[00:00:00] Speaker 04: I just wanted to on behalf of the panel express our gratitude to the law school and to its dean for all of their hard work and hospitality in helping our crew from Washington set this up. [00:00:12] Speaker 04: I want to thank the parties for schlepping here rather than Washington, D.C. [00:00:16] Speaker 04: I don't know if that's a plus or a minus. [00:00:18] Speaker 04: I assume a plus. [00:00:20] Speaker 04: And also, especially to the marshals who have been with us for two and a half days here now, too, and just take such good care of us. [00:00:27] Speaker 04: So thank you again to the dean and the law school. [00:00:30] Speaker 04: Our first case this morning is 181700, Board of Regents versus Boston Scientific Corporation. [00:00:38] Speaker 04: Mr. Shor, whenever you're ready. [00:00:44] Speaker 02: Thank you, your honor. [00:00:46] Speaker 02: The question presented to the court is whether the state of Texas sovereign right to choose where it adjudicates disputes has been abrogated or waived, actually waived, by its filing of a case in its own state, the state of Texas. [00:01:02] Speaker 02: And I think the place to start here is the status of the law before the patent venue statute was enacted. [00:01:08] Speaker 02: And in FMC, [00:01:10] Speaker 04: just because we're here at a law school and for our benefit as well. [00:01:14] Speaker 04: Could you spend a couple minutes to just tell us how we got here and where we are in terms of the issue? [00:01:19] Speaker 04: I'd appreciate it very much. [00:01:21] Speaker 02: Yes, Your Honor. [00:01:21] Speaker 02: The state of Texas through the Board of Regents of the University of Texas holds all patents for the 14 institutions of the University of Texas systems. [00:01:29] Speaker 02: They filed suit against three entities, Boston Scientific, Ethicon, and Medtronic in the Western District of Texas. [00:01:37] Speaker 02: It is undisputed [00:01:38] Speaker 02: that jurisdiction exists over Boston Scientific in the state of Texas. [00:01:42] Speaker 02: They have employees in the state of Texas. [00:01:43] Speaker 02: They sell infringing articles in the state of Texas. [00:01:46] Speaker 02: The state of Texas has personal jurisdiction uncontested. [00:01:49] Speaker 02: However, under the patent venue statute, Boston Scientific came in and said the patent venue statute basically deprives the state of Texas of their sovereign choice about resolving disputes within the state because you have to sue in the place where the defendant resides [00:02:06] Speaker 02: or has an established place of business. [00:02:08] Speaker 04: So if you were not a state that were the patent holder here, it would be clear this would be kosher. [00:02:14] Speaker 02: Absolutely. [00:02:14] Speaker 02: They could move up to Delaware and that would be inappropriate. [00:02:17] Speaker 02: Absolutely. [00:02:18] Speaker 01: And in fact, under the logic that is being offered by my worthy adversary... And the Board of Regents is asserting its claims as a political arm of the state of Texas, correct? [00:02:29] Speaker 01: Undisputed. [00:02:30] Speaker 01: It's standing in the shoes of the state of Texas. [00:02:33] Speaker 02: It is the state of Texas. [00:02:34] Speaker 02: So under their theory the Congress tomorrow could pass a patent venue statute that said all patent cases have to be heard in the district of Guam. [00:02:43] Speaker 02: And the state of Texas would have to go to Guam to enforce its patents. [00:02:46] Speaker 02: That's just ridiculous. [00:02:48] Speaker 04: That's not a legal conclusion. [00:02:51] Speaker 04: That's just an observation. [00:02:52] Speaker 04: But if you were just a regular party, there's no dispute. [00:02:56] Speaker 04: No dispute. [00:02:57] Speaker 04: And there's one, at least one major Supreme Court case involving Puerto Rico here. [00:03:02] Speaker 04: But that was, and the state prevailed. [00:03:04] Speaker 04: But in that case, the state was a defendant in the action. [00:03:08] Speaker 04: And so this is, as you will acknowledge, I'm sure, different because here the state is the plaintiff, correct? [00:03:14] Speaker 02: Right. [00:03:15] Speaker 02: There's two sides to the sovereign coin. [00:03:16] Speaker 02: One is, as it stated in FMC, Supreme Court case FMC versus South Carolina Port authorities, dual sovereignty is a defining feature. [00:03:27] Speaker 02: of our constitutional blueprint. [00:03:30] Speaker 02: And then if you take that dual sovereignty as you go back to the original Judiciary Act, you go back to the Constitution. [00:03:35] Speaker 01: What do you mean by dual sovereignty? [00:03:37] Speaker 01: Are you referring to the ability of the state to sue and also to defend? [00:03:44] Speaker 02: No, no. [00:03:44] Speaker 02: Dual sovereignty is the idea that there are two sovereigns involved here. [00:03:47] Speaker 02: There's the union of all of our states. [00:03:49] Speaker 02: That's the federal government is one sovereign. [00:03:52] Speaker 02: But the states are their own individual sovereigns. [00:03:54] Speaker 02: And one of the ways that you kind of can understand that [00:03:56] Speaker 02: You and I are all citizens of the United States. [00:03:59] Speaker 02: But each of us can only be a citizen of one state. [00:04:02] Speaker 02: So you choose which state you're going to be a citizen of. [00:04:04] Speaker 02: And that's why corporations choose which state they're going to be a citizen of. [00:04:08] Speaker 02: Individuals choose what state. [00:04:09] Speaker 02: So it's a dual sovereign system. [00:04:12] Speaker 02: And one of the things from the beginning of the Constitution, they said to protect the integrity of the sovereign, the dignity of the sovereign, only one court was given [00:04:22] Speaker 02: jurisdiction over disputes between states and non-residents of the state. [00:04:26] Speaker 02: That's the Supreme Court, and that's in Article 3. [00:04:30] Speaker 02: However, and then Ames is a really interesting case, the Ames case, which is cited in our brief, and it basically says under this dual sovereignty system, states, quote... Does the Constitution extend to the state? [00:04:45] Speaker 01: and cover the state when the state seeks to act as a plaintiff as opposed to defend it? [00:04:50] Speaker 02: Absolutely. [00:04:50] Speaker 02: Because the state, anything a state