Regents of the Univ. of Minn. v. Lsi Corporation , 926 F.3d 1327 ( 2019 )

United States Court of Appeals
for the Federal Circuit
______________________
REGENTS OF THE UNIVERSITY OF MINNESOTA,
Appellant
v.
LSI CORPORATION, AVAGO TECHNOLOGIES U.S.
INC.,
Appellees
GILEAD SCIENCES, INC.
Intervenor
______________________
2018-1559
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2017-
01068.
--------------------------------------------
REGENTS OF THE UNIVERSITY OF MINNESOTA,
Appellant
v.
ERICSSON INC., TELEFONAKTIEBOLAGET LM
ERICSSON,
Appellees
2 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
GILEAD SCIENCES, INC.
Intervenor
______________________
2018-1560, 2018-1561, 2018-1562, 2018-1563, 2018-1564,
2018-1565
______________________
Appeals from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in Nos. IPR2017-
01186, IPR2017-01197, IPR2017-01200, IPR2017-01213,
IPR2017-01214, IPR2017-01219.
______________________
Decided: June 14, 2019
______________________
MICHAEL A. ALBERT, Wolf, Greenfield & Sacks, PC,
Boston, MA, argued for appellant. Also represented by
STUART DUNCAN SMITH, RICHARD GIUNTA, GERALD B.
HRYCYSZYN, CHARLES T. STEENBURG.
KRISTOPHER L. REED, Kilpatrick Townsend & Stockton
LLP, Denver, CO, argued for all appellees. Appellees LSI
Corporation, Avago Technologies U.S. Inc. also represented
by EDWARD JOHN MAYLE, DAVID E. SIPIORA.
MARK S. DAVIES, Orrick, Herrington & Sutcliffe LLP,
Washington, DC, for appellees Ericsson Inc., Telefonaktie-
bolaget LM Ericsson. Also represented by EASHA ANAND,
WILL MELEHANI, San Francisco, CA; EDMUND HIRSCHFELD,
New York, NY; DEBRA JANECE MCCOMAS, Haynes & Boone,
LLP, Dallas, TX; J. ANDREW LOWES, Richardson, TX.
ADAM MORTARA, Bartlit Beck LLP, Chicago, IL, argued
for intervenor. Also represented by NEVIN M. GEWERTZ;
MEG E. FASULO, Denver, CO.
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 3
COURTNEY DIXON, Appellate Staff, Civil Division,
United States Department of Justice, Washington, DC, ar-
gued for amicus curiae United States. Also represented by
MARK R. FREEMAN, ALISA BETH KLEIN, MARK B. STERN,
JOSEPH H. HUNT.
JOSHUA STEPHEN JOHNSON, Vinson & Elkins LLP,
Washington, DC, for amicus curiae Association of Public
and Land-grant Universities. Also represented by JOHN
PATRICK ELWOOD.
MICHAEL W. SHORE, Shore Chan DePumpo LLP, Dal-
las, TX, for amici curiae STC.UNM, The Board of Trustees
of Purdue University, The Board of Trustees of Indiana
University. Also represented by ALFONSO CHAN, RUSSELL
J. DEPALMA; ANDREW M. HOWARD, Howard & Spaniol,
PLLC, Dallas, TX.
THOMAS MOLNAR FISHER, Solicitor General, Indiana
Office of Attorney General, Indianapolis, IN, for amici cu-
riae State of Indiana, State of Texas, State of Hawaii, State
of Illinois, State of Massachusetts, State of Michigan, State
of Minnesota, State of Mississippi, State of New Jersey,
State of Ohio, State of Rhode Island, State of South Caro-
lina, State of Utah, State of Virginia. Also represented by
JASON R. LAFOND, Office of the Attorney General of Texas,
Austin, TX.
JOHN THORNE, Kellogg, Hansen, Todd, Figel & Freder-
ick, P.L.L.C., Washington, DC, for amici curiae Computer
& Communications Industry Association, High Tech Inven-
tors Alliance, The Internet Association, L Brands, Inc.,
Newegg Inc., Red Hat, Inc., SAP America, Inc., SAS Insti-
tute Inc., The Software & Information Industry Associa-
tion, Symmetry LLC, Xilinx. Also represented by DANIEL
SIMON GUARNERA, ARIELA M. MIGDAL, GREGORY G.
RAPAWY.
4 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
JOEL THAYER, Washington, DC, for amicus curiae ACT
The App Association.
ANNA-ROSE MATHIESON, California Appellate Law
Group, San Francisco, CA, for amicus curiae America's
Health Insurance Plans.
MARK A. LEMLEY, Durie Tangri LLP, San Francisco,
CA, for amici curiae Jeremy W. Bock, Michael A. Carrier,
Andrew Chin, Brian L. Frye, Shubha Ghosh, Yaniv Heled,
Mark A. Lemley, Yvette Joy Liebesman, Brian J. Love, Su-
san Barbieri Montgomery, Tejas N. Narechania, Tyler T.
Ochoa, Arti K. Rai.
______________________
Before DYK, WALLACH, and HUGHES, Circuit Judges.
Opinion for the court by Circuit Judge DYK, in which
WALLACH and HUGHES, Circuit Judges, join.
Additional views by Circuit Judges DYK, WALLACH, and
HUGHES.
DYK, Circuit Judge.
The Regents of the University of Minnesota (“UMN”)
appeals from decisions by the United States Patent and
Trademark Office (“USPTO”) Patent Trial and Appeal
Board (“Board”) declining to dismiss petitions for inter
partes review (“IPR”). The petitions were alleged to be im-
proper because states supposedly enjoy sovereign immun-
ity in IPR proceedings. We conclude that state sovereign
immunity does not apply to these proceedings, and there-
fore we affirm.
BACKGROUND
The University of Minnesota is an arm of the state of
Minnesota and is one of the largest public research institu-
tions in the country. It pursues patent protection for inven-
tions resulting from its research and is the owner of U.S.
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 5
Patent Nos. 5,859,601 (’601 patent), 7,251,768 (’768 pa-
tent), 7,292,647 (RE45,230 patent), 8,588,317 (’317 patent),
8,718,185 (’185 patent), and 8,774,309 (’309 patent). The
patents were assigned to UMN at the outset of prosecution,
and they were issued between January 12, 1999, and July
8, 2014. These patents cover two distinct technologies.
Appellee LSI Corp. designs and supplies semiconduc-
tors; it is alleged to infringe UMN’s ’601 patent, which
claims particular types of “read channel” chips. Appellee
Ericsson Inc. is a telecommunications company. Its cus-
tomers’ use of Ericsson’s products was alleged to infringe
UMN’s ’768, RE45,230, ’317, ’185, and ’309 patents. These
patents claim technology used for 4G LTE networks.
UMN, alleging infringement of these patents, sued LSI
and separately sued Ericsson’s customers in district court.
Ericsson intervened in the customer suits.
After the commencement of the suits for patent in-
fringement, LSI and Ericsson separately petitioned for IPR
seeking a determination of unpatentability of the chal-
lenged claims on grounds of anticipation and obviousness.
See LSI Corp. v. Regents of the Univ. of Minn., No.
IPR2017-01068, Paper 1 (P.T.A.B. Mar. 10, 2017); Ericsson
Inc. v. Regents of the Univ. of Minn., Nos. IPR2017-01186,
Paper 1 (P.T.A.B. Mar. 28, 2017); IPR2017-01197, Paper 1
(P.T.A.B. Mar. 29, 2017); IPR2017-01200, Paper 1
(P.T.A.B. Mar. 30, 2017); IPR2017-01213, Paper 1
(P.T.A.B. Mar. 30, 2017); IPR2017-01214, Paper 1
(P.T.A.B. Mar. 30, 2017); IPR2017-01219, Paper 1
(P.T.A.B. Mar. 30, 2017).
