An offensive weapon?: An empirical analysis of the "sword" of state sovereign immunity in state-owned patents

Columbia Law Review

Volumn 110, Issue 6, 2010, Pages 1574-1615

  Narechania, Tejas N ^a  

^a The Earth Institute at Columbia University

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EID: 78049371749     PISSN: 00101958     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Note

References (220)

1. Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999).
2. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999).
3. E.g., Intellectual Property Protection Restoration Act of 2003: Hearing Before the Subcomm. on Courts, the Internet, and Intellectual Prop. of the H. Comm. on the Judiciary, 108th Cong. 2 (2003) [hereinafter IPPRA 2003 Hearings] (statement of Rep. Howard L. Berman, Ranking Member, H. Subcomm. on Courts, the Internet, and Intellectual Prop.) (stating "practical effect of these decisions" is to allow states to "have their cake and eat it too"); Sovereign Immunity and the Protection of Intellectual Property: Hearing Before the S. Comm. on the Judiciary, 107th Cong. 2 (2002) [hereinafter 2002 Senate Hearings] (statement of Sen. Patrick J. Leahy, Chairman, S. Comm. on the Judiciary) (calling Florida Prepaid and College Savings decisions result of "an activist Court that is whittling away at the legitimate constitutional authority of the Federal Government"); State Sovereign Immunity and Protection of Intellectual Property: Hearing Before Subcomm. on Courts and Intellectual Prop. of the H. Comm. on the Judiciary, 106th Cong. 3-4 (2000) [hereinafter 2000 House Hearings] (statement of Rep. Howard L. Berman, Member, H. Subcomm. on Courts and Intellectual Prop.) ("[T]he law is distinctly unfair and imbalanced. Those decisions created such unfairness and imbalance in Federal law.").
4. E.g., Xechem Int'l, Inc. v. Univ. of Tex. M.D. Anderson Cancer Ctr., 382 F.3d 1324, 1335 (Fed. Cir. 2004) (Newman, J., additional views) (noting "increasing urgency... to establish fair relationships and just recourse"); Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., No. C 06-00737 MHP, 2006 WL 1530177, at 6 (N.D. Cal. June 5, 2006) (questioning "the wisdom of the currently governing law"); Xechem Int'l, Inc. v. Univ. of Tex. M.D. Anderson Cancer Ctr., No. Civ.A. H-02-1013, 2003 WL 24232747, at 9 (S.D. Tex. Mar. 19, 2003) (finding "controlling decisions of the Supreme Court" lead to "undesirable results").
5. E.g., Vicki C. Jackson, Principle and Compromise in Constitutional Adjudication: The Eleventh Amendment and State Sovereign Immunity, 75 Notre Dame L. Rev. 953, 953 (2000) ("The Court's Eleventh Amendment and sovereign immunity case law deserves the condemnation and resistance of scholars."); Yvonne A. Tamayo, Patently Absurd: Expanded State Immunity in the Global Knowledge Market, 6 Va. J.L. & Tech. 1, para. 2 (2001), at http://www.vjolt.net/vol6/issue1/v6i1a01-Tamayo.html (on file with the Columbia Law Review) ("[T]he direction taken by the Supreme Court in Florida Prepaid... marks an ill-founded and most unfortunate departure from traditional Eleventh Amendment analysis."). But see Eugene Volokh, Sovereign Immunity and Intellectual Property, 73 S. Cal. L. Rev. 1161, 1170 (2000) (concluding "Florida Prepaid results are far from practically senseless or morally repugnant"); Ann Woolhandler, Old Property, New Property, and Sovereign Immunity, 75 Notre Dame L. Rev. 919, 920 (2000) (stating decisions are "no big deal"). A more complete discussion of the criticisms of the Court's decisions is outlined infra Part I.B-C.
6. Biomedical Patent, 2006 WL 1530177, at 6.
7. Petition for a Writ of Certiorari at 21, Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., 129 S. Ct. 895 (2009) (No. 07-956) [hereinafter BPMC Petition] ("[T]hose who drafted [the Eleventh Amendment] would never have embraced California's exploitative interpretation, which has little to do with sovereignty....").
8. Id. at 3 ("California's effort to invoke sovereign immunity selectively in this case is part of a larger scheme to use the federal courts as both a sword and shield." (emphasis added)). For detail on how state patentees may use their immunity as a sword, see infra Part I.C.
9. Nicholas Dernik, Comment, State Sovereign Immunity: States Use the Federal Patent Law System as Both a Shield and a Sword, 8 J. Marshall Rev. Intell. Prop. L. 134, 147 (2008).
10. 10 See, e.g., Peter Lattman, Critics Take Aim at California's Patent Shield, Wall St. J., Nov. 13, 2007, at B1 ("As a plaintiff alleging patent infringement, the [University of California system] has settled a claim against Genentech Inc. for $200 million, secured a payment of $185 million from Monsanto Co., and won a $30 million settlement from Microsoft Corp."); see also BPMC Petition, supra note 7, at 2 ("While they embrace federal jurisdiction when it helps them..., states simultaneously avoid federal jurisdiction when they themselves are faced with claims of patent infringement; in those circumstances, they assert sovereign immunity under the Eleventh Amendment.").
11. David Wolman & Heather Wax, Putting the Squeeze on State Immunity: Are States Abusing Their Immunity from Intellectual Property Laws?, Tech. Rev., Aug. 21, 2002, at http://www.technologyreview.com/business/12921 (on file with the Columbia Law Review); see also Robert G. Bone, From Property to Contract: The Eleventh Amendment and University-Private Sector Intellectual Property Relationships, 33 Loy. L.A. L. Rev. 1467, 1498 (2000) (noting "very little empirical data to support" predictions of abuse of immunity).
12. Black's Law Dictionary 766 (8th ed. 2004).
13. For a discussion on how early philosophers, including Hobbes, Locke, and Montesquieu, informed the Framers' views of sovereignty, see Donald L. Doernberg, Sovereign Immunity or the Rule of Law: The New Federalism's Choice 63-70 (2005) (noting influences of political philosophers on development of Declaration of Independence and Constitution).
14. The Federalist No. 81, at 450 (Alexander Hamilton) (George Sade ed., 2006) (emphasis omitted). Hamilton shared this view with many of his Founding contemporaries, who also believed that the Constitution did not create a federal judiciary capable of adjudicating cases involving states. During Virginia's ratification convention, Patrick Henry expressed a fear that Article III allows "cognizance of controversies between a state and citizens of another state." 3 The Debates in the Several State Conventions on the Adoption of the Federal Constitution 543 (Jonathan Elliot ed., 2d ed. 1891) [hereinafter Constitution Debates]. In response, James Madison asserted that "[i]t is not in the power of individuals to call any State into court." Id. at 533. Similarly, John Marshall stated that "no gentleman will think that a state will be called at the bar of the federal court." Id. at 555. Statements coming out of other state conventions expressed similar sentiments. In its statement ratifying the Constitution, Rhode Island clarified its understanding that the judicial power of the United States does "not extend to... any suit by any person against a state." 1 Constitution Debates, supra, at 336. New York made a similar statement, suggesting that "the judicial power of the United States... does not... authorize any suit by any person against a state." Id. at 329.
