti o n. But, e xc epta s r es tr aine d a nd l i m i te d by th at i nstr um ent, theyposs ess and exer ci se the author i ty of i nd ependent St ate s, and the pri nci ple s o fpubli c l aw to whi c h we ha v e r e fe r r e d a r e a pp l i c ab l e t o them

. ” Id. at 72 2. He c o nt i nue d wi ththe obs er va ti o n tha t “[ t] he se ve r alS ta te s ar e o fe qua ld i g ni tya nd a utho r i ty, a nd the i nd e pe nd e nc e o f o ne i mpl i e s the e xc l us i o n o fpow er fro m al lo ther s. ” Id. T h e Su p re m e C ou rt h as ret u rn ed rep ea te d ly to th is th em e i n the l i ne o fc as es tha t be g anwi th S e min ol eTribe o f F l o r i d a v . F l o r i da, 5 17U. S
. 4 4 ( 19 96 ) , i n whi chthe C o u r tr e i n v i g o r a t e d th e d o c t r i n e o fs t a t e s o v e r e i g n i mm u n ity :68 N o. 08

- 4164 Altho ug h the t ex t o fthe [ El ev en th] Am en dm en t w ou ld ap p ear to restrict on ly th e A rticl e I I Idiversi ty j uri sdic ti on o fthe federa lco urt s, w e hav e unde r st o o d the Eleventh Am en dm en t to s ta nd no ts o muc h f o r wh a ti ts a y s , b utf o r the p r e s up po s i ti on . . . wh i c h i tc o nfi r ms. . . . T ha tp r e s up p os itio n, firs t obs er ve d ov er a ce n tu ry a g o in Hans v. Lou i s i ana , 13 4 U.S
. 1 ( 1890 ) , has tw o parts : fi rst, tha t ea chS ta te i s a so ve r ei g n e nt i tyi n o ur fed erals y st em; a nd s ec o nd, tha t “ ‘ [ i ] t i s i nhe r en t inth e n a t u r e of so ve re ign ty n otto be am en ab le t o t h e s u it of a n ind ivid u al w ith ou t it s c on se n t,’ ” id

. , a t1 3 ( e mpha s i s de l e t e d) , quo t i ngT he F e de r a l i s tNo
. 8 1 , p . 4 8 7 ( C
. R o s s i t e r e d

. 1 9 6 1 ) ( A. H am ilton).

. . . For over a cen tu ry w e hav e reaffi rm ed that federa lj uri sdic ti on o versuits ag ai nst unconsenti ng S tat es w as not conte m pla ted by the Const i tuti on wh en e stabl i shi ng the j ud i ci al pow ero fthe U ni ted S tat es. 517 U .S. at54 ( som e inter nalquotat i on m ar ks and ci tati o ns de l et ed)

. The the m e co nt i nue s i n Flori da P repaid, 52 7 U .S. at 6 34 -35 , Co l l eg eS a v i n gs , 5 27 U
. S. at66 9- 70 ( r efer r i ngt o “ th e so ve r ei g n i m m uni ty th at th e St at es p os se ss ed be for e e n te rin g th e U n ion ” ) , A lden v. M a ine, 5 27U. S
. 7 06 , 7 13 ( 19 99 ) ( “[ A]s the Co ns ti tution’s struc tu re, i ts history, and the au th oritat iv e i nt erpreta ti ons by thi s Courtm ake cl ear, the State s’ i m m unity fro m sui t i s a fund am entalas pec t of the so ver ei gnty whi chthe S ta te s enj o y ed be f o r e th e r at i fi ca ti o n o fthe Consti tuti on, and wh i ch theyr eta i n to day ( ei ther l i ter al l y or by vi rtue of thei r adm i ssi on i nto th e U n ionN o. 08

- 4164 69 up o n a n e qu a lf o o t i ngwi th the o the r S t a t e s ) e xc e pt as al te r ed by th e pl an o f th e Con ve nt i o n o r ce r ta i n co nst itu tio n al A m en d m en ts .”), Kim e l v. Fl or i da Boar d of R egen ts, 52 8 U .S. 62 , 72-7 3 (2 00 0), Boardof Tr us tees o

f t he U niversi ty of A labam a v. G arre tt, 531 U
. S. 356, 363-64 (2001), a nd Federal M arit im e C o m m is si on v. South C arolina St ate P orts Autho ri ty, 5 35 U. S
. 743 , 7 60 ( 20 02 ) ( “T he pr ee m i ne nt p urp ose of state sovereign im m un ity i s to accord St ate s the di gni ty that i s co nsi ste nt with thei r sta tu s a s so ve re ign en tit ies .”).

B This bri efr eview d em onst ra tes thatthe sta tes enj oy
“ s o v e r e i g n i mmun i t y . ” B u t th a t t u r n s o u t t o b e j u s t th e beginning ofthe i nquir y. T h e te rm i s, afteral l, a gener al one; i t a pp l i es not onl y t o th e st at es, but to the Unite d St ate s, to fo rei gn co untri es, and to N ati ve A m er i can tribes. Earl y theor i sts tho ught that s ove re i gnty w as necess a r i l y a s i ngul a r p he no men o n: e i the r a n e nt i t y e nj oye d sov er ei gnty, o r i t di d not

— th er e was no suc h thi ng as p ar tia l sov er eig n ty . See , e . g. , J
. L. B RI ERLY, T HE L A W O F N AT I ONS : A N I NTR OD UCTION TO T HE I NTERNATI ONA L L AW OF P E A CE 8 ( S ir H um p hrey W aldoc k ed

