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  • My Health, Inc. v. ALR Technologies, Inc. (E.D. Tex. 2017)

    Damned if you do . . .

    By Kevin E. Noonan –

    Great cases like hard cases make bad law.  For great cases are called great, not by reason of their importance . . . but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment.

    Northern Securities Co. v. U.S. (1904) (Holmes, Jr., J., dissenting)

    District Court for the Eastern District of TexasIt is a reality not needing emphasis or reiteration that the extent of subject matter eligibility in patent law has been in turmoil following the U.S. Supreme Court's decisions in Bilski v. Kappos, Mayo Collaborative Servs. v. Prometheus Labs, AMP v. Myriad Genetics, and Alice Corp. v. CLS Bank Int'l.  During this same timeframe, the Court arguably relaxed the standards for district courts to award attorney's fees under 35 U.S.C. § 285 in Octane Fitness v.  ICON Health & Fitness, Inc. and Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.  Consequences of the confluence of these two branches of patent law jurisprudence befell plaintiff (and in one magistrate judge's eyes, patent troll) My Health, Inc., who awarded a total of $371,862.95 to defendants ALR Technologies, Inc.; InTouch Technologies, Inc.; MyNetDiary, Inc.; and McKesson Technologies, Inc. in My Health, Inc. v. ALR Technologies, Inc.

    These consolidated cases arose as part of a patent assertion campaign by My Health, extending from 2012 to these cases, which were filed in May 2016 involving U.S. Patent No. 6,612,985; claim 1 is representative:

    A method for tracking compliance with treatment guidelines, the method comprising: determining a current assessment of one or more diagnosed conditions in a patient based on data about each of the diagnosed conditions from the patient who is at a remote location and on one or more assessment guidelines for each of the diagnosed conditions; updating an existing treatment plan for each of the diagnosed conditions based on the existing treatment plan, the current assessment, and on one or more treatment guidelines for each of the diagnosed conditions to generate an updated treatment plan for each of the diagnosed conditions; reviewing the updated treatment plan for each of the diagnosed conditions; determining if one or more changes are needed to the reviewed treatment plan for each of the diagnosed conditions; changing the reviewed treatment plan if the one or more changes are determined to be needed; providing the patient with the reviewed treatment plan for each of the diagnosed conditions; and generating and providing compliance data based on the updated treatment plan and the reviewed treatment plan for each of the diagnosed conditions.

    This patent is assigned on its face to the University of Rochester and later assigned to My Health.  Ten months after the complaints were filed, the district court held the asserted claims to be invalid for failure to satisfy patent eligibility requirement of 35 U.S. § 101.  The court granted the defendants' motions to dismiss and entered judgment, and prompted by "[t]his outcome, in addition to My Health's extensive litigation campaign, the manner in which My Health litigated the cases, and the weakness of My Health's § 101 position, prompted the prevailing defendants to move for their attorneys' fees under 35 U.S.C. § 285," according to Magistrate Judge Payne.

    The magistrate judge's Memorandum and Order sets forth a history of My Heath's patent assertion history, which started in April 2012.  According to the magistrate judge, this began a series of 31 lawsuits filed in the Eastern District of Texas (as well as 11 declaratory judgment cases filed in other judicial districts) where there was never a finding on the merits and what settled for anywhere from $240,000 to $30-50,000 (with the higher settlement amounts occurring in the earlier-filed litigations which settled prior to the Supreme Court's Alice decision; $50,000 was the median settlement amount).  In all cases until these latest ones, the parties settled and no court ruled on validity or infringement of the '985 patent claims.  In additions, five inter partes review (IPR) petitions were filed; none of these IPRs came to Final Written Decision after the parties settled each of them.

    In addition to this history, the magistrate judge's recitation of the facts include tales of a pattern of behavior wherein My Health contacted certain defendants directly threatening suit, despite these defendants being represented by counsel (and in many instances inquiring about settlement), in the face of these defendants refusing to confer without defendant's counsel being present.  One example was in this litigation, wherein MyNewDiary's counsel informed My Health (by e-mail):

    Please direct any future correspondence regarding this matter to me and to me alone.  I wish there to be no misunderstandings.  My client will not be entering into any licensing agreements with PLA, for the reasons I have previously explained.  I wish this to be very clear.  Should you contact me or my client(s) with any further unlawful extortion requests, I will seek sanctions against you . . . .  I hope I have made myself imminently clear.