15. U.S. Const. art. III, § 2.
16. Chisholm v. Georgia, 2 U.S. (2 Dall.) 419, 420 (1793) ("[T]he Constitution vests a jurisdiction in the Supreme Court over a State, as a defendant, at the suit of a private citizen of another State."). The opinion stated that "the words, unqualified, strongly tended at least to subject States as defendants." Id. at 421.
17. Seminole Tribe v. Florida, 517 U.S. 44, 69 (1996) (noting Chisholm was received with "shock of surprise" (quoting Monaco v. Mississippi, 292 U.S. 313, 325 (1934))). But see id. at 106 n.5 (Souter, J., dissenting) (stating Monaco's suggestion that Chisholm was received with "shock of surprise" is an "erroneous assertion"); John J. Gibbons, The Eleventh Amendment and State Sovereign Immunity: A Reinterpretation, 83 Colum. L. Rev. 1889, 1927 (1983) ("[C]ontrary to the position of the profound shock school, the Second Congress did not regard Chisholm v. Georgia as a matter of great moment."). Despite Justice Souter's and Professor Gibbons's suggestions to the contrary, the prevailing view seems to be that Chisholm was in fact a surprise and a matter of great moment. See, e.g., Richard H. Fallon, Jr., et al., Hart and Wechsler's The Federal Courts and the Federal System 871 (6th ed. 2009) [hereinafter Hart & Wechsler] (noting decision "provoked a strongly adverse reaction").
18. U.S. Const. amend. XI.
19. See, e.g., Osborn v. Bank of the U.S., 22 U.S. (9 Wheat.) 738, 857 (1824) (holding "the 11th amendment... is, of necessity, limited" to only suits where a state is an explicit defendant); Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 393-96 (1821) (holding state may not assert immunity from federal constitutional review in appeal to decisions in criminal action which it initiated). According to one text, only one case filed between the ratification of the Eleventh Amendment and the Civil War, Ex Parte Madrazzo, 32 U.S. (7 Pet.) 627, 632 (1833), was dismissed by the Court on sovereign immunity grounds. Hart & Wechsler, supra note 17, at 872-73. But see Hollingsworth v. Virginia, 3 U.S. (3 Dall.) 378, 382 (1798) (compelling dismissal of suit filed before ratification of Eleventh Amendment, but which was still active through ratification process).
20. 134 U.S. 1 (1890).
21. Id. at 10-11, 20. The petitioner in Hans, a citizen of Louisiana, "contend[ed] that he... [was] not embarrassed by the obstacle of the Eleventh Amendment, inasmuch as that amendment only prohibits suits against a State which are brought by the citizens of another State." Id. at 10. Hans argued that the Amendment's text was limited to suits "prosecuted against one of the United States by citizens of another State," U.S. Const. amend. XI (emphasis added), and because he was a citizen of the same state, he should be free to sue. 134 U.S. at 11. The Court agreed that "the amendment does so read," but was concerned about the "anomalous result" where a "State may be sued in the federal courts by its own citizens, though it cannot be sued for a like cause of action by the citizens of other States." Id. at 10.
22. 134 U.S. at 12-16. The Court began its analysis with Hamilton's "profound remarks" that "[i]t is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent." Id. at 12-13 (emphasis omitted) (quoting The Federalist No. 81 (Alexander Hamilton)). The Court noted that Hamilton's views were shared by many founding contemporaries, including Henry, Mason, Madison, and Marshall. Id. at 14; see also supra note 14 (discussing views of Hamilton and other Founders). The Court concluded that the views of these Founders were "sensible and just." 134 U.S. at 14. The Court also drew from Justice Iredell's dissent in Chisholm. Based on Iredell's "exhaustive examination of the old law," the Court found that "in every case since" Chisholm, the sovereign had not been haled into court. Id. at 16. The Court accordingly concluded that "[t]he suability of a state, without its consent, was a thing unknown to the law." Id. The Court stated that "the cognizance of suits and actions unknown to the law... was not contemplated by the Constitution when establishing the judicial power of the United States." Id. at 15.
23. In looking beyond the narrow text of the Eleventh Amendment, Hans v. Louisiana has been widely understood to stand for the proposition that the Eleventh Amendment is a restoration of the originally contemplated constitutional structure. Hart & Wechsler, supra note 17, at 878-80.
24. See infra notes 42-43, 61-65, and accompanying text (discussing later cases' reliance on Hans's interpretation of state immunity).
25. Outside of the limitations on immunity discussed in this subsection, the Court has recognized several other limitations to state sovereign immunity. First, Ex parte Young articulated a standard by which private individuals may, despite the Eleventh Amendment, prevent state officials from engaging in unconstitutional or illegal behavior. Ex parte Young, 209 U.S. 123, 168 (1908) (making distinction between suit against state and suit against state official "to prevent his enforcing an unconstitutional enactment"). Second, the Court has declined to hold that actions initiated by the United States or by a coequal sovereign state are barred by the Eleventh Amendment. Monaco v. Mississippi, 292 U.S. 313, 328-29 (1934) (holding that providing a federal forum for states to resolve disputes is "essential to the peace of the Union" and Founders envisioned suits initiated by United States as "inherent in the constitutional plan"). Lastly, the Court declared that immunity does not extend to local governments. Lincoln Cnty. v. Luning, 133 U.S. 529, 530 (1890) ("The Eleventh Amendment limits the jurisdiction only as to suits against a State.... In this respect [a county] is a part of the State only in [a] remote sense... ."). For a general discussion regarding the "exceptions" to Hans, see Hart & Wechsler, supra note 17, at 884-85.
26. Edelman v. Jordan, 415 U.S. 651, 673 (1974) (quoting Murray v. Wilson Distilling Co., 213 U.S. 151, 171 (1909)).
27. Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 241 (1985); see also Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 99 (1984) (requiring state "unequivocally express[]" consent to federal jurisdiction); Great N. Life Ins. Co. v. Read, 322 U.S. 47, 54 (1944) (requiring state make "clear declaration" of waiver in matters of financial administration).
28. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 678 (1999) ("[W]e observed (in dictum) that there is 'no place' for the doctrine of constructive waiver in our sovereign-immunity jurisprudence...." (quoting Edelman, 415 U.S. at 673)).
29. Nonetheless, the Court continues to find that states may waive their immunity through the acceptance of a number of congressional conditions, including through Congress's exercise of its spending power and through the congressional approval of interstate agreements. E.g., South Dakota v. Dole, 483 U.S. 203, 210 (1987) (finding "[t]he offer of benefits to a state by the United States dependent upon cooperation by the state with federal plans" is no "violation of the State's sovereignty" (quoting Oklahoma v. Civil Serv. Comm'n, 330 U.S. 127, 143-44 (1947))); Petty v. Tenn.-Mo. Bridge Comm'n, 359 U.S. 275, 280 (1959) (noting Congress can approve "sue-and-be-sued clause in a compact under conditions that make it clear that the States accepting it waived any immunity from suit").