After the petitions for IPR were filed, and before the
USPTO decided whether to institute IPR, UMN filed a mo-
tion to dismiss in each proceeding based on state sovereign
immunity. The USPTO convened an expanded panel, con-
sisting of three administrative patent judges as well as the
Chief Judge, Deputy Chief Judge, and two Vice Chief
Judges. In each proceeding, the Board concluded that state
6 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
sovereign immunity applied to IPR proceedings but that
UMN waived its immunity by filing suit against petitioners
in district court. 1 A concurrence to each of the Board deci-
sions concluded that sovereign immunity was not impli-
cated in part because “[a]t its core, inter partes review is a
circumscribed in rem proceeding, in which the Patent Of-
fice exercises jurisdiction over the patent challenged, ra-
ther than the parties named.” J.A. 13; J.A. 33.
UMN appealed the Board’s decisions, and the cases
have been consolidated on appeal. Gilead Sciences, Inc.,
facing the same issue for its own IPR petitions, sought
leave to intervene, which was granted. Regents of the Univ.
of Minn. v. LSI Corp., Appeal No. 2018-1559 (Fed. Cir. Apr.
19, 2018), ECF No. 35. We have jurisdiction under
28 U.S.C. § 1295(a)(4)(A). 2
1 The Board’s order denying UMN’s motion to dis-
miss is at LSI Corp. v. Regents of the University of Minne-
sota, No. IPR2017-01068, Paper 19 (P.T.A.B. Dec. 19,
2017), which is identical in relevant part to the Board’s or-
der in Ericsson Inc. v. Regents of the University of Minne-
sota, Nos. IPR2017-01186, Paper 14; IPR2017-01197,
Paper 14; IPR2017-01200, Paper 16; IPR2017-01213, Pa-
per 14; IPR2017-01214, Paper 14; IPR2017-01219, Paper
15 (P.T.A.B. Dec. 19, 2017).
2 Appellee LSI argues that UMN’s appeal is not ripe
because any harm to UMN would not occur unless and un-
til the Board instituted IPR, which may or may not occur.
(The USPTO and the other parties to this appeal do not
challenge our jurisdiction). It is well-established that deci-
sions denying sovereign immunity are appealable as collat-
eral orders, and the “ultimate justification is the
importance of ensuring that the States’ dignitary interests
can be fully vindicated.” P.R. Aqueduct & Sewer Auth. v.
Metcalf & Eddy, Inc., 506 U.S. 139, 146–47 (1993) (citing
Mitchell v. Forsyth, 472 U.S. 511, 527–29 & n.10 (1985));
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 7
While this appeal was pending, this court decided
Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc.,
896 F.3d 1322 (Fed. Cir. 2018), holding that IPR proceed-
ings were not barred by tribal sovereign immunity. A peti-
tion for certiorari was filed in that case, and the petition
was denied, 139 S. Ct. 1547.
DISCUSSION
I. Post-Issuance Administrative Proceedings 3
Addressing the issue of state sovereign immunity re-
quires a detailed understanding of the history of IPR pro-
ceedings and the reasons that Congress created such
proceedings.
The USPTO is an agency within the Department of
Commerce and is “responsible for the granting and issuing
of patents.” 35 U.S.C. §§ 1, 2. Almost every year the num-
ber of submitted patent applications has increased, from
approximately 100,000 in 1980 to nearly 650,000 in 2018.
U.S. Patent & Trademark Office, U.S. Patent Statistics,
Calendar Years 1963-2015, https://www.uspto.gov/web/
see Chehazeh v. Attorney Gen. of U.S., 666 F.3d 118, 135–
36 (3d Cir. 2012) (collecting cases); see also Mohawk Indus.,
Inc. v. Carpenter, 558 U.S. 100, 110 (2009). We see no ma-
terial difference between a decision made after institution
of IPR, as in Saint Regis Mohawk Tribe v. Mylan Pharma-
ceuticals Inc., 896 F.3d 1322, 1325 (Fed. Cir. 2018), and a
decision made before institution, as in this case. Given
UMN’s alleged dignitary interests in avoiding IPR, the
“purely legal” issue of whether sovereign immunity bars
IPR for state-owned patents is ripe for review. See Abbott
Labs. v. Gardner, 387 U.S. 136, 149 (1967), abrogated on
other ground by Califano v. Sanders, 430 U.S. 99, 105
(1977).
3 This history is discussed in the majority and concur-
rence in Saint Regis.
8 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
offices/ac/ido/oeip/taf/us_stat.pdf; U.S. Patent & Trade-
mark Office, FY 2018 Performance & Accountability Report
179 tbl.2 (2018) [hereinafter FY2 2018 P&A Rpt.],
https://www.uspto.gov/sites/default/files/documents/
USPTOFY18PAR.pdf. This has led to a steady backlog of
applications, and the USPTO now issues approximately
300,000 patents each year. FY 2018 P&A Rpt., at 180 tbl.3;
id. at 181 tbl.6. To perform its duty to examine and issue
patents, the USPTO relies on a corps of approximately
8,000 patent examiners who are charged with determining
whether an applicant is entitled to a patent for a claimed
invention. Id. at 205 tbl.28. Although essential to the ex-
amination process, the agency struggles to attract and re-
tain examiners able to perform sufficiently thorough prior
art searches and make a patentability determination. 4
Given the large number of patent applications, patent
examiners only receive roughly 22 hours to review each ap-
plication, which 70% of examiners have reported as insuf-
ficient time. U.S. Gov’t Accountability Office, GAO-16-490,
Patent Office Should Define Quality, Reassess Incentives,
and Improve Clarity 10, 25–26 (2016) [hereinafter Quality,
Incentives, & Clarity]. In those 22 hours, examiners must
ensure not only that technical formalities are met, but also
that the statutory requirements for patentability, such as
novelty and non-obviousness, are met. For this determina-
tion, the USPTO relies on the examiner’s prior art search-
ing, aided by prior art the applicant identifies.
For many years, until 2000, there was virtually no pub-
lic input in the initial examination process since patent ap-
plications were not published. Beginning in 2000, patent
4 See U.S. Gov’t Accountability Office, GAO-16-479,
Patent Office Should Strengthen Search Capabilities and
Better Monitor Examiners’ Work 28–29 & 28 n.50 (2016);
FY 2018 P&A Rpt., at 205 tbl.28 (2018) (showing net attri-
tion of more than 450 examiners from 2014 to 2018).
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 9
applications have been typically published 18 months after
the earliest claimed filing date, see 35 U.S.C. § 122; 37
C.F.R. § 1.211, and Congress has provided for some limited
public participation during the initial examination, 5 see 35
U.S.C. §§ 122(c), (e); H.R. Rep. No. 112–98, pt. I, at 48–49
(2011); 37 C.F.R. §§ 1.290–91. Nonetheless, in light of the
USPTO’s constrained resources and the absence of mate-
rial outside input during the initial examination, it is inev-
itable that there are patents granted in error. 6
This is not a new phenomenon. In 1980, Congress was
concerned that this was “a situation where a limited staff
is trying to cope with a constantly increasing workload and
is under pressure to make speedy determinations on
whether or not to grant patents.” S. Rep. No. 96–617, at 8
(1980); see also Patent Reexamination: Hearing on S. 1679
Before the Comm. on the Judiciary, 96th Cong. 3 (1980)
5 After a patent application is published, a third
party may file a pre-issuance submission, which includes
either a patent application, published patent application,
or other printed publication and, after 2011, a concise
statement as to the relevance of the submitted prior art to
the patentability of the claimed invention. 35 U.S.C.
§ 122(e); 37 C.F.R. § 1.290.
6 See Quality, Incentives, & Clarity, at 25
(“[E]xaminers’ time pressures are one of the central chal-
lenges for patent quality.”); see also Michael D. Frakes &
Melissa F. Wasserman, Does the U.S. Patent and Trade-
mark Office Grant Too Many Bad Patents?: Evidence from
a Quasi-Experiment, 67 Stan. L. Rev. 613, 652–53 (2015)
(finding increased patent grant rates correlated with in-
creased resource strain on the USPTO); Shawn P. Miller,
Where’s the Innovation: An Analysis of the Quantity and
Qualities of Anticipated and Obvious Patents, 18 Va. J.L. &
Tech. 1, 45 (2013) (estimating that 28% of issued patents
would be invalidated as anticipated or obvious).