does, it does as a sovereign. [00:04:54] Speaker 02: So a state is not an individual, it's not a corporation. [00:04:57] Speaker 02: A state only acts as a sovereign. [00:05:00] Speaker 02: Even in, if you look at the Wyandotte case, if you look at, there are several cases that say even, or the College Savings Banks case, even when the state acts in the commercial sphere, it's acting as a sovereign. [00:05:11] Speaker 02: It always acts as a sovereign. [00:05:13] Speaker 02: And what the Ames case said, and I think it's important, you take FMC, its dual sovereignty, then you take the Ames case and it says, quote, states were left free to seek redress for their own grievances in any court that had requisite jurisdiction. [00:05:29] Speaker 02: No limits were set upon the powers of choice in this particular. [00:05:34] Speaker 02: So states have the choice. [00:05:35] Speaker 02: If they can get personal jurisdiction over a defendant, they can sue the defendant. [00:05:40] Speaker 01: What about regents of the University of California versus Lilly? [00:05:44] Speaker 02: The Regent of the University of California is what I would call a bad lawyering case, and it should not be a case that is binding upon this case at all for several reasons. [00:05:52] Speaker 02: Number one... But it's contrary to what you just... No, it is not, Your Honor. [00:05:56] Speaker 02: It is not, Your Honor. [00:05:57] Speaker 02: And the reason why it's not is because in that case, you had a multi-district litigation where some pretrial matters were handled by an MDL court. [00:06:04] Speaker 02: And that MDL court then, sua sponte on its own, decided it was going to try the case instead of following the statute and sending the trial back to California. [00:06:13] Speaker 02: California did not object. [00:06:15] Speaker 02: They agreed to it. [00:06:17] Speaker 02: They should have immediately mandamus that court when it held onto the case. [00:06:21] Speaker 02: They should have mandamus that court and said, you can't do that. [00:06:24] Speaker 02: Hey, it violates the statute. [00:06:25] Speaker 02: Is that the basis on which the case was decided? [00:06:28] Speaker 02: Yes, it is. [00:06:29] Speaker 02: They waived their ability by not seeking mandamus of the judge to force him to take it back to California. [00:06:36] Speaker 02: And then the second thing they did is they went through the entire trial process. [00:06:40] Speaker 02: They agreed. [00:06:41] Speaker 02: They waived their argument by going through the entire trial process and waiting until appeal to complain that the case should have been sent back to California. [00:06:50] Speaker 01: It may be so, but we said the 11th Amendment applies to suits against the state. [00:06:55] Speaker 01: This isn't an 11th Amendment case. [00:06:57] Speaker 02: This is not an 11th Amendment case. [00:06:59] Speaker 02: This is a sovereignty case. [00:07:00] Speaker 02: And those are two different things. [00:07:01] Speaker 02: The 11th Amendment came about because of the Chisholm case. [00:07:04] Speaker 02: And that was kind of a funny case if you read the history of it. [00:07:08] Speaker 02: Georgia actually passed a law saying that anybody who tried to enforce a judgment against Georgia taken in another state could be subject to being executed. [00:07:16] Speaker 02: And then they passed the 11th Amendment in response to that Chisholm case. [00:07:20] Speaker 03: Can I just interrupt you for a minute and just say I understand what you're saying to us here today is that you're distinguishing the Regents of the University of California case because you're not relying on the 11th Amendment. [00:07:33] Speaker 03: You're relying more generically just on state sovereignty. [00:07:37] Speaker 02: We're relying on aims. [00:07:38] Speaker 02: Wyandotte and Georgia versus PRC. [00:07:41] Speaker 03: And the reason why... And none of those cases involve the patent, specific statute for patent venue, right? [00:07:50] Speaker 02: They don't. [00:07:50] Speaker 02: But then you got to realize also, if you look at the Brunette case, venue is not jurisdiction. [00:07:59] Speaker 02: So you can't, venue statutes are not jurisdiction. [00:08:01] Speaker 02: And then you also look at the case, and I believe it's in my reply brief, is [00:08:09] Speaker 02: You look at the statute that enables the Supreme Court to pass rules on procedure like venue rules. [00:08:15] Speaker 02: And it says, the Supreme Court is authorized to prescribe general rules of practice and procedure like venue, but those rules, according to the statute, quote, shall not abridge, enlarge, or modify any substantive right. [00:08:28] Speaker ?: Where are you looking in your reply brief? [00:08:30] Speaker 02: At page 8. [00:08:31] Speaker 02: And so if you look at the statute that enables the Supreme Court to promulgate rules of procedure or rules of [00:08:39] Speaker 02: managing their court, they are not allowed to pass rules that abridge, enlarge, or modify any substantive right. [00:08:47] Speaker 02: And it's absolutely clear that the right of a sovereign to bring a case within its borders, if there's jurisdiction, personal jurisdiction, is a substantive right. [00:08:58] Speaker 02: Jurisdiction is a substantive right. [00:09:00] Speaker 04: Can I just move you into sort of like the dual questions presented to us, the threshold question being whether we have jurisdiction [00:09:07] Speaker 04: and then reaching the merits. [00:09:09] Speaker 04: On the jurisdictional question, under collateral estoppel doctrine, collateral order doctrine, the first criteria is that it needs to have conclusively determined the disputed question. [00:09:24] Speaker 04: Why is that not met here? [00:09:26] Speaker 04: Because you still have the ability to go back to Delaware, the Delaware court, and to move to retransfer the case. [00:09:36] Speaker 02: flies in the whole face of the concept of affront to the dignity. [00:09:40] Speaker 02: We don't have to do anything in Delaware. [00:09:42] Speaker 02: We're not consenting to the jurisdiction of the Delaware court. [00:09:44] Speaker 02: We're not agreeing. [00:09:45] Speaker 02: The state of Texas is not going to go to Delaware. [00:09:47] Speaker 02: As a matter of fact, if this case... So you think requiring you to do that step in and of itself then merges with the merits question? [00:09:54] Speaker 02: