State Sovereign Immunity Does Not Apply to IPR Challenges

In Regents of the University of Minnesota v. LSI Corp., Nos. 18-1559 et al. (Fed. Cir. June 14, 2019), the Federal Circuit reversed the PTAB’s decision finding that state sovereign immunity would apply to IPR proceedings, but had been waived, and held that state sovereign immunity does not protect state-owned patents from challenges from IPR challenges.

University of Minnesota (UMN), an arm of the state of Minnesota, sued LSI and customers of Ericsson in district court, alleging infringement of several patents relating to semiconductors and 4G LTE networks. LSI and Ericsson then filed IPR petitions challenging the patents. UMN moved to dismiss the IPR challenges based on state sovereign immunity. The Board denied UMN’s motions, finding that UMN had waived its right to assert state sovereign immunity by filing suit in district court. UMN appealed.

On appeal, the Federal Circuit reversed. The court explained that “[state] sovereign immunity does not apply to suits brought by the United States, including agency proceedings commenced by the United States.” The court compared the case to Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), which found no tribal sovereign immunity in IPR proceedings, and discussed factors distinguishing IPR jurisdiction from Article III jurisdiction. The court determined that IPR proceedings represent the United States agency proceeding to reconsider a prior patent grant and are thus not subject to state sovereign immunity.