10 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
(statement of Sen. Bayh) (characterizing the USPTO as “an
understaffed and overworked office trying to handle an
ever increasing workload”); Industrial Innovation and Pa-
tent and Copyright Law Amendments: Hearing on H.R.
6033, H.R. 6934, H.R. 3806, H.R. 2414 Before the Sub-
comm. on Courts, Civil Liberties & the Admin. of Justice of
the H. Comm. on the Judiciary, 96th Cong. 580–81 (1981)
(statement of Sidney A. Diamond, Commissioner of Patents
and Trademarks). Congress’ solution was to provide for
reexamination of the original patent grant.
In general, until 1980 the only way the original patent
grant could be challenged was in patent litigation in dis-
trict court by a declaratory judgment action or as a defense
in a patent infringement action, both of which could be ex-
tremely expensive and both of which generally were not
available until a claim of infringement was asserted by the
patent owner. See Patlex Corp. v. Mossinghoff, 758 F.2d
594, 601–02 (Fed. Cir. 1985); S. Rep. 96–617, at 9–10 (tes-
timony of Sidney A. Diamond, Commissioner of Patents
and Trademarks). 7 In this respect, the United States’ pa-
tent system diverged from its English origins, which had
for centuries recognized the executive’s ability to recon-
sider a prior patent grant. 8 In 18th-century England,
7 There were earlier post-grant administrative pro-
ceedings to determine who was the proper owner of a pa-
tented invention (i.e., an interference proceeding), see, e.g.,
Morgan v. Drake, 36 F.2d 511 (C.C.P.A. 1929), and to
reevaluate the patentability of a patented invention based
on an application by the patent owner (i.e., a reissue pro-
ceeding), see Fresenius USA, Inc. v. Baxter Int’l, Inc., 721
F.3d 1330, 1336–40 (Fed. Cir. 2013) (discussing history).
8 See In re Bilski, 545 F.3d 943, 966–76 (Fed. Cir.
2008) (en banc) (Dyk, J., concurring) (discussing the rela-
tionship between the U.S. patent law and the English com-
mon law); Mark A. Lemley, Why Do Juries Decide If
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 11
parties could challenge the validity of a patent by petition-
ing the government via the Privy Council to revoke the
public franchise. Oil States Energy Servs., LLC v. Green’s
Energy Grp., LLC, 138 S. Ct. 1365, 1376–78 (2018). “The
Privy Council was a prominent feature of the English sys-
tem,” and “[b]ased on the practice of the Privy Council, it
was well understood at the founding that a patent system
could include a practice of granting patents subject to po-
tential cancellation in the executive proceeding.” Id. at
1377.
In 1980, Congress for the first time enacted post-grant
review provisions allowing a challenge to the validity of an
issued patent in an ex parte reexamination process. 9 Act of
Dec. 12, 1980, Pub. L. No. 96–517, 94 Stat. 3015 (1980). In
these proceedings, Congress sought to enlist the assistance
Patents Are Valid?, 99 Va. L. Rev. 1673, 1691–704 (2013)
[hereinafter Why Do Juries Decide?] (discussing the diver-
gence of early American and English patent practice).
9 Prior to 1836, Congress had authorized suit for
scire facias to invalidate a patent where the suit, though
brought by a private party, was under the control of the
United States. In the Patent Act of 1836, Congress re-
pealed that provision, but the Supreme Court concluded
that the statutory change did not remove the United
States’ ability to sue in equity to invalidate a patent, at
least where there had been fraud on the patent office. See
United States v. Am. Bell. Tel. Co., 128 U.S. 315, 371–73
(1888) (“[Such a suit by the United States] is so widely dif-
ferent, so much more beneficial, and is pursued under cir-
cumstances so much more likely to secure complete justice,
than any defense which can be made by an individual in-
fringer, that it is impossible to suppose that congress, in
granting this right to the individual, intended to supersede
or take away the more enlarged remedy of the govern-
ment.”); Why Do Juries Decide, supra n.8, at 1695–97.
12 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
of third parties to identify relevant prior art so as to ad-
dress the lack of public trust and confidence in the patent
system’s ability to weed out bad patents in initial ex parte
examination. 10 As the USPTO Commissioner explained
during consideration of the 1980 legislation,
The main reason [the new procedure of] reexami-
nation is needed is because members of the public
interested in the validity of a patent are sometimes
able to find pertinent prior patents and printed
publications not known or available to the
PTO . . . .
The patent owner’s competitors will devote great
effort and expense to invalidating a patent that af-
fects their businesses. They can afford to look for
documentary evidence of unpatentability in library
collections, technical journals and other sources
not within the PTO’s search file. Because of budg-
etary and time constraints, the examiner’s search
seldom extends beyond the PTO’s 22 million docu-
ment collection.
Industrial Innovation and Patent and Copyright Law
Amendments: Hearing on H.R. 6033, H.R. 6934, H.R. 3806,
H.R. 2414 Before the Subcomm. on Courts, Civil Liberties
& the Admin. of Justice of the H. Comm. on the Judiciary,
96th Cong. 576 (1981) (statement of Sidney A. Diamond,
Commissioner of Patents and Trademarks). Not only would
the USPTO benefit from greater public participation in
post-grant proceedings, but the proceedings also had new
10 Mark D. Janis, Rethinking Reexamination: Toward
a Viable Administrative Revocation System for U.S. Patent
Law, 11 Harv. J.L. & Tech. 1, 9–10 (1997); see S. Rep. No.
96–617, at 2–3, 14 (1980); H.R. Rep. No. 96–1307, pt. 1, at
3 (1980) (expressing concern as to the lack of confidence in
the patent system).
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 13
procedures that would allow the agency to focus its re-
sources on reevaluating those patents of particular concern
to the public. 11
Thus, “[t]he reexamination statute enabled the PTO to
recover administrative jurisdiction over an issued patent
in order to remedy any defects in the examination which
that agency had initially conducted and which led to the
grant of the patent.” Patlex, 758 F.2d at 601. Under the
reexamination procedures, if the USPTO learned of prior
art that raised “a substantial new question of patentabil-
ity” it could institute an ex parte reexamination. 35 U.S.C.
§ 303.
However, ex parte reexaminations did not solve the
agency’s problems. Once instituted, ex parte reexamina-
tion largely followed the same process as the initial exami-
nation, without further third-party input. S. Rep. No. 110–
259, at 18–19 (2008). It “follow[ed] essentially the same in-
quisitorial process between patent owner and examiner as
the initial Patent Office examination.” SAS Inst., Inc. v.
Iancu, 138 S. Ct. 1348, 1353 (2018) (citing 35 U.S.C. § 305).
In this respect, it was “meaningfully different” from the in-
ter partes reexamination and IPR proceedings that Con-
gress adopted thereafter. Return Mail, Inc. v U.S. Postal
Serv., No. 17-1594, slip op. at 14 (June 10, 2019).
In 1999, seeking to enhance the process, Congress en-
acted provisions for the inter partes reexamination
11 See Kimberly A. Moore, Worthless Patents, 20
Berkeley Tech. L.J. 1521, 1521–22, 1530–31 (2005) (noting
that only a small fraction of issued patents are ever as-
serted and that, in the sample of patents studied, more
than half of all the issued patents expired for failure to pay
maintenance fees); Mark A. Lemley, Rational Ignorance at
the Patent Office, 95 Nw. U. L. Rev. 1495, 1497, 1501–08
(2001) (same).
14 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
proceedings, in order to increase third party participation.
Act of Nov. 29, 1999, Pub. L. No. 106–113, 113 Stat. 1501
(1999); see H.R. Rep. 106–464, at 133 (1999).
Similar to ex parte reexamination, the inter partes
reexamination process began with a third-party request for
reexamination based on prior art, and if the prior art raised
a substantial new question of patentability, the USPTO
would grant the request and proceed with reexamination.