30. E.g., Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 535 U.S. 613, 620 (2002); see also Gardner v. New Jersey, 329 U.S. 565, 574 (1947) (holding when state files bankruptcy action in federal court, it waives immunity to its claims and related defenses); Gunter v. Atl. Coast Line R.R. Co., 200 U.S. 273, 284 (1906) (noting officers representing interests of state can submit state interests for judicial determination); Clark v. Barnard, 108 U.S. 436, 447 (1883) (noting that by appearing in an action, state can make itself party to that action); Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 393-96 (1821) (holding state may not assert immunity from federal constitutional review in appeal to decisions in criminal action which it initiated).
31. See, e.g., Fla. Dep't of Health & Rehabilitative Servs. v. Fla. Nursing Home Ass'n, 450 U.S. 147, 149-50 (1981) (finding state declaration to "sue and be sued" insufficient to find federal court jurisdiction); Kennecott Copper Corp. v. State Tax Comm'n, 327 U.S. 573, 577-80 (1946) (finding state's intention to be sued "in any court of competent jurisdiction" insufficient to find federal court jurisdiction); Smith v. Reeves, 178 U.S. 436, 441-45 (1900) (finding state does not consent to federal court jurisdiction simply by consenting to jurisdiction in its own state courts).
32. Gunter, 200 U.S. at 284.
33. Lapides, 535 U.S. at 624.
34. Id. at 619.
35. Id. at 622.
36. Id. at 621.
37. In Fitzpatrick v. Bitzer, 427 U.S. 445 (1976), the Court held that Congress could "provide for private suits against States" if it is ""appropriate legislation' for the purpose of enforcing the provisions of the Fourteenth Amendment." Id. at 456.
38. 517 U.S. 44 (1996).
39. The Court first faced this question seven years earlier, in Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989), overruled by Seminole Tribe, 517 U.S. at 47. In Union Gas, Justice Brennan's plurality opinion stated that, in ratifying the Constitution, the states gave Congress the power to abrogate state immunity through the exercise of an Article I power. Id. at 20. This, however, was overruled in Seminole Tribe, 517 U.S. at 47. Seminole Tribe's holding, however, did not impact the rule articulated in Fitzpatrick. See supra note 37.
40. 40. Seminole Tribe, 517 U.S. at 47.
41. Id. at 72.
42. Hans v. Louisiana, 134 U.S. 1, 14-16 (1890); see also supra notes 20-23 and accompanying text (describing Hans).
43. Seminole Tribe, 517 U.S. at 72.
44. Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999).
45. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999).
46. This Note will refer to both decisions collectively as the "Florida Prepaid decisions." When referring to a specific decision, this Note will refer to it as either Florida Prepaid (527 U.S. 627) or College Savings (527 U.S. 666).
47. Pub. L. No. 102-542, 106 Stat. 3567 (1992), invalidated by Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999).
48. Pub. L. No. 102-560, 106 Stat. 4230 (1992), invalidated by Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999).
49. Pub. L. No. 101-553, 104 Stat. 2749 (1990), invalidated by Chavez v. Arte Pub. Press, 204 F.3d 601, 608 (5th Cir. 2000) (holding CRCA was "doomed in the wake of Florida Prepaid").
50. 50. 893 F.2d 331 (Fed. Cir. 1990).
51. Id. at 334. Chew was decided in the period of time between Union Gas and Seminole Tribe. See supra note 39 and accompanying text. Thus, the Federal Circuit believed that Congress could abrogate immunity through the exercise of an Article I power. Nonetheless, the Federal Circuit found that the statute did not possess the requisite "unequivocal and textual" evidence of intent to abrogate. Chew, 893 F.2d at 334 (quoting Dellmuth v. Muth, 491 U.S. 223, 230 (1989)).
52. 893 F.2d at 336.
53. S. Rep. No. 102-280, at 8 (1992), reprinted in 1992 U.S.C.C.A.N. 3087, 3094. The Intellectual Property Clause, U.S. Const. art. I, § 8, cl. 8, gives Congress the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
54. H.R. Rep. No. 101-960, pt. 1, at 38-39 (1990).
55. S. Rep. No. 102-280, at 8.
56. H.R. Rep. No. 101-960, pt. 1, at 2. Congress believed it had the power to enact the statute under its Article I and Fourteenth Amendment powers. S. Rep. No. 102-280, at 8 (stating enactment "is justified under the Commerce Clause and the fourteenth amendment").
57. S. Rep. No. 102-280, at 12, 21 (noting changes to existing patent and trademark laws by PPVRCA and TRCA).
58. Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 672 (1999).
59. E.g., Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627, 642 (1999). Specifically, the Court found no abrogation under Congress's Fourteenth Amendment, Section 5 powers. The Court was unable to "identify the... "evil' or "wrong' that Congress intended to remedy, guided by the principle that the... legislation "must be judged with reference to the historical experience... it reflects.'" 527 U.S. at 639-40 (quoting City of Boerne v. Flores, 521 U.S. 507, 525 (1997)). In Florida Prepaid, the Court stated that, "in enacting the [PPVRCA], Congress identified no pattern of [patent] infringement by the States, let alone a pattern of constitutional violations." 527 U.S. at 628. Similarly, in College Savings, the Court found "no deprivation of property." 527 U.S. at 675.
60. In College Savings, the Court noted that there was "no suggestion" that "Florida Prepaid expressly consented to being sued." 527 U.S. at 676. Nor did the procedural posture of the case indicate that "the State ha[d] affirmatively invoked [the Court's] jurisdiction." Id. Thus, the Court concluded that if the state had waived its immunity, it could only have done so constructively. However, the Court determined that it could not square a constructive theory of waiver with the requirement "that a State's express waiver of sovereign immunity be unequivocal." Id. at 680. The Court thus determined that constructive waiver was "an anomaly in the jurisprudence of sovereign immunity" and "expressly overruled" it, and thereby concluded Florida had not waived its immunity. Id.
61. E.g., Hans v. Louisiana, 134 U.S. 1, 17 (1890). Nonetheless, no intellectual property case had ever been dismissed on state sovereign immunity grounds in nearly two hundred years of intellectual property jurisprudence. Todd Garvey & Brian T. Yeh, Cong. Research Serv., RL 34593, Infringement of Intellectual Property Rights and State Sovereign Immunity 6 (2008). The first intellectual property case dismissed on such grounds was Wihtol v. Crow, 309 F.2d 777 (8th Cir. 1962), where a federal district court in Iowa dismissed a copyright action against a school board for lack of subject matter jurisdiction. Garvey & Yeh, supra, at 6.
62. See supra notes 22-23 and accompanying text.
63. College Savings, 527 U.S. at 690.
64. Id. at 685 (quoting Welch v. Tex. Dep't of Highways & Pub. Transp., 483 U.S. 468, 477 (1987)) (internal quotation marks omitted).
