University Immune from Infringement Suits Under Young Doctrine

In Pennington Seed, Inc., et al. v. Produce Exchange No. 299, et al. (August 9, 2006), the Federal Circuit affirmed that Pennington’s claims against the University of Arkansas ("the University") for infringement of U.S. Patent No. 6,111,170 (for a non-toxic fescue grass licensed to Pennington and marketed as "MAXQ") were barred by the Eleventh Amendment.

The Eleventh Amendment to the United States Constitution limits the judicial authority of the federal courts and prevents citizens from bringing suit against a state in a federal court without its consent. According to Circuit Judge Gajarsa,

While Congress may abrogate, under certain circumstances, a state’s Eleventh Amendment immunity under Section 5 of the Fourteenth Amendment, see Tennessee v. Lane, 541 U.S. 509, 518 (2004), it may not do so under its Article I Commerce Clause power in patent cases, see Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627, 647-48 (1999).

. . . In Xechem, we noted that Florida Prepaid requires a showing "that the state action ‘left [the patentee] without a remedy under state law,’" 382 F.3d at 1332; however, such a showing is predicated upon Congress’s abrogation of Eleventh Amendment sovereign immunity. As specifically explained in Florida Prepaid, it is the Congress, not this court, that can abrogate Eleventh Amendment sovereign immunity for patent infringement, pursuant to Section 5 of the Fourteenth Amendment, if there is a showing that state remedies were insufficient and violated due process. 527 U.S. at 642-43, 646-47; see also Chew v. Cal., 893 F.2d 331, 336 (Fed. Cir. 1990).

Here, Pennington alleged in its complaint that the Arkansas Claims Commission is the only body allowed to hear claims against the state, but that it could not issue injunctions, conduct discovery, or issue a monetary award over $10,000. Pennington, however, fails to allege or explain how Congress made the specific finding that these state procedures are so inadequate that it abrogated state sovereign immunity to allow a patent infringement claim to be filed in federal court. Without such a finding, abrogation would be suspect under Florida Prepaid.

Although the district court found that there was no state forum in which to contest patent infringement claims, it did not find that other available remedies pursuant to state law were so insufficient that they violated the Fourteenth Amendment. In fact, Pennington’s First Amended Complaint inherently recognizes the sufficient state remedies acknowledged in Florida Prepaid. Namely, the complaint notes that the State legislature may consider claims and appropriate monetary awards greater than $10,000 (a legislative remedy), and it alleges that the state remedy for conversion (a judicial remedy) may be available. See Fla. Prepaid, 527 U.S. at 644 n.9. Moreover, Arkansas law allows other forms of relief aside from the Claims Commission. See, e.g., Austin v. Ark. State Highway Comm’n, 895 S.W.2d 941, 943 (Ark. 1995) ("[L]andowner, claiming a taking of property, may either seek prospective injunctive relief in chancery court or damages from the State Claims Commission."); Cammack v. Chalmers, 680 S.W.2d 689 (Ark. 1984) (allowing injunctive relief for State acts that are illegal, unconstitutional or ultra vires.) While these remedies may be "uncertain" or "less convenient," or may "undermine the uniformity of patent law," these attributes are not sufficient to show that the patentee’s due process rights have been violated. Florida Prepaid, 382 F.3d at 1332; Jacobs Wind Elec. Co. v. Fla. Dep’t of Transp., 919 F.2d 726, 728 (Fed. Cir. 1990).

The decision went on to note that continuing prospective violations of a federal patent right by state officials may be enjoined by federal courts under the Ex parte Young doctrine; however, the Eleventh Amendment precludes the plaintiff from obtaining monetary damages from individual defendants in their official capacities. Furthermore, this procedure cannot be applied to an action against any random state official. There must be a connection between the state officer and the enforcement of the act or else the suit will merely make him a representative of the state and therefore improperly make the state a party to the suit. Again, according to Circuit Judge Gajarsa

Allegations that a state official directs a University’s patent policy are insufficient to causally connect that state official to a violation of federal patent law—i.e., patent infringement. A nexus between the violation of federal law and the individual accused of violating that law requires more than simply a broad general obligation to prevent a violation; it requires an actual violation of federal law by that individual. See Frew, 540 U.S. at 437 (holding that the Ex parte Young doctrine applies when state officials act in violation of state law). The fact that a University Official has a general, state-law obligation to oversee a University’s patent policy does not give rise to a violation of federal patent law.

Essentially, Pennington asks the federal courts to enjoin the University Officials from neglecting their job duties established by state law. But, a federal court cannot enjoin a state official to perform his or her duty under state law. . . . A federal court may only enjoin ongoing activity that violates federal law. To hold otherwise would not only violate the principles of federalism and a state’s sovereign immunity, but it would also be akin to a suit against the state itself.