Correct. [00:09:55] Speaker 02: And again, take a look at Wyandotte. [00:09:57] Speaker 02: Wyandotte's the case for the state of Ohio filed in the Supreme Court. [00:10:01] Speaker 02: against Michigan, some Michigan defendants and other defendants for polluting the Lake Erie that flowed into Ohio. [00:10:08] Speaker 02: And what the court and the Supreme Court there declined jurisdiction over that case because they said you can sue in an Ohio court under the Ohio long arm statute and we'll look at it on appeal. [00:10:18] Speaker 02: But the reason why the Supreme Court declined jurisdiction is because they could sue in Ohio. [00:10:23] Speaker 02: Then you look at the Georgia versus PRC case where the Supreme Court had to accept jurisdiction. [00:10:28] Speaker 02: Why? [00:10:29] Speaker 02: because Georgia could not get jurisdiction over all the defendants in Georgia. [00:10:34] Speaker 02: Georgia has the right to adjudicate the dispute in Georgia, and if they can't do it in Georgia, they could go to the Supreme Court. [00:10:41] Speaker 02: Ohio, they could decline jurisdiction in the Supreme Court because Ohio, under the long-arm statute, could bring it in Ohio. [00:10:47] Speaker 02: So that's the same thing. [00:10:48] Speaker 02: That shows that the sovereign has the right to bring the case in any court where the personal jurisdiction can be obtained. [00:10:57] Speaker 01: Go to the third factor of the collateral order doctrine and be effectively unreviewable on appeal from a final judgment. [00:11:05] Speaker 02: Right. [00:11:05] Speaker 02: The affront to our dignity of showing up in Delaware and litigating can't be undone. [00:11:09] Speaker 01: Once we go to Delaware and litigate... How can you have an affront to the state's dignity if the state has chosen to step down and to compete toe to toe in the private sector? [00:11:19] Speaker 02: College Savings Bank. [00:11:20] Speaker 02: College Savings Bank says you cannot have a coercive waiver where just because you are participating in a commercial activity, [00:11:27] Speaker 02: that that is somehow ipso facto a waiver of your ability to assert your sovereignty. [00:11:32] Speaker 02: So college savings banks blows that argument out. [00:11:34] Speaker 02: There is no way that you can say that forcing us to go to Delaware to do anything when we don't consent to Delaware, we're not agreeing to Delaware, and it puts them in an untenable position too. [00:11:44] Speaker 02: Because if we did, if we were in Delaware, we're not consenting to any compulsory counterclaims. [00:11:49] Speaker 01: I understand your argument and I accept that the state has sovereignty [00:11:54] Speaker 01: on suits that's brought against the state. [00:11:56] Speaker 01: But I'm not yet convinced that you can use that sovereignty now, which is a defense, and now turn it into a sword and go out in the private sector battlefield and have a right that your competitors don't. [00:12:11] Speaker 02: Well, my competitors are not states. [00:12:14] Speaker 02: So states are different. [00:12:16] Speaker 02: I mean, fortunately or unfortunately, I've never met anybody who's faced a sovereign immunity or a sovereignty argument that said it was fair. [00:12:22] Speaker 02: Sovereignty is not meant to be fair. [00:12:23] Speaker 02: Sovereignty, the state occupies a place above and above other competitors in the marketplace, above citizens, above everything else. [00:12:31] Speaker 02: We're like the United States. [00:12:32] Speaker 02: We're a sovereign. [00:12:33] Speaker 02: And as a sovereign, we have a right. [00:12:35] Speaker 02: And again, Wyandotte, under the Constitutional and the Judiciary Act, states were left free to seek redress for their own grievances in any court that had the requisite jurisdiction. [00:12:46] Speaker 02: No limits were set on the powers of choice in this particular. [00:12:51] Speaker 02: No limits were set on the power of choice. [00:12:54] Speaker 02: Our choice is the Western District of Texas. [00:12:56] Speaker 02: There's personal jurisdiction in the West. [00:12:57] Speaker 01: To get this off the table, your citation, what you just said, when you say states or courts rather, are we talking about state courts and federal courts or just state courts? [00:13:10] Speaker 02: If there's personal jurisdiction, any court we want to be in, and we want to be in the Western District of Texas, personal jurisdiction is not, they don't disagree with it, they agree with it. [00:13:21] Speaker 02: And by the way, the only thing they're arguing, they're not arguing that Congress abrogated our sovereignty by doing this. [00:13:26] Speaker 02: They're not arguing that we consented to it. [00:13:29] Speaker 02: They're arguing that we waived it. [00:13:32] Speaker 02: We don't, we didn't waive it. [00:13:33] Speaker 02: As a matter of fact, by simply filing a suit. [00:13:38] Speaker 02: But you can't waive sovereignty by filing a lawsuit. [00:13:41] Speaker 02: That's College Savings Bank. [00:13:42] Speaker 02: It's Hydra Quebec. [00:13:44] Speaker 02: It's Tejik, which I argued the Tejik case before this court. [00:13:47] Speaker 02: And we only waive in compulsory counterclaims in the same form where we chose to file. [00:13:52] Speaker 02: That's Tejik. [00:13:54] Speaker 02: So you'd have to overrule Tejik. [00:13:56] Speaker 02: You'd have to overrule Ames. [00:13:57] Speaker 02: You'd have to overrule FMC. [00:13:59] Speaker 02: And you'd have to find something contrary to Wyandotte and Georgia PRC. [00:14:03] Speaker 03: Can I ask you, I have one more question, which is on the last element of the collateral order doctrine, can you just walk me through what would happen [00:14:14] Speaker 03: if we were to say we didn't have jurisdiction and you were in Delaware. [00:14:18] Speaker 03: What would happen at the end of the Delaware suit? [00:14:21] Speaker 03: You could still complain about the order that transferred the case to Delaware. [00:14:28] Speaker 02: Well, that's assuming the Supreme Court wouldn't hear our appeal of that decision. [00:14:31] Speaker 02: So we'd go to the Supreme Court. [00:14:32] Speaker 02: We wouldn't go to Delaware. [00:14:34] Speaker 02: And we'd go to the Supreme Court and say that that's an affront to our dignity. [00:14:36] Speaker 03: And there's actually- For the purposes of, okay, so you do that. [00:14:40] Speaker 03: You go to the Supreme