Vas-Cath v. Curators of University of Missouri

• Decision Date: 23 January 2007
• Docket Number: No. 06-1100.,06-1100.
• Citation: 473 F.3d 1376
• Parties: VAS-CATH, INCORPORATED, Plaintiff-Appellant, v. CURATORS OF the UNIVERSITY OF MISSOURI, Don Walsworth, Cheryl D.S. Walker, Anne C. Ream, M. Sean McGinnis, Marion H. Cairns, Angela M. Bennett, Thomas E. Atkins, Vicki M. Eller, Mary L. James and Connie Hager Silverstein, Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

473 F.3d 1376

VAS-CATH, INCORPORATED, Plaintiff-Appellant, v. CURATORS OF the UNIVERSITY OF MISSOURI, Don Walsworth, Cheryl D.S. Walker, Anne C. Ream, M. Sean McGinnis, Marion H. Cairns, Angela

M. Bennett, Thomas E. Atkins, Vicki M. Eller, Mary L. James and Connie Hager Silverstein, Defendants-Appellees.

No. 06-1100.

United States Court of Appeals, Federal Circuit.

January 23, 2007.

Vincent J. Belusko, Morrison & Foerster LLP, of Los Angeles, CA, argued for plaintiff-appellant. With him on the brief was J. Manena Bishop. Of Counsel was Nicole M. Smith.

Barbara C. McCurdy, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, argued for defendants-appellees. With her on the brief was Lara C. Kelley.

Before NEWMAN, LOURIE, and RADER, Circuit Judges.

NEWMAN, Circuit Judge.

Vas-Cath, Inc. appeals the dismissal of its appeal of the decision of the United States Patent and Trademark Office ("PTO") in an interference proceeding between Vas-Cath and the University of Missouri.¹ The appeal was dismissed by the United States District Court for the Western District of Missouri, on Eleventh Amendment grounds. We conclude that the Eleventh Amendment does not shield the University from appeal of the PTO's decision in favor of the University. By requesting and participating in the interference proceeding in the PTO, the University waived its constitutional immunity not only in that proceeding but also in the appeal taken by the losing party. Accordingly, the dismissal of the appeal is reversed.

BACKGROUND

A patent interference proceeding, 35 U.S.C. § 135, is conducted for the purpose of determining priority of invention as between competing applicants for patent on the same invention. In general the patent examiner checks for interfering patent applications while they are pending, Manual of Patent Examining Procedure ("MPEP") § 2303² ("Where two or more applications are found to be claiming the same patentable invention, they may be put in interference, dependent on the status of the respective applications and the difference between their filing dates."), and if conflict is discovered the examiner will initiate interference proceedings or suggest that the applicant amend the application by presenting a claim drawn to the same invention for interference purposes. See id. ("If the applications each contain at least one claim drawn to the same patentable invention (37 CFR 1.601(n)), the examiner proceeds to propose the interference."); see also MPEP § 2305 ("[T]he examiner may suggest that an applicant present a claim drawn to an invention claimed in another application or patent for the purpose of an interference with another application or patent.").

Occasionally the examiner does not act with respect to interfering applications, and a patent is issued to one applicant while another application on the same invention is still pending. In such event the applicant can request that an interference be conducted between the pending application and the issued patent. See 37 C.F.R. § 1.607 (entitled "Request by applicant for interference with patent"); MPEP § 2306.01 ("In order to avoid the issuance of two patents to the same patentable invention, the examiner should take steps to propose an interference between the application and the patent."). Following such proceeding and upon the PTO's determination of priority, the prior inventor is granted a patent and, if the losing party has already obtained a patent, the lost claims of the issued patent will be cancelled by operation of law. MPEP § 2363.03 ("The Board's judgment in an interference conducted under 37 CFR subpart E will state that the losing party is not entitled to a patent containing the claims corresponding to the count or counts."). See generally 35 U.S.C. § 135(a) (Interferences — "A final judgment adverse to a patentee from which no appeal or other review has been or can be taken or had shall constitute cancellation of the claims involved in the patent.").

That is the situation at bar. The Vas-Cath patent had issued while the University's application, although filed before the Vas-Cath application, was still pending. The University invoked the procedures to institute an interference between the University's pending application and Vas-Cath's issued patent; the University amended its application by copying into the application all nineteen claims from the Vas-Cath patent, as the practice permits. During the ensuing six-year interference proceeding both sides vigorously contested the issues, producing records, examining and cross-examining witnesses, filing motions and briefs, and arguing their positions. The PTO awarded priority to the University, granted the nineteen Vas-Cath claims to the University, and held that Vas-Cath is not entitled to the patent that had been issued to Vas-Cath. The Board ruled: "Accordingly, senior party Twardowski is entitled to a patent including its application claims which correspond to the count (namely, claims 1 and 19-38) and junior party Martin is not entitled to a patent including any of its patent claims which correspond to the count (namely, claims 1-19)." Martin v. Twardowski, Patent Interference No. 103,988 (Bd. Pat. App. & Int.2003). These were all of the claims in the Vas-Cath (Martin) patent.