. , 6th ed

. 1963). A so ver ei gn st ate i s r eco gni zabl e thro ugh sev er alchar acter i sti cs: a speci fi c te rr i tory, a pe rm anent popul ati on, i ts own go ver nm ent in c on tr ol, and the capaci ty to engag e inform al re lat ion s w ith oth er su c h en tit ies . R ES TATE MENT (T HIRD ) OF THE F OR EI GN R ELA TION S L AW O F T HE U NI T ED S TATE S § 20 1 ( 19 87 )
. The F r amer s o fthe Co ns ti tu
-70 N o. 08

- 4164 t i o n, h o we v e r, h a d a more nua nc e d v i e w o fthe c o nc e pt o f so ve r ei g nty . As J us ti ce Kenne dy put i t i n his co ncur r i ngo pi ni o n in U
. S. Term L i m i t s , Inc . v. Thor nt on , the F r amers “ spl i t th e at o m o fs o ve r ei g nty ” be twe enthe sta tes and th e nat i onalgo ver nm ent. 51 4 U.S
. 77 9, 83 8 ( 1995 ) ( K ennedy, J
. , co ncurr i ng)
. Thus, with r efer ence to sta te orN ati ve A m er ica n sover ei gnty, i t i s a l w ays nece ssar y to consi der whether sov er ei gn powers have alr ea d y b ee n ce d ed , see , e.g., C ent ral Virginia Com m u nity Coll egev. Katz, 546 U
. S. 356, 377- 78 ( 2006 ) ( sta tes ag re ed i n the pl a n o f the c o ns t i t ut i o na l Co nv e nt i o n not to assert sovereign im m un ity in ba nk rup tcy p roceed ings), or ab ro ga te d by va lid co n gr e s s i on al leg isla tio n, see , e . g. , Sem inoleTribe, 5 1 7U. S
. a t5 5

- 7 3 ; s e e a l so C i ty o f B o erne, 52 1 U .S. at 5 29 -30 (d es c rib in g re q u ir e m e n ts for v alid re m edi alm eas ures under s ecti on 5 of the F ourt eenth Am endm ent )
. In a ddi t i o n, a s the S up r e me Co ur tma de cle ari n Wi s co ns i n Depa r t m e ntof Cor r e ct i ons v. Schac ht, an o th era tt r ibut e o fs o ve r ei g n i m m uni tyunde r the fede r alCo ns ti tu ti o n i s th at“ th e El ev en thAm en dm en t g r a n t s th e S t a t e a l e g a l p o w e r t o a s s e r t a s o v e r e i g n i mm unity defe nse shoul d i t choos e to do so. T h e State ca n wai ve the de fense. . . . Norne ed a co ur t r ai se the d efe c t o n its ow n . U n les s t h e St at e ra ise s t h e m at te r, a co ur t ca n i g no r e i t. ” 52 4 U. S
. 3 81 , 3 89 ( 19 98 ) ( ci ta ti o ns om itted ). A notherquesti on, l ar gel y unexp lored f orst ate sov er ei gn i m m unity, but by now wellel abor ate d fo r f o r ei g n s o ve r ei g n im m un ity, de al s wi ththe s co pe o fthe defe nse. I s the doctr i ne abs olut e, or i s i t qual i fi ed or re str i cti ve? A nd i fi t has change d overti m e, are co urtsN o. 08

- 4164 71

r e q u i r e d t o a p p l y th e d o c t r i n e a s i t ap pl i e d a tth e t i me of the Founding, or at the ti m e any gi ven sta te en ter ed the Union, o r as the doct rine i s g ener al l y unders too d today? The answ erto thes e la tte r questi ons f orpurposes o f f or ei gn so ver ei gn i m m unity has r ecei ved exte nsi ve att e nt i o n i n b o th Co ng r e s s an d the c o ur t s . F r o m t he F o un di ngunt i l1 95 2, the Uni te d St ates gr an te d f o r ei g n n at i o ns abso l ute i m m unity fro m sui t in U
. S. co urts as a m att er ofc o m ity
. Verli nden B.V. v. Central Ba nk of N iger ia , 46 1 U
. S. 48 0, 48 6- 89 ( 1983) ( disc ussi ng The Sc hoon e rExch ange v. M cF addon , 1 1 U. S
. ( 7 Cr an ch) 11 6 ( 18 12 ) )
. The Suprem e C ou rt “defer re d to the deci si ons ofthe pol i ti calbr anches

. . . o n w hetherto ta ke j uri sdic ti on o ver ac ti o ns a g ains t f o r ei g n s o ve r ei g ns ” an d , “ [ u] nt i l1 95 2, the St at e D ep ar tm en t o rd in ar ily re q u es te d im m u n ity in a ll acti ons aga i nst fri endlyf or ei gn so ver ei gns. ” Id. a t4 8 6. Re ac t i n gi n th e wa k e o fWo r l d Wa r I It o th e i mpo r ta nt ro l e o fst ate
- own ed ente rp ri ses i n the Com m unis t co un t r i e s a nd r e l uc t a ntt o g i v e a l i t i g a t i o n a dv a ntage i n U
. S. co urts to tho se ente rp ri ses , i n 195 2 the U ni ted Sta te s s hi fted i ts posi ti on. Com m entat or s r egul ar l y o utl i ne d the tens i on be tw een abso l ute s ove re i gn i m m unity and the r i se ofst ate tr ading, part i cul ar l y in the S ovi et U nion, and exp ressed the con cern that “p rivate trad ers w i l lbe re l uctant to deal with s tat e t ra ders if t h eirl ega l r i g h t s a n d r e me d i e s a r e g r e a t l y c u r t a i l e d b y the pr i nci pl e o fs o v e r e i g n i mm un i t y . ” Be r na r d F e ns t e r wa l d, Jr., Sove r e ign Im m unity an d S ovi e tSt at eTr adi ng, 63 H ARV . L. R EV . 614 , 614 (19 50 ); se e a l s o S igm u n d T im b er g, So ver-72 N o. 08