35 U.S.C. § 312 (2002). However, significantly, unlike ex
parte reexamination, inter partes reexamination allowed
the third-party requestor to participate throughout the
proceeding. “Each time that the patent owner file[d] a re-
sponse to an action on the merits from the [USPTO], the
third-party requester shall have one opportunity to file
written comments addressing issues raised by the action of
the Office or the patent owner’s response thereto.” Id.
§ 314. The third party could also appeal to the Board of Pa-
tent Appeals and Interferences if the examiner found the
claims to be not unpatentable. “The participation by third
parties [was] considered vital” to the goal of “improving pa-
tent quality and validity” because “in many circumstances
they [would] have the most relevant prior art available and
incentive to seek to invalidate an allegedly defective pa-
tent.” H.R. Rep. 107–120, at 4 (2001). After 1999, Congress
continued to tweak ex parte and inter partes proceedings,
but they were less widely used than Congress had hoped
and had features that made them “troublesomely ineffi-
cient and ineffective as a truly viable alternative for resolv-
ing questions of patent validity.” S. Rep. No. 110–259, at
19 (2008). 12
12 For example, until 2002, a person requesting reex-
amination of a patent could not solely rely on prior art that
the USPTO had already considered. See Pub. L. 107–273,
§ 13105, 116 Stat. 1758, 1900 (2002). Another example of
the deficiency of these proceedings was that inter partes
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 15
In 2011, Congress enacted the Leahy-Smith America
Invents Act (“AIA”), Pub. L. No. 112–29, 125 Stat. 284
(2011), to “improve patent quality and limit unnecessary
and counterproductive litigation costs.” H.R. Rep. 112–98,
pt. I, at 40 (2011). Congress replaced inter partes reexami-
nation with new post-grant review procedures, including
IPR, covered business method review, and post-grant re-
view, while retaining ex parte reexamination. IPR in par-
ticular was designed to improve on the inter partes
reexamination process, and “[a]lthough Congress changed
the name from ‘reexamination’ to ‘review,’ nothing con-
vinces us that, in doing so, Congress wanted to change its
basic purposes, namely to reexamine an earlier agency de-
cision.” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,
2137, 2144 (2016). Just as with the prior reexamination
procedures, IPR “allows a third party to ask the U.S. Pa-
tent and Trademark Office to reexamine the claims,” id. at
2136, albeit with “broader participation rights,” id. at 2137.
Before IPR can be instituted, a person must file a peti-
tion challenging the validity of one or more patent claims
under § 102 or § 103 on the basis of prior art patents or
printed publications. 35 U.S.C. §§ 311, 312. The petition
may be supported by declarations. 35 U.S.C. § 312(a)(3)(B).
The petitioner need not have constitutional standing to file
the petition or participate in IPR. Cuozzo, 136 S. Ct. at
2143–44. After filing, the petitioner has a limited ability to
amend its petition as “the Board has determined that in
IPR a petitioner may only make clerical or typographical
corrections to its petition.” Saint Regis, 896 F.3d at 1328.
The petitioner must also serve the petition on the patent
reexamination took an average of three and a half years
from initiation to a certificate issue date. See U.S. Patent
& Trademark Office, Inter Partes Reexamination Filing
Data (2017), https://www.uspto.gov/sites/default/files/doc-
uments/inter_parte_historical_stats_roll_up.pdf.
16 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
owner, 37 C.F.R. § 42.105, and the patent owner may, but
need not, file a preliminary response, 35 U.S.C. § 313; 37
C.F.R. § 42.107(a).
If the Director of the USPTO, a politically accountable
executive officer, 13 determines that the appropriately filed
petition “shows that there is a reasonable likelihood that
the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition,” the Director may insti-
tute IPR. 35 U.S.C. § 314(a); see 35 U.S.C. § 325(d). “The
decision whether to institute inter partes review is commit-
ted to the Director’s discretion.” Oil States, 138 S. Ct. at
1371. This decision is “final and nonappealable.” 35 U.S.C.
§ 314(d); see Oil States, 138 S. Ct. at 1378 n.5 (citing
Cuozzo, 136 S. Ct. at 2140).
Once instituted, the Board, typically a three-member
panel of administrative patent judges, examines the valid-
ity of the asserted patent claims. A patent owner may re-
spond to the petition after IPR is instituted, 35 U.S.C.
§ 316(a)(8), but the petitioner bears the burden of proving
“unpatentability by a preponderance of the evidence,” id.
§ 316(e). The procedure for reexamining the earlier deci-
sion to issue the patent by design is abbreviated compared
to district court proceedings. See id. § 316(a)(11). During
IPR, the patent owner and petitioner can seek discovery,
but such discovery is generally limited to “(A) the deposi-
tion of witnesses submitting affidavits or declarations; and
(B) what is otherwise necessary in the interest of justice.”
Id. § 316(a)(5); 37 C.F.R. § 42.51(b); see 154 Cong. Rec.
S9988–89 (daily ed. Sept. 27, 2008) (statement of Sen. Kyl)
(noting that “[g]iven the time deadlines imposed on these
proceedings, it is anticipated that, regardless of the
13The Director is “appointed by the President, by and
with the advice and consent of the Senate,” and “may be
removed from office by the President.” 35 U.S.C. § 3(a)(1),
(4).
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 17
standards imposed . . . PTO will be conservative in its
grants of discovery”). 14 Additionally, although the parties
are entitled to an oral hearing, 35 U.S.C. § 316(a)(10); 37
C.F.R. § 42.70, “[t]he hearings are short, and live testimony
is rarely allowed.” Saint Regis, 896 F.3d at 1328 (citing Ul-
tratec, Inc. v. CaptionCall, LLC, 872 F.3d 1267, 1270 n.2
(Fed. Cir. 2017)).
Once instituted, the proceedings may continue without
either the petitioner or the patent owner. The statutory
provision states that if the petitioner stops participating,
the Board may continue on to a final written decision.
35 U.S.C. § 317(a). If the patent owner stops participating,
“[t]he Board has construed its rules to allow it to continue
review.” Saint Regis, 896 F.3d at 1328. During the proceed-
ing the patent owner may also seek leave to amend the
original patent claims to resolve the problem of patent eli-
gibility, as the applicant can do in initial examination
though the proposed amendments may also be challenged
by the petitioner. 35 U.S.C. § 316(d).
An IPR proceeding in general must be completed
within one year of institution. 35 U.S.C. § 316(a)(11). When
IPR is completed, the Board issues a final written decision
with respect to patent claims challenged by the petitioner
14 “[D]iscovery is limited as compared to that availa-
ble in district court litigation. Limited discovery lowers the
cost, minimizes the complexity, and shortens the period re-
quired for dispute resolution. There is a one-year statutory
deadline for completion of inter partes review, subject to
limited exceptions. What constitutes permissible discovery
must be considered with that constraint in mind.” Garmin
Int’l, Inc. v. Cuozzo Speed Techs. LLC, No. IPR2012–00001,
2013 WL 11311697, at *3 (Paper 26) (P.T.A.B. Mar. 5,
2013) (citations omitted) (contextualizing the Board’s in-
terpretation of the “necessary in the interest of justice”
prong for IPR discovery).
18 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
and any claims sought to be amended. 35 U.S.C. § 318(a).
A party dissatisfied with the decision may then appeal to
this court, id. § 319, 15 and the Director may intervene in
the appeal, id. § 143. After the time for appeal has expired,
or appellate review has been exhausted, the process ulti-
mately terminates with the USPTO issuing a certificate
canceling, confirming, or incorporating patent claims. Id.
§ 318(b). The proceeding cannot award monetary or other
relief against the patent owner. Following an IPR proceed-
ing that “results in a final written decision,” statutory es-
toppel applies to the petitioner with respect to “any ground
that the petitioner raised or reasonably could have raised
during” the IPR proceeding. Id. § 315(e). The patent owner
is estopped from obtaining “[a] claim that is not patentably
distinct from a finally refused” claim. 37 C.F.R.
§ 42.73(d)(3)(i).
