State Universities Rebuffed at High Court Over Patent Challenges
(Bloomberg) -- The U.S. Supreme Court refused to shield state-run universities from having to appear before a federal administrative body to defend the validity of patents they own.
The justices turned down an appeal by the University of Minnesota that argued it has state sovereign immunity from reviews by the Patent Trial and Appeal Board. An appeals court said the reviews are administrative actions, so sovereign immunity doesn’t apply.
The review boards, part of the U.S. Patent and Trademark Office, are popular with companies accused of infringement because the agency is faster and more likely to invalidate patents than a district court.
The university filed lawsuits against Ericsson AB customers, Broadcom Inc.’s LSI unit, and Gilead Sciences Inc., seeking royalties on patents it owned. Each of the companies sought review at the patent office.
The review board refused to throw out the cases brought by Ericsson and LSI, saying that by filing the lawsuits, the university had exposed itself to the validity challenges.
Gilead, seeking to challenge a patent for a cancer-fighting treatment, intervened in the university’s appeal alongside Ericsson and LSI.
Checking Its Work
The U.S. Court of Appeals for the Federal Circuit, which handles all patent appeals, went further than the board, saying there is no immunity at all for universities. The reviews are simply the agency checking its own work, the appeals court said.
In appealing to the Supreme Court, the university said the tech companies can challenge the validity of the patents in response to the lawsuit, but can’t open a new forum by going to the administrative board.
The Federal Circuit decision “injures the sovereignty of every state and subjects public universities to a new and increasingly invoked form of litigation without their consent,” the university said. “Those disputes implicate billions of dollars’ worth of intellectual property rights at the center of some of the most important sectors of our economy.”
In siding with LSI and Ericsson, the Federal Circuit cited its own ruling that said the St. Regis Mohawk Indian Tribe couldn’t claim tribal immunity to escape patent office reviews. In that case, Allergan Plc had paid the tribe to take ownership of its patents on the eye drug Restasis in a failed effort to shield the patents from scrutiny. The Supreme Court rejected an appeal of that decision.
The case is Regents of the University of Minnesota v. LSI Corp., 19-337.
©2020 Bloomberg L.P.