This morning the Federal Circuit issued one precedential opinion in a patent case. The court affirmed a district court’s ruling that sovereign immunity barred involuntary joinder, but reversed its ruling that, as a result, the lawsuit could not proceed under Federal Rule of Civil Procedure 19(b). The three judges on the panel (O’Malley, Newman, and Taranto) splintered in their reasoning. Here is the introduction to the majority opinion and the separate concurring and dissenting opinions.

Gensetix, Inc. v. Baylor College of Medicine (Precedential)

This case involves the interplay of state sovereign immunity under the Eleventh Amendment and required joinder of parties under Rule 19 of the Federal Rules of Civil Procedure. Gensetix, Inc. (“Gensetix”) exclusively licensed U.S. Patent Nos. 8,728,806 and 9,333,248 from the University of Texas (“UT”), an arm of the state of Texas. Gensetix then sued Baylor College of Medicine, Diakonos Research Ltd., and William K. Decker (collectively, “Baylor”) for infringement of the patents-in-suit, naming UT as an involuntary plaintiff pursuant to Rule 19(a). The District Court for the Southern District of Texas determined that the Eleventh Amendment barred joinder of UT as an involuntary plaintiff. Gensetix, Inc. v. Baylor Coll. of Med., 354 F. Supp. 3d 759, 766 (S.D. Tex. 2018). The court also concluded that, under Rule 19(b), the suit could not proceed in UT’s absence. Id. at 773–74. Accordingly, the court dismissed the suit. This appeal followed. For the reasons stated below, we affirm-in-part, reverse-in-part, and remand. 

NEWMAN, Circuit Judge, concurring in part, dissenting in part, concurring in the judgment.

The panel majority holds that the Board of Regents of the University of Texas System (“the University” or “UT”) has Eleventh Amendment immunity that shields it from involuntary joinder in this infringement suit against Baylor College of Medicine and others. Respectfully, I disagree.

The University is the assignee of the patents at issue, of which William K. Decker et al. are inventors. The University licensed the patents to Gensetix, Inc. for commercial development, with significant payments to the University. The “Patent And Technology License Agreement” grants Gensetix the exclusive right to make, use, and sell the patented subject matter for the life of the patents, and requires Gensetix to enforce the patents against any infringer. However, when Gensetix sought cooperation in this infringement suit, the University refused to join or be joined as a party, and invoked the Eleventh Amendment to bar involuntary joinder, thus preventing enforcement of the patents. The district court deemed the University to be a necessary party, and dismissed Gensetix’s infringement suit.

I respectfully dissent from the court’s holding that the University has Eleventh Amendment immunity from joinder in this litigation. However, this infringement suit may proceed without the University as a party, in conformity with Federal Rule of Civil Procedure 19(b); thus I concur in the court’s judgment.

TARANTO, Circuit Judge, concurring in part and dissenting in part.

I join Parts I and II-A of Judge O’Malley’s opinion except for footnote 6. Those portions of the opinion conclude that the constitutionally preserved protection of state sovereign immunity bars a coerced joinder of the University of Texas (UT), which is an arm of the State of Texas, as an involuntary plaintiff in this federal action, which Gensetix, Inc., as UT’s exclusive licensee, initiated to assert infringement of UT-owned patents. I agree that joinder of UT under Federal Rule of Civil Procedure 19(a), even though UT is a “required” party under that provision, would improperly subject UT “to the coercive process of judicial tribunals at the instance of private parties.” Seminole Tribe of Florida v. Florida, 517 U.S. 44, 58 (1996); see Franchise Tax Board of California v. Hyatt, 139 S. Ct. 1485, 1497 (2019).

I part company with Judge O’Malley’s opinion in its conclusion, in Part II-B, that the district court erred in ruling that the infringement action should not proceed under Rule 19(b) without the presence of required-party UT. For that reason, I dissent from the majority’s reversal of the district court’s dismissal of the action. The Supreme Court’s decision in Republic of Philippines v. Pimentel, 553 U.S. 851 (2008), explains that when a sovereign entity is a required party under Rule 19(a), is protected against joinder by sovereign immunity, and makes a non-frivolous assertion that it will be prejudiced by a suit proceeding in its absence, a district court is generally obligated to dismiss the suit under Rule 19(b). Because UT made such an assertion, I see no abuse of discretion in the district court’s dismissal of this action, which I would affirm.