65. Id.
66. Xechem Int'l, Inc. v. Univ. of Tex. M.D. Anderson Cancer Ctr., 382 F.3d 1324 (Fed. Cir. 2004).
67. Id. at 1332. Further, the court found that state sovereign immunity applied even in situations where the state defendant "is not a necessary party" to the action. Id. at 1331-32. Under Federal Circuit precedent, Xechem argued that the action could proceed without the university and over the objections of the state. The Federal Circuit reasoned that, because the state agent was the only party to the suit, and because the suit could not be sustained without a defendant, the immunity of the state prevented the suit from going forward. Id. at 1332.
68. Id. at 1333 (Newman, J., additional views) (stating Xechem may have pursued due process claim in state tribunal, or could have filed an Ex parte Young action).
69. Id. at 1335.
70. 2002 Senate Hearings, supra note 3, at 2 (statement of Sen. Patrick J. Leahy, Chairman, S. Comm. on the Judiciary) (stating Florida Prepaid decisions told states "they do not have to adhere to the law").
71. Id. at 18 (describing scenario where "the State has all the leverage"); id. at 40 (statement of Paul Bender, on behalf of the Property Owners Remedy Alliance) (agreeing with Chairman Leahy's assessment that state's "bargaining position ... is a very strong one because [it] cannot be sued"); Brief of Amici Curiae Chamber of Commerce of the United States of America & Software & Information Industry Association in Support of Petitioners at 6, Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., 129 S. Ct. 895 (2009) (No. 07-956) [hereinafter Chamber of Commerce Brief] (arguing "state entities [have] the power to "bully' private entities in negotiations for licenses").
72. E.g., 2002 Senate Hearings, supra note 3, at 3, 27-28, 40, 54-55, 78, 90 (2002) (collecting examples of infringement by University of Houston, State of Georgia, State of Maryland, University of California, Illinois Department of Tourism, and others).
73. U.S. Gen. Accounting Office, GAO-01-811, Intellectual Property: State Immunity in Infringement Actions 2 (2001).
74. Id. (noting of ninety-nine responses, thirty-five had not faced any accusations); see also id. at 58 (showing table of results).
75. Several bills to extend patent liability to states have been proposed since the Florida Prepaid decisions. See Intellectual Property Protection Restoration Act of 2003, S. 1191, 108th Cong. (2003); Intellectual Property Protection Restoration Act of 2003, H.R. 2344, 108th Cong. (2003); Intellectual Property Protection Restoration Act of 2002, S. 2031, 107th Cong. (2002); Intellectual Property Protection Restoration Act of 2001, S. 1611, 107th Cong. (2001); Intellectual Property Protection Restoration Act of 2001, H.R. 3204, 107th Cong. (2001); Intellectual Property Protection Restoration Act of 1999, S. 1835, 106th Cong. (1999) [hereinafter IPPRA 1999]. See generally Jeffrey W. Childers, Comment, State Sovereign Immunity and the Protection of Intellectual Property: Do Recent Congressional Attempts to "Level the Playing Field" Run Afoul of Current Eleventh Amendment Jurisprudence and Other Constitutional Doctrines?, 82 N.C. L. Rev. 1067 (2004) (discussing and analyzing Intellectual Property Protection Restoration Act of 2003 and similar amendments). None of these bills has been enacted.
76. See H.R. Rep. No. 101-960, pt. 1, at 38-39 (1990) ("This blanket immunity is certainly beyond the scope of the protection the founding fathers intended to impart on the States in providing sovereign immunity protection."); Matt Asay, Who Is the World's Biggest Patent Troll?, CNET News, Nov. 13, 2007, at http://news.cnet.com/8301-13505_3-9816163.html (on file with the Columbia Law Review) (quoting Prof. Mark Lemley stating "[t]he Framers never contemplated states suing people for patent infringement").
77. Dernik, supra note 9, at 147 (emphasis added).
78. Besides the case history presented in this subsection, this claim has also been made with respect to other forms of immunity, such as tribal immunity. See Katherine Florey, Indian Country's Borders: Territoriality, Immunity, and the Construction of Tribal Sovereignty 34 (2009) (unpublished manuscript), at http://works.bepress.com/katherine_florey/3 (on file with the Columbia Law Review) ("Selective waivers of immunity ... permit claims against [tribes] to be heard on their own terms.").
79. 458 F.3d 1335 (Fed. Cir. 2006).
80. Id. at 1337.
81. See infra note 113 and accompanying text (describing value of declaratory judgments in patent context).
82. Tegic Commc'ns Corp. v. Bd. of Regents of the Univ. of Tex. Sys., No. C05-0723L, 2005 WL 6127305 (W.D. Wash. July 26, 2005), aff'd, 458 F.3d at 1335.
83. Id. at 1 (granting motion to dismiss for "lack of subject matter jurisdiction because [defendant] is entitled to immunity under the Eleventh Amendment").
84. Tegic, 458 F.3d at 1340.
85. Id. at 1344 (citing Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 535 U.S. 613, 620 (2002)).
86. Id. ("[T]o the extent that Tegic's interests may be impaired by the Texas litigation, Tegic may seek to intervene in that litigation.").
87. 505 F.3d 1328, 1339 (Fed. Cir. 2007).
88. Id. at 1331 (describing 1997 lawsuit).
89. Id.
90. Id. at 1331-32.
91. Id. (describing subsequent lawsuit initiated by BPMC).
92. Id. at 1332 (noting action before Federal Circuit was filed in District Court for Northern District of California in 2006).
93. Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., No. C 06-00737 MHP, 2006 WL 1530177, at2 (N.D. Cal. June 5, 2006) (noting BPMC's arguments regarding state's waiver of sovereign immunity).
94. Id. at 6-7.
95. Biomedical Patent, 505 F.3d at 1331 (affirming).
96. Id. at 1336.
97. BPMC Petition, supra note 7, at 12. BPMC's Petition for a Writ of Certiorari was denied. Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., 129 S. Ct. 895 (2010).
98. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 39 (1998) (Scalia, J., dissenting).
99. H.R. Rep. No. 97-312, at 20 (1981).
100. BPMC Petition, supra note 7, at 15; see also Jennifer Polse, Comment, Holding the Sovereign's Universities Accountable for Patent Infringement After Florida Prepaid and College Savings Bank, 89 Calif. L. Rev. 507, 508, 528 (2001) (noting University of California used sovereign immunity to litigate "in its preferred forum" and that "the Eleventh Amendment provides a potent-and perhaps unfair-strategic tool for state universities contemplating an infringement action against private industry").
101. 101. BPMC Petition, supra note 7, at 13 (internal quotation marks omitted).
102. Id. at 4.
103. See, e.g., Lattman, supra note 10 ("As a plaintiff alleging patent infringement, the [University of California system] has settled a claim against Genentech Inc. for $200 million, secured a payment of $185 million from Monsanto Co., and won a $30 million settlement from Microsoft Corp.").
