Several Board decisions have issued this year finding public universities exempt from IPR proceedings because of the sovereign immunity clause of the 11th Amendment to the U.S. Constitution. See, e.g., Covidien v. University of Florida Research Foundation. In a recent decision, another university was dismissed from a pending IPR. This time, however, the IPR proceeding will continue.
In Reactive Surfaces LTD. v. Toyota, a petition was filed challenging claims of a patent co-owned by Toyota and the University of Minnesota. In moving to dismiss the IPR proceeding, the University argued that sovereign immunity requires the termination of the IPR proceeding in its entirety because the merits of the proceeding cannot be adjudicated in the University’s absence. The Board disagreed, noting that the rules specifically contemplate at least the following instances in which an IPR can continue in the absence of a patent owner:
The Board also noted that the University’s interests would continue to be adequately represented since Toyota held identical interests in the patent and they were represented by the same legal counsel in the IPR proceeding.
Immunity from IPR proceedings is a significant procedural advantage enjoyed by public universities. As a result of this decision, it would not be surprising if some companies consider changes to their joint venture agreements with public universities. In some cases at least, it may be better to be a licensee of technology jointly developed with a university rather than a co-owner. See, e.g., Neochord, Inc. v. University of Maryland, Baltimore and Harpoon Medical, Inc. (Second named party, Harpoon Medical, Inc., was an exclusive licensee—not a co-owner—and the IPR proceedings were terminated in their entirety.)
Posted on 07/17/2017 by Deakin Lauer