II. State Sovereign Immunity
While admitting that both ex parte and inter partes
reexamination did not implicate sovereign immunity, 16
UMN and its supporting amici contend that states enjoy
immunity from IPR proceedings.
States typically enjoy immunity from lawsuits brought
by private parties as a “fundamental aspect of the sover-
eignty which the States enjoyed before the ratification of
the Constitution, and which they retain today.” Alden v.
15 We have held, however, that a petitioner can only
appeal an adverse decision by the Board if it satisfies Arti-
cle III standing requirements. Consumer Watchdog v. Wis.
Alumni Research Found., 753 F.3d 1258, 1260–61 (Fed.
Cir. 2014).
16 “Q. Do States enjoy sovereign immunity in reexam
proceedings? A. In an ex parte reexamination, no . . . .”
“Q. So no sovereign immunity in inter partes reexam?
A. . . . I would say no . . . .” Oral Arg. at 6:20–7:01.
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 19
Maine, 527 U.S. 706, 713 (1999). This is sometimes referred
to as Eleventh Amendment immunity, 17 but “the sovereign
immunity of the States neither derives from nor is limited
by, the terms of the Eleventh Amendment.” Id.; see Semi-
nole Tribe of Fla. v. Florida, 517 U.S. 44, 54 (1996). “The
preeminent purpose of state sovereign immunity is to ac-
cord States the dignity that is consistent with their status
as sovereign entities,” while collaterally “serv[ing] the im-
portant function of shielding state treasuries.” Fed. Mar.
Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 760, 765
(2002) (“FMC”).
This immunity applies not only to proceedings brought
by a private party in an Article III forum but also to agency
adjudications brought by private parties that are similar to
court adjudications. Id. at 760. However, sovereign im-
munity does not apply to suits brought by the United
States, including agency proceedings commenced by the
United States. Id. at 752; Alden, 527 U.S. at 755 (citing
Principality of Monaco v. Mississippi, 292 U.S. 313, 328–29
(1934) (collecting cases)); United States v. Mississippi, 380
U.S. 128, 140–41 (1965); United States v Texas, 143 U.S.
621, 646 (1892). The Supreme Court recognized in FMC
that sovereign immunity does not bar an agency from
bringing an enforcement action against the state “upon its
own initiative or upon information supplied by a private
party.” 535 U.S. at 767–68.
UMN argues that sovereign immunity applies to IPR
proceedings where the state is the patent owner because
they are not like suits brought by the United States but are
entirely a dispute between a private party and the state,
17 “The Judicial power of the United States shall not
be construed to extend to any suit in law or equity, com-
menced or prosecuted against one of the United States by
Citizens of another State, or by Citizens or Subjects of any
Foreign State.” U.S. Const. amend. XI.
20 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
and they share similarities with Article III proceedings
where sovereign immunity applies. We have recently ad-
dressed the related question of whether tribal sovereign
immunity applies to IPR proceedings in Saint Regis Mo-
hawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322
(Fed. Cir. 2018), cert. denied, 139 S. Ct. 1547 (2019), and
held that it does not.
III. Saint Regis Mohawk Tribe
In Saint Regis, the Saint Regis Mohawk Tribe entered
into an ownership agreement regarding various patents,
which were the subject of ongoing IPR proceedings, and it
then invoked tribal sovereign immunity as a bar to those
proceedings. Id. at 1325. We concluded that tribal sover-
eign immunity did not apply to IPR because the “USPTO
[was] acting as the United States in its role as a superior
sovereign to reconsider a prior administrative grant and
protect the public interest in keeping patent monopolies
‘within their legitimate scope.’” Id. at 1329 (quoting
Cuozzo, 136 S. Ct. at 2144).
The Supreme Court has concluded that IPR proceed-
ings are essentially agency reconsideration of a prior pa-
tent grant. Cuozzo, 136 S. Ct. at 2144 (“[T]he purpose of the
proceeding is not quite the same as the purpose of district
court litigation . . . . [Instead,] the proceeding offers a sec-
ond look at an earlier administrative grant of a patent.”);
Oil States, 138 S. Ct. at 1374 (“[IPR] involves the same in-
terests as the determination to grant a patent in the first
instance.”). The fact that Congress has enlisted the assis-
tance of private parties does not change their essential
character. As discussed above, since 1980, Congress, con-
cerned with agency resource constraints, has relied on
third party participation to assist the agency’s evaluation
of patentability. See also Saint Regis, 896 F.3d at 1330–31
(Dyk, J., concurring). In IPR, Congress imported limited
discovery and live hearings. As explained in Saint Regis,
although these modifications to inter partes reexamination
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 21
make IPR “look[] a good deal more like civil litigation,”
SAS, 138 S. Ct. at 1353, fundamentally these proceedings
continue to be a “second look at an earlier administrative
grant of a patent,” Cuozzo, 136 S. Ct. at 2144. See Saint
Regis, 896 F.3d at 1327–29. The USPTO’s enlistment of
third parties in IPR has made the process less of an
“agency-led, inquisitorial process for reconsidering pa-
tents,” and more of a “party-directed, adversarial process,”
SAS, 138 S. Ct. at 1355, i.e., “[an] adversarial, adjudicatory
proceeding[] between the ‘person’ who petitioned for review
and the patent owner,” Return Mail, slip op. at 14, but that
does not disturb the basic purpose of the proceeding,
“namely, to reexamine an earlier agency decision,” Cuozzo,
136 S. Ct. at 2144. “Ultimately several factors convince[d]
us that IPR is more like an agency enforcement action than
a civil suit brought by a private party, and we conclude[d]
that tribal immunity is not implicated.” Saint Regis, 896
F.3d at 1327. 18 These factors are equally applicable to state
sovereign immunity.
First, “[i]t is the Director, the politically appointed ex-
ecutive branch official, not the private party, who ulti-
mately decides whether to proceed against the sovereign.”
Saint Regis, 896 F.3d at 1328. Although there must be a
petition for IPR to be initiated (i.e., “[35 U.S.C. § 311(a)]
doesn’t authorize the Director to start proceedings on his
own initiative,” SAS, 138 S. Ct. at 1355), any “person who
is not the owner of [the] patent” may file a petition, 35
U.S.C. § 311(a), even those who do “not have a concrete
18 We did not hold that interference proceedings were
barred by state sovereign immunity in Vas-Cath, Inc. v.
Curators of Univ. of Mo., 473 F.3d 1376, 1382 (Fed. Cir.
2007), nor do we decide that issue here. We note that inter-
ference proceedings may more closely resemble agency ad-
judication between private parties as compared to IPR
proceedings.
22 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
stake in the outcome; indeed, they may lack constitutional
standing,” Cuozzo, 136 S. Ct. at 2143–44. The Director’s de-
cision to institute is within his discretion, and Congress
went so far as to bar judicial review of that decision. 35
U.S.C. § 314(d). In this respect, IPR “is not initiated by pri-
vate parties in the way that a common-law cause of action
is.” Oil States, 138 S. Ct. at 1378 n.5.
Second, even if the petitioner or patent owner elects not
to participate during IPR, the Board can continue to a final
written decision, “reinforc[ing] the view that IPR is an act
by the agency in reconsidering its own grant of a public
franchise.” Saint Regis, 896 F.3d at 1328. In contrast, civil
litigation in an Article III forum terminates when there is
no longer a “case or controversy.”
Third, the IPR procedure is in other respects distinct
from ordinary civil litigation. The Federal Rules of Civil
Procedure do not apply. Unlike civil litigation, during IPR
a patent owner may amend its claims. (In district court lit-
igation, a patent owner may only amend patent claims to
correct typographical errors). Id. at 1328–29. Even though
discovery and a live hearing may be part of an IPR proceed-
ing, both are more limited than their civil counterparts. Id.