104. See BPMC Petition, supra note 7, at 4-5, 22-24 (arguing California "purposely cultivates a reputation for litigiousness" at which "[i]t is very successful").
105. Vas-Cath, Inc. v. Curators of Univ. of Mo., 473 F.3d 1376, 1378 (Fed. Cir. 2007). This type of proceeding, known as an interference proceeding, is permitted by 35 U.S.C. § 135 (2006).
106. Id. at 1379-80 (noting Vas-Cath's appeal was transferred to Missouri and then dismissed).
107. Id. at 1378 ("[T]he dismissal of the appeal is reversed.").
108. Id. at 1381 ("[A] state's participation in the federal patent system does not of itself waive immunity in federal court ... .").
109. Id. at 1382. The court determined that the administrative proceeding was sufficiently similar to civil litigation because it involved "adverse parties, examination ... of witnesses, [and] production of documentary evidence" among other shared characteristics. Id.
110. Id. at 1383 (quoting Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 535 U.S. 613, 619 (2002)).
111. Id. at 1385. Vas-Cath's statutory right of appeal is conferred by 35 U.S.C. § 146 (2006). See Vas-Cath, 473 F.3d at 1379 & n.3. The First Circuit reached a similar result in New Hampshire v. Ramsey, 366 F.3d 1, 15 (1st Cir. 2004) (holding state voluntarily subjects itself to federal jurisdiction where it participates in administrative proceedings providing for judicial review); see also note 167 and accompanying text (describing Federal Circuit case where state was found to have consented to compulsory counterclaims).
112. Vas-Cath, 473 F.3d at 1383 (quoting Lapides, 535 U.S. at 620) (internal quotation marks omitted).
113. Christopher L. Beals, Comment, A Review of the State Sovereignty Loophole in Intellectual Property Rights Following Florida Prepaid and College Savings, 9 U. Pa. J. Const. L. 1233, 1261 (2007); see also Peter S. Menell, Economic Implications of State Sovereign Immunity from Infringement of Federal Intellectual Property Rights, 33 Loy. L.A. L. Rev 1399, 1409 (2000) (indicating declaratory judgment actions provide significant advantages to companies threatened with infringement actions).
114. See supra text accompanying notes 79-86.
115. Tegic Commc'ns Corp. v. Bd. of Regents of the Univ. of Tex. Sys., 458 F.3d 1335, 1342 (Fed. Cir. 2006).
116. Id.
117. Bone, supra note 11, at 1509 (discussing strategy of "seeking excessively broad patents"). Professor Bone suggests that this is especially so because the patent examination process appears to be "skewed in the direction of patent grants." Id; see also Polse, supra note 100, at 526 (stating "[u]niversities now actively accumulate patents").
118. Bone, supra note 11, at 1509.
119. Makan Delrahim, Patently Unfair, Nat'l Rev. Online, Apr. 25, 2008, at http:// www.nationalreview.com/articles/224296/patently-unfair/makan-delrahim (on file with the Columbia Law Review).
120. Bone, supra note 11, at 1509-10; see also Christopher R. Leslie, Patents of Damocles, 83 Ind. L.J. 133, 156 (2008) ("[L]icensing ... imposes costs on competitors that they would not incur in a competitive market unhindered by fraudulently procured patents."); Polse, supra note 100, at 526 (stating universities "vigorously court potential licensees").
121. Chamber of Commerce Brief, supra note 71, at 10; see also Leslie, supra note 120, at 148, 154-55 (suggesting "[a]ggressive patentees tout their previous victories in patent infringement litigation" and that "[t]he cost of a license can be considerably less than the damages for infringement discounted by the probability of being held liable").
122. Tegic Commc'ns Corp. v. Bd. of Regents of the Univ. of Tex. Sys., 458 F.3d 1335, 1342 (Fed. Cir. 2006).
123. See supra Part I.C.
124. Tegic, 458 F.3d at 1341 (quoting Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 535 U.S. 613, 620 (2002)). For a description of relevant case law, see supra Part I.C.1.
125. BPMC Petition, supra note 7, at 15.
126. See Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., No. C 06- 00737 MHP, 2006 WL 1530177, at 6 (N.D. Cal. June 5, 2006) (expressing concern regarding public university's immunity where "[s]imilarly situated private universities enjoy no such advantage").
127. Bone, supra note 11, at 1509 (discussing strategy of "seeking excessively broad patents"). For additional discussion of this effect, see supra notes 117-118 and accompanying text.
128. Delrahim, supra note 119.
129. Chamber of Commerce Brief, supra note 71, at 6.
130. Cf. Leslie, supra note 120, at 167-71 (suggesting where "the expected benefits of fraud outweigh the costs, ... firms ... will rationally commit fraud in their patent applications").
131. See, e.g., Menell, supra note 113, at 1433-34 (noting differences between state universities and other state agencies).
132. Nat'l Sci. Bd., Nat'l Sci. Found., Science and Engineering Indicators 2010, at 5-7 (2010), available at http://www.nsf.gov/statistics/seind10/pdf/seind10.pdf (on file with the Columbia Law Review) ("America's academic institutions ... conduct the bulk (55%) of U.S. basic research ... .").
133. The IPLC provides comprehensive litigation data beginning January 1, 2000. See Lex Machina, About: Stanford IPLC & Lex Machina, at http://www.lexmachina.org/ about (last visited Sept. 15, 2010). Online access is free to academics, judges, and policymakers. Id.
134. See Steven Shavell, Extensions of the Basic Theory, in Foundations of Economic Analysis of Law 419, 433 (2004) (noting selection effects in litigated cases because "the cases that go to trial are not a random sample").
135. This is a necessarily incomplete data set. The BPMC case, described supra notes 87-96 and accompanying text, for example, is held out as an example of a state "secur[ing] a litigation advantage through the selective, and inconsistent, assertion of Eleventh Amendment immunity." BPMC Petition, supra note 7, at 15. The decision which eventually resolved the matter resulted from a lawsuit filed by BPMC, a nonstate entity, and in which the state entity was the defendant. The original lawsuit, however, was not one filed by or initiated by California; rather, California intervened in an existing lawsuit. Such a lawsuit would not be included here. Nonetheless, this incompleteness may be preferable to alternative negative effects that would result from including all lawsuits involving the sample of universities. See infra text accompanying notes 136-137.
136. See supra Part I.B (describing use of state sovereign immunity as a shield from litigation).
137. BPMC Petition, supra note 7, at 15.
138. Ass'n of Univ. Tech. Managers, FY 2007 AUTM U.S. Licensing Activity Survey (2007) (on file with the Columbia Law Review).