    According to the Memorandum, "[t]he request was ignored."

    Finally with respect to My Health's "bad actions," counsel apparently made false representations to the Federal Circuit regarding defendants' acquiescence to My Health's voluntary dismissal of its appeal of the District Court's invalidity determination under § 101 (as well as an agreement that the parties bear their own costs), and manipulated the docket in an unrelated case to avoid a hearing on defendants' motion for attorney's fees.

    Based on this record, the Magistrate Judge granted defendants' motion for fees in varying amounts depending on the extent of each defendant's claim.  According to the Magistrate:

    My Health's cases are exceptional for a number of reasons.  The first is the weakness of My Health's post-Alice patent-eligibility position.  Patient treatment and monitoring methods such as those claimed by the '985 patent had been declared ineligible long before My Health filed its 2016 lawsuits.  . . .  As the [District] Court recognized in evaluating defendants' § 101 motion, "[s]uch claims have universally been found to be unpatentable under Alice."  By the time My Health filed its 2016 lawsuits, guidance from the Federal Circuit regarding claims in this category had mounted to a level that would give any litigant a reasonably clear view of § 101's boundaries. . . .  There were of course gray areas, but by the time My Health's 2016 lawsuits were filed, it should have been clear that the '985 patent claims were "manifestly directed to an abstract idea."

    Importantly, the Magistrate asserted that "[t]he weakness in My Health's § 101 position is by itself a sufficient basis for finding the cases exceptional," which places within a court's discretion not only the objective baselessness of whether duly granted claims deserve the presumption of validity but also the subjective bad faith with which an infringement claim is brought, based solely on the court's invalidity determination.  Citing Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., the Magistrate justified this decision by saying it is "necessary to deter wasteful litigation in the future."  No. 2016-2442, 2017 WL 6062460, at *4 (Fed. Cir. Dec. 8, 2017).  And the Magistrate stated that it was My Health's responsibility to "reassess its case in view of new controlling law," specifically the Supreme Court's Alice decision (despite the difficulties attendant upon determining how the Court's patent eligibility jurisprudence should be applied).

    In addition, the Magistrate's opinion makes it clear that My Health's conduct in asserting its patents was a factor in its decision to award attorney's fees.  The Order cites My Health's extensive litigation campaign and avoidance of the case reaching the merits in the "31 lawsuits, 11 declaratory judgment actions, and 5 IPRs."  While stating that "[t]o be sure, a volume litigant does not automatically expose himself to attorneys' fees simply because he files a lot of lawsuits, "the number of lawsuits filed by My Health, many of which settled right on the cusp of a merits determination (most for similar amounts), supports the conclusion that My Health was filing lawsuits 'for the sole purpose of forcing settlements, with no intention of testing the merits of [the] claims,'" wrote the Magistrate, citing SFA Sys., LLC v. Newegg Inc., 793 F.3d 1344, 1350 (Fed. Cir. 2015) in support.  The "remarkable" similarities in the settlement amounts also supported the Magistrate's conclusion that My Health was "exploiting the high cost to defend complex litigation to extract a nuisance value settlement" as in Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1327 (Fed. Cir. 2011), inter alia, because "[t]he settlement amounts against the different defendants could not have possibly been tied to a reasonable royalty for use of the claimed invention" nor relating to "the alleged inventions' footprint in the marketplace" or the rough equivalence of the amounts of infringing units made by each of these disparate defendants.  And the settlement amounts appeared to the Magistrate to represent "nuisance" value, signaling the Magistrate's apprehension that My Health was acting as a patent troll (without ever mentioning this disparaging term).

    My Health's purported misfeasance and malfeasance undoubtedly made it easy for the Magistrate to be persuaded that these defendants were entitled to attorney's fees and that this was an exceptional case.  But the Magistrate's predicate basis for reaching his decision is frankly based on a conclusion that, regardless of a patent claim's presumption of validity, merely asserting the '985's claims was improper because they were clearly invalid.  There may be circumstances where a change in the law rendered by the Federal Circuit or Supreme Court might support such a decision.  Respectfully, the current state of patent subject matter eligibility is not one of them.

