## Facts

- Covidien LP petitioned for inter partes review challenging claims 1–18 of U.S. Patent No. 7,062,251, owned by University of Florida Research Foundation, Inc. (UFRF).
- UFRF is a Florida not-for-profit corporation affiliated with the University of Florida that holds and licenses patents arising from university research.
- In related litigation, UFRF sued Covidien in Florida state court over an alleged breach of a license agreement involving the patent.
- Covidien removed the dispute to federal court and pursued a counterclaim; the federal court held UFRF was an arm of the State of Florida entitled to Eleventh Amendment immunity and remanded the case.
- Before UFRF’s preliminary response was due in the PTAB proceedings, UFRF moved to dismiss the IPR petitions based on sovereign immunity.
- The PTAB permitted briefing on sovereign immunity and later issued an order dismissing the petitions without reaching patentability.

## Issues

1. Whether UFRF qualified as an “arm of the State of Florida” entitled to sovereign immunity in PTAB proceedings.
2. Whether state sovereign immunity applies to inter partes review proceedings initiated by a private party.
3. Whether UFRF waived sovereign immunity by enforcing or licensing the patent or by participating in related litigation.

## Decision

- The PTAB determined UFRF was an arm of the State of Florida and could invoke sovereign immunity.
- The PTAB held sovereign immunity barred IPR proceedings brought by a private petitioner against UFRF’s patent.
- The PTAB found no waiver of immunity because UFRF sued only in state court and did not consent to federal or PTAB adjudication.
- The PTAB dismissed the IPR petitions and did not institute review or address the merits of unpatentability.
- The PTAB treated dismissal as jurisdictional and provided for refund treatment consistent with PTO fee rules when review is not instituted.

## Legal Principles

- State entities, including qualifying arms of a state university, may assert sovereign immunity to bar inter partes review petitions filed by private parties absent consent or waiver.
- Sovereign immunity may apply in administrative adjudicatory proceedings when the proceeding is sufficiently adversarial and trial-like, not only in Article III courts.
- A patent owner does not waive sovereign immunity merely by holding, licensing, or asserting patent rights, and filing suit in state court does not itself constitute consent to private-party-initiated PTAB adjudication.
- When sovereign immunity bars the proceeding, the PTAB may dismiss the petition without institution and without reaching patentability.

## Conclusion

The PTAB dismissed Covidien’s IPR petitions after concluding UFRF was an arm of the State of Florida entitled to sovereign immunity, that IPR is an adversarial adjudication to which the immunity applies, and that UFRF had not waived or consented to PTAB review.


Covidien LP v. Univ. of Fla. Rsch. Found., Inc., No. IPR2016-01274 (P.T.A.B. Jan. 25, 2017)