Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 21
`Entered: January 25, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`COVIDIEN LP,
`Petitioner,
`
`v.
`
`UNIVERSITY OF FLORIDA RESEARCH FOUNDATION
`INCORPORATED,
`Patent Owner.
`____________
`
`Cases
`IPR2016-01274 (Patent 7,062,251 B2)
`IPR2016-01275 (Patent 7,062,251 B2)
`IPR2016-01276 (Patent 7,062,251 B2)
`____________
`
`Before KRISTEN L. DROESCH, BRYAN F. MOORE, and
`FRANCES L. IPPOLITO, Administrative Patent Judges.
`
`IPPOLITO, Administrative Patent Judge.
`
`
`
`ORDER
`
`
` Dismissing Petitions for Inter Partes Review Based on Sovereign Immunity
`37 C.F.R. §§ 42.5, 42.72
`
`
`
`
`
`
`
`
`Tel: 571-272-7822
`
`Paper 21
`Entered: January 25, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`COVIDIEN LP,
`Petitioner,
`
`v.
`
`UNIVERSITY OF FLORIDA RESEARCH FOUNDATION
`INCORPORATED,
`Patent Owner.
`____________
`
`Cases
`IPR2016-01274 (Patent 7,062,251 B2)
`IPR2016-01275 (Patent 7,062,251 B2)
`IPR2016-01276 (Patent 7,062,251 B2)
`____________
`
`Before KRISTEN L. DROESCH, BRYAN F. MOORE, and
`FRANCES L. IPPOLITO, Administrative Patent Judges.
`
`IPPOLITO, Administrative Patent Judge.
`
`
`
`ORDER
`
`
` Dismissing Petitions for Inter Partes Review Based on Sovereign Immunity
`37 C.F.R. §§ 42.5, 42.72
`
`
`
`
`
`
`
`
`
`IPR2016-01274 (Patent 7,062,251 B2)
`IPR2016-01275 (Patent 7,062,251 B2)
`IPR2016-01276 (Patent 7,062,251 B2)
`
`
`I. INTRODUCTION1
`On June 28, 2016, Covidien LP (Petitioner) filed three petitions
`seeking inter partes review of claims 1–18 of U.S. Patent No. 7,062,251 B2
`(Exhibit 1001, “the ’251 patent”) pursuant to 35 U.S.C. §§ 311–19.
`IPR2016-01274, Paper 2 (“Pet.”); IPR2016–01275, Paper 3; IPR2016-
`01276, Paper 3. Prior to the deadline for Patent Owner University of Florida
`Research Foundation Incorporated (“UFRF”) to file its Preliminary
`Response, Patent Owner requested a conference call with the Board for
`authorization to file (1) a motion to dismiss Petitioner’s Petition on the basis
`of UFRF’s sovereign immunity and (2) a motion to suspend the deadline for
`the filing of the Preliminary Response pending the Board’s decision on
`Patent Owner’s motion to dismiss based on sovereign immunity. IPR2016-
`01274, Paper 9 (“Order”). Our September 7, 2016 Order summarizes the
`August 31, 2016 conference call that took place between counsel for the
`parties and Judges Ippolito, Moore, and Droesch. Paper 9.
`As indicated in our Order, we authorized the filing of Patent Owner’s
`Motion to Dismiss Based on UFRF’s Sovereign Immunity (Paper 12,
`“Mot.”), Petitioner’s Opposition to Patent Owner’s Motion (Paper 15,
`“Opp.”), and Patent Owner’s Reply to Petitioner’s Opposition (Paper 16,
`“Reply”)2. We, however, denied Patent Owner’s request to suspend the
`
`
`1 This Decision addresses an issue that is identical in all three cases.
`Therefore, we exercise our discretion to issue one Decision to be filed in
`each of the three cases. The parties, however, are not authorized to use this
`style heading in subsequent papers.
`
` Unless indicated otherwise, citations refer to documents filed in IPR2016-
`01274.
`
` 2
`
`
`
`2
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`deadline for Patent Owner to file its Preliminary Response. Nonetheless, in
`consideration of the briefing schedule, we have extended the deadline for the
`filing of Patent Owner’s Preliminary Response to March 3, 2017. See
`Papers 11, 17, 20.3
`This Decision addresses the issue of whether Patent Owner UFRF is
`entitled to Eleventh Amendment immunity defense to the institution of an
`inter partes review of the ’251 patent.