  • Conference & CLE Calendar

    CalendarJanuary 4, 2018 – "Patent Drafting for Machine Learning: Structural Claim Limitations, Avoiding 101 or 112 Rejections" (Strafford) – 1:00 to 2:30 pm (EST)

    January 9, 2018 – "After-Final Practice: Navigating PTO Options to Compact Patent Prosecution — Utilizing After-Final Consideration Pilot 2.0, Pre-Appeal Conference and More" (Strafford) – 1:00 to 2:30 pm (EST)

    January 9, 2018 – "Sequence Listings and Patent Applications" – 1:00 to 2:30 pm (ET)

    January 11, 2018 – "Patent Term Adjustments and Extensions: Leveraging Recent Decisions and USPTO Rule Changes" (Strafford) – 1:00 to 2:30 pm (EST)

    January 17, 2018 – "Top Patent Law Stories of 2017" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    January 17, 2018 – Customer Partnership Meeting of Technology Center 2600 (U.S. Patent and Trademark Office) – 8:30 am to 4:00 pm (ET)

    March 5-6, 2018 – Advanced Patent Law Seminar (Chisum Patent Academy) – Houston, TX

    March 8-9, 2018 – Advanced Patent Law Seminar (Chisum Patent Academy) – Cincinnati, OH

    ***Patent Docs is a media partner of this conference or CLE

  • Season’s Greetings from Patent Docs

    Holiday StarsThe authors and contributors of Patent Docs wish their readers and families a Happy Holidays.  Publication of Patent Docs will resume on December 26th.

  • Webcast on After-Final Practice

    Strafford #1Strafford will be offering a webcast entitled "After-Final Practice: Navigating PTO Options to Compact Patent Prosecution — Utilizing After-Final Consideration Pilot 2.0, Pre-Appeal Conference and More" on January 9, 2018 from 1:00 to 2:30 pm (EST).  Justin J. Cassell of Workman Nydegger and Mandy J. Song of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel on the various USPTO options for responding after final rejection of a patent application. The panel will review the basics of each option and focus on strategic considerations and using different options. The panel will also provide an update on the ongoing pilot program, review statistics and discuss their experiences.  The webinar will review the following issues:

    • What options are available to patent counsel upon receiving a final rejection to a patent application?
    • What should patent counsel consider when determining if—and which—PTO option to use in response to a final rejection?
    • How can patent counsel and applicants leverage the PTO options for compact patent prosecution?

    The registration fee for the webcast is $297.  Those interested in registering for the webinar, can do so here.

  • USPTO to Hold TC 2600 Customer Partnership Meeting

    USPTO Building FacadeThe U.S. Patent and Trademark Office will be holding a customer partnership meeting of Technology Center 2600 from 8:30 am to 4:00 pm (ET) on January 17, 2018.  The agenda for the meeting is as follows:

    • Morning Network — 8:30 – 9:00 am
    • Introductions — TC Contacts for Procedural Issue — 9:00 – 9:30 am
    • Presentation: 103 General & TC Specific Training — 9:30 – 10:30 am
    • Morning Break — 10:30 – 10:45 am
    • Presentation: How SPEs/Primaries are trained to review Office Actions — 10:45 – 11:45 am
    • Lunch — 11:45 am – 1:00 pm
    • Workshops — 1:00 – 2:15 pm
    • Afternoon Break — 2:15 – 2:30 pm
    • Presentation: Examiner Interview Trainings and Practices — 2:30 – 3:30 pm
    • Director Panel Q&A — 3:30 ~ 4:00 pm

    Attendees will be able to engage in open conversations with Managers, Quality Assurance Specialists, and Directors during the Morning Network and Lunch sessions.

    The meeting will be held in the USPTO's Madison-North Auditorium, 600 Dulany Street, Alexandria, VA.  Those wishing to attend the meeting can register here.  Additional information regarding the customer partnership meeting, including how to participate via WebEx, can be found here.

  • Webcast on Patent Term Adjustments and Extensions

    Strafford #1Strafford will be offering a webcast entitled "Patent Term Adjustments and Extensions: Leveraging Recent Decisions and USPTO Rule Changes" on January 11, 2018 from 1:00 to 2:30 pm (EST).  Thomas L. Irving, Jill K. MacAlpine, and Charles E. Van Horn of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to IP counsel for calculating patent term adjustments, interplay with patent term extensions, examine recent court treatment, and offer approaches for preserving rights and maximizing patent term adjustments and patent term extensions.  The webinar will review the following issues:

    • What are the lessons from the recent Federal Circuit decisions regarding the patent term calculation?
    • How will the recent changes for the USPTO alter the landscape for PTA and PTE practice?
    • What best practices should patent applicants take to preserve rights and maximize PTA and PTE?