- 4164

e ign Im m uni ty, St at eTr adi ng, So ci al i s m an d S e l f

- D e cept i on , 56 N W . U. L. R EV . 109, 111 (1961 ). I n 195 2, Ja c k Tate, A cti ng Lega lA dvis erf orthe Dep ar tm e nto fS t a t e , wr o t e a l e t t e r t o the Ac t i ngAtto rney Generala n nounci ng tha t the S tat e Depart m ent intended hencef orth t o apply a r est ri cti ve theo ryo ff or ei gn sov er ei gn i m m unity: A ccor ding to the c l ass i calo r abso l ute th eory of so ve r ei g n i m m uni ty, a so ve r ei g n ca nno t, w itho ut hi s co nsent, be m ade a re sp on d en t in the c ourt s ofano therso vere ign. A ccor ding to the ne w ero r r es tr i ct i ve the o r y o fs o ve r ei g n i m m uni ty, the i m m unity o fthe sov erei gn i s r eco gni zed with re gar d to so ver ei gn o r pu bl i c ac ts ( jure im per ii ) of a sta te, bu t n ot with r espectto pri vate act s ( jure ges ti onis ). L etter from J ack B

. Tat e, A cting L egal A d viser, U
. S. Dep ar tm ent o fS tat e, to A cti ng U.S
. A tto rneyGenera l Ph il ip B
. Perlm an ( M ay 19, 1952), reprinte d i n 26 De p ’t S ta te Bul l

. 9 84

- 85 ( 19 52 )
. Af te r describ i ngthe t r en d am ong variou s co untri es toward a re str i cti ve theo ryo f sov er ei gn i m m unity a nd not i ng “that the widesp read a nd i nc r e a s i ng pr a c t i c e o n the pa r t o f g o v e r nme nt s o f engag i ng i n com m er ci alact i vit ies [ m ade] nece ssa rya p ra cti ce which [ w oul d] e nabl e per sons doi ng business wi ththe m t o ha ve the i r r i g ht s det er m i ne d i n the cour ts, ” Tate wrote th at i t would there afterbe the S tat e Dep ar tm ent’ s pol i cy “to f ol l ow the res tri cti ve theo ryo f sov er ei gn i m m un ity i n the consi derat i on o fr equests o f f o r ei g n g o ve r nm en ts f o r a g r an t o fs o ve r ei g n i m m u-N o. 08

- 4164 73 ni ty. ” Id. “The r eas ons w hi ch obv i ousl y m oti vate st ate tr adin gc o un t r i e s i n a dh e r i ngt o the the o r y [ o fab s o l ute i m m unity] with perhaps i ncre asi ng r i gi dity, ” wrot e Tat e, “a re m os t p er su as i v e t h at th e U n ite d Sta te s s h ou ld change i ts pol i cy. ” Id. Ex peri ence und erthe Tate Le tte r dem onst ra ted that m or e wa s necessa ry, as the Suprem e Cour t r eco unted i n V erlind en : The re str i cti ve theo rywas not initi al l y e nacted i nto l aw . . . and i ts appli cati on pro ved tr oubl esom e. A s in the past, init i alr esponsibi l i ty f or d ec id in g q u es tio n s o f so ve re ign im m u n ity fell pri m ar i l y upon the Executi ve . . . and the c ou rt s abi ded by“s ugges ti ons ofim m u n ity”
. . . . A s a conse quence , for ei gn nat i ons often pl aced di plo

m at i c pr es su r e o n the S ta te Depa r tment i n s ee k i ng i m m uni ty
. On o cc as i o n, po l i ti ca lc o ns i der at i o ns led to su ggestion s of im m u n it y i n ca ses w he re i m m unity w oul d not hav e be en av ai l abl e under th e re st ric tiv e t h eo ry . An addi ti o na lc o m pl i ca ti o n was po se d b y the f act th at f or ei gn nat i ons did notal w ays m ake re quests to the S tat e Depart m ent. In su ch cas es, th e r es po ns ibi l i tyf ell to the c o ur ts t o de te r m i ne w h et h er so ve re ign im m u n ity ex ist ed , gen er ally b y re fer en c e t o p rior Sta te D ep ar tm en t d ec isi o ns . . . . Nots ur pr i sing l y, the g o ve r ni ngs ta nda r ds we r e n e i the r c l e a r n o r u ni f o r ml y a pp l i e d. I n 197 6, Congr ess p as se d the F or ei gn S ove re i gn I m m uni ti es Acti n o r dert o fr ee the Go ve r nm en t74 N o. 08

- 4164 from the case -by- case di plo m ati c pre ssur es, to cl ar i fy the go ver ni ng st andards, and to “a ssur [ e] litig an ts th at
. . . d ec isio n s a re m ad e o n p u re ly legal grou nd s and un d e r p roced ure s tha t insu re d u e p ro c es s,” H .R . Re p . N o. 94 -14 87, p. 7 (1 97 6). Ve r l i n de n B. V. , 4 6 1 U. S
. a t4 8 7

