PTAB Denies IPR Petition Against the State of Florida Due to 11th Amendment Sovereign Immunity

Written by Jeffrey C. Wu, Ph.D. and Kerry S. Taylor, Ph.D.

In Covidien LP v. University of Florida Research Foundation Incorporated, IPR2016-01274, -01275, -01276 (January 2017), the Patent Trial and Appeal Board held that Eleventh Amendment sovereign immunity applies to inter partes review (IPR) proceedings before the PTAB.

Covidien filed three IPR petitions against U.S. Patent 7,062,251 in response to a breach of contract lawsuit from University of Florida Research Foundation (UFRF) over a patent license.  UFRF responded by filing a motion to dismiss each of Covidien’s three IPR petitions before the Board, asserting that it was an arm of the State of Florida through the University of Florida and entitled to “an Eleventh Amendment immunity defense to the institution of an IPR” by the PTAB.

In its opinion, the Board first found that under Supreme Court precedent in FMC1, the Eleventh Amendment “limits not only the judicial authority of the federal courts to subject a state to an unconsented suit, but also precludes certain adjudicative administrative proceedings, depending on the nature of those proceedings, from adjudicating complaints filed by a private party against a nonconsenting State.”  The Board then reviewed whether an IPR qualified as such a proceeding.  The Board found that an IPR proceeding qualified because IPRs are “adversarial contested cases between a patent owner and a petitioner in which the petitioner bears the burden of proof and initiates the proceedings by filing a petition requesting the institution of a trial” and “the Board rules and procedures governing inter partes review resemble civil litigation in federal courts.”

Following its finding that IPRs are subject to Eleventh Amendment immunity, the Board then examined whether Patent Owner UFRF was entitled to Eleventh Amendment immunity.  The Board applied the Manders2 four factor test for determining whether an entity is an “arm of the State” sufficient for sovereign immunity: (1) how state law defines the entity; (2) what degree of control the State maintains over the entity; (3) where the entity derives its funds; and (4) who is responsible for judgments against the entity.  In applying the four factors, the Board found that each factor weighed in favor of UFRF being an “arm of the State of Florida” and concluded that UFRF was entitled to Eleventh Amendment immunity.  Because UFRF was entitled to Eleventh Amendment immunity and such immunity applied to IPR proceedings, the Board dismissed each pending petition where UFRF had “successfully raised this defense.”

1Fed. Mar. Comm’n v South Carolina State Ports Auth., 535 U.S. 743, 753–761 (2002) (“FMC”).

2Manders v. Lee, 338 F.3d 1304, 1309 (11th Cir. 2003) (en banc).