Vas-Cath appealed, as authorized by 35 U.S.C. § 146,³ to the United States District Court for the District of Columbia. On the University's motion that court transferred the case to the Western District of Missouri pursuant to 28 U.S.C. § 1406(a). In Missouri the University asserted Eleventh Amendment immunity from suit in federal court, and on this ground the district court granted the University's motion to dismiss.

DISCUSSION

The Eleventh Amendment limits the judicial authority of the federal courts and bars unconsented suit against a state.⁴ See Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 268, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997) (a state cannot be sued in federal court without its consent); Seminole Tribe of Florida v. Florida, 517 U.S. 44, 54, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996) (stating that "federal jurisdiction over suits against unconsenting States `was not contemplated by the Constitution when establishing the judicial power of the United States.'") (quoting Hans v. Louisiana, 134 U.S. 1, 15, 10 S.Ct. 504, 33 L.Ed. 842 (1890)). The entitlement of the University of Missouri to the constitutional immunity of the state is not disputed. Mo. Const. Article IX, § 9(a); Mo.Rev.Stat. § 172.020 (2000). Issues of Eleventh Amendment immunity receive plenary appellate review. McKesson Corp. v. Div. of Alcoholic Beverages and Tobacco, Dep't of Bus. Regulation of Florida, 496 U.S. 18, 30, 110 S.Ct. 2238, 110 L.Ed.2d 17 (1990); Martin v. Hunter's Lessee, 14 U.S. (1 Wheat.) 304, 348, 4 L.Ed. 97 (1816); Xechem Int'l, Inc. v. Univ. of Texas M.D. Anderson Cancer Center, 382 F.3d 1324, 1326-27 (Fed.Cir.2004).

A

The district court held that since there was not a waiver of immunity by the University, Vas-Cath's suit must be dismissed on Eleventh Amendment grounds. The court relied on Quileute Indian Tribe v. Babbitt, 18 F.3d 1456 (9th Cir.1994), wherein the court addressed the question of whether participation in contested proceedings before the Interior Board of Indian Appeals constituted a waiver by the winning tribe of tribal immunity as to the ensuing appeal by the losing tribe. The court held that the prevailing tribe had not waived its immunity as to the subsequent court action, stating that the Quinault Tribe's participation in the administrative proceeding, which it had not initiated, was not "the express and unequivocal waiver of tribal immunity that we require in this circuit." Id. at 1460. By analogy, the Missouri district court held that the University had not waived its immunity as to the subsequent appeal by Vas-Cath of the PTO decision.

Vas-Cath points to factual differences from the Quileute case and argues that Supreme Court precedent, applied to the facts of this case, indeed supports waiver. Vas-Cath stresses that the interference contest in the PTO was conducted at the University's request, that the University fully participated in the PTO proceeding and voluntarily produced state witnesses and documents, that the result was to deprive Vas-Cath of its property, and that no Eleventh Amendment immunity was asserted by the University at any stage of that proceeding. Vas-Cath argues that any immunity was clearly and unequivocally waived when the University provoked and successfully litigated the interference contest, and that such waiver includes appeal by the party that lost its patent to the University; Vas-Cath states that its § 146 action was not a new claim against the University, but simply the statutory path of review of the agency ruling.

The University responds that it has absolute immunity from any action in federal court, and that this immunity was not waived by its participation in the PTO proceeding or its action to secure the patent to which it was entitled as first inventor. The University states that this civil action by Vas-Cath improperly subjects the University, as an arm of the state, to federal authority, in violation of the Constitution.

B

It is established that a state's participation in the federal patent system does not of itself waive immunity in federal court with respect to patent infringement by the state, and that such waiver cannot occur unless the conditions are such that there is violation of the Fourteenth Amendment's guarantee of due process. In Florida Prepaid Postsecondary Education Expense Bd. v. College Savings Bank, 527 U.S. 627, 119 S.Ct. 2199, 144 L.Ed.2d 575 (1999) the Court held that Congress does not have authority to abrogate Eleventh Amendment immunity with respect to patent infringement by the states, for "Congress identified no pattern of patent infringement by the States, let alone a pattern of constitutional violations," id. at...