- 8 8 ( c i t a t i o ns a nd f o o tnot e om itted ). The Fo re i gn S overe i gn I m m unit i es A ct ( “FS I A ”) , 28 U
. S. C. §§ 1330 , 13 32, 13 91 (f ) , 14 41( d), and 160 2- 1611 , c od ifies th e re st ric tiv e t h eo ry of so ve re ign im m u n it y . It pr o vi des tha t “a f o r ei g n s ta te s ha l lb e i m m une fr o m the j ur i sdi ction ofthe c o ur ts o fthe Uni te d S ta te s an d o fthe St ate s, ” 2 8 U.S
. C. § 1 604, exce pt i n case s where:

• th e fo re ign st at e h a s e x p licit ly or im p lied ly w aived i ts im m un ity, § 1605(a)(1) ;

• th e a cti on i s ba sed o n com m er ci alact i vi ty car ri e d o n i n the Uni t e d S t a t e s b y the f o r e i gn sta te, an act per f or m ed in the U ni ted S tat es re l ate d to com m er ci alact i vi ty ofthe f or ei gn st at e el se wher e, o r a n a ctouts i de o fthe U n ited S tat es re l ate d to com m er ci alact i vi ty ofthe f or ei gn st ate o u ts i de ofthe U ni ted St ate s that c auses a dir ect effect i n the U ni ted States , § 1605(a)(2) ;

• the a cti on co ncer ns r i ghts i n proper ty that has be en ta ken in vi ol ati on o fi ntern atio nal l aw , wh er e th e p ro pertyi s co nnected to com m er ci al a cti vi ty ofthe f or ei gn st ate w ithin th e U nited States, § 1605(a)( 3);N o. 08

- 4164 75

• the a ctio n conce rns ri ghts i n re ales tat e o r i nhe r i ta nc e o r g i ft pr o per tyl o ca te d i n the U nited States, § 1605(a)( 4);

• the a cti on invol ves cer tain noncom m er ci al tor ts occur ring w i thi n the U ni ted State s, § 1605 (a)( 5);

• th e action invo lves a m ariti m e li e n , § 1605(b); or

• the a cti on invol ves cer tain acts o fte rr or i sm c o n n e c t e d t o th e f o r e i gn s t a t e , § 1 6 0 5 A. Inad d itio n, i n a c tio n s b ro u gh t b y for eig n Sta te s (o r in case s whe re a forei gn S tat e inter venes ) the f or ei gn S tat e is not accord ed i m m un it y w ith resp ect to an y cou nt erc l a i m: ( a) f orwh i ch a f or ei gn st ate would not b e e nti tl ed to i m m unity under sect i on 1 605 or160 5A
. . . had such cl ai m bee n br ought in a separ ate act i on aga i nst the f or ei gn st ate ; o r ( b) ar i si ng o ut o fthe transact i on o r occur re nce th at i s th e su bj ec t m at te r o f th e cl ai m of th e f or ei gn st ate ; o r ( c) to the extent that the c ounter cl ai m does not se ek relie f ex c ee d in g in a m o u n t o r d iffer in g in ki nd fro m thatso ught bythe f or ei gn st ate
. 28 U
. S. C. § 1 607. “T he mos t si g ni fi ca ntof th e F S I A’s e xc ept i o ns . . . i s th e
‘ com m er ci al ’ exce pti on o f§ 1605 ( a) (2)
. . . . ” Rep ub l i c of A rge ntina v. Wel tover, Inc. , 50 4 U.S
. 60 7, 61 1 ( 19 92). W hen76 N o. 08

- 4164

e v a l u a t i n gw h e th e r a f o r e i g n S t a t e h a s e n g a g e d i n c o mm er ci alact i vi ty that f al l s withi n the com m er ci alact i vi ty excepti on, a c ou rtm ust e val uate the nature ofthe act, rath er than the p urp ose for w hich that a c t w as u nd erta ke n . 28 U .S.C . § 16 03 (d ); Rep ub l i c of Arge nt i na , 5 0 4 U
. S. at 61 4 (“[T ] he i ssue i s whether the par ti cul aract i ons that the for ei gn st ate per f or m s ( w hatev er t he m oti ve behi nd them ) ar e the typeo fact ion s by w hi ch a pri vate p arty e ng ages in ‘trad e or traffi c or com m erce,’ B lack’s Law Dic ti onar y 2 70 ( 6th e d. 1990 )
. ”)
. “[W ] hen a f or ei gn g o ve r nm en t ac ts , no t as regul at o r o fa mar k et, b ut i n t he m anner ofa pri vate pl aye r w i thi n i t, the f or ei gn so ve r ei g n’ s ac ti o ns a r e ‘ co m m er ci al ’ wi thin t he mean i ng ofthe FS I A
. ” Rep ub l i c of Arge nt i na , 5 0 4 U .S
. at 614. W he re o ne o fthe F S I A ’ s st atut o r y e xc ept i o ns , l i k e th e o ne f orco m m er ci alact s, appli es, “the f or ei gn st at e shal lbe l i able in the sa m e m anner and to the s am e e xtent a s a pri vate i nd i vi du alunder l i ke ci rcum stances” ( w i th m o di fi ca ti o ns f o r puni ti ve da m ages a nd wr o ng ful death act i ons)
. 28 U
. S. C. § 1 606. The Suprem e Cour t h as had seve ra lo pp or tuni ti es to d i s c u ss th e c om m er c ial-a c t e x c ep tio n to th e g en er al ru le of fo re i gn so ver ei gn i m m unity. I t has r eco gni zed that “the di st i nc ti o n b etwee n sta te so ve r ei g n a ct s, o n the o ne ha nd, a nd s ta te c o m m er ci ala nd pr i va te a cts , o n the othe r, [ i s] notenti re ly novelto A m er i can l aw . ” R epubl ic of Arge nt i na , 50 4 U.S
. at61 3 ( dis c ussi ng A lf re d D unhill o f L o ndon , Inc. v. Republi c of C uba , 4 2 5 U. S
. 6 8 2 , 6 9 5- 96 (19 76 )). In d e e d , a s ea rly as 18 23 C h ief Ju st ice M ar sh all no te d the i m po r ta nc e o fthe di st i nc ti o n:N o. 08

