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Poking Holes in the State Immunity Shield
A federal appeals court on Tuesday weakened the shield that public universities and other state entities have increasingly used in recent years to protect themselves from lawsuits in federal court.
The decision by the U.S. Court of Appeals for the Federal Circuit involved a patent dispute between the University of Missouri and a private company, Vas-Cath Incorporated. Vas-Cath had been granted U.S. patents for a type of medical catheter in the late 1990s even though Missouri had filed its petition first. The university challenged the awarding of the Vas-Tech patents through a process known as an "interference," and in 2003, the Patent and Trademark Office, after a court-like proceeding involving calling and cross-examining of witnesses, sided with Missouri. Vas-Tech's patent claims were awarded to the university.
The company appealed in federal court, and the university asserted that, as a state entity, it was immune to such a lawsuit under the 11th Amendment to the U.S. Constitution. The district court, agreeing that the university had not waived its immunity, dismissed the lawsuit.
In a unanimous ruling Tuesday, however, a three-judge panel of the Federal Circuit court reversed that ruling. The court endorsed longstanding precedent that a state entity does not abrogate, or waive, its immunity merely by participating in the federal patent process. But the Supreme Court has ruled that a state entity does waive its immunity, the appeals court said, "when it voluntarily invokes federal jurisdiction or makes a clear declaration of its intent to submit itself to federal jurisdiction."
Missouri did that, Judge Frances Newman said in writing for the court, when it asked the Patent and Trademark Office to void the Vas-Cath patents. It is unfair, the court suggested, for the university to seek the federal government's help in winning the patents, and then seek protection from an attempt to review that decision. "The university initiated and participated in the contested [Patent and Trademark Office] interference against Vas-Cath; we conclude that the university cannot both retain the fruits of that action and bar the losing party from its statutory right of review, even if that review is conducted in federal court," the judge wrote.
Barbara McCurdy, a lawyer in Washington who represented Missouri before the Federal Circuit court, said that the case was noteworthy because federal courts have previously deemed public universities and other state entities to have waived their immunity at the point that they sought relief from federal courts. Viewing involvement in administrative proceedings like the patent interference process as abrogating immunity, too, could limit the circumstances under which public agencies can shield themselves from federal suit, she and other legal experts agreed.
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