Source: https://patentlyo.com/patent/2017/02/sovereign-university-challenge.html
Timestamp: 2019-04-24 17:53:10+00:00

Document:
The 11th amendment applies were private party invokes the power of a court to coercively adjudicate against a state without its consent. The principal argument of the petitioner was that the action against the patent was basically in rem – somewhat like the bankruptcy courts where rights in the res are adjudicated and where the Supreme Court has previously held the 11th amendment does not apply. But the PTAB panel held that the result of the adjudication would be the cancellation of a claim in the patent and that this would adversely affect the patent owner.
Thus, the PTAB recognized that the adjudication of validity of a patent involves more than simply the adjudication of the validity of a public right, but a coercive suit against the owner of the patent because the result of the litigation is the revocation of the patent, the property of the patent owner. As in FMC, the Supreme Court case relied upon by the PTAB, the state cannot simply stand by and wait until an action is filed in court against it trying to enforce the order of the PTAB where it can there assert sovereign immunity. The result of the IPR is the cancellation of the state’s patent. No subsequent lawsuit against it is required.
Prediction, one way or the other, the Supreme Court will eventually have to decide whether the Seventh Amendment applies to patent validity, and then whether an administrative tribunal can constitutionally revoke a patent for invalidity without violating the Seventh Amendment. As others have reported, the Supreme Court apparently denied certiorari in MCM Portfolio LLC v. Hewlett-Packard, and in Cooper v. Lee, because the court was internally split on this issue (Stern v. Marshall was 5-4, with Scalia in the majority.) With a new conservative judge appointed to the court, the court may and probably will take more interest in this issue sooner rather than later.
Ned’s post was excellent – what are you getting at?
In your view, what did he miss?
Ned has pulled one of his legendary “disappear when the discussion does not fit his agenda” tricks – yet again – on the topic of “patents are property” on another thread.
This was the first thread that he has resurfaced with the beginnings of his meme, and the “runaway” was still fresh in my mind.
Would really really really like if he paid attention and followed the thought process that I have put on the table time and again.
President Donald Trump will begin work Friday dismantling the financial regulations enacted after the 2008 economic crisis, hours after the first major economic report of his administration is released. [Among other directives, the order forces the delay of the implementation of a rule that] required retirement advisers to act in their clients’ best interests.
Cuz regulationz is teh bad. Just ask the patent maximalists! They ran to the voting both to pull the lever for this path 0l0 gical lying s0 ci 0 path. And they’re still cheering him on.
But we shouldn’t point this out. So unfair.
Which is also why the new Federal cause of action regarding trade secrets is so interesting.
Quite quietly, that Federal Action added a layer in addition to (and in some ways supplanting) the sovereignty of the States.
While the actors involved are not likely to be States themselves, which will attenuate the soveriegnty angle somewhat, individuals within the “sovereign states” will not be so lucky.
It will be interesting to see if this principle applies to other entities given sovereign immunity such as foreign governments, the USA itself, domestic dependent nations, etc.
Subject matter eligiblity isn’t going anywhere (childish d.o.a. attempts to rewrite the statute notwithstanding).
I have to say it’s incredibly amusing to watch the rightwing maximalists obsess over this stuff while the men t@lly ill s 0 ci0 path they elected for President is busy destroying the country.
Has the inevitable war started yet? That’ll be great news for patents.
We have always been at war with Mexico and Australia.
But . . . but, a patent is a public right! This case is so awesome. Illustrating yet again the absurdity and constitutional anomaly created by the IPR construct. Rights for me, but not for thee. Good on you Florida.
BTW dearest Board, since you profess to be a Court – why no comity with the actual courts? Too hard to wrap your collective heads around the ‘full faith and credit’ clause? And since the 11th is viable, why not the 7th? What? Congress can’t conjure way 11th? or is it just the 7th? Meh, maybe I am too hard on the Board, it not like they are going to declare themselves usurpers and put themselves out of a job.
Right, per the CAFC in MCM the 7A doesn’t apply because “patents are public rights” but now per the PTAB the 11A does?
The reality is that public rights law is highly complex and CAFC and PTAB are in over their heads.
Joy and MCM were historically poorly written opinions. At least in Patlex, J. Newman made an attempt at intellectually connecting the dots.
Still, ultimate blame lies with SCOTUS for not lending a stabilizing hand. With the pending confirmation of Gorsuch, that might change.
Nice to see that admitted at last.