- 4164 77 I t i s, w e t hi nk, a s o und pr i nc i pl e, tha t when a g o ve r nm en t be co m es a partne r i n a ny t r ading co m pan y, i t di ve st s i ts el f, s o f ara s co nc erns the tr ansact i ons ofthatco m p an y, o fi ts sov er ei gn ch ar ac te r, a nd t ak es tha t o fa pr i va te c i ti ze n. Inst ea d of co m m u n ica tin g t o th e c om p an y it s p riv il ege s a nd i ts prer og ati ves, i t desc ends to a l ev elwi th th o se wi th whom i t as so ci at es i ts el f, a nd tak es the charac terwh i ch bel ongs to i ts ass oci ate s, a nd t o the b us i ne s s wh i c h i s t o b e t r a ns a c t e d. B ankof the U nite d State s v. P lante rs ’ Bankof Georgi a , 22 U
. S. ( 9 W h ea t.) 90 4, 90 7 (1 82 3); c f
. S l o a n S h ip y a r d s Co rp. v. U ni t e d S t at e s Sh ippi ng Bd. Em e rge ncy F le e tCorp. , 25 8 U. S
. 5 49 , 5 67

- 68 ( 19 22 )
. Re l y in go n pr ec ede nt s dea l i ng wi ths ta te a ct i o n wi th i n the Uni te d S ta te s, the D unhill plur al i ty j u st ifi ed the l i ne be tw een c om m er ci aland go ver n m en ta l ac ts as follow s: Inth is s am e t ra d itio n, So uth C a rol ina v. U n i ted Sta tes , 199 U
. S. 437 ( 1905 ), d rew a line fo r pu rp os es of ta x im m u n ity be tw ee n th e h i s t o r ica lly re cogni zed go ver nm entalfuncti ons ofa St ate an d b us inesse s e ng ag ed i n b y a S ta te o fthe k i nd w h ich ther eto f or e had be en pursued by pri vate en te r pr i se . S i m i l ar l y, i n O hio v
. He l ve r i ng, 29 2 U
. S. 36 0, 36 9 ( 1934 ) , the Court sai d: “I fa sta te ch o o se s to g o i nt o the b us i ne ss of buy i nga nd sel l i ng co m m odi ti es, its r i ght t o do so m ay be c on c ed ed so f a r as th e F ed er al C on st itu tio n is c o nc e r ne d; b utthe e xe r c i s e o fthe r i g hti s n ot th e p er for m an c e o f a go ve rn m en ta l fu n c tio n . . . .78 N o. 08

- 4164 W he n a s t a t e e n t e r s th e ma r k e tp l a c e s e e k i ng custo m er s it d ives ts i tse l fo fi ts qua siso ver ei gnty pro tanto , and ta k e s o n th e ch aract er of a tr ader

. . . . ” I t i s thus a f am i l i arco n c ep t that “ther e i s a co nsti tuti onall i ne be tw ee n the St ate as go ver nm ent a nd the St ate as tr ader

. . . . ” N ew Yo rk v . U nited Sta tes , 326 U
. S. 5 7 2 , 5 79 (1946). Se e a l so Pard e n v. Ter m i nal R. Co. , 377 U
. S. 184, 18 9- 19 0 (1 96 4); Cali

f or ni a v. Tayl or, 35 3 U.S
. 55 3, 56 4 (19 57 ); U nite d Sta te s v. C alif ornia , 29 7 U.S
. 175, 18 3 (1936). 425 U
. S. at69 6. It w as ag ain st th is b ac kd ro p th at th e C ou rtco u ld have re consi dered the questi on wh ethera dist i ncti on between co m m er ci alact s a nd go ver nm entalacts w as pr o perf o r the s ta te s o ve r ei g n i m m uni tyi t f o und re fl ecte d i n the Ele venth Am endm ent. I t di d n ot do so , ho wev er, i n a ny s us ta i ne d way

. In Coll egeSa vi ngs , J usti ce Sca l i a wrot e: T he “m arket p articipan t” cas e s from our d orm ant C o mm e r c e Cl ause j uri sprudence, r el i ed upon by the Unite d Sta tes , ar e inapp osi te.
. . . Thos e ca se s ho l d tha t, w he r e a S ta te a ct s as a pa r ti ci pan t i n th e p riv ate m ar ket, i t m ay preferthe goo ds or se rv ice s o fi ts ow n cit ize n s, ev en th ou gh it co u ld n otd o s o w h ile a c t i n g as a m ar ke t re gu lat or . . . . T h e “m ar ke t pa rt icip an t” ex c ep tio n t o j u d icia lly cr ea te d do r m an t Comm er ce Cl au se r es tr i cti ons m akes se nse b ecause the evi laddress ed by thos e r es tr i ct i o ns