Court. [00:14:41] Speaker 03: Then what happens? [00:14:42] Speaker 03: And let's say, I just want for myself and for the students in the room to hear what it is that would happen at the end of the Delaware case. [00:14:51] Speaker 02: Well, there's actually a Supreme Court case that says if we go to Delaware and we submit this to the, voluntarily go to Delaware, in other words, don't appeal to the Supreme Court and go to Delaware and let them decide the issue, we're stuck with what the Delaware court decides. [00:15:02] Speaker 02: That would be the result. [00:15:03] Speaker 02: But we wouldn't do that. [00:15:04] Speaker 02: We would go to the Supreme Court. [00:15:05] Speaker 04: But why couldn't you also alternatively just dismiss it, move to dismiss in Delaware, get a final judgment and [00:15:12] Speaker 04: healed it to us in that venue. [00:15:15] Speaker 02: Well, practically what would happen is we'd go file this case in the Supreme Court and the Supreme Court would have to take the case under the Georgia PRC case because we can't, supposedly, if we can't get personal jurisdiction or we can't get the case heard because the venue statute has somehow been transformed into a jurisdictional statute, which it's not, so you would have to transform the venue statute into a jurisdictional statute. [00:15:35] Speaker 02: It's not. [00:15:36] Speaker 02: But if somehow that happened, we'd go file in the Supreme Court. [00:15:39] Speaker 02: And if Supreme Court agreed that a venue statute is a jurisdictional statute, they'd have to take our case. [00:15:44] Speaker ?: So what would you take to the Supreme Court? [00:15:46] Speaker 02: The patent case. [00:15:47] Speaker 04: Or our decision in that regard, or the patent case itself? [00:15:51] Speaker 04: What procedural? [00:15:52] Speaker 02: Well, procedurally, we would go to the Supreme Court and say that you did not have the ability to make us go to Delaware. [00:15:56] Speaker 04: So you would be appealing our decision to the Supreme Court. [00:15:58] Speaker 02: Right. [00:15:59] Speaker 02: But if the Supreme Court disagreed with it and affirmed you, which I don't believe they would, but if they did affirm you, we would simply non-suit the case and go sue them in the Supreme Court. [00:16:08] Speaker 02: and under the Georgia versus PRC case, the Supreme Court has to take it. [00:16:12] Speaker 02: I don't think the Supreme Court is going to appreciate being forced to take every patent case filed by a sovereign because the patent venue statute has been magically transformed by the Federal Circuit into a jurisdictional statute. [00:16:22] Speaker 01: It's not. [00:16:22] Speaker 01: Could you apply the original suit in the Supreme Court? [00:16:24] Speaker 02: Absolutely. [00:16:25] Speaker 01: That is what you're talking about. [00:16:27] Speaker 02: Yes. [00:16:28] Speaker 02: Yes. [00:16:29] Speaker 02: So if you transform [00:16:31] Speaker 02: a venue statute into a jurisdictional statute in violation of two Supreme Court cases, somehow venue becomes jurisdiction, which it's not, then every sovereign would be filing their patent cases in the Supreme Court because otherwise every state is going to be forced to go to Delaware to enforce their rights. [00:16:49] Speaker 02: So this is an untenable situation. [00:16:51] Speaker 02: I'm over my time and I want to make sure I have a little time for rebuttal. [00:16:56] Speaker 04: Thank you, Your Honor. [00:17:05] Speaker 00: Good morning. [00:17:06] Speaker 00: May it please the court. [00:17:07] Speaker 00: In Lapidese, the Supreme Court warned against the selective use of sovereign immunity to achieve litigation advantage. [00:17:16] Speaker 00: And that's exactly what the board and tissue gen are trying to do here. [00:17:21] Speaker 00: But sovereign immunity is a shield. [00:17:23] Speaker 00: What do you see as the difference between sovereignty and sovereign immunity? [00:17:28] Speaker 00: So that's a good question, because it certainly percolates through the briefing. [00:17:32] Speaker 00: Sovereign immunity, [00:17:34] Speaker 00: to be playing was the basis on which the motion to dismiss was brought before the district court. [00:17:39] Speaker 00: There was no mention of this broader penumbra of sovereignty. [00:17:43] Speaker 00: And to the extent that sovereignty is what my adversary suggested, which is the right of a sovereign to choose the federal district court in which it brings a patent infringement suit, regardless of federal venue statutes, there's no support for that. [00:17:59] Speaker 00: But that [00:17:59] Speaker 00: I submit is the version of sovereignty that's being advocated and pressed for today. [00:18:05] Speaker 00: None of the cases that were mentioned, and I'm happy to walk through them by my adversary, suggests that sovereign immunity or sovereignty, a broader principle of constitutional sovereignty, confers on the state a right to home field advantage in federal court when it brings a patent infringement suit. [00:18:24] Speaker 00: There's absolutely no support for that proposition. [00:18:27] Speaker 01: Does it have that advantage in state courts? [00:18:30] Speaker 00: A patent infringement suit? [00:18:31] Speaker 00: So in state court, presumptively a patent infringement suit would be preempted or not. [00:18:39] Speaker 01: We have exclusive jurisdiction. [00:18:42] Speaker 00: Yes, your honor. [00:18:42] Speaker 00: So in state court, based on Pennhurst, we have, I think it is arguable and probably correct that a state can waive its sovereign immunity in state court, but not in the federal courts. [00:18:57] Speaker 00: But here we didn't have that situation. [00:18:59] Speaker 00: Here instead we had the board and tissue gen invoking federal jurisdiction in the western district of Texas and then making the argument that they could selectively invoke federal jurisdiction just in that venue but not in any other venue. [00:19:18] Speaker 00: And that's not what the cases say. [00:19:20] Speaker 00: Eli Lilly is on point and we can talk about that. [00:19:23] Speaker 00: When you invoke federal jurisdiction, whether by removal, as in the Lapides case, whether by intervention, whether by filing a complaint, you invoke federal jurisdiction and consent to it writ large. [00:19:36] Speaker 00: And you consent to the application of the federal rules. [00:19:39] Speaker 00: That was the