    The registration fee for the webcast is $297.  Those interested in registering for the webinar, can do so here.

  • Webinar on Sequence Listings and Patent Applications

    Sequence ListingPatent Docs readers are invited to attend a webinar on "Sequence Listings and Patent Applications" that will take place on January 9, 2018 from 1:00 to 2:30 pm (ET).  Suzannah K. Sundby of Canady + Lortz LLP and Carl Oppedahl of Oppedahl Patent Law Firm LLC will explain how to prepare and e-file computer-readable sequence listings.  The webinar will address the following topics:

    • learn about the PatentIn software
    • learn about the Checker software
    • nuts and bolts of how to generate a sequence listing
    • how to download a sequence listing from WIPO and format it for the USPTO
    • how to modify an existing Sequence Listing text file without PatentIn
    • general requirements for sequence listings
    • how to respond to sequence listing notices
    • frequently made mistakes

    While there is no cost to participate in the program, advance registration is required.  Those interested in attending the webinar can register here.

  • Webcast on Patent Drafting for Machine Learning

    Strafford #1Strafford will be offering a webcast entitled "Patent Drafting for Machine Learning: Structural Claim Limitations, Avoiding 101 or 112 Rejections" on January 4, 2018 from 1:00 to 2:30 pm (EST).  Gregory Rabin of Schwegman Lundberg & Woessner and Michael D. Stein of Baker & Hostetler will provide guidance to patent practitioners on overcoming challenges when seeking patent protection for machine learning inventions, and will also discuss what can be done to anticipate and minimize the risks of § 101 or § 112.  The webinar will review the following issues:

    • What hurdles must patent counsel overcome to demonstrate inventorship?
    • How can patent counsel meet the requirements under § 101 and § 112 in machine learning patent applications?
    • What steps should patent counsel take to minimize the likelihood of § 101 or § 112 rejections?

    The registration fee for the webcast is $297.  Those interested in registering for the webinar, can do so here.

  • Guest Post — Diagnosing Patent Subject Matter Eligibility

    By John Wizeman* and Anthony D. Sabatelli** —

    Clarity on patent subject matter eligibility is still being sought five years after Mayo [1] and three years after Alice [2].  Further adding to the confusion is the fact that discoveries in diagnostics, despite their apparent importance to the biomedical sciences, have been repeatedly determined as ineligible subject matter under 35 USC § 101.  The two step Alice/Mayo test has increased the percentage of invalid patents, and the decision by the Supreme Court to deny certiorari in the case of Ariosa vs. Sequenom [3] in 2016 means we are unlikely to see a reversal of this trend in the near future.  Inventors are still finding it challenging to implement the current guidelines toward a successful diagnostics patent grant.  In this piece we provide perspective from a 2016 Federal Circuit decision that provides some over-looked hints for moving forward with inventions relating to diagnostics.

    Three high-profile cases have pushed inventors of clinical diagnostic tools into a more restricted path of subject matter eligibility:  the Supreme Court's Myriad [4] decision, and two cases out of the Federal Circuit, Sequenom and Genetics Technologies Ltd.[5]  All of these cases involved broad clinical diagnostic innovations, instead of focusing on the specific research methods they created.  The first of these, Myriad, was a landmark case that reversed contemporary policy on isolated gene patentability.  The Supreme Court not only decided that isolated genes were not patent eligible, but also that the comparison of an isolated gene to a control gene represented an abstract idea, and was therefore also ineligible.  The second decision restricting patent eligibility came from the Sequenom case, in which a "significant contribution to the medical field" which represented a truly novel discovery was dismissed as patent ineligible.  The discovery, that "cell-free, fetal DNA" (cffDNA) was present in maternal blood, represented a major advancement and clearly deviated from the prior art.  The merits of the discovery are still relevant in the use of diagnostic tests, as cffDNA is becoming a more reliable and common non-invasive early pregnancy procedure to diagnose genetic abnormalities.  However, the court held that no transformation of "the nature of the claim" into "a patent eligible application" was present, based on the concept that the discovery was simply harnessing an observable natural phenomenon and applying well known assays toward that discovery.  The third of these decisions, Genetics Technologies, dealt with a patent regarding coding DNA (protein-creating) and junk DNA (non-protein creating), which could be inherited together at higher than expected frequencies.  This finding could be used to selectively analyze junk DNA instead of coding DNA and provide the basis of diagnostic tests for genetic conditions.  The patent was deemed invalid due to this being a "law of nature".  These cases focused on the clinical impact, rather than on the specific breakthrough research methods involved.