`For the reasons discussed below, we determine that Patent Owner
`UFRF, as an arm of the State of Florida, is entitled to a sovereign immunity
`defense to the institution of an inter partes review of the challenged patent.
`Further, we dismiss Petitioner’s Petitions in IPR2016-01274, -01275, and -
`01276 because UFRF has successfully raised this defense in these
`proceedings.
`
`II. BACKGROUND
`By way of background, Patent Owner filed an action in the Circuit
`Court of the Eighth Judicial District in Florida, Case No. 01 2016 CA
`001366, against Petitioner alleging breach of a license contract between the
`parties involving the ’251 patent. Mot. 1; Pet. 2. In that suit, Petitioner
`responded with a counterclaim seeking a declaratory judgment that it does
`not infringe the ’251 patent. Mot. 1. On this basis, Petitioner successfully
`removed the state court suit to the United States District Court for the
`Northern District of Florida. Mot. 1; Univ. of Fla. Res. Found., Inc. v.
`
`
`3 After filing its Reply, Patent Owner renewed its request to file a motion to
`suspend the filing deadline for its Preliminary Response. We denied that
`request, but extended the preliminary response filing date to March 3, 2017.
`Papers 17, 19, 20.
`
`
`
`3
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`Medtronic PLC, Case No. 1:16CV183-MW/GRJ, 2016 WL 3869877 (N.D.
`Fla. July 15, 2016) (“UFRF v. Medtronic”). Separately, Petitioner also filed
`three petitions requesting inter partes review of the ’251 patent. See Pet. 2–
`3.
`
`Following removal of its dispute to district court, Patent Owner
`argued there that it is an arm of the State of Florida through the University of
`Florida. On this basis, UFRF argued that it is entitled to Eleventh
`Amendment immunity from Petitioner’s declaratory judgment counterclaim
`in the federal court. UFRF v. Medtronic, 2016 WL 3869877, at *1. The
`District Court agreed with Patent Owner and remanded the action back to
`state court. Id. at *1–16. Petitioner has since appealed the District Court’s
`decision, which is currently pending at the Federal Circuit (Appeal No. 16-
`2422).
`
`III. ANALYSIS
`a. Sovereign Immunity in Administrative Proceedings
`The Eleventh Amendment of the United States Constitution provides
`that the “Judicial power of the United States shall not be construed to extend
`to any suit in law or equity, commenced or prosecuted against one of the
`United States by Citizens of another State, or by Citizens or Subjects of any
`Foreign State.” U.S. CONST. amend. XI. The Supreme Court has interpreted
`this amendment to encompass a broad principle of sovereign immunity,
`whereby the Eleventh Amendment limits not only the judicial authority of
`the federal courts to subject a state to an unconsented suit, but also precludes
`certain adjudicative administrative proceedings, depending on the nature of
`those proceedings, from adjudicating complaints filed by a private party
`
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`against a nonconsenting State. Fed. Mar. Comm’n v South Carolina State
`Ports Auth., 535 U.S. 743, 753–761 (2002) (“FMC”); see also Vas-Cath,
`Inc. v. Curators of Univ. of Missouri, 473 F.3d 1376, 1383 (Fed. Cir. 2007)
`(applying FMC to interference proceedings and observing that “contested
`interference proceedings in the PTO bear ‘strong similarities’ to civil
`litigation, . . . and the administrative proceeding can indeed be characterized
`as a lawsuit” (citation omitted)).
`Of particular relevance to our inquiry is the Supreme Court’s decision
`in FMC. In FMC, South Carolina Maritime Services, Inc., a cruise ship
`company, filed a complaint against the South Carolina State Ports Authority
`(SCSPA) with the Federal Maritime Commission (Commission) seeking
`damages and injunctive relief from the SCSPA’s repeated denials of
`Maritime Services’ requests for permission to berth a cruise ship in the port
`facilities in Charleston, South Carolina. FMC, 535 U.S. at 747–749.
`Maritime Services’ Complaint was referred to an administrative law judge
`(ALJ) at the Commission for review. SCPSA moved to dismiss Maritime
`Services’ Complaint because the “Constitution prohibits Congress from
`passing a statute authorizing Maritime Services to file this Complaint before
`the Commission and, thereby sue the State of South Carolina for damages
`and injunctive relief.” Id. at 749. The ALJ handling the matter agreed with
`SCPSA and dismissed Maritime Services’ Complaint. Id.
