PTAB Sovereign Immunity Dispute Heads to CAFC

Federal Circuit to Consider PTAB Sovereign Immunity Defense

State-affiliated entities enjoy immunity from suit in federal courts under the 11th amendment. To date, a handful of such entities have successfully leveraged the same immunity theory to avoid review of their patents before the Patent Trial & Appeal Board (PTAB). While still other Patent Owners have aligned themselves with Native American Tribes in an effort to benefit from their sovereign status in the hopes of avoiding PTAB review.

More recently, in Ericsson v. Regents of the University of Minnesota.the PTAB has determined that sovereign immunity is waived where the sovereign entity files an infringement suit. (here)

Appeal was taken from this decision this week.

As the Ericsson dispute is still in the preliminary proceeding phase, the Board effectively stayed the proceeding last Friday, explaining (here):

In view of the particular circumstances of this case, including the unique nature of the Eleventh Amendment immunity right at issue, as well as the fact that the stay requested pertains to the specific proceedings for which appellate review is sought, we conclude that it is appropriate to suspend the deadline for filing of Patent Owner’s Preliminary Response pending appellate review of the Order Denying Patent Owner’s Motion to Dismiss (Paper 14) based on Eleventh Amendment immunity.

The Patent Owner has since sought appeal from the Board’s waiver decision via the collateral order doctrine, explaining (here):

[T]he Board’s decision is appealable under 28 U.S.C. § 1295(a)(4)(A), via the collateral order doctrine. . . .¶ Like sovereign immunity itself, the collateral order doctrine applies equally to appeals from agency adjudications—including appeals in which an agency rejects a sovereign immunity claim.

As I pointed out previously, it may be that the Court sees this issue as closely aligned to the questions presented in Oil States.  Namely, whether it is fair to compare the PTAB’s review as being akin to a lawsuit; if not, the sovereign immunity defense could fall independent of the waiver debate.  Stay tuned.

Scott A. McKeown is an author of the Patents Post Grant.