    From an overly simplified view, diagnostic tools can be broken down into finding new methods to isolate pure samples (laws of nature), determining changes in those samples in pathological conditions (a natural phenomenon) and comparing the results to non-pathological samples (an abstract idea) — i.e. the three judicially created exceptions to patent subject matter eligibility.  By this rudimentary breakdown, there can be almost no new protected innovations in diagnostics.  However, a case tangentially related to diagnostics, Rapid Litigation Management Ltd., v. Cellzdirect, Inc.[6], offers significant insight into a clearer path toward patent eligibility.  Although it has been over a year since the Federal Circuit ruling, the guidance provided by this important case can have far reaching implications and provide a clearer path forward for diagnostics.

    The Federal Circuit Court of Appeals ruled in favor of the patentee, providing insight into eligible subject matter as it relates to the Alice/Mayo test.  The patentee claimed a new way of freezing down and preserving hepatocytes, liver cells that have a wide range of uses in research and clinical settings.  A key difference in the Rapid Litigation case is that the wording of the claim applies its discovery of a law of nature toward a laboratory technique.  The claim in this case referred to hepatocytes frozen down multiple times as a method for laboratory refinement and potential diagnostic testing.  In its most basic form, the claim describes a natural phenomenon — hepatocytes can survive multiple freeze-thaw cycles.  Given the decisions in the earlier cases, this claim alone would likely be enough to be deemed ineligible in the current environment.  However, the additional novel steps of purification and refreezing were not obvious given the prior art.  Similar to the Sequenom finding, the Rapid Litigation claim (1) directed to a "law of nature", (2) was non-obvious given the prior art, and (3) relied heavily on established methods.  The difference between the Sequenom finding and the finding in the Rapid Litigation case is the application toward which each invention was ultimately aimed.  Many diagnostic tests face similar hurdles which can require a new approach to ensure successful patent protection.  Although clinical impact may provide weight to the importance of an invention, focus on the underlying laboratory methodology can lead this new approach by focusing on the novelty and practical use.

    Although one path to better ensuring eligibility for diagnostic patent claims may be to include treatment options, this path could be restricted toward a single treatment paradigm and become quickly irrelevant as new treatments arise.  Summing up the lessons from the cases mentioned above, patents aimed toward new diagnostic tests should not:  (1) rely solely on genetic identification or pathology, (2) harness common assays to compare patient information to a standard, (3) rely on the discovery or levels of a pathologically correlated molecule, or (4) be based on any non-synthetic or simply observable method of detection, even if that method is novel.  Therefore, rather than examining treatment options, inventors should explore placing their inventions in the context of laboratory research methodology.  For instance, if the application of the Sequenom finding related their purification of cffDNA into a lab method for non-invasive preparation and storage of purified fetal DNA by freezing down maternal cells or plasma as a storage system, and then using that material for purification and later use, the novelty of separation from the maternal plasma may have been enough to qualify under the second step of the Alice/Mayo test.

    Although dramatic changes to the Alice/Mayo framework may still occur, inventors will need to live in the current eligibility environment for the time being.  Recent failures for diagnostic cases can be used as a guide for protecting new discoveries and inventions.  Unlike uncertain clinical treatments or new biomarkers, refined laboratory methods, as per Rapid Litigation, could provide a critical outlet for inventors.

    [1] Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012)
    [2] Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014)
    [3] Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015)
    [4] Association for Molecular Pathology v. Myriad Genetics. Inc., 133 S.Ct. 2107 (2013)
    [5] Genetic Technologies Ltd. v. Merial L.L.C., 2015-1202, 2015-1203 (Fed. Cir. 2016)
    [6] Rapid Litigation Management Ltd. v. CellzDirect, Inc., 2015-1570 (Fed. Cir. 2016)

    * John Wizeman recently received his Ph.D. in biomedical sciences with a concentration in neuroscience from the University of Connecticut Health Center.  His research focused on retinal injury and repair in addition to several student leadership roles.  He then moved into a postdoctoral position researching cerebellar development.  He has published numerous papers in different specialties of neuroscience.  Currently, he focuses in neurodevelopment and teaches several Medical/Dental and Graduate courses at UConn Health.
    ** Dr. Sabatelli is a Partner with Dilworth IP