It is clear from the history and operation of IPR that
these proceedings are designed to allow the USPTO to har-
ness third parties for the agency to evaluate whether a
prior grant of a public franchise was wrong, a feature car-
ried over from inter partes reexamination. In this way, IPR
is akin to FMC proceedings brought by the agency that
would not be barred by sovereign immunity. 535 U.S. at
767–68. Indeed, Saint Regis relied heavily on the Supreme
Court’s analysis in FMC, which dealt with state sovereign
immunity. 896 F.3d at 1326 (“Although the precise con-
tours of tribal sovereign immunity differ from those of state
sovereign immunity, the FMC analysis is instructive.”).
Applying FMC’s analysis as we did in Saint Regis, we hold
that IPR, like inter partes reexamination, is similar to an
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 23
agency enforcement action instituted by the USPTO “upon
information supplied by a private party” rather than civil
litigation, so state sovereign immunity is not implicated.
FMC, 535 U.S. at 768.
We also read the Supreme Court’s holding in Oil States,
that IPR evaluation of patent validity concerns “public
rights,” as supporting the conclusion that IPR is in key re-
spects a proceeding between the government and the pa-
tent owner. In Oil States, the Court concluded that IPR
proceedings could be conducted before the agency rather
than an Article III court because they concern matters
“which arise between the Government and persons subject
to its authority,” that is “arising between the government
and others, which from their nature do not require judicial
determination.” 138 S. Ct. at 1373 (emphases added) (quot-
ing Crowell v. Benson, 285 U.S. 22, 50 (1932)). 19 The Court
concluded that despite the increased participation of third
parties, IPR “remains a matter involving public rights, one
‘between the government and others.’” Id. at 1378 (empha-
sis added) (quoting Ex parte Bakelite Corp., 279 U.S. 438,
451 (1929)). We interpret the Court’s language in Oil States
as concluding that IPR is an adjudication of public rights,
and therefore able to be resolved in a non-Article III forum,
because it is in key respects a proceeding between the
United States and the patent owner. In this way, these pro-
ceedings are not barred by state sovereign immunity since
19 This is not to say that the public rights doctrine
may not cover instances of disputes between private par-
ties regarding a public right. See MCM Portfolio LLC v.
Hewlett–Packard Co., 812 F.3d 1284, 1288–92 (Fed. Cir.
2015). But we read the Supreme Court as having resolved
the public rights issue in Oil States on the narrower ground
that IPR is a proceeding between the United States and the
patent owner, rather than adjudication between two pri-
vate parties regarding a public right.
24 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
sovereign immunity does not bar proceedings brought by
the United States. FMC, 535 U.S. at 752; Alden, 527 U.S.
at 755 (citing Principality of Monaco, 292 U.S. at 328–29).
UMN argues that the reasoning in Saint Regis is inap-
posite to the current appeal because there are salient dif-
ferences between tribal and state sovereign immunity. In
Saint Regis we recognized “many parallels” between tribal
and state sovereign immunity but left “for another day the
question of whether there is any reason to treat state sov-
ereign immunity differently.” 896 F.3d at 1329. We now
conclude that the differences between tribal and state sov-
ereign immunity do not warrant a departure from the rea-
soning in Saint Regis.
To be sure, “immunity possessed by Indian tribes is not
coextensive with that of the States,” Kiowa Tribe of Okla.
v. Mfg. Techs., Inc., 523 U.S. 751, 756 (1998), as the two are
derived from different origins, compare id. at 756–57, with
Alden, 527 U.S. at 713–28. Tribal sovereign immunity “is
subject to the superior and plenary control of Congress,”
Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978),
whereas state sovereign immunity can only be abrogated
under “a valid grant of constitutional authority,” Kimel v.
Fla. Bd. of Regents, 528 U.S. 62, 73 (2000). But, as noted
above, suits brought by the United States have long been
recognized as not being impeded by either tribal or state
sovereign immunity, and when Congress intends to abro-
gate either tribal or state sovereign immunity for suits
brought by private parties, it must do so with clear lan-
guage. See, e.g., Michigan v. Bay Mills Indian Cmty., 572
U.S. 782, 790 (2014) (tribal sovereign immunity); Blatch-
ford v. Native Village of Noatak & Circle Village, 501 U.S.
775, 786 (1991) (state sovereign immunity).
The patentee’s suggestion that Saint Regis rests on the
authority of Congress to abrogate tribal sovereign immun-
ity finds no support in the decision or the statutory scheme.
There is no indication in the AIA or its legislative history
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 25
that Congress designed IPR to abrogate tribal immunity.
And, contrary to UMN’s arguments, Saint Regis did not
base its reasoning on implied abrogation of tribal sovereign
immunity. Instead, Saint Regis concluded that IPR was an
agency reconsideration proceeding to which sovereign im-
munity does not apply in the first instance. 896 F.3d at
1329. This reasoning applies equally to states as it does to
tribes.
UMN further contends that, unlike tribal immunity,
there is a presumption (the Hans presumption) that state
sovereign immunity applies to proceedings, such as IPR,
that were “anomalous and unheard of when the Constitu-
tion was adopted.” FMC, 535 U.S. at 755–56 (quoting Hans
v. Louisiana, 134 U.S. 1, 18 (1890)). We disagree. First, “it
was well understood at the founding that a patent system
could include a practice of granting patents subject to po-
tential cancellation in the executive proceeding of the Privy
Council” (i.e., that the executive could provide a forum for
resolving questions of patent validity). Oil States, 138 S.
Ct. at 1376–78. Second, the Supreme Court recognized in
FMC that even though the Hans presumption applied to
bar resolution of private disputes in an agency forum, it did
not bar resolution of an agency enforcement action against
a state that was initiated based on information supplied by
a third party. FMC, 535 U.S. at 767–68. As we held in Saint
Regis, IPR is properly viewed as an agency’s reconsidera-
tion of a previous patent grant that is aided by information
supplied by a third party, and state sovereign immunity
does not bar these proceedings.
We conclude that state and tribal sovereign immunity
do not differ in a way that is material to the question of
whether IPR proceedings are subject to state sovereign im-
munity. Thus, under the reasoning of the majority and
26 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
concurrence in Saint Regis, we conclude that state sover-
eign immunity does not apply to IPR proceedings. 20
20 UMN argues that the Supreme Court’s decision in
Franchise Tax Board of California v. Hyatt, 139 S. Ct.
1485, 1495 (2019), recognizes that “the only forums in
which the States have consented to suits by one another
and by the Federal Government are Article III courts.”
UMN contends that this decision supports its position that
IPR proceedings cannot be maintained even if they are pro-
ceedings brought by the United States. Fed. R. App. P. 28(j)
Letter, ECF No. 155. Unlike the current appeal, Hyatt in-
volved only the question whether state sovereign immunity
barred private suits brought against a state in a sister
state’s courts. The Court answered in the affirmative, over-
ruling Nevada v. Hall, 440 U.S. 410 (1979). We do not read
Hyatt as holding that state sovereign immunity applies in
agency proceedings initiated by the United States.
First, the sentence in Hyatt relied on by UMN cites
FMC as sole authority for the proposition. The Supreme
Court specifically recognized in FMC that an agency “re-
mains free to investigate alleged violations . . . either upon
its own initiative, or upon information supplied by a pri-
vate party, and to institute its own administrative proceed-
ing against a [state entity].” 535 U.S. at 768 (citation
omitted). There is no indication in Hyatt that the Court in-
tended to undermine FMC. Just as the agency could bring
an enforcement action in FMC, so too can the USPTO in-
stitute an IPR proceeding based on information supplied by
a private party where the final decision is reviewable by an
Article III court.
Second, even if state sovereign immunity might in
some circumstances bar administrative proceedings involv-
ing states, this would not bar the USPTO’s reconsideration
of a prior patent grant because a state impliedly consents
to such proceedings when it applies for, or otherwise
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION 27
We finally note, although not implicated in the facts of
this case, the concerns raised by the parties and amici that
if sovereign immunity barred IPR proceedings against pa-
tents obtained by a sovereign, nothing would prevent a
state from lending its sovereign immunity to private par-
ties, as the tribe attempted to do in Saint Regis. 21 Such ma-
nipulation would undo Congress’ central quality control
mechanism in creating post-grant administrative proceed-
ings.
