Eleventh Amendment Protects States From Involuntary Joinder in Patent Suits

Gensetix, Inc. v. Baylor College of Medicine

Before Newman, O’Malley, and Taranto. Appeal from the U.S. District Court for the Southern District of Texas.

Summary: A state can invoke sovereign immunity under the Eleventh Amendment to protect against involuntary joinder from patent suits.

Gensetix is an exclusive licensee of a patent owned by the University of Texas (“UT”). Gensetix filed a patent suit against Baylor. UT refused to join the patent suit, so Gensetix joined UT under Rule 19 as a required party. In response, UT filed a motion to dismiss itself from the suit, arguing sovereign immunity from the Eleventh Amendment prohibited UT from being involuntarily joined to the suit. The District Court agreed with UT and dismissed UT from the suit. The District Court later dismissed the entire case, finding UT was an indispensable party and that the case could not proceed in UT’s absence. Gensetix appealed.

On appeal, Gensetix claimed that sovereign immunity does not preclude involuntary joinder of a sovereign under Rule 19. Gensetix argued that the Eleventh Amendment protects sovereigns against suits, but it does not prevent sovereigns from being joined as a plaintiff. Gensetix further argued that UT had an obligation to join the suit because of the license agreement between Gensetix and UT. In response, UT claimed sovereign immunity protections extend to joinder under Rule 19. UT further contended that although it had entered into a license agreement with Gensetix, this agreement did not waive its sovereign immunity.

The Federal Circuit agreed with UT and held sovereign immunity protections extend to joinder. The Federal Circuit noted that t he Eleventh Amendment is not limited to cases brought “against” a state. Rather, the purpose of the Eleventh Amendment is to prevent a State from being brought into court against its will. Thus, even though no party brought a claim against UT, sovereign immunity still applies. The Federal Circuit further held UT was not obligated to join the suit because of the license agreement, noting that the license agreement expressly stated that UT was not waiving its sovereign immunity.

While the Federal Circuit affirmed the District Court’s decision to dismiss UT, the Federal Circuit reversed the District Court’s determination that the case could not proceed in UT’s absence.  The Federal Circuit noted, among other things, that there was no risk of multiple suits under the agreement and that Gensetix had no recourse to assert the patent rights in UT’s absence.  The Federal Circuit remanded for further proceedings.

Judge Newman dissented in part, arguing that UT did not have immunity under the Eleventh Amendment in this instance. In particular, Judge Newman argued that UT had a contractual obligation under the license agreement to join the suit.

Judge Taranto dissented in part, arguing that the case must be dismissed, as UT was an indispensable party and the case could not continue without UT.

Editor: Paul Stewart