Can "Sovereign" Entities be Sued for Intellectual Property Infringement?

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One of the more interesting questions in the intellectual property world in recent years is, can the federal or a state government be sued for infringement under Federal patent, trademark, or copyright law? In short, the answer is generally Yes for the U.S. Government and No for states, state universities, and tribal nations.

State sovereign immunity to lawsuits in federal courts derives from the Eleventh Amendment of the U.S. Constitution. While this immunity is nearly absolute, it may not apply in three situations: (1) where Congress has enacted “unequivocal statutory language” abrogating—i.e., repealing—states’ immunity, (2) where the Constitution allows Congress to encroach on the states’ sovereignty, and (3) where a State has waived immunity or consented to being sued. State universities as “instrumentalities” of the state, also enjoy sovereign immunity, which is significant in that state schools often engage in substantial commercial activities that raise potential IP issues. Tribal nations are considered “domestic independent nations” and, therefore, possess “inherent sovereign immunity.”

Notably, the Eleventh Amendment does not provide counties and municipalities with the protections of sovereign immunity. See, e.g., Board of Trustees of the University of Alabama v. Garrett, 531 U.S. 356 (2001); Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30 (1994).

In the IP realm, two such statutes purporting to abrogate sovereign immunity have been considered by the Supreme Court in the last two decades. In Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, SCOTUS considered the Patent Remedy Act, which purported to expressly abrogate the states’ sovereign immunity to patent infringement suits. The Court held that the PRA’s abrogation of states’ sovereign immunity was invalid, thereby immunizing states from claims for patent infringement.

And, early this year, the Supreme Court in Allen v. Cooper unanimously struck down the abrogation clause of the Copyright Remedy Clarification Act of 1990 (CRCA), which provided that a state “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in federal court” for copyright infringement. In holding that states cannot be held liable for monetary damages in copyright infringement lawsuits, the Court relieved the State of North Carolina from liability for publishing online the copyrighted videos and photographs taken by Frederick Allen of Queen Anne’s Revenge, a ship captured and sailed by Blackbeard, which ran aground off the coast of North Carolina in 1718.

On the other hand, the U.S. government has specifically waived sovereign immunity for patent and copyright infringement claims, as well as for violations under the Lanham Act, the federal law that governs trademark rights. These waivers mean that, with some limits, patent, copyright, and trademark infringement suits can be brought against the U.S. government.

It should be noted, however, that states, and in particular state universities, do have the right to sue private parties for infringement of their own intellectual property rights—and often do. In fact, some data reflects that educational institutions file between 45 and 50 patent-related suits each year in the U.S. And several recent decisions by SCOTUS and the U.S. Court of Appeals for the Federal Circuit have held that inter partes review (IPR) proceedings before the Patent Trial an Appeal Board (PTAB) are available defensive means for private parties to challenge the validity of state and sovereign-entity owned patents.

In Regents of the University of Minnesota v. LSI Corp., the Federal Circuit held that state sovereign immunity did not immunize the University of Minnesota from IPR proceedings. This decision came on the heels of the court’s 2018 decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., holding that tribal sovereign immunity did not preclude IPR proceedings involving the St. Regis Mohawk Indian Tribe.  Notably, the Supreme Court declined to grant certiorari in the latter case.

Interestingly, while sovereign-owned patents are subject to challenge in post-grant review proceedings, a sovereign entity (at least the federal government) cannot itself challenge another’s patent rights before the PTAB. In Return Mail Inc. v. United States Postal Service, the Supreme Court held that the U.S. government is not a “person” capable of challenging the validity of an issued patent before the PTAB, thereby foreclosing the U.S. government from bringing IPRs and other post-grant proceedings.

While we recommend conferring with intellectual property counsel if you anticipate a dispute with a state entity over IP rights, our key takeaway points are: (1) Sovereign state entities cannot be sued for federal intellectual property right infringement, but public universities are well known for going after infringers; and (2) State, public university and Tribal-owned patents are subject to challenge—and invalidation—in post-grant review proceedings before the PTAB.

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