`The Commission then performed its own review of the ALJ’s
`dismissal and found that the doctrine of state sovereign immunity “is meant
`to cover proceedings before judicial tribunals, whether Federal or State, not
`executive branch administrative agencies like the Commission.” Id. at 750.
`
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`SCSPA appealed the Commission’s findings to the Fourth Circuit Court of
`Appeals. Id. In reversing the Commission’s decision, the Fourth Circuit
`Court of Appeals reviewed the “precise nature” of the procedures employed
`by the Commission and determined that “the Commission’s proceeding
`walks, talks, and squawks very much like a lawsuit and . . . its placement
`within the Executive Branch cannot blind us to the fact that the proceeding is
`truly an adjudication.” Id. at 750–751.
`At the Supreme Court, in a 5-4 majority decision, with Justice
`Thomas writing for the majority, the Supreme Court began with the
`sentiment that “[t]he Framers, who envisioned a limited Federal
`Government, could not have anticipated the vast growth of the
`administrative state.” FMC, 535 U.S. at 755. The Court further explained
`that, in these circumstances, a “Hans presumption” of sovereign immunity
`may apply where “the Constitution was not intended to raise up any
`proceedings against the States that were anomalous and unheard of when the
`Constitution was adopted.” Id. (citing Hans v. Louisiana, 132 U.S. 1, 18
`(1890)). To decide whether the “Hans presumption” applies, the Supreme
`Court examined the nature of the Commission’s adjudication proceedings to
`“determine whether they are the type of proceedings from which the Framers
`would have thought the States possessed immunity when they agreed to
`enter the Union.” Id. at 756. The Court further noted generally that there
`are numerous common features shared by administrative adjudications and
`judicial proceedings:
`Federal administrative law requires that agency adjudication
`contain many of the same safeguards as are available in the
`judicial process. The proceedings are adversary in nature. They
`
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`
`are conducted before a trier of fact insulated from political
`influence. A party is entitled to present his case by oral or
`documentary evidence, and the transcript of testimony and
`exhibits together with the pleadings constitute the exclusive
`record for decision. The parties are entitled to know the
`findings and conclusions on all of the issues of fact, law, or
`discretion presented on the record. Ibid. (citations omitted).
`Id. at 756–757.
`
`The Court further observed that the similarities between the
`Commission’s proceedings and civil litigation were “overwhelming.” FMC,
`535 U.S. at 759. For example, the Court found that the Commission’s Rules
`of Practice and Procedure “bear a remarkably strong resemblance to civil
`litigation in federal courts (e.g., similarity between the Commission’s rules
`governing pleadings and discovery and the Federal Rules of Civil
`Procedure). Id. at 757–58.
`Additionally, the Court found that the role of the ALJ assigned to hear
`cases at the Commission was similar to that of an Article III judge. Id. at
`758–59. In particular, the ALJ prescribed the order in which evidence shall
`be presented; disposed of procedural requests or similar matters; heard and
`ruled upon motions; administered oaths and affirmations; examined
`witnesses; directed witnesses to testify or produce evidence available to
`them; ruled upon offers of proof; and disposed of any other matter that
`normally and properly arose in the course of proceedings. Id. The Court
`noted the ALJ fixed the time and manner of filing briefs and issued a
`decision that included a statement of findings and conclusions, “as well as
`the reasons or basis therefor, upon all the material issues presented on the
`record, and the appropriate rule, order, section, relief, or denial thereof.” Id.
`at 759. The Court added that the ALJ’s ruling subsequently becomes the
`7
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`final decision of the Commission unless a party appeals to the Commission
`or the Commission decides to review the ALJ’s decision “on its own
`initiative.” Id. at 759.
`Based on these similarities between the Commission’s proceeding and
`civil litigation, the Court held that state sovereign immunity barred the
`Commission from adjudicating complaints filed by a private party against a
`nonconsenting State. Id. at 760. In doing so, the Court commented that
`if the Framers thought it an impermissible affront to a State’s
`dignity to be required to answer the complaints of private
`parties in federal courts, we cannot imagine that they would
`have found it acceptable to compel a State to do exactly the
`same thing before the administrative tribunal of an agency, such
`as the FMC. The affront to a State’s dignity does not lessen
`when an adjudication takes place in an administrative tribunal
`as opposed to an Article III court. In both instances, a State is
`required to defend itself in an adversarial proceeding against a
`private party before an impartial federal officer. Moreover, it
`would be quite strange to prohibit Congress from exercising its
`Article I powers to abrogate state sovereign immunity in Article
`III judicial proceedings but permit the use of those same Article
`I powers to create court-like administrative tribunals where
`sovereign immunity does not apply.