point in Eli Lilly. [00:19:42] Speaker 00: So. [00:19:43] Speaker 04: Can I just ask you, on the threshold kind of question under the collateral order doctrine, [00:19:49] Speaker 04: Is it your view that the only reason we don't go to the merits of this case now is because they still have the ability to go back to Delaware and ask for a retransfer? [00:20:02] Speaker 04: And two questions, sort of like, is that your view? [00:20:06] Speaker 04: And if that's so, that's kind of a ministerial thing. [00:20:09] Speaker 04: We're just saying, OK, we'll be back here six months from now, right? [00:20:14] Speaker 00: Yes. [00:20:14] Speaker 00: So, Your Honor. [00:20:17] Speaker 00: Technically, we believe an order to transfer is not a collateral order. [00:20:22] Speaker 00: That's what this court stated in FDIC versus Mako Bank Court. [00:20:28] Speaker 00: It said a transfer order is not a final judgment. [00:20:31] Speaker 00: It's interlocutory and not appealable. [00:20:34] Speaker 00: That said, there wasn't an issue of sovereignty at play in that case, so it's not exactly on point. [00:20:41] Speaker 00: We don't think Florida aqueduct is exactly on point either, because that was a motion to dismiss. [00:20:46] Speaker 00: And the court really emphasized that the value of the 11th Amendment sovereign immunity, it was a defendant, the state entity there. [00:20:52] Speaker 03: What exactly is your argument for why the three elements of the collateral order doctrine don't apply? [00:20:59] Speaker 00: Well, we don't believe it's a final order. [00:21:01] Speaker 00: Why not? [00:21:02] Speaker 03: Well, that it's not a final order, that's fine. [00:21:05] Speaker 00: Yes. [00:21:05] Speaker 03: But then what about conclusively determine the disputed question? [00:21:09] Speaker 00: We don't believe it's done that either, because as has been suggested, [00:21:14] Speaker 00: The district currently presiding over this case hasn't weighed in on the issue. [00:21:18] Speaker 04: So that was my question. [00:21:20] Speaker 04: Are you saying that one thing, we can call it ministerial or whatever, that the only reason that that factor is not met is because they have to go back next week, go to the district court judge, and move to retransfer it back to Texas. [00:21:38] Speaker 04: But if they did that and the district court rejected that motion, [00:21:42] Speaker 04: then would they meet the collateral order doctrine, all the factors? [00:21:46] Speaker 00: Well, I think, as I said, neither FDIC nor, because the motion to transfer was denied in that case as well. [00:21:56] Speaker 00: Or the transfer was, the US entity, the FDIC was transferred to a court it didn't want to be in. [00:22:03] Speaker 00: But that wasn't considered final. [00:22:06] Speaker 00: But again, I don't think that that is, I don't think the case is squarely on point, and to be candid, [00:22:10] Speaker 00: I think the collateral order issue is a little closer than the merits issues because there is not a case specifically on points. [00:22:18] Speaker 04: So just to come back to my original question, which is maybe it's me, but can you answer the question that Judge Stola and I both posed? [00:22:27] Speaker 04: Is your only reason why the conclusively determined the disputed question is not met? [00:22:33] Speaker 04: is because they haven't gone back to Delaware, asked them to retransfer, and the court hasn't yet rejected it. [00:22:41] Speaker 04: So that, if they did that, and next month wouldn't we be back here, and wouldn't the collateral order doctrine suggest that we do have jurisdiction? [00:22:51] Speaker 00: So technically, yes, in part. [00:22:55] Speaker 00: It's arguable that they could also go to the district of Delaware and say, well, transfer to Massachusetts. [00:23:01] Speaker 00: Transfer to Minnesota. [00:23:03] Speaker 00: This issue hasn't, where this case is actually going to be tried hasn't been settled conclusively yet. [00:23:09] Speaker 04: So if they do get, if they go back to Delaware and Delaware says no, rejects the issue, the request to retransfer it, then we're done and there's no more defense under the law. [00:23:21] Speaker 00: I think I would agree with that. [00:23:22] Speaker 00: I would agree with that. [00:23:24] Speaker 00: But as I said, I think the collateral. [00:23:25] Speaker 00: What about if they move to dismiss? [00:23:28] Speaker 00: If they just went over to Delaware tomorrow and said, [00:23:31] Speaker 00: They certainly could have done that. [00:23:32] Speaker 00: That was something that we raised at the threshold of this appeal, whether they should just voluntarily dismiss in Delaware. [00:23:39] Speaker 00: But that was a choice that they chose not to make. [00:23:41] Speaker 04: So let's go on. [00:23:42] Speaker 04: Assuming we pass the collateral order doctrine and we're here on the merits. [00:23:47] Speaker 00: Sure. [00:23:48] Speaker 04: So now tell us where we are. [00:23:49] Speaker 00: So the court recently addressed similar questions in a similar context involving the University of Florida Research Foundation. [00:23:59] Speaker 00: That's just a very recent case. [00:24:01] Speaker 00: And in that case, the regents took the position that they waived sovereign immunity as to some issues, but not as to 101 issues. [00:24:11] Speaker 00: And the court said a state waives its 11th Amendment immunity when it consents to federal court jurisdiction by voluntarily appearing in federal court. [00:24:20] Speaker 00: Now, I recognize that in the briefs and just now we heard that it's not the 11th Amendment. [00:24:25] Speaker 00: It's just sovereignty. [00:24:27] Speaker 00: The case law is very clear. [00:24:29] Speaker 00: When in Hans versus Louisiana, the Supreme Court said, well, sovereign immunity is broader than the 11th Amendment. [00:24:38] Speaker 00: What it meant is that the 11th Amendment explicitly applies only to suits brought against a state by citizens of another state. [00:24:46] Speaker 00: And in Hans versus Louisiana, the Supreme Court said, well, it also applies, because this was the common law, to suits brought against a state by citizens of that state. [00:24:57] Speaker 00: That's the distinction. [00:24:58] Speaker 00: It's not amorphous. [00:24:59] Speaker 00: It's not vague. [00:25:00] Speaker 00: It's not something we need to wonder about. [00:25:02] Speaker 00: There is no case