Texas Uni’s sovereign immunity fail went as expected
The denial of the petition for panel rehearing or en banc rehearing in Board of Regents of the University of Texas System v Baylor College of Medicine is not surprising.
The original panel opinion followed, with limited discussion, the earlier University of Minnesota decision where panel (Justices Dyk, Wallach and Hughes) held state sovereign immunity did not apply to inter partes reviews (IPRs) because an IPR represents the US government’s reconsideration of its initial patent grant.
The Univ of Minn panel found its reasoning to be in line with St Regis Band of Mohawk v Mylan (Justices Dyk, Moore and Reyna), which held, on similar grounds, that tribal sovereign immunity did not apply to IPRs.
Between these two panel opinions there are five Federal Circuit judges who support the notion that an IPR is a reconsideration proceeding that doesn’t trigger sovereign immunity.
Notably, there was no dissent in the Univ of Texas v Baylor panel opinion (Justices Prost, Lurie and Stoll), suggesting that those three judges are also comfortable with this. Given the absence of even a single dissent in St Regis, Univ of Minnesota, or Univ of Texas v Baylor, it is unsurprising that the rehearing petition did not succeed.
The fears expressed in the amicus brief filed by the Association of Public and Land-grant Universities in the Univ of Texas case supporting rehearing also seem somewhat overblown. The amicus brief argues that compelling public universities to participate in IPRs would saddle them with substantial litigation costs and divert resources.
But it is rarely the case that universities find themselves subject to IPRs out of the blue, unconnected to their attempts to license their IP for commercial purposes. For example, in Univ of Minn the IPR arose parallel to an infringement case brought by that university. It also appeared in the Univ of Texas v Baylor case, where the University of Texas’ licensee, Gensetix, sued Baylor in district court.
This was also the case in St Regis, where the tribe acquired rights to patents subject to litigation and then-pending IPRs in the hope that its sovereign immunity would end the IPRs.
IPRs arise most often when there are charges of infringement or commercial disputes relating to a patent. Since public universities are more likely to commercialise their patents by licensing them to commercial partners, it is easy for them to dictate that the commercial partner will bear the expense of any IPRs in their licences. And where the university is enforcing a patent on its own, it stands in the same position as any patent holder who would have to defend its patent.
Gary Frischling is a partner at Milbank and a member of the firm’s litigation and arbitration group. He can be contacted at: gfrischling@milbank.com