139. See John R. Allison & Emerson H. Tiller, The Business Method Patent Myth, 18 Berkeley Tech. L.J. 987, 1036-39 (2003) (describing "empirical support for the existence of a relationship between the number of prior art references and patent value, as well as the intuitive appeal of an argument that such a relationship exists"); Dietmar Harhoff et al., Citations, Family Size, Opposition and the Value of Patent Rights, 32 Res. Pol'y 1343, 1345 (2003) (finding relationship between prior art citations and patent value); see also Bhaven N. Sampat, When Do Applicants Search for Prior Art?, 53 J.L. & Econ. 399, 412-415 (describing empirical finding that patent "applicants systematically contribute a higher share of prior art reference ... for their more important inventions" to protect against validity challenges). "The theory behind the relationship of prior art references and value is that the more citations that are considered during prosecution by the examiner, the less likely it is that some prior art exists that will invalidate the patent." John R. Allison et al., Extreme Value or Trolls on Top? The Characteristics of the Most- Litigated Patents, 158 U. Pa. L. Rev. 1, 15 n.31 (2009). But, "[b]ecause lawyers know this, the value relationship may reflect not only the strength of patents that cite a lot of prior art, but also efforts by applicants to "bulletproof' patents they expect to litigate by citing a great deal of art." Id. That is, patent applicants may attempt to bolster the perceived value of their patents, or protect them from challenge, by merely citing a lot of prior art.
140. Supra Part II.A (outlining methodology).
141. BPMC Petition, supra note 7, at 15.
142. But see supra note 134 and accompanying text (noting potential selection effect).
143. The sample of universities used corresponds to the sample of universities in the AUTM data. This list is available in Appendix A. Litigation data on each university was collected from the IPLC and is current through February 2010. See supra note 133 and accompanying text (describing IPLC). For a detailed empirical discussion on university patent litigation, see generally Scott Shane & Deepak Somaya, The Effects of Patent Litigation on University Licensing Efforts, 63 J. Econ. Behav. & Org. 739 (2007). The same is also true for Table 6. Thus, all of the Tables presented in this Part rely on data collected from the same set of universities, available in Appendix A.
144. The universities sampled for Tables 1 and 2 are the same universities for which there is data in the AUTM survey, see supra note 143.
145. A very few number of lawsuits, six in total, were perpetually stayed. This appears to have occurred because of parallel bankruptcy proceedings.
146. Some lawsuits were also concluded by a consent decree. Where the terms of the decree were available, those lawsuits were deemed "adjudged," and the winner of the suit determined by those terms.
147. It is also important to note that the win rate of those cases which reach decision may not be comparable to the win rate among settled cases. See Shavell, supra note 134, at 433 ("[T]he cases that go to trial may be very different from the population of cases that settle, so that generalizing from trial cases is difficult and may be misleading.").
148. BPMC Petition, supra note 7, at 12. In the BPMC case, the initial action was filed by California in an improper venue. After the action was dismissed, BPMC refiled its counterclaims in a proper venue. In response to BPMC's complaint in the second action, California asserted its immunity. Id. at 6-7.
149. Dernik, supra note 9, at 147.
150. But see supra note 134 and accompanying text (noting potential selection effect). Further, it is possible that the merits of cases brought by states are generally substantially weaker than those of cases brought by private plaintiffs. If this is the case, then state performance on par with that of private performance would be indicative of a state advantage. However, there does not appear to be any data indicating that state- initiated patent litigation is consistently weaker on the merits than privately-initiated litigation.
151. See supra note 130 and accompanying text (explaining states will be more aggressive patentees if they have higher incentives).
152. See National Science Board, supra note 132, at 5-7, 5-51 to 5-54 (noting number of patents issued to academic institutions quadrupled from 1988 to 2003, but has since leveled off).
153. A disclosure is a filing by a university researcher required by the Bayh-Dole Act. That Act states that recipients of federal funding are entitled to apply for patents in inventions resulting from such funding, but only if the recipient first discloses the discovered invention to the federal agency providing funding. 35 U.S.C. § 202(c)(1) (2006). Thus, a contractor or university researcher will typically file a disclosure and may then later decide to file a patent application.
154. However, it is possible that private universities are responding to a perceived threat from state universities. That is, private universities are quick to apply for a patent, fearful that a state university will apply first and then subsequently be immune from challenge. Available data, however, does not appear to suggest that this is the case.
155. Bone, supra note 11, at 1509 (discussing strategy of "seeking excessively broad patents"). For further discussion of this effect, see supra note 117.
156. See supra note 139 and accompanying text (describing relationship between prior art citations and patent strength).
157. All of the patents in the sample were granted between 2001 and 2007. Roughly one quarter of these patents were applied for before the Florida Prepaid decisions. For information on the universities included in the sample, see supra note 143.
158. See infra note 159.
159. For public universities, the post-Florida Prepaid licensing activity is significantly greater (in a statistical sense) than the pre-Florida Prepaid licensing activity. For private universities, the difference between the number of licenses executed before and after the Florida Prepaid decisions is not statistically significant. However, the difference between these differences is not statistically significant. Nonetheless, statistical significance may not be the most appropriate or useful criterion, especially because the data reflected in Table 7 are based on the entire population of AUTM data, rather than a random sample. See, e.g., Stephen T. Ziliak & Deidre N. McCloskey, The Cult of Statistical Significance 1-2 (2008) (arguing that overreliance on statistical significance "has been an exceptionally bad idea").
160. Infra note 161.
161. For both public and private universities, the difference between the total active licenses before and after Florida Prepaid is statistically significant. As noted above, however, statistical significance may not be the most appropriate or useful measure in this context because the data reflected in Table 8 are based upon the entire population of AUTM data, rather than a random sample. See Ziliak & McClosky, supra note 159, at 1-2.
162. It is, however, also possible that private universities are more likely than public universities to monetize their patents through some mechanism other than licensing, such as through the creation of privately-owned corporations, or through the outright sale of the patent. If this is true, then this fact may account for the results described in Tables 7 and 8.
163. See supra Tables 1 & 2 (presenting data indicating public universities are not more successful patent plaintiffs than private universities).
164. See supra Tables 3-6 (presenting data indicating public universities are not more aggressive patentees than private universities).
165. Lapides v. Bd. of Regents of the Univ. Sys. of Ga., 535 U.S. 613 (2002).
166. Vas-Cath, Inc. v. Curators of Univ. of Mo., 473 F.3d 1376, 1385 (Fed. Cir. 2007). For a fuller discussion of the case, see supra notes 105-112 and accompanying text.
167. Regents of Univ. of N.M. v. Knight, 321 F.3d 1111, 1126 (Fed. Cir. 2003) ("[W]hen a state files suit in federal court to enforce its claims to certain patents, the state shall be considered to have consented to have litigated in the same forum all compulsory counterclaims.").
168. See supra notes 79-96 and accompanying text (discussing Tegic and BPMC cases).
169. But see Amy Markopoulos, Through the Vas-Cath Lens: A Brief Look at the Interaction of the Eleventh Amendment and Patent Interference Proceedings 1, 10-15 (May 2, 2007) (unpublished manuscript), available at http://ssrn.com/abstract=1009383 (on file with the Columbia Law Review) (suggesting Vas-Cath would be overturned by Supreme Court).
170. Menell, supra note 113, at 1403 (noting "legal, market, social, and political constraints" on state infringement of private patent rights).