standing for a broader principle that, as a sovereign, a state has a right to select a particular federal district court if it has personal jurisdiction and sue any entity there for patent infringement. [00:25:17] Speaker 00: There is no case for that. [00:25:18] Speaker 04: And Eli Lilly... Well, there's no case that affirmably says that they can do it, but what's your best authority for why they can't? [00:25:25] Speaker 00: Well, I think Eli Lilly is our best authority. [00:25:27] Speaker 00: In that case, the board of California made the same argument. [00:25:33] Speaker 04: That, just for clarification, is our opinion, not the Supreme Court's. [00:25:37] Speaker 00: It is. [00:25:37] Speaker 00: It is your opinion. [00:25:38] Speaker 00: I think Lapidese is very strong authority as well from the Supreme Court and consistent with this court, which is that by engaging, invoking federal jurisdiction, one consents to federal jurisdiction. [00:25:50] Speaker 00: And it's not in a specific venue. [00:25:52] Speaker 04: But Eli Lilly. [00:25:53] Speaker 04: That issue hasn't been decided by the Supreme Court. [00:25:57] Speaker 00: I think it's odd only because such a radical breadth of sovereignty is being asserted by the board and by tissue gen here. [00:26:07] Speaker 00: I'm not sure anyone else quite has had the temerity to assert that kind of sovereignty. [00:26:15] Speaker 00: But in that case, the Board of Regents of California did. [00:26:18] Speaker 00: They said, well, we've waived our sovereign immunity, consented to sovereignty only in California, and you can't transfer us [00:26:27] Speaker 00: as part of MDL proceedings to Indiana. [00:26:30] Speaker 00: And the statute, the MDL statute there, it doesn't have an explicit provision as to states either, just like the venue statute for patent cases. [00:26:41] Speaker 00: And the Federal Circuit addressed this on the merits. [00:26:47] Speaker 00: It was not waived. [00:26:48] Speaker 00: The Federal Circuit did not say, well, you waive this by not contesting the consolidation for trial. [00:26:55] Speaker 00: quite frankly, it's a jurisdictional issue. [00:26:58] Speaker 00: So it says the 11th Amendment applies to suits against a state, not suits by a state. [00:27:04] Speaker 00: That's the holding of Eli Lilly. [00:27:06] Speaker 00: And once you invoke federal jurisdiction, you're subject to the federal rules like the MDL transfer rule. [00:27:13] Speaker 00: That's the basis for that holding. [00:27:15] Speaker 00: It's not an issue that was waived. [00:27:17] Speaker 00: So college, I think there was a discussion of College Savings Bank being [00:27:22] Speaker 00: Dispositive here. [00:27:23] Speaker 00: College Savings Bank is a completely different case in law and facts. [00:27:27] Speaker 00: It had to do with a plaintiff saying the state of Florida had essentially constructively waived its sovereign immunity by engaging in the sorts of activities that are regulated by the Lanham Act. [00:27:40] Speaker 00: It was constructive waiving. [00:27:42] Speaker 00: Pardon me? [00:27:43] Speaker 00: And it was the defendant as well. [00:27:45] Speaker 00: But what the court held, what Justice Scalia held for the majority, was that [00:27:50] Speaker 00: You can't just constructively waive by engaging in business activities. [00:27:54] Speaker 00: But he distinguished that kind of constructive waiver very clearly from active waiver by participation in litigation invoking federal jurisdiction. [00:28:05] Speaker 00: He said, that's real waiver. [00:28:07] Speaker 00: And that point was reiterated in Lapidu's discussion of college savings banks. [00:28:11] Speaker 00: So college savings bank is really just not on point. [00:28:14] Speaker 00: A little bit about original jurisdiction. [00:28:19] Speaker 00: I still don't fully grasp the argument, but this is what we know and we can agree on. [00:28:24] Speaker 00: Original jurisdiction is vested in the Supreme Court in cases involving a state. [00:28:30] Speaker 00: But the same clause, Section 2 of Article 3 says, but Congress can invest that original jurisdiction in the district courts. [00:28:41] Speaker 00: And that's what it did in Section 1331, Section 1338. [00:28:44] Speaker 00: It explicitly did that. [00:28:47] Speaker 00: Ames versus Kansas. [00:28:49] Speaker 00: recognizes that. [00:28:51] Speaker 00: It said, this case can go forward in the circuit court, the lower circuit court. [00:28:56] Speaker 00: The other original jurisdiction cases, Wyandotte versus Ohio, that was a case in which the court declined to exercise original jurisdiction, but venue was proper in Ohio. [00:29:11] Speaker 00: Actually, the case that's most helpful of these original jurisdiction cases, to the extent any of them are, [00:29:18] Speaker 00: is Georgia versus Pennsylvania Railroad? [00:29:21] Speaker 00: Because as my adversary pointed out, in that case, Justice Douglas said, look, we should probably take this case against these 20 railroads because it's not clear that venue can properly be laid against all of them. [00:29:36] Speaker 00: So what's the implication of that? [00:29:38] Speaker 00: It means that in this case brought by a state, federal venue rules were going to prevail. [00:29:45] Speaker 00: And so in view of that, [00:29:48] Speaker 00: And in view of the importance of the case, original jurisdiction was accepted. [00:29:54] Speaker 00: So that means federal venue actually applies to that case. [00:29:58] Speaker 00: But all of this is somewhat beside the point, because the board and tissue den didn't seek to file suit in the Supreme Court. [00:30:08] Speaker 00: Could they have? [00:30:09] Speaker 00: I guess. [00:30:10] Speaker 00: The Supreme Court hasn't heard a jury trial since 1797, so I don't think it would have accepted it. [00:30:16] Speaker 00: But technically they could have, but they didn't. [00:30:19] Speaker 00: That's the only bearing of original jurisdiction in this case. [00:30:24] Speaker 04: Can I just ask a question? [00:30:24] Speaker 04: I should know the answer. [00:30:26] Speaker 04: I assume it's somewhere, which is what's going on in Delaware? [00:30:29] Speaker 04: Did somebody stay in this case? [00:30:31] Speaker 04: And was it the Delaware court or was it us? [00:30:34] Speaker 00: Yes, Your Honor. [00:30:35] Speaker 00: So immediately after transfer, notice of appeal was taken. [00:30:39] Speaker 