— the pr ospectthatS tat es w i l luseN o. 08

- 4164 79

cus to m duti es, excl usi onar y t ra de re gul ati ons, an d oth er ex er c ise s o fg ov er n m en ta l p ow er . . . to fav or th eir ow n cit ize n s . . . — is en ti r ely abs en t w h er e t h e St at es a r e bu yin g a n d se llin g in the m arke t. In co ntra st, a sui t byan ind i vi du al aga i nst a n unco n se n ting St ate i s the ve ryev i lat w hi ch the Ele venth Am endm en t i s di re cted

— an d i t e xi sts w h et her ornotthe St ate i s a cti ng f or profi t, i n a t ra dit i onal l y “ pri vate ” e nter p rise, an d a s a “mar k etpa r ti ci pan t. ” I n the s o ve r ei g ni m m unity c onte xt, m or eov er, “[ e] venhandness” be t we e n i n d i v i d u a l s a n d S t a t e s i s n o t t o be e xpected: “[ T]he const i tuti onalrole o fthe St ate s se ts the m a par t from o th ere m pl o y er s an d de fen dants. ” We l ch [ v. Te xas D ep’ to f H ighways an d Publ i c Tran s p. ], 483 U
. S. [ 468, 477 (1987)]. 527 U
. S. at 685-86 ( citations om itted ). T he con cern s un d erl y i ng th e do r m an t Comm er ce Cl au se , ho wev er, are q u i t e d i ffe r e n tfr o m th o s e mo t i v a t i n gs o v e r e i g n i mm uni ty, a s th e Cou r t unde r st an d abl y r ec o g ni ze d. The l a t t e r d o c t r i n e r e c e i v e d l i t t l e a t t e n t i o n . A s i d e fr o m a co upl e o ffl ee tingr efer en ce s i n di ss en tingo pi ni o ns and an e ve n br i eferr esponse bythe m aj or i ty, i t doe s no t appear that the r ati onal e u nd er l yi ng the r eco gni ti on o f a co m m er ci al -acts exce pti on f orpurposes o ff or ei gn sov er ei gn i m m unity was co nsi dered bythe Court. W hat a tte nti on there was pri m ar i l y cam e fro m J usti ces St eve ns and Brey er . In hi s di sse nti ng o pini on in that c a s e , J us t i c e S t e v e ns r e mar k e d: The p r o ce dur alpo stur e o fthi s ca se r equi r es the C ou rt to assu m e t h a t Flori d a Prep aid is an “arm80 N o. 08

- 4164 of the St ate ” of Fl or i da because its acti vi ti es r elat e to the S ta te ’ s edu ca ti o na lpr o g r ams. . . . But th e v alid ity of th at as su m p tio n i s d ou b tfu l if the C o ur t ’ s j ur i s pr ud e nc e i n thi s a r e a i s t o be ba se d pr i m ar i l y o n p r es en t- daya ss um pti o ns ab o u tth e s t a t us o fth e d o c t r i n e o fs o v e r e i g n i mm un i t y i n the 1 8 th c e ntur y . S o v e r e i g ns di d not th en play th e kind of role in t h e com m ercial m arke tp lac e t h at th ey d o t od ay . In fu tu re ca se s, it m ay ther ef or e b e app ro pri ate to l i m i t the co ver ag e o fs ta te s o ve r ei gn i m m uni tyb y t r ea tingthe c o mme r c i a le n t e r p r i s e s o fth e S t a t e s l i k e th e c o mme r c i a l a c t i v i t i e s o f f o r e i g n s o v e r e i g n s u n d er t he For ei gn S ove re i gn I m m unit i es A ct o f19 76. 52 7 U. S
. a t 69 1- 92 ( S te ve ns , J
. , di ss en ting ) ( ci tingthe F S I A’ s c o mme r c i a l a c t i v i t y e xc e pt i o n, 2 8 U. S
. C. § 1 605( a) ( 2) , and i ts defini ti on of“com m er ci alact i vi ty, ” i d. § 1 603( d))

. J usti ce Br eye r’ s di sse nt al so m en ti oned that Congre ss had draw n a l i ne be tw een a state’ s publ i c ac ts a n d i t s a c t s a s a “ ma r k e tp a r t i c i p a n t ” i n th e F S I A: I n do i ngs o , Co ng r e s s f o l l o we d the mo de r n t r e nd , w hich sp read rapid ly after th e Secon d W orld W ar, re ga rd i n g for eig n st at e s ov er eig n im m u n ity
. . . . I nde ed, g i ve n the wi dely a cc ept ed vi ew a m o ng m od er n n at ion s t h at w h en a St at e e n ga ge s in o r d i n a r y c o mme r c i a la c t i v i t y s o v e r e i g n i mm un ity has n o significant role to p lay, i t is tod ay’s hol ding, not P a rden , th a tc r e a t e s th e l e g a l“ a n o maly .” 52 7 U. S
. a t 69 9 ( i nt erna lquo ta ti o n mar k s an d c i ta ti o ns om itted ).N o. 08