171. Id. at 1438-39 (footnotes omitted).
172. Cf. Press Release, Fed. Trade Comm'n, FTC Reinstates Complaint of Unfair Methods of Competition Against Unocal (July 7, 2004), at http://www.ftc.gov/opa/2004/ 07/unionoil.shtm (on file with the Columbia Law Review) (suggesting Unocal "induced" California Air Resources Board into adopting regulations that would require use of patented Unocal technology). But see James G. McEwen et al., Intellectual Property in Government Contracts 205 (2009) ("State legislatures often tilt the playing field in favor of universities in terms of IP enforcement.").
173. Menell, supra note 113, at 1439.
174. E.g., Woolhandler, supra note 5, at 920.
175. Robert A. Cohen, Patent Infringement and the Eleventh Amendment: Can the Sovereign Be Held Accountable?, 49 IDEA 85, 116-19 (2008); Menell, supra note 113, at 1417; see also Patent Remedy Clarification Act: Hearing on H.R. 3886 Before the Subcomm. on Courts, Intellectual Prop. and the Admin. of Justice of the H. Comm. on the Judiciary, 101st Cong. 43 (1990) (statement of Robert Merges, Associate Professor, Boston University School of Law) (noting "alternative State remedies" may be available).
176. E.g., Hathorn v. Lovorn, 457 U.S. 255, 266-67 n.18 (1982) ("We frequently permit state courts to decide "collaterally' issues ... involving the federal patent laws."); Pratt v. Paris Gas Light & Coke Co., 168 U.S. 255, 259 (1897) (holding state courts may adjudicate patent issues implicated in state causes of action); Jacobs Wind Elec. Co. v. Fla. Dep't of Transp., 919 F.2d 726, 728 (Fed. Cir. 1990) (noting state courts may decide validity of federal patent); Christianson v. Colt Indus. Operating Corp., 822 F.2d 1544, 1552 (Fed. Cir. 1987) (stating "Congress was not concerned that an occasional patent law decision ... of a state court" could undermine goal of uniform patent adjudication); see also Sean B. Seymore, The Competency of State Courts to Adjudicate Patent-Based Malpractice Claims, 34 AIPLA Q.J. 443, 464 (2006) (noting "federal courts eagerly permit state courts to adjudicate collateral patent law issues").
177. McEwen et al., supra note 172, at 202. It is possible for a state to waive immunity in state court without waiving immunity in federal court. For a detailed state-by-state analysis of sovereign immunity waivers, see id. at 205-559.
178. Menell, supra note 113, at 1432.
179. But see Polse, supra note 100, at 526 ("State university systems ... are now revising their patent and technology transfer policies to encourage their faculty to patent more inventions."). However, there is no indication that the new policies encourage researchers to patent "basic research results." Bone, supra note 11, at 1509.
180. Menell, supra note 113, at 1433. But see id. at 1433-34 (noting a lesser effect on state university researchers because such researchers have private incentives to commercialize their research). Nonetheless, the "traditional focus upon academic recognition and basic scientific breakthroughs" may "minimize[] the risk" posed by state university researchers. Id. at 1435. Thus, although some state researchers may be incentivized by the number of patents they obtain, there are also likely to be other, more important incentives mitigating the effect of the potential for the abuse of state sovereign immunity. For additional detail on the impact of immunity on university researchers, see generally Gary Pulsinelli, Freedom to Explore: Using the Eleventh Amendment to Liberate Researchers at State Universities from Liability for Intellectual Property Infringements, 82 Wash. L. Rev. 275 (2007) (proposing state university researchers should have absolute immunity from infringement lawsuits).
181. Menell, supra note 113, at 1432-33. But see Bone, supra note 11, at 1499 ("It is not enough to suppose that state actors are just more law-abiding than the average citizen.").
182. See supra Part III.A (describing legal and social factors which may have curbed extent to which states use their immunity as offensive weapon).
183. See supra Tables 7 & 8 and accompanying text.
184. See supra Part I.C.2 (describing potential offensive advantages).
185. Chamber of Commerce Brief, supra note 71, at 9 (quoting Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 734-35 (Fed. Cir. 1988)); see also Leslie, supra note 120, at 154-55 ("Competitors sometimes pay to license a patent that they suspect was fraudulently procured because risk of infringing and being held liable is too great... [I]t is often rational for the competitor to license a patent that she does not believe is valid. If the licensee enters the market without a license and cannot prove invalidity, the patent litigation could bankrupt the firm. The cost of a license can be considerably less than the damages for infringement discounted by the probability of being held liable.").
186. Chamber of Commerce Brief, supra note 71, at 10 (quoting Arrowhead, 846 F.2d at 735).
187. This could be true even though the states themselves are not systematically engaging in practices to file for weak patents.
188. See Leslie, supra note 120, at 156 ("[L]icensing ... imposes costs on competitors that they would not incur in a competitive market unhindered by fraudulently procured patents.").
189. See generally Daniel J. Meltzer, Overcoming Immunity: The Case of Federal Regulation of Intellectual Property, 53 Stan. L. Rev. 1331 (2001) (describing and analyzing various remedies).
190. See infra Part III.B.1 (analyzing potential market solution).
191. See infra Part III.B.2-3 (analyzing potential judicial and legislative solutions).
192. See 2000 House Hearings, supra note 3, at 24 (statement of Marybeth Peters, Register of Copyrights, Copyright Office of the United States) (noting any solution which lacks "constitutionality and effectiveness ... is of little value").
193. See Bone, supra note 11, at 1489-91 (suggesting parties can "secur[e] contractual waivers"); Menell, supra note 113, at 1436-38 (noting "self-help responses" whereby parties "can take advantage of their economic clout directly in their dealings with states"); see also Christina Bohannan, Beyond Abrogation of Sovereign Immunity: State Waivers, Private Contracts, and Federal Incentives, 77 N.Y.U. L. Rev. 273, 292-303 (2002) (detailing case law regarding contractual waivers of immunity).
194. Baum Research & Dev. Co. v. Univ. of Mass. at Lowell, 503 F.3d 1367, 1368-69, 1372 (Fed. Cir. 2007); see also Bd. of Trs. Sabis Int'l Sch. v. Montgomery, 205 F. Supp. 2d 835, 846 (S.D. Ohio 2002) ("[T]he State's insertion of a binding arbitration clause ... waives the State's Eleventh Amendment immunity, and constitutes consent to be sued in federal court."). But see Nat'l Ass'n of Bds. of Pharmacy v. Bd. of Regents of Univ. Sys. of Ga., No. 3:07-CV-084 (CDL), 2008 WL 1805439, at 18 (M.D. Ga. Apr. 18, 2008) (holding merely entering into contract is insufficient to waive immunity).
195. See MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007) (holding licensee may bring declaratory judgment action to test validity of licensed patent without first breaking agreement). Thus, a party who successfully negotiates for a waiver of immunity may be able to challenge the validity of the patent underlying the agreement effecting the waiver. However, there does not appear to be any case law which tests the MedImmune holding in a sovereign immunity context.