CAFC and PTAB are in over their heads.
But they’re not over “anonys” head! He has all the answers.
The Oscars aren’t until Feb 26.
Actually, IMHO, the silent reasoning under Patlex, is that the statute at the time provided a de novo trial in the district court, for any results of the ex-parte reexamination. In other words, the PTO was just like any other challenger to the validity of the patent – when the case was finally sued out in District Court. Granted there is a complex issue of sovereign immunity concerning the Feds, as to why that was a bench trial and not a jury trial, but nevertheless, it was a trial court of record will full Civ.R.P and Civ.R.Evid protections.
De novo trial court review is only the first half of the constitutional fix.
If a private right, then the Article I tribunal may only render advisory opinions on questions of law that then require Dist Ct enforcement and de novo review.
Ex party reexam after Patlex fails in this regard. But for an appeal from the reexamination, the patent is invalidated. This renders it (like IPR) unconstitutional (if a private property right).
Of course, the public rights designation fixes all separation of powers problems.
Medtronic ought to sue in Florida Fifteenth District Circuit Court for a DJ of invalidity. It’ll be fun to see the state courts run a patent trial.
That jurisdiction is what the claim of immunity is implying, after all. The state of Florida can’t argue now that the court doesn’t have jurisdiction.
But only if the Sovereign waives it’s right to be sued in State court. It ain’t called sovereign immunity for nothing.
The dispute between the parties extends back to a license agreement between UFL and Medtronic/Covidien of the patent at issue. UFL exerted its right to audit the books, but was refused by Medtronic. UFL then sued in state court on the contract. Medtronic counterclaimed for DJ of invalidity/noninfringement and removed the case to federal court on the patent claims and on diversity grounds.
Seems like a waiver situation to me. You want to play the game, you give up the immunity.
[S]overeign immunity derives not from the Eleventh Amendment but from the structure of the original Constitution itself.
All-time classic “strict constructionist” stuff. Very principled!
What does the constructionist “stuff” have to do with your implied jab at “principled”…?
It’s almost as if you do not want law to have foundation.
It’s a reference to endless empty sloganeering we’re going to have to endure while listening to Gorsuch’s cheerleaders.
The mythology is that strict contructionist/originalist types like “Scalia” have better/stronger “principles” than those OTHER judges. Of course it’s not true. It’s just different principles and, like everyone else, the adherence to “original intent” (or whatever the conservative legal meme du jour is) gets chucked to the curb (or not) depending on the desired outcome.
That’s an odd way of approaching the foundation of law.
sometimes referred to the States’ immunity from suit as “Eleventh Amendment immunity[,]” [that] phrase is [a] convenient shorthand but something of a misnomer, [because] the sovereign immunity of the States neither derives from, nor is limited by, the terms of the Eleventh Amendment. Rather, as the Constitution’s structure, its history, and the authoritative interpretations by this Court make clear, the States’ immunity from suit is a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Constitution, and which they retain today (either literally or by virtue of their admission into the Union upon an equal footing with the other States) except as altered by the plan of the Convention or certain constitutional Amendments.
Thanks! I knew that but maybe some of your friend’s were confused.
Bowers v. Hardwick was controlling law, too, until — totally unexpectedly! (LOL) — it went up in smoke.
And then there was a few years here when folks insisted over and over and over that “controlling law” said you couldn’t look at the relationship of a claim to the prior art when determining eligibility. Of course, that was nonsense. But if there were any doubts (and, truthfully, there weren’t among reasonable people who spent more than two seconds thinking about it) there’s no question that the “controlling law” now says otherwise.
There’s also plenty of articles about the 11th and sovereign immunity all over the Internet, including Wikipedia.
I recall hearing an anecdote years ago that the “inspiration” for the expansive view of the 11th came from a clerk at one of the Justice’s Thanksgiving Dinners.
The existing loophole in the “controlling law” (see how that works?) is represented by Central Virginia Community College v. Katz (holding that the Bankruptcy Clause of the Constitution abrogates state sovereign immunity.).
“ Dismissed before Institution based on Sovereign Immunity of the patentee. Moving forward it will be interesting to see whether the Federal Circuit is willing to hear an appeal or instead apply the standard law that institution decisions are not subject to appeal.
u m, if dismissed before institution, then the reach of the “no appeal OF the institution decision” cannot be correct ad that very state could not have been reached.
Uh it’s a public right.
Patents attorneys + constitutional law = comedy hour.