  • PTAB Decides Patent Infringement Lawsuit Waives Eleventh Amendment Sovereign Immunity to Inter Partes Review

    By Kevin E. Noonan –

    USPTO SealThe Patent Trial and Appeal Board was seemingly sufficiently vexed over the question of whether the St. Mohawk Indian Tribe was entitled to have the Board dismiss, on grounds of sovereign immunity, inter partes reviews on patents the Tribe licensed from Allergan (see "Mohawk Nation Exercises Sovereign Immunity in Inter Partes Review") to solicit amicus curiae briefs on the issue from "interested parties."  But today, an expanded panel of the Board, including Chief Judge David Ruschke, issued an order dismissing a sovereign immunity challenge by the State of Minnesota in Ericsson Inc. and Telefonaktiebolaget LM Ericsson v. Regents of the University of Minnesota.  The coincidence of these two decisions is curious, particularly because while the scope of sovereign immunity enjoyed by the various recognized Tribes of Native Americans is both uncertain and subject to Congressional abrogation (albeit only when express), a State's sovereignty is acknowledged and protected by the Eleventh Amendment.  Notwithstanding these considerations, the Board rendered its decision, and the legal rationale set forth in its Order provides some insight into not only how the Board may rule on the Tribe's motion but on how the Board (and the Patent Office) perceives its role and authority to make such decisions.

    The Director granted Ericsson's IPR petitions involving U.S. Patents Nos. 7,251,768; 8,718,185; 8,588,317; 8,774,309; and RE45,230.  In response to institution, the State of Minnesota filed a motion to dismiss based on its Eleventh Amendment sovereign immunity.  The unresolved question before the Board was whether this immunity was available to enable Minnesota to avoid inter partes review.  Despite earlier decisions by the Board that states could assert sovereign immunity in IPRs (see Covidien LP v. Univ. of Fla. Research Found., Inc., Case IPR2016-01274 (PTAB Jan. 25, 2017); NeoChord, Inc. v. Univ. of Md., Balt., Case IPR2016-00208 (PTAB May 23, 2017); and Reactive Surfaces Ltd., LLP v. Toyota Motor Corp., Case IPR2016-01914 (PTAB July 13, 2017)), and the panel's agreement that "IPR is an adjudicatory proceeding of a federal agency from which state entities are immune," the expanded panel decided that Minnesota had waived sovereign immunity because it had asserted the IPR-challenged patents in a patent infringement lawsuit in district court.

    The expanded panel, which comprised Deputy Chief Administrative Patent Judge Scott R. Boalick, Vice Chief Patent Judges Jacqueline Wright Bonilla and Scott C. Weidenfeller, and Administrative Patent Judges Jennifer S. Bisk, Robert J. Weinschenk, and Charles J. Boudreau in addition to the Chief Administrative Patent Judge, expressly set forth its reliance on the Chief Judge's authority under 35 U.S.C. § 6 to expand panels when issues before the Board are of exceptional importance or are "necessary to secure and maintain uniformity of the Board's decisions" (despite skepticism from reviewing courts, including the Federal Circuit and Supreme Court, about these practices, for example in Oil States Energy Services, LLC v. Greene's Energy Group, LLC).  The expanded panel's decision did not overturn or otherwise disturb the Board's earlier decisions that a State could assert its Eleventh Amendment sovereign immunity to have the Board dismiss an IPR proceeding against patents assigned to a state University as an arm of the state.  This is consistent with the Supreme Court's decision in Fed. Mar. Comm'n v. S.C. State Ports Auth., 535 U.S. 743 (2002), that administrative agency adjudications can be sufficiently similar to district court litigation for a State to assert sovereign immunity as applied to the Patent Office by the Federal Circuit in Vas-Cath, Inc. v. Curators of Univ. of Mo., 473 F.3d 1376 (Fed. Cir. 2007).  And in a footnote, the expanded panel states that the differences between civil litigation and IPR proceedings are not enough to evince a Congressional intent to "compel states to surrender their sovereign immunity" consistent with Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999).