00: There were some initial submissions that were due before the district court. [00:30:42] Speaker 00: In those submissions, both parties said we thought the case should be stayed pending appeal, and then the district court did that. [00:30:49] Speaker 00: So a little bit on some of the other authority. [00:30:53] Speaker 00: I have Tejik, A123 Systems versus Hydro-Quebec, Biomedical Patent Management. [00:31:01] Speaker 00: These are the only cases that have been cited for the proposition that as a sovereign, a party has a right to select the venue that it's going to bring a patent infringement suit [00:31:11] Speaker 00: in federal court if there's personal jurisdiction. [00:31:14] Speaker 00: Every single one of those cases involves two separate actions. [00:31:19] Speaker 00: So there's a first action in which the sovereign arguably weighs sovereign immunity, either by intervening or by bringing it as a declaratory judgment plaintiff. [00:31:30] Speaker 00: And then there's a second action in which it asserts sovereign immunity. [00:31:34] Speaker 00: And in each one of those cases, the court held, well, waiver in one action [00:31:39] Speaker 00: doesn't constitute waiver in a separate and second action. [00:31:43] Speaker 00: This is one action. [00:31:45] Speaker 00: The waiver occurred here. [00:31:47] Speaker 00: So the cases just don't apply. [00:31:49] Speaker 00: They don't apply at all. [00:31:51] Speaker 00: And it kind of makes sense. [00:31:52] Speaker 00: We wouldn't take the position that by waiving sovereignty in this case, in a case three years from now, if we brought a declaratory judgment action against the University of Texas, that sovereign immunity wouldn't apply because it had been waived in this case. [00:32:09] Speaker 01: I see my time is... My colleague just still asked you to walk us through the application of the collateral order doctrine and you got to the two steps. [00:32:23] Speaker 01: What about the third one? [00:32:26] Speaker 00: Well, Your Honor, I would say that the Board can raise these arguments on appeal and it didn't [00:32:40] Speaker 01: I guess they're arguing that by the time we get to that point, to where the case is over and now we appeal on the merits, that the affront to the dignity of the state has already occurred. [00:32:53] Speaker 00: Well, and that is their argument and that's why this case exists somewhat between FDIC, which we've cited, which this court said in order transferring is not a collateral order, and [00:33:08] Speaker 00: Puerto Rico aqueduct where a court said forcing a state as a defendant to be forced into litigation through trial is a violation of sovereign immunity potentially and a collateral order. [00:33:19] Speaker 00: Here we have something in between. [00:33:21] Speaker 00: We have a plaintiff who's invoked federal jurisdiction with knowledge of the rules of venue arguing that having to be forced to litigate this patent case is such an affront to our sovereignty in Delaware that [00:33:37] Speaker 00: It amounts, arises to the level of Puerto Rico aqueduct. [00:33:40] Speaker 04: But that kind of requires that we decide the merits. [00:33:42] Speaker 04: That gets into the merits question, right? [00:33:45] Speaker 04: So if it's not, it just seems to me that it would be odd to decline jurisdiction based on, we would almost have to decide the merits in order to decline jurisdiction. [00:33:58] Speaker 04: Am I missing something here? [00:34:00] Speaker 00: Your Honor, so in preparing this, for this argument, [00:34:06] Speaker 00: certainly came to the conclusion that the collateral order is much closer and there are certain issues of economy that would favor deciding it, and I see those, and I think that the merits are not close, and perhaps it would make the most sense just to clarify that at this point. [00:34:29] Speaker 04: to take that step may not be of consequence to you all, because you all end up in the same place. [00:34:33] Speaker 04: But to us, we would be deciding that we have jurisdiction to entertain these. [00:34:39] Speaker 04: And do you see that as a leap if we were to do that? [00:34:42] Speaker 04: I mean, this wouldn't affect other patent cases and other venue disputes that we have, right? [00:34:49] Speaker 04: This could be singularly limited to this kind of issue, right? [00:34:56] Speaker 00: It could be limited to this kind of issue, but as the [00:34:59] Speaker 00: The court, I think, has experienced over the past year issues of sovereignty being implicated by suits in which a university is bringing a patent infringement suit are coming up more and more. [00:35:13] Speaker 00: So could this come up in a different context? [00:35:16] Speaker 00: Perhaps. [00:35:18] Speaker 04: But it wouldn't affect the run-of-the-mind patent cases. [00:35:20] Speaker 04: No, it wouldn't affect... [00:35:26] Speaker 00: I think it would only affect those in which the sovereignty layer is imposed upon it because I think that that is the real harm that is being posited by the board and by tissue gen here. [00:35:38] Speaker 04: My view is that if you were to reveal on merits then, no doors would effectively be open because we've had a presidential opinion that would decide that question on the merits. [00:35:48] Speaker 04: So it's, wouldn't you know that, right? [00:35:51] Speaker 00: I don't see the doors being opened sitting here or standing here today. [00:35:55] Speaker 00: I don't, I would agree that it's a very narrow issue. [00:36:00] Speaker 00: We raised it because it is jurisdictional and we thought we should raise it as a threshold issue. [00:36:09] Speaker 04: Thank you very much. [00:36:10] Speaker 00: Thank you. [00:36:14] Speaker 04: We'll restore your five minutes if you need it. [00:36:16] Speaker 02: Thank you, your honor. [00:36:21] Speaker 02: Their only argument below was waiver. [00:36:23] Speaker 02: That's the only thing they argue. [00:36:24] Speaker 02: Now, they seem to be arguing abrogation that the Supreme Court abrogated or Congress abrogated the state of Texas sovereign immunity by passing a patent venue statute that does not mention states. [00:36:37] Speaker 02: It does not mention immunity or sovereignty. [00:36:39] Speaker 02: There's no mention of states at all. [00:36:41] Speaker 02: And so it's impossible and the only way that you can abrogate is through the 14th Amendment. [00:36:47] Speaker 