CONCLUSION
IPR represents the sovereign’s reconsideration of the
initial patent grant, and the differences between state and
tribal sovereign immunity do not warrant a different result
than in Saint Regis. We therefore conclude that state sov-
ereign immunity does not apply to IPR proceedings. In
obtains ownership of, a patent that is “a creature of statute
law” and granted “subject to potential cancellation in [an]
executive proceeding.” Oil States, 138 S. Ct. at 1374, 1377
(“We conclude that inter partes review is one of th[e] con-
ditions [for patentability].”). When one sovereign acquires
property under the domain of another, sovereign immunity
does not bar reconsideration of the property grant by the
originating sovereign. See Georgia v. City of Chattanooga,
264 U.S. 472, 479–80 (1924) (“The terms on which Tennes-
see gave Georgia permission to acquire and use the land
and Georgia’s acceptance amount to consent that Georgia
may be made a party to condemnation proceedings.”); Up-
per Skagit Indian Tribe v. Lundgren, 138 S. Ct. 1649,
1657–61 (2018) (Thomas, J., dissenting) (discussing the im-
movable-property exception to sovereign immunity).
21 See Adam Davidson, Why is Allergan Partnering
With The St. Regis Mohawk Tribe?, The New Yorker, Nov.
13, 2017 (reporting on interest by state universities in com-
moditizing sovereign immunity for privately owned pa-
tents).
28 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
light of the above disposition, we do not address the issue
of whether, if sovereign immunity were to apply to IPR pro-
ceedings, the state here waived such immunity by assert-
ing patent claims in district court that were later
challenged in a petition for IPR.
AFFIRMED
COSTS
No costs.
United States Court of Appeals
for the Federal Circuit
______________________
REGENTS OF THE UNIVERSITY OF MINNESOTA,
Appellant
v.
LSI CORPORATION, AVAGO TECHNOLOGIES U.S.
INC.,
Appellees
GILEAD SCIENCES, INC.
Intervenor
______________________
2018-1559
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2017-
01068.
--------------------------------------------
REGENTS OF THE UNIVERSITY OF MINNESOTA,
Appellant
v.
ERICSSON INC., TELEFONAKTIEBOLAGET LM
ERICSSON,
Appellees
2 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
GILEAD SCIENCES, INC.
Intervenor
______________________
2018-1560, 2018-1561, 2018-1562, 2018-1563, 2018-1564,
2018-1565
______________________
Appeals from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in Nos. IPR2017-
01186, IPR2017-01197, IPR2017-01200, IPR2017-01213,
IPR2017-01214, IPR2017-01219.
______________________
Additional views of DYK, WALLACH, and HUGHES, Circuit
Judges.
While the opinion for the court does not reach the issue,
in our view state sovereign immunity also does not apply
to IPR proceedings because they are in substance the type
of in rem proceedings to which state sovereign immunity
does not apply.
I. In Rem Proceedings
On appeal the parties dispute whether IPR is an in rem
proceeding to which sovereign immunity does not apply,
even if the proceedings are deemed adversarial as between
private parties.
For sovereign immunity purposes, at least in some con-
texts the Supreme Court’s “precedent has drawn a distinc-
tion between in rem and in personam jurisdiction, even
when the underlying proceedings are, for the most part,
identical.” Tenn. Student Assistance Corp. v. Hood, 541
U.S. 440, 453 (2004). In personam proceedings involve
“subjecting a State to the coercive process of judicial tribu-
nals at the instance of private parties,” which constitutes
an affront to a state’s dignity. Id. (quoting Seminole Tribe
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
3
of Fla. v. Florida, 517 U.S. 44, 58 (1996)); see, e.g., id. (“The
issuance of process . . . is normally an indignity to the sov-
ereignty of a State because its purpose is to establish per-
sonal jurisdiction over the State.”). In rem proceedings,
where personal jurisdiction need not be established over a
state or its officers, at least in some contexts, “do[] not, in
the usual case, interfere with state sovereignty even when
States’ interests are affected.” Cent. Va. Cmty. Coll. v. Katz,
546 U.S. 356, 370 (2006) (holding that states have waived
sovereign immunity for certain proceedings brought pursu-
ant to the Bankruptcy Clause). And, as we describe below,
IPR is an in rem proceeding.
Despite language in some Supreme Court cases
broadly describing the United States’ immunity to in rem
proceedings, 1 recognition of state sovereign immunity in
such proceedings has been more limited. For example,
1 See, e.g., The Siren, 74 U.S. 152, 154 (1868)
(“[D]irect suits cannot be maintained against the United
States, or against their property . . . .”); but see The Davis,
77 U.S. 15, 19–20 (1869): “There are some expressions in
the opinion of this court in the case of The Siren, which
seem to imply that no suit in rem can be instituted against
property of the United States under any circumstances.
But a critical examination of the case and the reasoning of
the court, will show that that question was not involved in
the suit, and that it was not intended to assert such a prop-
osition without qualification.” Davis held that personal
property of the United States in the hands of a common
carrier is not immune to an in rem “proceeding which does
not need a process against the United States, and which
does not require that the property shall be taken out of the
possession of the United States.” 77 U.S. at 21–22; see also
California v. Deep Sea Research, Inc., 523 U.S. 491, 507
(1998) (relying on Davis in the context of state sovereign
immunity).
4 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
sovereign immunity generally bars quiet title actions
against state-owned real property, particularly where the
dispute is “over a vast reach of lands and waters long
deemed by the State to be an integral part of its territory.”
Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 281–
82 (1997) (citing Tindal v. Wesley, 167 U.S. 204, 223
(1897)). 2 With state-owned personal property, the Court
has considered whether the disputed property was “owned
by a state and used and employed solely for its governmen-
tal uses and purposes,” because for an ostensibly in rem
proceeding against the state’s property, “[t]o permit a cred-
itor to seize and sell [the property] to collect his debt would
be to permit him in some degree to destroy the government
itself.” In re New York, 256 U.S. 503, 510 (1921) (second
portion quoting Klein v. City of New Orleans, 99 U.S. 149,
150 (1878)). In other contexts, the Court has looked to
whether the state is in actual possession of the disputed
property: “an actual possession, and not that mere con-
structive possession which is very often implied by reason
of ownership under circumstances favorable to such impli-
cation.” California v. Deep Sea Research, Inc., 523 U.S. 491,
507 (1998) (quoting The Davis, 77 U.S. 15, 21 (1869)). This
is “consistent with the principle which exempts the [State]
from suit and its possession from disturbance by virtue of
judicial process.” Id. (alteration in original) (quoting Davis,
77 U.S. at 21).
IPR is distinguishable from these in rem proceedings
where the Court has held that sovereign immunity applies.
Unlike Coeur d’Alene, IPR does not implicate ownership of
real property or the state’s ability to regulate within its
2 Suits concerning ownership of immovable property
owned by one sovereign, but located in another, may not
implicate sovereign immunity. See Upper Skagit Indian
Tribe v. Lundgren, 138 S. Ct. 1649, 1654–55 (2018); id. at
1657–61 (Thomas, J., dissenting).
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
5
own domain. Cf. Oil States Energy Servs., LLC v. Green’s
Energy Grp., LLC, 138 S. Ct. 1365, 1376 n.3 (2018) (“Mod-
ern invention patents . . . are meaningfully different from
land patents.”). Patents are creations of federal statutory
law and are regulated by that law, id. at 1374 (quoting
Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S.
24, 40 (1923)), which includes the ability of the executive to
consider whether a previous grant was erroneous, id. at
1376–78 (noting that “[IPR] is one of th[e] conditions” of
patentability). Patents are also not property that is used by
a state “solely for its governmental uses and purposes.”