`Id. at 760–761 (citations omitted).
`After FMC, the Federal Circuit decided Vas-Cath, Inc. v. Curators of
`the University of Missouri, 473 F.3d 1376 (Fed. Cir. 2007), in which the
`Federal Circuit reversed the district court’s dismissal of Vas-Cath’s appeal
`of the interference decision in favor of the Curators of the University of
`Missouri (“University of Missouri”). The Patent Office issued a patent to
`Vas-Cath while the University of Missouri’s patent application was pending.
`Id. at 1379. The University of Missouri copied all the claims from Vas-
`
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`Cath’s patent to invoke an interference proceeding between the parties. Id.
`The Board awarded priority to the University of Missouri and granted the
`claims to the University of Missouri. Id. Vas-Cath appealed the Board’s
`decision to the district court, pursuant to 35 U.S.C. § 146. Id. In response,
`the University of Missouri asserted Eleventh Amendment immunity from
`suit in federal court and moved to have the appeal dismissed. Id. The
`district court granted the University of Missouri’s motion, which Vas-Cath
`appealed to the Federal Circuit.
`In reversing the district court’s dismissal, the Federal Circuit noted
`that the suit was not by an individual against an unconsenting state, but
`involved review of an agency adjudication to which the state had consented
`by requesting the interference and participating in the proceeding. Id. at
`1383. The Federal Circuit concluded that “when the University initiated and
`participated in the interference, its participation included the ensuing
`statutory review procedures; the University cannot invoke Eleventh
`Amendment immunity, after it prevailed, to shield the agency decision from
`review.” Id. at 1384.
`In its decision, the Federal Circuit referred to the Supreme Court’s
`FMC analysis and commented on similarities between an interference
`proceeding and civil litigation. Vas-Cath, 473 F.3d at 1382. The Federal
`Circuit stated
`[i]n Federal Maritime Comm’n v. South Carolina State Ports
`Authority, 535 U.S. 743, 757–59, 122 S.Ct. 1864, 152 L.Ed.2d
`962 (2002) the Court drew analogy between some agency
`proceedings and civil litigation, in that case to preserve the
`immunity of the non-consenting state in the agency proceeding.
`Like proceedings in the Federal Maritime Commission,
`
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`
`contested interference proceedings in the PTO bear “strong
`similarities” to civil litigation, id. at 760, 122 S.Ct. 1864, and
`the administrative proceeding can indeed be characterized as
`a
`lawsuit. PTO
`interferences
`involve adverse parties,
`examination and cross-examination by deposition of witnesses,
`production of documentary evidence, findings by an impartial
`federal adjudicator, and power to implement the decision. See,
`e.g., 37 C.F.R. § 1.651(a) (during an interference, “an
`administrative patent judge shall set a time for filing motions (§
`1.635), for additional discovery under § 1.687(c) and testimony
`period for taking any necessary testimony.”); § 1.671(a)
`(“Evidence
`[for an
`interference] consists of affidavits,
`transcripts of depositions, documents and things.”); § 1.671(b)
`(“[T]he Federal Rules of Evidence shall apply to interference
`proceedings” except “[t]hose portions of the Federal Rules of
`Evidence relating to criminal actions, juries, and other matters
`not relevant to interferences.”).
`Id. (emphases added).
`
`With these cases in mind, we turn now to the facts, arguments, and
`evidence before us in the instant proceedings.
`b. Whether the FMC Decision Applies to Inter Partes Review
`Proceedings
`As a threshold issue, Petitioner argues that the FMC decision does not
`apply to inter partes reviews because these proceedings are a mechanism for
`the Office to take “‘a second look at an earlier administrative grant of a
`patent’ – a federally-issued property right that would not exist but for the
`statutory provisions in the Patent Act.” Opp. 1 (citing Cuozzo Speed Techs.,
`LLC v. Lee, 136 S. Ct. 2131, 2144 (2016)). Petitioner asserts the Office may
`issue a patent only if it appears that the applicant is entitled to a patent under
`standards defined by federal law because a patent is “created by the act of
`Congress; and no rights can be acquired in it unless authorized by statute,
`
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`and in the manner the statute prescribes.” Id. at 3 (citing 35 U.S.C. § 131;
`Gayler v. Wilder, 51 U.S. (10 How.) 477, 494 (1850)). Further, according to
`Petitioner, “a[] patent owner takes a patent subject to the Patent Office’s
`authority to review that property grant.” Id. at 2.
