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Monday, March 13, 2017

A State University’s Patents May be Immune From PTAB Review

Nancy C. Wilker, Ph.D., J.D.W. John Keyes, Ph.D., J.D.

By Nancy Wilker, Ph.D and W. John Keyes, Ph.D.
Members of our Patent Practice Group
Since its introduction in 2012, inter partes review (IPR) has provided a relatively efficient means of challenging an issued patent on the basis of lack of novelty or obviousness.  Instead of challenging the patent in a court of law, a party can now petition the Patent Trial and Appeal Board (PTAB) to initiate an IPR.
IPR proceedings are heard by a panel of administrative law judges from the PTAB who decide whether to institute a review.  If one is instituted, they eventually issue a final decision on patentability of the challenged patent.
This powerful tool has become so popular that it is almost universally employed by parties defending against patent-based lawsuits. Consumer electronics giants have enthusiastically embraced IPRs as a means for challenging patents. Apple alone has filed more than 200 IPR petitions.  The automotive and pharmaceutical industries also have leveraged this tool extensively.
It appears now there are limits.  In its January decision in Covidien LP v. University of Florida Research Foundation Inc., the PTAB ruled that patents held by certain state-affiliated institutions are immune from challenges in IPR proceedings because of the protection afforded by the Eleventh Amendment of the US Constitution.
That amendment provides that 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.”
The Eleventh Amendment has been interpreted broadly.  For example, in Federal Maritime Commission v. South Carolina State Ports Authoritythe Supreme Court determined that it precludes certain adjudicative administrative agencies organized under Article I of the Constitution, such as the Federal Maritime Commission (“FMC”), from adjudicating complaints filed by a private party against a non-consenting state. More...

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