University can claim sovereign immunity in cancer treatment suit, rules Federal Circuit
The dispute arises from the biotechnology company Gensetix’s acquisition of exclusive licencing of US patent numbers 8,728,806 and 9,333,248 from the University of Texas in 2014.
The patents relate to methods of modifying a patient’s immune system to kill cancer cells. William Decker, the named inventor of the patents, developed the treatments during his employment at the University of Texas MD Anderson Cancer Center.
In September 2008, the university granted an exclusive licensing of the patents to Alex Mirrow, a third party irrelevant to the suit, who then assigned these rights to Gensetix six years later.
According to the company, Decker left the university around 2011 and joined the faculty at the Baylor College of Medicine. In April 2017, Gensetix then sued the college, Diakonos Research and William Decker at the District Court for the Southern District of Texas for infringing the patents, naming the university as an involuntary plaintiff. Gensetix argued that the patents were assigned to the university under Decker’s employment contract, and it now had exclusive rights.
Gensetix noted that, before filing its complaint, it requested that the university join the suit as a co-plaintiff, but was refused. The university argued that it is a sovereign state entity under Texas law and that, under the Eleventh Amendment to the US Constitution, the district court had no subject matter jurisdiction over it.
The court determined that the amendment barred the calling of the university as an involuntary plaintiff and also concluded that the suit could not proceed without it and so, dismissed the case.
Gensetix appealed to the federal circuit, arguing that the district court erred both in holding that sovereign immunity barred the university’s involuntary involvement, and in ruling that the infringement suit should be dismissed rather than proceed in its absence.
The federal circuit disagreed with Gensetix’s attempt to limit the eleventh amendment to its text, and its argument that sovereign immunity can only be held in cases “against” a state, holding that this was contrary to Supreme Court guidance.
The court sided with the university and stated that “neither Supreme Court case law, nor the decisions of this circuit or our sister circuits”, support Gensetix’s arguments that a sovereign entity may be joined as an involuntary plaintiff.
But it did, however, reverse the district court’s ruling that Gensetix cannot proceed with its suit without the university’s involvement, describing the previous decision as an ”abuse of discretion”. It held that as “an exclusive licensee”, Gensetix “cannot enforce its patent rights without the court allowing the suit to proceed” in the university’s absence.