`In this regard, Petitioner contends that the patent grant is not a private
`right but a public right subject to all statutory conditions for its grant. Id. at
`3 (citing Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985)).
`Petitioner further relies on MCM Portfolio LLC v. Hewlett-Packard Co., 812
`F.3d 1284, 1289 (Fed. Cir. 2015), cert. denied (Oct. 11, 2016) (No. 15-
`1330), for the proposition that “because patent rights are public rights, ‘their
`validity is susceptible to review by an administrative agency.’” Opp. 4
`(citing MCM, 812 F.3d at 1289). Petitioner adds that the Office has
`conducted proceedings that correct or cancel issued patents for decades
`without “any suggestion that this authority would be limited by sovereign
`immunity.” Id.
`Petitioner’s arguments are unpersuasive. Petitioner does not cite to
`any case law, or persuasive authority otherwise, supporting its position that a
`state’s Eleventh Amendment immunity may be limited or abrogated by a
`public rights exception. In MCM, Petitioner MCM argued that inter partes
`reviews are unconstitutional because any action revoking a patent must be
`tried in an Article III court with the protections of the Seventh Amendment.
`MCM, 812 F.3d at 1288. Disagreeing with Petitioner MCM, the Federal
`Circuit noted that the public rights exception allows Congress to delegate
`disputes over public rights to non-Article III courts. Id. at 1289. The
`Federal Circuit further noted that prior Federal Circuit precedent,
`
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`particularly Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985) and
`Joy Technologies v. Mandbeck, 959 F.2d 226 (Fed. Cir. 1992), have held
`that “the issuance of a valid patent is primarily a public concern and involves
`a ‘right that can only be conferred by the government even though validity
`often is brought into question in disputes between private parties.” MCM,
`812 F.3d at 1291 (citing Joy, 959 F.2d at 228; Patlex, 758 F.2d at 604).
`Nonetheless, although the MCM decision held that inter partes
`reviews do not violate Article III or the right to a jury trial under the Seventh
`Amendment, this decision did not address the particular issue before us,
`which is whether inter partes reviews implicate the immunity afforded to a
`state by the Eleventh Amendment. Thus, Petitioner’s arguments based on
`the public rights exception are unpersuasive.
`Next, Petitioner argues that sovereign immunity is irrelevant to inter
`partes reviews because these proceedings are directed to the patent itself,
`and are not suits or adjudications of a private claim against the state by
`another party. Opp. 5–7. Petitioner points to the fact that a patent owner is
`not subject to a monetary judgment in an inter partes review and that the
`Office may continue an inter partes review without the petitioner’s
`participation. Opp. 6 (citing 35 U.S.C. § 317(a); Cuozzo, 136 S. Ct. at 2131,
`2136). Petitioner further describes the federal government as the acting
`party in an inter parte review, and argues that a state entity cannot use
`sovereignty to prevent the federal government from bringing an action
`against it. Id. at 7. In a separate section of its Opposition, Petitioner
`additionally analogizes inter partes reviews to in rem bankruptcy actions “in
`which jurisdiction of the adjudicating court or agency is predicated on the
`
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`property such that the owner’s sovereign immunity is irrelevant.” Opp. 9
`(citing Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 446–447
`(2004)). In this context, Petitioner argues that the Office does not exercise
`jurisdiction over a patent owner in an inter partes review and the identity of
`the patent owner is irrelevant. Id. at 10.
`We do not agree that the FMC decision is inapplicable to inter partes
`reviews on this basis. First, in FMC, the Court observed that the type of
`relief sought is irrelevant to the issue of whether a suit is barred by the
`Eleventh Amendment. FMC, 535 U.S. at 765 (citing Seminole Tribe, 517
`U.S. 44, 58 (1996). “While state sovereign immunity serves the important
`function of shielding state treasuries . . . the doctrine’s central purpose is to
`accord the States the respect owed them as joint sovereigns. It is for this
`reason, for instance, that sovereign immunity applies regardless of
`whether a private plaintiff’s suit is for monetary damages or some other
`type of relief.” Id. (internal citations omitted) (emphasis added).
