Does sovereign immunity expand venue in patent infringement cases? UT v. BOSTON SCIENTIFIC

Does sovereign immunity expand venue in patent infringement cases? UT v. BOSTON SCIENTIFIC

A patent is a set of exclusive rights granted to the inventor of a new invention. An inventor gains a patent in the United States by filing a patent application with the United States Patent and Trademark Office.  The patent application is reviewed and if all the statutory requirements are met, the inventor is granted a patent on the invention described in the patent application.  A patent grants its owner the exclusive right to make, use, sell and import the invention in the United States.  If someone exercises one of these exclusive rights without the consent of the patent owner, that can be considered patent infringement. A patent owner can combat patent infringement by filing a lawsuit which requests an injunction to stop patent infringement and monetary damages for patent infringement which has occurred.

When a plaintiff files a patent infringement lawsuit in the United States, that lawsuit is subject to several other legal principles.  The plaintiff must file a patent infringement case in a court that has jurisdiction over the case and proper venue.  If the court does not have jurisdiction over the defendant or venue is improper, the defendant can request that the case be dismissed or transferred to another court.

Sovereign immunity is another relevant issue in patent infringement cases.  Stated simply, sovereign immunity grants states immunity from litigation unless the state consents to the litigation.  Sovereign immunity extends to the different arms of a state.  Schools and Universities operated by a state enjoy a degree of sovereign immunity.  This means that if a state university infringes on a patent, it is very difficult to bring a patent infringement case. The question then becomes, does sovereign immunity allow a plaintiff state university to reach further than a normal patent infringement plaintiff.  Can a state university sue a defendant for patent infringement and prevent the case from being transferred to a different court because the state university refuses to consent to the transfer?

BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM, TISSUEGEN, INC., v. BOSTON SCIENTIFIC CORPORATION, 2018-1700 (C.A.F.C 2019) is a case which deals with this issue.  The plaintiff in this case is the University of Texas.  The plaintiff is the assignee of several patents developed at the university.  Its portfolio includes U.S. Patent Nos. 6,596,296 and 7,033,603, which are directed to implantable drug-releasing biodegradable fibers.
Dr. Kevin Nelson, co-inventor of the patents-in-suit, developed the claimed technology at the University of Texas at Arlington and founded TissueGen Inc. as a vehicle for commercializing his inventions. UT exclusively licensed the patents to TissueGen, which then commercialized its ELUTE® fiber product.  In November 2017, the plaintiff sued the defendant for patent infringement in the Western District of Texas. The plaintiff conceded that Western District of Texas was not the proper venue for the case because the defendant is a Delaware corporation with a principal place of business in Massachusetts.

However, the plaintiff argued that venue is proper in the Western District of Texas because the plaintiff is an arm of the State of Texas, has the same sovereign immunity as the State of Texas, it would offend the dignity of the State to require it to pursue persons who have harmed the State outside the territory of Texas, and the State of Texas cannot be compelled to respond to any counterclaims, whether compulsory or not, outside its territory.

This district court disagreed with the plaintiff and transferred the case to the District of Delaware.  The plaintiff appealed to the Court of Appeals for the Federal Circuit.  The Federal Circuit affirmed the district court’s decision. The Federal Circuit held that the state sovereignty principles asserted by the plaintiff do not grant it the right to bring suit in an otherwise improper venue.

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