In a case of first impression, an expanded PTAB panel (including Chief APJ Ruschke) found that a parallel enforcement action by a patent owner waives its sovereign immunity defense against under the 11th Amendment an AIA petition in Ericsson v. Regents of the University of Minnesota.  The expanded panel first affirmed its earlier decisions finding that sovereign immunity will prevent an IPR from proceeding against a patent owner who has not waived the defense. In this particular case, however, the patent owner “waived its Eleventh Amendment immunity by filing an action in federal court alleging infringement of the patent being challenged in this proceeding.”

Expanded Panel Procedure

The panel first explained its operating procedures with respect to selecting cases for disposition by an expanded panel, noting that the waiver issue in this case qualified as one of exceptional importance and also the need for uniformity:

“The standard operating procedure sets forth some of the reasons for which the Chief Judge may expand a panel. PTAB SOP 1, 3–4 (§ III.A). For example, an expanded panel may be appropriate when ‘[t]he proceeding or AIA Review involves an issue of exceptional importance.’ Id. (§ III.A.1). An expanded panel may also be appropriate when ‘necessary to secure and maintain uniformity of the Board’s decisions.’ Id. (§ III.A.2).”

The PTAB’s Rationale

The expanded panel first noted that the AIA confers upon a defendant in a district court action the right to file an IPR within one year of being served with a complaint, suggesting that a patent owner who brings an enforcement action subject to this provision of AIA is effectively consenting to an IPR being filed within one year.

The expanded panel also found that cases cited by patent owner where waiver had not occurred were distinguishable because, in those cases, the same claims could still be raised as counterclaims by a defendant. By contrast, the panel noted that an IPR is different from raising a counterclaims in litigation because of the unique procedures spelled out in the AIA for determining validity and the different standards that apply to an IPR compared to district court validity determinations.

What About Transfers to Indian Tribes or Similar Sovereign Entities?

The PTAB has not yet decided whether a transfer to an Indian tribe such as in the Allergan case is adequate to give rise to a sovereign immunity defense.  It is not clear whether the PTAB will decide that question now or simply find that the parallel enforcement action by the patent owner renders it moot.