In Pennington Seed et al. v. Produce Exchange No. 299 et al. (05-1440), the Federal Circuit affirmed that claims against the University of Arkansas for infringement of a patent were barred by the Eleventh Amendment to the United States Constitution.

Pennington filed suit against the University of Arkansas for infringement and conversion of U.S. Patent No. 6,111,170 (the ‘170 patent). The ‘170 patent claims a type of non-toxic fescue grass that does not adversely affect livestock that graze upon it. AgResearch developed the grass and received the ‘170 patent on August 29, 2000. It then licensed the patent to Pennington, which markets it as MAXQ.

The District Court dismissed the original complaint due to the University’s Eleventh Amendment immunity. Concurrent with that dismissal, the court granted Pennington’s motion to file its First Amended Complaint against several university officials for infringement of the ‘170 patent, deprivation of federal rights, and conversion. The district court subsequently dismissed the First Amended Complaint based on Eleventh Amendment immunity and lack of personal jurisdiction.

The Eleventh Amendment to the United States Constitution limits the judicial authority of the federal courts and prevents citizens from bringing suit against a state in a federal court without its consent. While Congress may abrogate, under certain circumstances, a state’s Eleventh Amendment immunity under Section 5 of the Fourteenth Amendment, it may not do so under its Article I Commerce Clause power in patent cases.

In Florida Prepaid, the Supreme Court held that Congress did not have the authority under Article I, Section 8 of the Constitution to abrogate state sovereign immunity. The amendment to the Patent Act that abrogated state sovereign immunity, 35 U.S.C. §§ 271(h), 296(a), did not reflect any Congressional findings upon which Congress could base the abrogation of the Eleventh Amendment sovereign immunity of the states pursuant to the Fourteenth Amendment. The Act merely served as a uniform remedy for patent holders against states instead of a remedy for constitutional violations, such as where a state provides inadequate or no state court remedies.

The infringement of a patent by a state may be actionable in federal courts “only where the State provides no remedy, or only inadequate remedies, to injured patent owners for its infringement of their patent.” The Act’s legislative history in Florida Prepaid, however, provided no factual premise that Congress was attempting to remedy Fourteenth Amendment violations. The Court noted that the State of Florida provided various alternative remedies to recover for patent infringement, such as a legislative remedy through a claim for payment or a judicial remedy through a takings or conversion claim against the state.

In affirming the dismissal, the Federal Circuit held that:

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

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

Although the district court found that there was no state forum in which to contest patent infringement claims, it did not find that other available remedies pursuant to state law were so insufficient that they violated the Fourteenth Amendment. In fact, Pennington’s First Amended Complaint inherently recognizes the sufficient state remedies acknowledged in Florida Prepaid. Namely, the complaint notes that the State legislature may consider claims and appropriate monetary awards greater than $10,000 (a legislative remedy), and it alleges that the state remedy for conversion (a judicial remedy) may be available. See Fla. Prepaid, 527 U.S. at 644 n.9. Moreover, Arkansas law allows other forms of relief aside from the Claims Commission. See, e.g., Austin v. Ark. State Highway Comm’n, 895 S.W.2d 941, 943 (Ark. 1995) (“[L]andowner, claiming a taking of property, may either seek prospective injunctive relief in chancery court or damages from the State Claims Commission.”); Cammack v. Chalmers, 680 S.W.2d 689 (Ark. 1984) (allowing injunctive relief for State acts that are illegal, unconstitutional or ultra vires). While these remedies may be “uncertain” or “less convenient,” or may “undermine the uniformity of patent law,” these attributes are not sufficient to show that the patentee’s due process rights have been violated. Florida Prepaid, 527 U.S. at 644-45; see also Xechem, 382 F.3d at 1332; Jacobs Wind Elec. Co. v. Fla. Dep’t of Transp., 919 F.2d 726, 728 (Fed. Cir. 1990).

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