New York, 256 U.S. at 510. 3 Although a state does not
waive its sovereign immunity merely by participating in
commercial activity, 4 as UMN has done here, such private
3 In recent years states have sought to supplement
revenue by increasing market participation in licensing
and enforcing patents. See Andrew Chung, Schools that
Sue: Why More Universities File Patent Lawsuits, Reuters
(Sept. 15, 2015); Malathi Nayak, Patent-Heavy Schools
Look to Courts for IP Paydays, BNA Intellectual Property
Blog (June 14, 2017); Jacob H. Rooksby, Innovation and
Litigation: Tensions Between Universities and Patents and
How to Fix Them, 15 Yale J.L. & Tech. 312, 330–40 (2013);
Tejas N. Narechania, Note, An Offensive Weapon?: An Em-
pirical Analysis of the “Sword” of State Sovereign Immunity
in State-Owned Patents, 110 Colum. L. Rev. 1574, 1601
(2010). The federal government’s policy of encouraging
commercialization of research performed with federal
funds under the Bayh-Dole Act, Pub. L. No. 96–517, 94
Stat. 3015 (1980), hardly suggests state sovereign immun-
ity bars administrative reconsideration of an erroneously
granted patent.
4 Coll. Sav. Bank v. Fla. Prepaid Postsecondary
Educ. Expense Bd., 527 U.S. 666, 685 (1999) (“[A] suit by
an individual against an unconsenting State is the very evil
at which the Eleventh Amendment is directed—and it
6 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
market participation does not make patents “public prop-
erty of a state used and employed for public and govern-
mental purposes” that would implicate sovereign
immunity in in rem proceedings under the Supreme
Court’s decision in In re New York. Id. at 510.
Also, because patents are intangible property—a right
to exclude—the concern of protecting the state’s “posses-
sion from disturbance” is not applicable for IPR where own-
ership is not disputed. Deep Sea, 523 U.S. at 507. A state
cannot “actual[ly] possess[]” a patent even if the state oth-
erwise claims ownership, see id. (quoting Davis, 77 U.S. at
21), and the Board does not physically intrude into the
state’s domain to obtain jurisdiction over a patent or to re-
solve the issue of its validity. We do not distinguish be-
tween tangible and intangible property, but instead
between property that is physically possessed by a state
and property that is not. Thus, IPR does not disturb a
state’s actual possession even if a state-owned patent is
found to have been erroneously granted.
Not only is an IPR proceeding unlike in rem proceed-
ings held to implicate sovereign immunity, IPR is closely
akin to proceedings where the Supreme Court has con-
cluded sovereign immunity is not a bar; for example, in rem
bankruptcy proceedings involving discharge of a debt owed
to the state. In Tennessee Student Assistance Corp. v. Hood,
an individual received student loans from the state of Ten-
nessee and then later sought discharge of the state debt in
bankruptcy proceedings. 541 U.S. at 444–45. She served
the state with her complaint and a summons. Id. The state
moved to dismiss the complaint based on state sovereign
immunity. Id. at 445. The Court held that the state enjoyed
exists whether or not the State is acting for profit, in a tra-
ditionally ‘private’ enterprise, and as a ‘market partici-
pant.’”).
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
7
no sovereign immunity because of the in rem character of
the bankruptcy proceedings.
“The discharge of a debt by a bankruptcy court is . . .
an in rem proceeding,” id. at 447, as “the court’s jurisdiction
is premised on the res, not on the persona,” id. at 450. Alt-
hough “States, whether or not they choose to participate in
the proceeding, are bound by a bankruptcy court’s dis-
charge order no less than other creditors,” id. at 448, the
“debtor does not seek monetary damages or any affirmative
relief from a State by seeking to discharge a debt; nor does
he subject an unwilling State to coercive judicial process,”
id. at 450. In this way, “the court’s exercise of its in rem
jurisdiction to discharge a student loan debt is not an af-
front to the sovereignty of the State.” Id. at 451 n.5.
IPR is similarly an in rem proceeding—a proceeding to
reevaluate the validity of an issued patent. See Cuozzo
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144 (2016) (not-
ing “that the proceeding offers a second look at an earlier
administrative grant of a patent”). Just as with a bank-
ruptcy proceeding to discharge a debt, IPR is an in rem pro-
ceeding that is not premised on obtaining jurisdiction over
a state or its officers. The Board’s jurisdiction is premised
on the res (i.e., the patent). A person files a “petition to in-
stitute an inter partes review of the patent.” 35 U.S.C. §
311(a) (emphasis added). As in bankruptcy, a petitioner for
IPR “does not seek monetary damages or any affirmative
relief from a State by seeking to [have a patent reviewed in
IPR]; nor does he subject an unwilling State to a coercive
judicial process.” Hood, 541 U.S. at 450. “[IPR] does not
make any binding determination regarding ‘the liability of
[one party to another] under the law as defined.’” Oil
States, 138 S. Ct. at 1378 (quoting Crowell v. Benson, 285
U.S. 22, 51 (1932)). The petitioner only seeks to have the
agency reconsider a previous grant of a patent, and the only
relief the Board can offer is the revocation of erroneously
granted patent claims. IPR ultimately terminates only
with a certificate that either cancels erroneously granted
8 REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
patent claims, confirms claims determined to be patenta-
ble, or incorporates newly amended claims determined to
be patentable. 35 U.S.C. § 318(b). No monetary or other re-
lief against the patent owner is authorized or provided. 5
Additionally, similar to the state’s situation in Hood,
there is no statutory requirement compelling a state to par-
ticipate in IPR as a patent owner, even if it is otherwise
motivated to do so. 6 The parallels between IPR and the
5 To the extent the estoppel provisions in 37 C.F.R.
§ 42.73(d)(3), prevent a patent owner from obtaining a pa-
tent on claims that are patentably indistinct from cancelled
claims in an IPR proceeding, that result is no different than
what is mandated under traditional principles of res judi-
cata and collateral estoppel. See B&B Hardware, Inc. v.
Hargis Indus., Inc., 135 S. Ct. 1293 (2015); MaxLinear, Inc.
v. CF CRESPE LLC, 880 F.3d 1373 (Fed. Cir. 2018); Ohio
Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333 (Fed.
Cir. 2013). In the absence of such a provision, the result
would still be the same (i.e., the later claim is unpatentable
for the same reasons as the earlier patentably indistinct
claim).
6 It is questionable whether a patentee risks default
by failing to participate in the IPR proceedings. While the
Board has on occasion interpreted non-participation as
abandonment under 37 C.F.R. § 42.73(b)(4), see, e.g., VDF
Futurceuticals, Inc. v. Kazerooni, No. IPR2017–00547,
2018 WL 842176 (P.T.A.B. Feb. 9, 2018), it is questionable
whether a default judgment could be entered cancelling a
patent if the state owner does not participate. See 35 U.S.C.
§ 313 (“[T]he patent owner shall have the right to file a pre-
liminary response . . . .” (emphasis added)); 37
C.F.R. § 42.107(a) (“The patent owner may file a prelimi-
nary response to the petition.” (emphasis added)); 35
U.S.C. § 316(a)(8) (requiring regulation “providing for the
filing by the patent owner of a response to the petition”); 37
REGENTS OF THE UNIV. OF MINN. V. LSI CORPORATION
9
bankruptcy proceedings in Hood reinforce the conclusion
that IPR do not raise the concerns that have animated ap-
plication of sovereign immunity for certain in rem proceed-
ings.
The USPTO’s “second look at an earlier administrative
grant of a” public franchise does not constitute an affront
to a state’s sovereignty, Cuozzo, 136 S. Ct. at 2144, partic-
ularly where the only possible adverse outcome is the can-
cellation of erroneously granted claims. Although patent
law, like bankruptcy, is a specialized area of law, we see no
reason why the exercise of the executive’s historically well-
recognized ability to reconsider a grant of a public fran-
chise in an in rem proceeding “is more threatening to state
sovereignty than the exercise of” an Article III court’s
bankruptcy in rem jurisdiction. Hood, 541 U.S. at 451.
Therefore, it seems to us that IPR proceedings are the
type of in rem proceedings to which state sovereign immun-
ity does not apply.
C.F.R. § 42.120 (“A patent owner may file a response to the
petition . . . .” (emphasis added)). It is the petitioner that
“shall have the burden of proving a proposition of un-
patentability by a preponderance of the evidence.” 35
U.S.C. § 316(e).