196. Bone, supra note 11, at 1491 (noting "effectiveness of waiver depend[s] on the particular state's statutes"); Menell, supra note 113, at 1437 (stating "key determinant[]" will be "extent to which state law limits the terms of such contracts"). Importantly, however, a litigant does not bear the burden of proving that the state entity had the authority to waive. Baum, 503 F.3d at 1372.
197. See, e.g., Negotiating Prohibited Contract Clauses, Univ. of N.C., Charlotte, at http://legal.uncc.edu/prohibitedclauses.html (on file with the Columbia Law Review) (last updated Jan. 16, 2009) ("[C]lauses requiring the University to consent to litigation ... are prohibited under N.C. Gen. Stat. 22B-3."). But see Bone, supra note 11, at 1491 n.82 (noting Massachusetts statutory law and California case law conferring authority to waive immunity).
198. Menell, supra note 113, at 1437.
199. But see id. (suggesting "industry-university research agreements" can give private entities "concentrated leverage for insisting upon protection from infringement").
200. BPMC Petition, supra note 7, at 20-22.
201. Chamber of Commerce Brief, supra note 71, at 8-10; see also Leslie, supra note 120, at 148-51 (criticizing court doctrine failing to give weight to public threats of litigation).
202. See supra notes 182-188 and accompanying text (describing cost imposed on innovative activity).
203. Some have alleged that immunity also creates a problem whereby states "purposely cultivate[] a reputation for litigiousness." BPMC Petition, supra note 7, at 4-5, 22-24. However, the empirical data presented in this Note seem to indicate that this is not the case. See supra Part II.B.1.
204. Conversely, it is possible that a litigious state is merely zealously guarding its valid property rights. But see Leslie, supra note 120, at 148 (suggesting "[a]ggressive patentees tout their previous victories in patent infringement litigation").
205. BPMC Petition, supra note 7, at 20-22.
206. Brief for the United States as Amicus Curiae at 14-16, Biomedical Patent Mgmt. Corp. v. Cal. Dep't of Health Servs., 129 S. Ct. 895 (2009) (No. 07-956).
207. See supra notes 79-96 and accompanying text (discussing Tegic and BPMC cases); see also Markopoulos, supra note 169, at 1, 10-15 (suggesting that existing extensions of Lapides may be unconstitutional).
208. 129 S. Ct. 895 (denying petition for writ of certiorari).
209. See, e.g., Marcia Coyle, Options Dwindle for Foes of State Immunity, Nat'l L.J., Jan. 26, 2009, at 1, 22 (stating "denial of review" in BPMC means Congress may be "last best option"). But see Matthew Paik, Note, Sovereign Immunity and Patent Infringement, Ten Years After Florida Prepaid: The State of the Law and How It Can Be Fixed, 60 Hastings L.J. 901, 922-23 (2009) ("[A]lthough certiorari was denied by the Court ... this approach remains a possible avenue for supporters of reform." (citation omitted)).
210. IPPRA 1999, supra note 75.
211. Id.
212. E.g., id. ("A State opts into the Federal intellectual property system by ... agree[ing] to waive sovereign immunity from suit in Federal court ... ."); 2000 House Hearings, supra note 3, at 34 (statement of Mark A. Lemley, Professor, Boalt Hall School of Law, University of California at Berkeley) ("Under [IPPRA 1999] ... a state that wished to take advantage of the benefits of the federal intellectual property system ... would have to waive its immunity ... ."); see also IPPRA 2003 Hearings, supra note 3, at 6 (statement of Marybeth Peters, Register of Copyrights, Copyright Office of the United States) (stating bill "grant[s] the benefit of fully-enforceable intellectual property rights only to those States that waive").
213. There is a risk, however, that some states will not waive their immunity under the proposed legislative scheme. See 2000 House Hearings, supra note 3, at 56 (statement of Mark A. Lemley, Professor, Boalt Hall School of Law, University of California at Berkeley) (noting "a number of States might actually decide not to waive their immunity"); id. at 27 (statement of Marybeth Peters, Register of Copyrights, Copyright Office of the United States) ("It is far from a foregone conclusion that States will uniformly waive their immunity ... ."). This may leave a gap in the ability of licensees to challenge patents owned by nonwaiving states and granted prior to the enactment of the new legislative scheme.
214. U.S. Const. art. I, § 8, cl. 1.
215. 483 U.S. 203, 210 (1987) (quoting Oklahoma v. Civil Serv. Comm'n, 330 U.S. 127, 144 (1947)).
216. 2000 House Hearings, supra note 3, at 27 (statement of Marybeth Peters, Register of Copyrights, Copyright Office of the United States); see also IPPRA 2003 Hearings, supra note 3, at 11-12 (statement of Marybeth Peters, Register of Copyrights, Copyright Office of the United States) ("We feel confident that the bill is within Congress' constitutional authority."); 2000 House Hearings, supra note 3, at 34 (statement of Mark A. Lemley, Professor, Boalt Hall School of Law, University of California at Berkeley) ("A similar waiver ... passed constitutional muster in South Dakota v. Dole."); Bohannan, supra note 193, at 310 ("[W]hen states ... waive their immunity in exchange for federal benefits, those waivers should be enforced."); Meltzer, supra note 189, at 1385 ("Congress should be able to ... mak[e] states eligible recipients [of federal intellectual property rights], but only if they waive their sovereign immunity."); Polse, supra note 100, at 535 (suggesting Congress should be able to condition grant of rights on waiver); Coyle, supra note 209, at 22 (paraphrasing Paul Bender, Professor of Law at Arizona State University, as saying that ""tempting' the states into waiving their immunity ... is the better and constitutional approach"); supra note 29 (noting Court has found States may waive immunity by accepting a congressional condition). But see Childers, supra note 75, at 1113 (suggesting opt-in regime might "give rise to an unconstitutional condition"); Paik, supra note 209, at 920 ("[T]he Spending Clause is a suboptimal way of addressing the problem.").
217. See supra Part III.B.1-2 (describing market and judicial solutions).
218. See supra note 75 (noting various congressional attempts to overturn Florida Prepaid decisions).
219. See Patent Reform Act of 2009, S. 515, 111th Cong. (2009) (as reported by S. Comm. on the Judiciary, Apr. 2, 2009) (failing to include opt-in legislative provision requiring state patent owners to submit to jurisdiction in actions "seeking a declaration with respect to a Federal intellectual property right," as in IPPRA 1999, supra note 75); Patent Reform Act of 2009, S. 610, 111th Cong. (2009) (same); Patent Reform Act of 2009, H.R. 1260, 111th Cong. (2009) (same).
220. See, e.g., Coyle, supra note 209, at 22 (noting interest group support for legislative fix and that denial of review may renew efforts to enact one); David Goldman, Want More Jobs? Fix the Broken Patent System, CNNMoney.com, June 21, 2010, at http://money.cnn.com/2010/06/21/technology/patent_reform/index.htm (on file with the Columbia Law Review) (noting "businesses ... are eager for Congress to act" on patent reform).