UMass’ Sovereign Immunity / Subject Matter Jurisdiction Argument Fails in RNA Patent Dispute with University of Utah

UMass’ Sovereign Immunity / Subject Matter Jurisdiction Argument Fails in RNA Patent Dispute with University of Utah

University of Utah Requests Order Requiring Correction of Inventorship

Last week, the District of Massachusetts rejected a motion to dismiss the University of Utah's (UUtah) RNA patent complaint against state officials at the University of Massachusetts (UMass) and other research institutes. UUtah's complaint alleges that Dr. Brenda Bass, a professor on its faculty, should be named either the sole inventor or a joint inventor on two RNA patents. The motion - based on sovereign immunity - contended that the Supreme Court had exclusive subject matter jurisdiction pursuant to 28 U.S.C. § 1251(a) because the case involved a controversy between instrumentalities of two states: UUtah and UMass.

Generally speaking, states cannot be sued as defendants without their consent, except in the limited class of cases in which a state may be made a party in the Supreme Court by virtue of the original jurisdiction conferred by the Constitution. However, the Ex parte Young doctrine provides a narrow exception to this rule. The doctrine permits an action in federal court against state officials seeking prospective relief to enjoin a continuing violation of the U.S. Constitution or federal law.

In Univ. of Utah v. Max-Planck-Gesellschaft zur Forderung der Wissenschaften E.V., 2012 U.S. Dist. LEXIS 80311 (D. Mass. June 11, 2012) [enhanced version available to subscribers], the UMass defendants contended that the Ex parte Young doctrine did not apply because the case was within the Supreme Court's original and exclusive jurisdiction over all controversies between two or more states. The court rejected this contention:

In defendants' view, because the real party in interest here is UMass, a co-owner of the patent, this case involves a battle between two state entities, and there is a sufficient remedy in an alternative forum, the Supreme Court. However, UUtah chose to sue the state officials in federal district court, and to drop the state as a party to preclude exclusive jurisdiction in the Supreme Court. In an analogous situation, the Second Circuit held that the plaintiff has the right to choose whether to name the state or state officials as defendants and "to enjoy (or suffer) the jurisdictional consequences of that decision."

(citations omitted)

In another attempt to avoid Ex parte Young, defendants claimed that UUtah's relief was retrospective, not prospective, because the effect would be to deprive the state of Massachusetts of its intellectual property. Defendants were correct that such relief would have a financial impact on UMass, as it would lose either a whole or partial interest in the patents. However, UUtah argued that such effect was merely an ancillary effect of prospectively correcting inventorship. As noted by the court, determining prospective relief:

requires a "straightforward inquiry into whether the complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective." A federal court can order prospective relief that has an impact on the state treasury, provided that the impact on the state treasury is only an ancillary result of requiring that the state official conform his or her conduct to the dictates of federal law.

(citations omitted)  

In rejecting defendants' retrospective / prospective argument, the court held that:

a state's interest in patents does not "uniquely implicate sovereign interests." In the absence of a "core sovereign interest," a state's injunction suit against state officers "may properly proceed in a district court." Unlike disputes over lakes, rivers, and state boundaries, a quarrel over patent rights does not implicate core sovereign interests. Accordingly, this court has jurisdiction over the action against the UMass state officials under the Ex parte Young doctrine.

(citations omitted) 

The defendants further argued that because the relief sought in a 35 U.S.C. § 256 correction of inventorship claim would be directed against the USPTO and not state officials, Ex parte Young did not apply. Despite the fact that the USPTO would correct the patent if UUtah prevailed, the requested relief was still prospective in nature and did not involve a retroactive remedy. Thus, the Ex parte Young exception could still apply to the request for relief.


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