Background
The Regents of the University of Minnesota, a state university and arm of the State of Minnesota, owns patents covering certain types of “read channel” chips used in data storage devices. LSI Corporation and Ericsson Inc. were accused of infringing those patents and separately filed petitions for inter partes review (IPR) at the Patent Trial and Appeal Board, seeking to invalidate the challenged claims on anticipation and obviousness grounds.
The University moved to terminate the IPR proceedings, invoking Eleventh Amendment sovereign immunity. Unlike private parties or tribal entities, state entities enjoy substantial immunity from suit in federal court under the Eleventh Amendment and the doctrine of state sovereign immunity. The University argued that IPR proceedings at the PTAB were sufficiently court-like to trigger that immunity and compel dismissal of the challenges to its patents. The PTAB denied the motion, and the University appealed to the Federal Circuit.
The Court’s Holding
The Federal Circuit affirmed the PTAB’s denial and held that state sovereign immunity does not apply in inter partes review proceedings. Relying primarily on its 2018 decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals, the court reasoned that IPR is an agency enforcement action in which the USPTO reconsiders its own patent grant — a proceeding the court had characterized as standing outside the reach of both tribal and state sovereign immunity.
The court acknowledged a potentially important doctrinal difference: unlike tribal immunity, state immunity under the Eleventh Amendment has an explicit constitutional foundation, and sovereign immunity principles may differ in detail between states and tribes. But the court found those differences not determinative here. The reasoning that controlled in St. Regis Mohawk — that IPR is the government reconsidering a government grant through its own administrative machinery — applies equally to state sovereigns. The mere constitutional grounding of Eleventh Amendment immunity does not change the nature of IPR as an executive agency enforcement action directed at the patent grant itself, not at the state.
Key Takeaways
- State sovereign immunity (Eleventh Amendment) does not apply in IPR proceedings before the PTAB, just as tribal sovereign immunity does not apply — patent owners cannot use either form of immunity to avoid PTAB validity challenges.
- Universities and state-affiliated research institutions that hold patents cannot insulate those patents from inter partes review by invoking their status as arms of the state.
- The ruling closed a significant potential loophole: after St. Regis Mohawk blocked the tribal-immunity strategy, some patent owners with state-entity connections had considered whether state sovereign immunity might succeed where tribal immunity had failed. UMN v. LSI foreclosed that argument.
- The case completes a trilogy — alongside St. Regis Mohawk and Oil States — that firmly established IPR as an administrative proceeding immune to most constitutional and immunity-based procedural challenges.
Why It Matters
University technology transfer programs have grown substantially over the past three decades, with research universities now generating significant patent portfolios and licensing revenue. If state universities could assert sovereign immunity to block IPR challenges, they would enjoy a litigation advantage unavailable to private patent holders — and the integrity of the IPR system as a universal check on patent quality would be undermined.
UMN v. LSI ensured that patents held by state entities are subject to the same PTAB validity review as any other patent. The decision is particularly significant for the pharmaceutical and semiconductor industries, where university-held patents are frequently asserted and where IPR has become a standard defense tool. The Supreme Court subsequently declined to review the Federal Circuit’s holding, leaving this rule in place as settled law.