- 4164 81 J usti ce S cal i a f ound those al l usi ons to f or ei gn so ver ei gn im m u n ity u n h elp fu l; h e d ism iss ed th e “ su gg es ti on . . . t h a t w e l i m i ts t a t e s o v e r e i g n i m m u n i t y t o n o n c o mm er ci alst ate act i vi ti es becaus e C ongr ess has so l i m i ted f ore ign so ve re ign im m u n ity ” w ith th is c om m en t: This propos al i gnor es the f act that sta te sov er ei gn im m u n ity , un l i k e fo re ign so ve re ign im m u n ity , i s a co n st it u ti ona l doctr i ne thati s m eant to be b oth i m m utabl e byCongr ess and re si st an t to tr ends. The text ofthe Ele vent h A m endm ent, o fco urse , m ak es no di st i nc ti o n b etwee n c o m m erci ala nd n on c om m er c ial st at e a c tiv itie s . . . . 52 7 U. S
. a t 68 6 n. 4 ( o pi ni o n o fS ca l i a, J
. )
. The t ex t o fthe El ev en thAm en dm en t, o fcou rse, a l so s ay s no th i ngabo ut sta te sov er ei gn im m unity. I fthe m att erwere fully pr esente d today, i t i s pos sibl e that the Courtm i ght v i ew m at te rs d iffer en tly . In vir t u a l l y a ll of th e c as es th at foll o we d Coll egeSa vi ngs , the Co ur t r ec o gn ize d tha t no th i ng about the doct rine o fst ate so ver ei gn i m m unity

— ei ther i ts b r ea dtho r i ts l i m i ta ti o ns

— appears i n th e E l eve nth A m en d m en t. Se e, e . g. , S o u th C a rol ina Sta te P o rts A uth ., 535 U
. S. at75 3 ( “[ T]he Ele venth Am endm ent doe s no t d efin e t h e s c op e o f th e S t a t e s ’ so ve re ign im m u n ity ; i t is bu t one p articu lar ex em p lifi cation of th at im m un ity. ”); G arre tt, 5 3 1 U. S
. a t3 6 3 ( “ Al tho ugh b y i t s t e r ms the Amen dm ent a pp l i es only t o sui ts aga i nst a S tat e byci ti zens of a no the r S t a t e , o urca s e s h a v e e xt e nd e d the Amen dm en t ’ s a p p l i c ab i l i t y t o s u i t s b y c i t i z e n s a g a i n s tth e i r o wn St at es .” ); K im el, 52 8 U.S
. at72

- 73 ( quoti ng Blat ch f or d v
. Nat i veVi l l ageof

Noat ak an d Ci r cl eVi l l age, 50 1 U.S
. 775, 77 982 N o. 08

- 4164 ( 1991 ) , f orthe propos ition that “w e hav e underst oo d the E l e v e nth Am e nd men t t o s t a nd no t s o muc h f o r wh at i t sa y s, b utf o r the p resu ppo si ti o n o fo urc o ns ti tu
tional struc tu re w hich i t con fi rm s”). These m or e re cent devel opm ents i n the l aw ofst ate sov er ei gn im m unity l end som e s up portto the possibi l i ty that the quest i on o fthe sc op e of s tat e s ove re i gn i mm un i t y m ay not y e tb e r e s o l v e d. As Ih a v e a l r e a dy not ed , at l east th roug h th e end of th e nin e t e e nt h ce nt ury th e C ourtr egul ar l y a pp l i ed pri nci ple s o fpubli c i nter national l aw ( th a t i s , the princ iples tha t ap p ly am ong differ ent nat i on- sta tes o fthe w or l d) t o the U. S. state s. Those pr i nc i pl es pe r m ea te thi s co unt r y ’ s f o unda ti o na ldo cum en ts , an d i nt erna ti o na l an al o g i es ab o und i n the Feder al i st Papers. Thus, i t a pp ear s that the b u rden o f proo fi s o n thos e who w oul d deny t h at the r ule s g overni ngthe i m m uni tyo ff o r ei g n c o unt r i es a ppl y i n the conte xt o fthe sta tes , o r that a t i m e cam e w hen st ate so verei gn i m m unity di ver ged fro m f or ei gn so ver ei gn i m m uni ty
. As o f 17 87, th es e wer e j us t two ap p li ca ti o ns ofthe sam e doct rine. T h e Su p re m e C ou rth as d ec id ed atlea st on e c as e in whi ch it looke d b ac kt o the o r i g i na lpl ano fthe Co nv en ti on t o see i fa sta te re tained its so ver ei gn i m m unity o r if it c ed ed a port i on o fthati m m unity t o the federa lgo ver nm ent. Thi s was Cen tr al Vi rgi ni a Com m uni ty Col l ege v. Katz , i n w hi ch the C ou rt h el d that a n adver sar y pr oceedi n g in bankr up tcy bro ught bya Ch apter11 tr ustee to set asi de prefer enti altr ansfer s that the debto r had m ad e to state agen cie s w as no t barred by the state’sN o. 08

- 4164 83

so ve r ei g n i m m uni ty
. 5 46 U
. S. a t 35 9. Es se nt i al l y, the St ate of Vir gi ni a w anted to preve nt the tr ustee from und oi ng the p re fer enti altr ansfer s. I t would have succeeded i fthe tr ustee ’ s a cti on ra n u p against the bar ri er o fs o v e r e i gn i mm un i t y . Bu t, n o t i ngtha tb a nk ruptcy j uri sdic ti on i s in rem and that the s tat es at the t i m e o f the F ounding had acquie sced i n a g ra n t of c ongr ess i onal p ow er to regu late the ba nk rup tcy p rocess , the C ou rt fou n d th at n o s u c h im m u n i t y ex ist ed