    Nevertheless, the expanded panel decided that these determinations were not the end of the question before the Board.  Here, the State of Minnesota had filed a complaint against the Ericsson Petitioners, and this was enough for the Board to conclude that this action by the State in one forum (the Article III District Court) had waived its sovereign immunity before the Article I PTAB, a different forum both in kind and Constitutional origins.  The expanded panel acknowledged that "[a] State's waiver of Eleventh Amendment immunity in one action does not necessarily extend to a separate action, even if the separate action involves the same parties and the same subject matter," citing Biomedical Patent Mgmt. Corp. v. Cal., Dep't of Health Servs., 505 F.3d 1328, 1339 (Fed. Cir. 2007).  But the Board did not recognize this Federal Circuit decision to lay out a "bright-line rule" precluding waiver of sovereign immunity in one forum by actions in another forum on the same patents.  The expanded panel relied on Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613 (2002), for the principle that waiver depends on "the need to avoid unfairness and inconsistency, and to prevent a State from selectively using its immunity to achieve a litigation advantage" (illustrating the continuing conflation, when it serves their purpose, for the Board to analogize its proceedings with litigation).  The closest case on its facts to the waiver question before the expanded panel in its view is Regents of Univ. of New Mexico v. Knight, 321 F.3d 1111 (Fed. Cir. 2003), where the Federal Circuit found waiver of sovereign immunity by a State asserting its patents in district court with regard to compulsory counterclaims.  The grounds for this analogy is the nature of compulsory counterclaims in litigation (which must be asserted "or be forever barred from doing so"; emphasis in opinion) and the provisions of 35 U.S.C. § 315(b) that require a patent infringement defendant to file an IPR petition within one year of being sued "or be forever barred from doing so" (emphasis in opinion).  In each case, it is the State's affirmative filing of a patent infringement complaint that imposes the requirement for a defendant to react and this is enough, in the Board's view, for the State to have waived sovereign immunity in this case.

    With regard to Minnesota's argument that "any waiver of Eleventh Amendment immunity should be limited to the venue where Patent Owner filed its action," the expanded panel acknowledges that "waiver is generally limited in this way" in district court litigation; once again the Board does not understand this to be a "bright-line rule."  And the Board cites its opinion that recognizing a State's sovereign immunity under these circumstances "would result in substantial unfairness and inconsistency."

    One member of the expanded panel, APJ Bisk, wrote separately to enunciate her view that "a state university, having availed itself of Patent Office procedures to secure patent rights from the public, may not subsequently invoke sovereign immunity as a shield against reconsideration by the Patent Office in an inter partes review proceeding of whether the agency improvidently granted a patent monopoly in the first instance," her diction plainly reciting her prejudices in these matters.  Substantively, she notes the differences between district court litigation and the administrative nature of an IPR, and the factual and procedural distinctions between IPRs and the administrative activities in the Supreme Court's FMC precedent.  Citing MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1293 (Fed. Cir. 2015), the APJ also improvidently characterizes patent rights as "public rights" in advance of the Supreme Court's impending decision in Oil States on precisely that question, in a portion of her concurring opinion focused on the importance of IPR proceedings to protect the public from improperly granted patents.  No doubt aware of similar arguments by amici curiae solicited by the Board in the St. Regis Mohawk Tribe IPRs, the APJ also characterizes IPRs as being actions in rem to defeat claims of sovereign immunity, and cites the (until recently ephemeral) right for a patent owner to amend claims as another distinction between IPRs and litigation.

    The decision provides the avenue for the Board's judicial overseers to opine on the extent to which and under what circumstances the Eleventh Amendment shields a State from inter partes review.  However it raises the question of whether the Board, as the adjudicatory arm of an administrative agency, is empowered to render such a decision or whether the proper position would have been for the Board (expanded panel or not) to have recognized Minnesota's sovereign immunity and left it to the Federal Circuit (and, likely and ultimately, the Supreme Court) to make the determination that sovereign immunity does not apply or has been waived and on what basis.

    Before Chief Administrative Patent Judge David P. Ruschke, Deputy Chief Administrative Patent Judge Scott R. Boalick, Vice Chief Asministrative Patent Judges Jacqueline Wright Bonilla and Scott C. Weidenfeller, and Administrative Patent Judges Jennifer S. Bisk, Robert J. Weinschenk, and Charles J. Boudreau
    Order Denying Patent Ownwer's Motion to Dismiss by Chief Administrative Patent Judge Ruschke, concurring opinion by Administrative Patent Judge Bisk