02: The 14th Amendment is not implicated here. [00:36:50] Speaker 02: a venue statute, so in other words to rule against us, a rule against the state of Texas, you'd have to find that a venue provision is substantive jurisdictional rights to defendants to only be sued where they reside as opposed to where there's jurisdiction over them. [00:37:09] Speaker 02: That is absolutely contrary to Brunette Machine Works versus Cockham Industries that says venue provisions do not confer substantive rights. [00:37:18] Speaker 02: It would also violate this [00:37:22] Speaker ?: supporting your position? [00:37:23] Speaker 02: Well, it's the Supreme Court case on point that says venue provisions do not confer substantive rights. [00:37:30] Speaker 02: I understand that. [00:37:31] Speaker 03: I just was wondering if you viewed it as your best case supporting your position. [00:37:35] Speaker 03: So if your answer is yes. [00:37:36] Speaker 02: Yes, it's directly on point. [00:37:38] Speaker 02: It's the Supreme Court. [00:37:39] Speaker 02: And they're trying to turn a venue provision into a substantive right to only be sued where they reside. [00:37:44] Speaker 02: And that would completely overturn [00:37:48] Speaker 02: All the 200 years of precedent that says a sovereign has the right to sue, a sovereign state has the right to sue a defendant in any court where the sovereign consents or waives, where there's personal jurisdiction over the defendant. [00:38:03] Speaker 02: It is undisputed we do not consent to Delaware. [00:38:06] Speaker 02: It is undisputed that we have not waived our sovereignty. [00:38:09] Speaker 02: That's why we're here. [00:38:10] Speaker 02: It is undisputed that we have jurisdiction over them in Texas. [00:38:14] Speaker 02: They don't dispute that. [00:38:15] Speaker 02: There is personal jurisdiction in Texas. [00:38:18] Speaker 02: So the question is, now I believe they're changing the game in the middle of the game and trying to say, well, wait a minute. [00:38:24] Speaker 02: The patent venue statute abrogated your sovereignty. [00:38:28] Speaker 02: And it did away with the Ames case that says we have an absolute unfettered right of choice to sue to protect the state's rights in any place where we can get jurisdiction. [00:38:37] Speaker 02: That's what Ames says. [00:38:38] Speaker 02: I quoted it to you. [00:38:40] Speaker 02: It also flies in the face of Wyandotte and Georgia PRC [00:38:44] Speaker 02: where the Supreme Court said, I have to take the Georgia case. [00:38:47] Speaker 02: Why do I have to take the Georgia case? [00:38:49] Speaker 02: Because Georgia doesn't have personal jurisdiction in Georgia in the court that Georgia wants to be in over all the defendants. [00:38:58] Speaker 02: So we do have jurisdiction. [00:39:01] Speaker 02: Now, a different question may arise if one day the state of Texas or the state of Minnesota or any other state wants to sue someone for patent infringement where there is not personal jurisdiction. [00:39:11] Speaker 02: And then they would have to go to the Supreme Court. [00:39:12] Speaker 01: And then the Supreme Court can decide what they want to do, either take it or... So once the state files its suit, are you arguing that the rules of civil procedure don't apply to it as well? [00:39:24] Speaker 02: Well, the rules of civil procedure, to the extent they don't violate the state's sovereignty, certainly apply. [00:39:28] Speaker 02: But the rules of civil procedure, to the extent they violate substantive rights, those rules would violate the statute that enabled the Supreme Court to pass the rules. [00:39:37] Speaker 02: I mean, I quoted the statute to you. [00:39:38] Speaker 02: The statute says, [00:39:42] Speaker 02: that such rules, quote, shall not abridge, enlarge, or modify any substantive right. [00:39:50] Speaker 02: So the substantive right of a sovereign to choose a venue where it has personal jurisdiction over the defendant is a substantive right that the Supreme Court recognized in Ames, it recognized in Wyandotte, and it recognized in Georgia versus PRC. [00:40:04] Speaker 02: So for you to say that we can't do what we're trying to do suing the Western District of Texas, you would have to say, [00:40:10] Speaker 02: that the choice of where a sovereign enforces its rights is not a substance of right. [00:40:15] Speaker 02: That is completely adverse to at least half a dozen Supreme Court cases, but the one that is directly on point here is Ames. [00:40:24] Speaker 02: So unless you have further questions, we don't see this as a close case at all. [00:40:28] Speaker 02: And again, this is not an 11th Amendment issue. [00:40:31] Speaker 02: We are not, the only way the 11th Amendment would come into play is if once we were in court, they filed counterclaims against us. [00:40:39] Speaker 02: And so that's what makes it an untenable position. [00:40:41] Speaker 02: Because if we have to go to Delaware, and then they present counterclaims against us, then that would violate our sovereign immunity under the 11th Amendment. [00:40:50] Speaker 02: And then what do you do? [00:40:51] Speaker 02: You're in a weird situation to catch 22. [00:40:54] Speaker 02: This is not going to have major implications across the patent world. [00:40:59] Speaker 02: This only relates to a very limited situation where you have a sovereign holds a patent, the sovereign has [00:41:06] Speaker 02: the ability to exercise personal jurisdiction over a defendant who is infringing or conducting business within the state, and here that's undisputed, and the state or the sovereign chooses to file within its territorial borders. [00:41:22] Speaker 02: And remember, jurisdiction in our federal court system is territorial. [00:41:26] Speaker 02: And this is a jurisdictional question. [00:41:28] Speaker 02: We have the right [00:41:30] Speaker 02: as a state sovereign to submit to the jurisdiction of a court of our choice. [00:41:33] Speaker 02: And our choice is the Western District of Texas. [00:41:35] Speaker 02: We have personal jurisdiction. [00:41:37] Speaker 02: That should end the inquiry. [00:41:38] Speaker ?: Thank you. [00:41:39] Speaker 04: I thank both sides and the cases submitted. [00:41:42] Speaker 04: It's a little bit of irony here that we're hearing this dispute at a law school, whereas I feel like maybe I need to go back to law school. [00:41:52] Speaker 04: Thank you.