. Id. 3 62

- 63
. I fo ne w er e t o f ol l ow the sa m e m ethod olo gy f orst ate sov er ei gn i m m unity g ener all y, o ne would st ar t with th e anal ogyto f or ei gn so ver ei gn i m m unity a nd m ove f or w ar d i n each case . Onl y o ne questi on

—b u t a big o ne

— w oul d rem ai n: have the contours ofst ate so ver ei gn i m m uni t y c ha ng e d o v e r t i me, j us ta s the c o nt o ur s o f f or ei gn so ver ei gn i m m unity hav e done? G i v e n t he f a c tth a tth e d o c t r i n e o fs t a t e s o v e r e i g n i mm un ity i s one th at ha s been de velo p ed over the yea rs by the cour ts, l ar gel y base d o n str uctura l as sum pti ons, ther e i s no o bvi ous obsta cl e t o tak i ng the sa m e m ove aw ay fro m an abso l ute theor y o fi m m unity forst ate s a s th e Uni te d S ta te s ha s do ne ( fi r sti n the Ta te Le tt erand lat er i n the FS I A ) f orf or ei gn g ove rnm entali m m unity. M an y o fthe c o m pet i ti ve c o nc erns tha t m oti va te d the lat te r m ov e a p p l y to th e s ta te s w ith eq u al for c e. T h er e is no apparent re aso n, f or exam ple , w hy the U ni ver si ty ofW i sco nsi n shoul d be i m m une fro m l aw sui ts that M ar quette U ni ver si ty, a Cathol i c J esui t ins tituti on loc at ed in M ilw au ke e, w ou ld h av e t o d efe n d . N o r is th e re an y a p p ar en t re as on w h y a st at e-o w n ed h os p ita l, or garbage pick

- up ser vi ce, or pow er pla nt, should h ave84 N o. 08

- 4164

a co m peti ti ve edge o vera pri vate com peti tor
. A nd , gi ven the f act that l i ti gat i on i m poses tr ansact i on co sts

— of ten ver y hi gh co sts

— on th e p ar ti e s , i t s ee m s u n d en iab le that the f ai l ure to re cogni ze a c om m er ci al

- act excepti on f o r s t a t e e nt i t i e s c o nfe r s the s a me k i nd o fc o mpe ti ti ve advantage o n the sta tes t h at the Unite d Sta tes was re l uctant to confero n so ci al i st orCom m unis t co untri es w he n it em brac ed the restrictive t h eory of forei gn sovereig n im m u n ity aft e r W o r l d W ar II . See , e . g. , J o a n E. D o n og h u e, Ta k ing the “S o vereig n” O ut o f the Fo reign So vere ig n Immu n i t i e s A c t : A F u n c t i o n a l A p p r o a c h t o th eC o mm e r ci a l Act i vi ty Exc ept i on , 17Yal e J
. Int’ lL. 48 9, 49 0 ( 1992 ) ( “Com m unis t g ove rnm ents gener al l y s up port ed an abs ol u te theo ry. . . wh i l e W est er n go ver nm ents prom ote d a r est ri cti ve theo ry. . . .” ) ; se e a l so 1 R ES T AT EME NT (T HIRD ) OF THE F O R E I G N R ELA TION S L AW O F T HE U NIT ED S TATE S 390 (1987 ) (Int rod uc tory N ote to Part I V , Ch

. 5). Capi ta l i sm an d pr i va te o wner sh i p ha ve ser ve d the Uni te d S ta te s wel l

. Ev entho ug h th ere i s no c l au se i n the Consti tu ti on e xpli ci tl y c om m i tting thi s co untry to such an eco nom i c sy stem ( al though the Takings Cl ause of the F i fth A m endm ent m ay com e cl ose ) , the anti tr ust law s hav e been call ed qu asi-const itutiona l, and there se ems l i tt l e do ubttha t ec o nom i c fr ee do m i s hi g h o n the listof ch er ish ed righ ts . See , e . g. , U nite d State s v. Topco A ss ociate s, Inc. , 405 U .S. 59 6, 61 0 (1 97 2) (“ A n tit ru st law s . . . ar e th e M ag n a C ar ta of fre e e n te rp ris e .”); N orthe rn P ac. R .R . Co . v. U nited Sta tes , 3 56 U. S
. 1 , 4 ( 19 58 ) ( “T he Sher m an A ct was d esi gned to be a co m prehensi ve c h ar te r of e c on om ic lib er ty [.]”). A t a m in im u m , th is pu bl ic p olicy s houl d provi de a r ule o fco nstr ucti on f orN o. 08

- 4164 85

co ur ts c o ns i der i ngque stions o fs ta te s o ve r ei g n i m m uni ty. A t a st ro ngerl eve l, thes e co nsi derat i ons m ay yet persuade the S up re m e Cour t t o tak e up the questi on w heth er the sco pe ofthe sov er ei gn i m m unity e nj oye d by the s tat es should b e lim i ted i n the sam e way that sov er ei gn i m m u n ity is l i m i ted f orf or ei gn nat i ons, such th a t an e x c e p t i o n t o i mmu n i t y w o u l d e x i s tf o r c o mm er ci alact s. M y pos i ti on in thi s c as e, how eve r, does not depend upon the Court’ s t aking the l att erst ep. Even n ow , La pid es and the C ou rt’ s o therdeci si ons that re cogni ze w ai ver s of sov er ei gn i m m unity by li ti gat i on c o n d u c tr e q u i r e u s t o r e i n s t a t e P h o e n i x ’ s c o u n t e r c l a i ms on r em and. Foral lo f these re aso ns, I re spectfully di sse nt.

12- 28- 10