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Board of Regents of the University of Texas System v. Boston Scientific Corp.

State Sovereignty Does Not Bar Transfer of Plaintiff State’s Infringement Suit to Appropriate Venue

Board of Regents of the University of Texas System v. Boston Scientific Corp., __ F.3d __, 2019 WL 4196997 (Fed. Cir. Sept. 5, 2019) (Prost, Reyna, STOLL) (W.D. Tex.: Yeakel) (3 of 5 stars)

Fed Cir affirms order transferring patent infringement case from W.D. Tex. to D. Del. Plaintiff University of Texas (“UT”) had asserted that state sovereignty principles barred the transfer.

Jurisdiction: The Fed Cir has jurisdiction over UT’s appeal. Though the transfer order was not a final judgment, UT’s invocation of state sovereignty principles brings it within the collateral order doctrine because the district court’s transfer order conclusively determined a disputed question, resolved an important issue completely separate from the merits, and was effectively unreviewable on appeal. Per Puerto Rico Aqueduct, 506 U.S. 139 (1993), “States and State entities may invoke the collateral order doctrine to immediately appeal an order denying a claim of sovereign immunity.” Op. at 6. Though Puerto Rico involved a State entity standing as defendant, and not (as here) plaintiff, it applies here because its argument “invoke[s] attributes of state sovereignty to preclude a suit from going forward.” Id. at 11.

Venue determination: “[T]he state sovereignty principles asserted by UT do not grant it the right to bring a patent infringement suit in an improper venue.” Op. at 11. Per Eli Lilly, 119 F.3d 1559 (Fed. Cir. 1997), the doctrine of state sovereign immunity (a.k.a. “Eleventh Amendment immunity”) applies to suits against a state, not suits by a state, and the opinion rejects UT’s contention that the doctrine secured a state’s right to “dictate where it litigates its property rights.” Op. at 16 (quoting brief). Further, the Constitution’s Original Jurisdiction clause does not confer to a state “the right to control the forum . . . in which it sues a citizen of another state,” Op. at 18 (quoting brief), and the opinion discusses Ames, 111 U.S. 449 (1884); Georgia, 324 U.S. 439 (1945); and Wyandotte, 401 U.S. 493 (1971). Finally, “[T]he inherent powers of Texas as a sovereign [do not] allow UT to disregard the rules governing venue in patent infringement suits once it chooses to file such a suit in federal court.” Op. at 21. The opinion discusses sovereign immunity decisions in the removal context from the Supreme Court and the regional circuits.

D. Del.’s Jurisdiction: Because Texas has neither a sovereign immunity nor a relevant state sovereign right to waive/abrogate in this context, the absence of consent by UT to suit in Delaware did not deprive the District of Delaware of jurisdiction. The requirements for a sovereign to waive its rights discussed in College Savings, 527 U.S. 666 (1999), are not on point because sovereign immunity does not apply where the State proceeds as a plaintiff. Brunette Machine Works, 406 U.S. 706 (1972), is not contradictory because this is not a case where there was some statutory authority in play that overrode the patent venue statute.

KEYWORDS: COLLATERAL ORDERS; APPELLATE JURISDICTION; VENUE; SOVEREIGN IMMUNITY; STATE SOVEREIGNTY