`Second, we are not persuaded that an inter partes review is an in rem
`action directed only to the patent and not against the patent owner. Initially,
`we observe that the term inter partes means between the parties, which in
`itself captures the notion that the proceeding is directed to both parties over
`whom the Board exercises jurisdiction. The statutes and rules governing
`inter partes reviews are consistent with this view. To start, the patent owner
`must be served with the petition for the petition to be considered “complete”
`and accorded a filing date. 37 C.F.R. § 42.105 (“The petition and supporting
`evidence must be served on the patent owner at the correspondence address
`of record for the subject patent. The petitioner may additionally serve the
`
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`petition and supporting evidence on the patent owner at any other address
`known to the petitioner as likely to effect service.”); 37 C.F.R. § 42.106 (“A
`petition to institute inter partes review will not be accorded a filing date
`until the petition satisfies all of the following requirements . . . (2) Effects
`service of the petition on the correspondence address of record as provided
`in § 42.105(a).”).
`Moreover, the statutory framework of Leahy-Smith America Invents
`Act, Pub. L. No. 112–29, 125 Stat. 284, 331 (2011) (AIA or Patent Act)
`includes procedural safeguards against the harassment of patent owners
`through successive petitions by the same or related parties. For example, 35
`U.S.C. § 315(b) states that “an inter partes review may not be instituted if
`the petition requesting the proceeding is filed more than 1 year after the date
`on which the petitioner, real party in interest, or privy of the petitioner is
`served with a complaint alleging infringement of the patent.” As discussed
`in our Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756 (Aug. 14,
`2012), one of the core functions of this real party-in-interest/privy
`requirement is “to protect patent owners from harassment via successive
`petitions by the same or related parties, to prevent parties from having a
`‘second bite at the apple,’ and to protect the integrity of both the USPTO and
`Federal Courts by assuring that all issues are promptly raised and vetted.”
`Id. at 48,759 (emphasis added). Additionally, the AIA estops relitigating in
`court those issues that a petitioner raised, or reasonably could have raised,
`during an inter partes review. 35 U.S.C. § 315(e)(1). The estoppel
`provision serves as a further safeguard to prevent patent owner harassment.
`See 157 CONG. REC. S1374 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl)
`
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`(Congress included “procedural limits on post-grant administrative
`proceedings that will prevent abuse of these proceedings for purposes of
`harassment or delay.”); see also 157 CONG. REC. S952 (daily ed. Feb. 28,
`2011) (statement of Sen. Grassley) (Inter partes review “would include a
`strengthened estoppel standard to prevent petitioners from raising in a
`subsequent challenge the same patent issues that were raised or reasonably
`could have been raised in a prior challenge.”).
`Third, Petitioner’s reliance on bankruptcy actions, such as those
`described in Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440
`(2004), is misplaced. In Hood, the Supreme Court reiterated the principle
`that a “bankruptcy court’s in rem jurisdiction permits it to determine all
`claims that anyone, whether named in the action or not, has to the property
`or thing in question. The proceeding is one against the world [and] . . .
`[b]ecause the court’s jurisdiction is premised on the res, however, a
`nonparticipating creditor cannot be subjected to personal liability.” Id. at
`448 (citations and quotations omitted). In contrast, an inter partes review is
`not a proceeding “against the world,” but directed to evaluating the validity
`of the patent owner’s patent. This distinction is shown, for example, by the
`estoppel provisions in 37 C.F.R. § 42.73(d)(3)(i)–(ii) following an adverse
`judgment against the patent owner. Specifically, Rule 73(d)(3)(i)–(ii)
`provides:
`
`(3) Patent applicant or owner. A patent applicant or
`owner is precluded from taking action inconsistent with the
`adverse judgment, including obtaining in any patent:
`(i) A claim that is not patentably distinct from a
`finally refused or canceled claim; or
`
`
`
`15
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`IPR2016-01274 (Patent 7,062,251 B2)
`IPR2016-01275 (Patent 7,062,251 B2)
`IPR2016-01276 (Patent 7,062,251 B2)
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`
`(ii) An amendment of a specification or of a
`drawing that was denied during the trial proceeding, but
`this provision does not apply to an application or patent
`that has a different written description.
