Patent holder finds filing suit can backfire

Protecting the value of a patent is an important part of intellectual property asset management. A lot of strategies for doing this are tried and true, but as we have written about previously, some strategies don’t always work.

In the earlier case, the tactic in question involved a pharmaceutical company that sought to extend the security of a drug patent by transferring a patent to a Native American tribe and licensing back exclusive rights to the product. The theory was to have the tribe claim sovereign immunity against against patent validity challenges from potential competitors through inter partes review (IPR). That move didn’t fly with the Patent Trial and Appeal Board (PTAB) and the U.S. Court of Appeals for the Federal Circuit affirmed the board’s decision.

State school’s immunity claim fails

That case is not dead yet. A request for appeal is pending before the U.S. Supreme Court.

In the meantime, another recent sovereign immunity claim failed before a federal court. Parties in the matter are the University of Florida Research Foundation (UFRF) and General Electric. At issue was a purported UFRF medical technology patent for automating medical data collection on computers rather than by pen and paper.

The UFRF sued, claiming GE infringed on the patent. However, GE successfully argued that the concept behind the process in question was ineligible for patent to begin with. The courts agreed and dismissed the UFRF suit. UFRF appealed, objecting that the patent was immune from challenge because of sovereign immunity.

Late in February, the appeals panel reaffirmed the invalidity finding and further said that even though it had not specifically waived its right to sovereign immunity protection, it had done so by filing the suit.

There are legal observers who say that sovereign immunity in the context of patent law is unfair on its face because it grants sovereign governments an edge over private patent holders.

But if the UFRF-GE case is any indication, it would seem there are courts willing to entertain the idea that there are limits to the scope of protection available under sovereign immunity. And that could have implications in terms of patent litigation in the future.

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