…and yet another “wrinkle” that will need to be “re-calibrated” if – as anony puts it – patents really are nothing more than public rights.
yet another “wrinkle” that will need to be “re-calibrated” if – as anony puts it – patents really are nothing more than public rights.
And nobody will bat an eye because “sovereign immunity” for states who choose to participate in the patent system was always bizarre to begin with.
Once again, your feelings are off.
I really doubt that. California and WARF will continue to obtain, license and enforce their patents, just as they are doing now.
Not so – and it should be more than apparent why not (as the wrinkles continue to unfold).
Of course, you can pretend otherwise or ask someone to explain it all to you.
ask someone to explain it all to you.
Because gob knows you’re incapable of explaining anything to anybody.
I spoke with someone at UC today, by the way. I asked them if changes to sovereign immunity or the public rights aspect of patents would have a noticable impact on their patent acquisition and licensing.
Oh wait, you don’t understand that, do you?
As the wrinkles unfold, the person you talked to will be singing a different song.
Anony can you explain further?
I think he means that if it’s a public right to bring an action then no immunity.
That is what I got from that as well.
Patent = public right = patent is not property = state cannot claim sovereign immunity as the patent is not property of a state but rather a legislative grace of the federal government.
Exactly, as a ‘public right’ the patent exists solely as a creature of statute and, therefore, can be entirely governed by the administrative construct the Congress devises. But, we run into the 7th, Markman v. Westview?, at the end of that rabbit whole.
In short, a public right is a cause of action that belongs exclusively to the executive and legislative branches.
The resolution of a public right does not implicate the judicial power.
Article III involvement is at the discretion of Congress.
In its original, restrictive form, a public right was merely a right that existed between the government and a private actor.
Congress can create a legal carve out under the public rights rubric for universities, pharma, etc.
As far as I am aware, it has not done so under the AIA.
To hold that sovereign immunity protects public universities from a public right cause of action is a constitutional absurdity – one that likely was not considered in the PTAB’s cited SCOTUS case.
Can we see the text of the 11th amendment again so we can all better understand this “absurdity”?
Oh, here it is: The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
Sounds to me like an exception for a Federal suit based on diversity jurisdiction, not a wholesale immunity to any suit. The Amendment was passed in 1794 to nullify Chisholm (1793) which held that diversity jurisdiction could be used haul States into Federal Court.
The first three words of your quote need to be viewed in light of what anony stated.
You kind of missed that, Malcolm.
This is not tough stuff.
If you were trying to make an argument, you failed miserably.
But most of what you say barely makes sense anyway so it’s not worth sweating over.
Yes – those very simple things seem never to make sense to you.
Hint: this is a YOU problem.
What the hell is a “one of the United States”?
The United States is a collection of sovereign entities that we call “states” – they united together to form the federal government. “One of the United States” is one of those states, such as my home state of Missouri.
This is similar (but also quite different) to the UK structure where England is a separate and distinct from Scotland, but both are part of the UK.
Got it. Now the 10th Amendment makes sense…. the States gave them selves a bunch of shared powers except what they didn’t.
Question, which state is it that got sovereign immunity? Are we sure it’s Florida?
Believe me, PTAB considered all angles before this decision. My informed speculation would be this decision is from the solicitors office and the political branch and was given to the panel. It’s pure self preservation. To ignore the 11th as this juncture, would create a SCOTUS scenario, in which the entire framework of the IPR construct would need to be squared against a separation of powers and federalism framework implicated by the purpose behind the 11th amendment. Screwing the requestor and dismissing under the 11th, allows the IPR construct to survive another day. And the longer PTO can keep the IPR construct in place, the better chance it has to survive.
Regarding the “decision from the solicitor’s office and political branch” – I was actually surprised that the decision here came from these three judges – although all quite experienced – none of them are part of the PTAB/USPTO leadership structure.
The timing of the release suggests no political involvement.
True, there is no record of the political department or the solicitors office, but that does not mean they were not involved. In my informed speculation they were. In your idealistic view they were not. Fair enough. Let’s issue a FOIA and find out. Oh wait, PTO would claim privilege, so I guess we have to wait for the google-DC tell all.
iwasthere, given the 5-4 nature of the split at the Supreme Court on this issue, I see this case going there eventually.
Do you believe that the SCOTUS nominee would be more or less favorable to the power of the administrative state?
iwasthere, very must like Scalia and Roberts.

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