`
`
`Emphases added. The effect of estoppel in this instance extends beyond the
`challenged patent at issue in the inter partes review to “any patent” that the
`patent owner may seek to obtain. Thus, the estoppel arising from an adverse
`judgment applies to a particular patent owner, not the world at large or
`otherwise.
`Fourth, we are not persuaded that an inter partes review is an action
`brought by the federal government against a state. In general, any “person
`other than the owner of the patent may petition the PTO for [inter partes] re-
`view.” St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d
`1373, 1374 (Fed. Cir. 2014) (citing 35 U.S.C. § 311). A petition for inter
`partes review must identify “each claim challenged, the grounds on which
`the challenge to each claim is based, and the evidence that supports the
`grounds for the challenge to each claim.” 35 U.S.C. § 312(a)(3). The patent
`owner may file a response to the petition, and the PTO must decide within
`three months after receiving that response whether to institute an inter partes
`review. 35 U.S.C. § 314(b). The PTO may not institute an inter partes
`review unless “there is a reasonable likelihood that the petitioner would
`prevail with respect to at least 1 of the claims challenged in the petition.”
`35 U.S.C. § 314(a). After instituting inter partes review, the Board conducts
`the review on the merits. Unless the review is dismissed, the Board “shall
`issue a final written decision” addressing the patentability of the claims at
`issue in the proceeding. 35 U.S.C. § 318(a). In this capacity, the Board’s
`16
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`IPR2016-01274 (Patent 7,062,251 B2)
`IPR2016-01275 (Patent 7,062,251 B2)
`IPR2016-01276 (Patent 7,062,251 B2)
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`role in the inter partes review is not unlike that of the Commission in FMC
`(see FMC, 535 U.S. at 764), which is to assess the merits of the arguments
`presented by the parties in an impartial manner.
`Thus, based on the foregoing, we determine that the analysis in FMC
`applies to the present issue before us. With the decision in FMC as
`guidance, we next examine whether an inter partes review is the type of
`proceeding from which the Framers would have thought the states possessed
`immunity.
`c. FMC Analysis Applied to Inter Partes Review
`In its Motion, Patent Owner argues that an inter partes review is an
`adjudicatory agency proceeding that meets all the requirements evaluated in
`FMC for sovereign immunity to apply. Mot. 11. Referring to legislative
`history, Patent Owner argues that when inter partes reviews replaced inter
`partes reexaminations, Congress intended to convert inter partes
`reexamination from an examinational to an adjudicative proceeding. Id. at 5
`(citing H.R. Rep. No. 112–98, pt. 1, at 46, 2011 U.S.C.C.A.N. 45; 157 Cong.
`Rec. S1366 (Mar. 8, 2011) (Repub. Pol. Comm. Leg. Notice S.23 (Feb. 28,
`2011 entered by Sen. Kyl))). Patent Owner adds that Congress required the
`Director to promulgate regulations for inter partes review proceedings that
`“enact many features common to judicial proceedings, including discovery,
`depositions, protective orders, the imposition of sanctions, and an oral
`hearing.” Id. at 6 (citing 35 U.S.C. § 316(a)).
`Patent Owner argues that, under the enacted rules, inter partes review
`is similar to civil litigation for several reasons. This, according to Patent
`Owner, is because inter partes reviews are adversarial “contested cases
`
`
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`IPR2016-01274 (Patent 7,062,251 B2)
`IPR2016-01275 (Patent 7,062,251 B2)
`IPR2016-01276 (Patent 7,062,251 B2)
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`between a patent owner and a petitioner in which the petitioner bears the
`burden of proof and initiates the proceeding by filing a petition requesting
`the institut[ion of] a trial.” Id. at 9 (citing 35 U.S.C. §§ 311–314). Patent
`Owner argues that inter partes reviews are routinely held before panels of
`three impartial administrative patent judges (APJs), immune from political
`influence, who serve a role functionally comparable to that of an Article III
`judge, including ruling on proffers of evidence, regulating the course of the
`proceeding, exercising independent judgment and having the power to
`compel testimony. Id. at 8–9 (citing 37 C.F.R. §§ 42.51–42.74).
`Further, Patent Owner argues that inter partes reviews are governed
`by pleadings similar to those in civil litigation that include the petition,
`patent owner’s preliminary response, and post-institution patent owner’s
`response. Id. at 1
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