## Facts

- Xechem International, Inc., a biopharmaceutical company, funded and supported research at the University of Texas M.D. Anderson Cancer Center aimed at improving formulations of paclitaxel.
- The parties entered a sponsored research agreement (1995) and later a patent and technology license agreement (1997) granting Xechem an exclusive worldwide license to manufacture and market the resulting formulations in exchange for payments and royalties.
- Xechem filed a patent application listing a Xechem employee and a University employee as joint inventors; the University objected and pursued its own application listing only its employee as inventor.
- The University’s application issued as U.S. Patent Nos. 5,877,205 and 6,107,333, naming only the University employee as inventor.
- After issuance, the University notified Xechem that it considered the license agreement terminated; Xechem disputed the termination and sought correction of inventorship to add its employee.
- Neither the research agreement nor the license agreement contained express language consenting to suit against the University or waiving sovereign immunity.
- Xechem sued the University and the Board of Regents in federal district court, including a claim seeking correction of inventorship; the University moved to dismiss on Eleventh Amendment immunity grounds, and the district court dismissed.
- On appeal, the dispute was limited to whether the University could be sued in federal court to obtain correction of inventorship.

## Issues

1. Whether the Eleventh Amendment bars a private party’s federal-court action seeking correction of inventorship under 35 U.S.C. § 256 against a state university treated as an arm of the state.
2. Whether the University waived Eleventh Amendment immunity by entering research and licensing contracts, engaging in commercial IP transactions, or accepting federal research funds.
3. Whether Congress abrogated state sovereign immunity for inventorship-correction actions through the patent statutes.

## Decision

- The Federal Circuit affirmed the dismissal.
- The University, as an arm of the State of Texas, was entitled to Eleventh Amendment immunity from Xechem’s federal § 256 inventorship-correction claim.
- No waiver occurred because the relevant agreements contained no unmistakable consent to federal suit, and neither commercial activity nor receipt of federal funds implied consent.
- No congressional abrogation applied because the patent statutes did not contain a clear statement subjecting nonconsenting states to suit for correction of inventorship, and Article I patent power does not supply a basis to abrogate state immunity under controlling Supreme Court precedent.
- The holding was confined to federal-court jurisdiction and did not decide the availability of any state-forum remedies.

## Legal Principles

- A state and its arms are presumptively immune from private suits in federal court absent a valid waiver or valid congressional abrogation.
- Waiver of Eleventh Amendment immunity must be unequivocally expressed; it is not inferred from a state entity’s participation in commerce, entry into contracts, or operation of a licensing program.
- Receipt of federal funds does not waive immunity unless the funding program clearly conditions acceptance on consent to suit in federal court.
- Congressional abrogation of state sovereign immunity requires a clear statement in the statute and a valid constitutional basis; patent statutes authorizing inventorship correction do not, by themselves, abrogate immunity for suits against nonconsenting states.

## Conclusion

The Federal Circuit held that a state university cannot be sued in federal court to correct inventorship under § 256 absent an express waiver or valid statutory abrogation, and that neither contracting for research and licensing, commercializing patents, nor accepting federal funds establishes such consent.


Xechem Int’l, Inc. v. Univ. of Tex. M.D. Anderson Cancer Ctr., 382 F.3d 1324 (Fed. Cir. 2004)