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Federal Circuit says University of Texas Can’t Be Pulled Into Patent Suit

Reported by Perry Cooper on bloomberglaw.com

In a precedential opinion on Friday, the Federal Circuit ruled that sovereign immunity prevented the University of Texas (“UT”) from being involuntarily added as a plaintiff in an infringement suit over its medical patents. The court also reversed the trial court’s dismissal, ruling that Gensetix, Inc. could still continue with its suit against Baylor College of Medicine without UT. The decision allows patent infringement suits to move forward without the patent owner. Cooper elaborates on the implications of the ruling:

Gensetix’s attorney called the decision ‘important for parties who enter into exclusive licenses with patent owners who are sovereigns with immunity.’ The patent owner ‘will either have to join its licensees patent infringement lawsuit if they agreed to do so in the exclusive agreement—or sit on the sideline while the licensee proceeds with litigation asserting patents that the sovereign owns,’ Paul Skiermont of Skiermont Derby LLP in Dallas said in an email.

Judges Newman and Taranto dissented from different parts of the opinion. Newman did not agree that UT was protected by sovereign immunity because it entered into commerce, while Taranto would have dismissed the suit because UT asserted it will be harmed if the suit proceeds. The division suggests there could either be a rehearing. Cooper speculates: 

Whether the case must be dismissed where a required party can’t be joined for immunity reasons is a close question, ‘and may well merit further review—either by an en banc court or the Supreme Court,’ Tejas N. Narechania, intellectual property professor at Berkeley Law School, said in an email. But this might not be the right case. ‘The circuits aren’t squarely divided yet—there are differences in the types of immunity (state, tribal, foreign) as well as the extent to which the sovereign’s interests remain defended,’ he said.

For more information on this case, see our coverage.

Moderna Loses Challenge to Arbutus Patent on Vaccine Technology

Reported by Vishwadha Chander and Jan Wolfe on nytimes.com

The U.S. Patent and Trademark Office rejected Moderna’s attempts to invalidate a patent owned by Arbutus Biopharma, which could pose obstacles to Moderna’s efforts to develop a coronavirus vaccine and other next-generation vaccines. The dispute centers around Arbutus’s ‘069 patent, which relates to lipid nanoparticle (“LNP”) technology that allows the body to make its own therapeutic proteins. The patent office rejected Moderna’s argument that the patent should be revoked for obviousness. Chander and Wolfe highlight the implications of the decision by quoting Zachary Silbersher, a patent lawyer not involved in the case:

LNP technology is crucial to Moderna’s vaccine development efforts, and the patent ruling could increase pressure on the Cambridge, Massachusetts-based firm to pay for a license to Arbutus’ patent portfolio… ‘At the end of the day, Arbutus might be able to claim a royalty in the [coronavirus] vaccine,’ Silbersher said.

Moderna can appeal the ruling to the U.S. Court of Appeals for the Federal Circuit. Chander and Wolfe point out, however, that the Federal Circuit often affirms the patent office’s decisions.

Washington NFL Team Loses Race to the Trademark Office: Does it Matter?

Reported by Michael T. Smith on ipwatchdog.com

The Federal Circuit’s requirement of a bona fide intent to use a trademark in commerce may create obstacles for individuals who applied for trademark registration of the Washington Redskins’ possible replacement names. The professional football team decided to retire the “Redskins” name, and three possible replacement names are Warriors, Red Wolves, and Redtails. Two individuals were first to apply for trademark registration of these possible names. However, being first to apply for registration of a trademark might not matter, because there must be objective evidence of a bona fide intent to use the mark at the time of filing. Smith, citing the Federal Circuit, explains the bona fide intent test:

The Trademark Trial and Appeal Board has held, and the U.S. Court of Appeals for the Federal Circuit has affirmed, that ‘whether an applicant had a “bona fide intent” to use the mark in commerce at the time of filing the application requires objective evidence of intent…[a]lthough the evidentiary bar is not high, the circumstances must indicate that the applicant’s intent to use the mark was firm and not merely intent to reserve a right in the mark.’ Lack of bona fide intent thus is an available ground for opposing an application…”

In addition to the requirement of a bona fide intent to use at the time of the application filing, the applications for the possible team names cannot be assigned before the marks are used in commerce. Smith explains how these goodwill requirements may make the applicants’ early filing pointless:

While there are benefits to being first in line at the USPTO, and filing intent to use applications can be a good business strategy, an applicant must have objective evidence of its bona fide intent to use the mark or risk walking away empty-handed. In the present case, the applicants have intent to use applications for new team names, which are subject to opposition absent objective evidence of intent to use at the time of filing, and which cannot be assigned until the marks have been used. Sometimes, there are more important things than being first.